The Bankruptcy Act includes a section that addresses employee rights explicitly. Section 525 is Bankruptcy Protection Against Discriminatory Treatment. The law states employers may not take adverse actions against employees or job seekers who are debtors or associates of debtors who:
- Are involved in a bankruptcy proceeding
- Are insolvent before the start of a proceeding or its discharge
- Has left a debt that is dischargeable in bankruptcy unpaid
New York City has a specific law prohibiting most employers from even learning about bankruptcies during a pre-employee background screening.
Under the New York City Human Rights Law Credit Check Law, employers with four or more employees may not check your credit for creditworthiness, bankruptcies, or judgments and liens unless you are applying for one of the following types of employment:
- Police or peace officers
- Executive-level positions having control over finances, computer security, or trade secrets for a company
Non-executive positions are not exempt from the law, including bank tellers, cashiers, and other positions handling money.
Derek Smith
3 min. read
Derek Smith