Effect of Recent New York City Amendments May Limit Brokers and Advisers in Conducting Credit and Background Checks on Potential Employees
The New York City Council recently passed two amendments to the New York City Human Rights Law that are likely to substantially affect the manner in which firms in New York City may evaluate the qualifications and background of potential new employees. The Stop Credit Discrimination in Employment Act (SCDEA) mandates that, as of September 3, 2015, employers may not conduct credit checks on potential new employees. The Fair Chance Act (FCA) requires that, beginning October 27, 2015, employers may not conduct a criminal background check or examine a potential employee’s arrest or conviction record until after they have given the potential employee a conditional employment offer.
This Dechert OnPoint focuses on the application of these laws to SEC-registered investment advisers and broker-dealers that are subject to the laws of New York City.