Shifting state laws and updates at the federal level can make it difficult for employers to stay ahead of new compliance requirements. Some of these recent changes may affect your background check policies and hiring decisions. We’ve rounded up the latest updates to explain what they mean for employers and how you can take action to help you stay compliant.
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New York State: New Law Bans Credit History in Hiring Decisions
New York has become the latest state to restrict the use of credit history in employment decisions.
The new state law makes it an “unlawful discriminatory practice” for employers to request or use someone’s consumer credit history for employment decisions. Credit history refers to a person’s consumer credit report; their credit score; and information about their credit accounts, including late or missed payments, charged-off debts, and bankruptcies.
Under the law, background check companies are prohibited from including credit information on consumer reports provided to employers.
There are some exemptions to the law, including but not limited to:
- Employers required by state or federal law or a self-regulatory organization to use consumer credit history for employment
- Some law enforcement positions, including peace officers and police officers
- Some positions subject to a background investigation by a state agency
- Positions requiring security clearance under law
Gov. Kathy Hochul signed the bill into law in December. It will go into effect statewide in April.
What New York Employers Need to Know
Beginning April 18, most New York employers will be prohibited from using consumer credit history for hiring, promotion, or compensation decisions. Take these steps now to begin preparing for the new law:
- Review processes: Look over your organization’s background screening policy and make the necessary adjustments to reflect the new requirements.
- Train HR staff: Make sure your HR team, hiring managers, and third-party partners understand the new rules regarding consumer credit history.
- Monitor updates: Continue to watch for updates from state agencies as the law’s April enforcement date gets closer.
Congress Tightens THC Standards in Redefinition of Hemp
As part of the federal government funding bill passed in November, Congress amended the federal definition of hemp, a change that experts say will ban most hemp products currently on the market.
Under the amended definition, which takes effect Nov. 12, 2026, “hemp” will include only cannabis and derivatives that contain no more than 0.3% total tetrahydrocannabinols (THC) on a dry-weight basis. This change replaces the previous standard, which only measured delta-9 THC.
The new definition also sets a cap on hemp-derived products, stating they must not contain more than 0.4 milligrams of THC per container. This language will ban most hemp products, including ingestible gummies, vapes, and drinks.
What Employers Need to Know
At this point, the federal redefinition of hemp does not directly affect employer drug screening requirements or employment practices. However, once the new definition goes into effect, products previously considered legal may be reclassified as controlled substances, which could impact pre-employment and workplace drug testing policies.
Right now, you should continue to monitor federal guidance for updates. It’s also a good idea to review your drug testing and substance use policies with this new definition in mind, particularly if you’re in a highly regulated industry.
Read more: An Employer Guide to Understanding Pre-Employment Drug Screening
Illinois: Supreme Court Rules FCRA Claims Must Show Harm
The Illinois Supreme Court recently ruled that consumers must show actual harm to bring certain claims under the Fair Credit Reporting Act (FCRA). The decision may limit lawsuits based solely on alleged statutory violations where no “concrete” injury occurred.
In the case Fausett v. Walgreens, the court held that a consumer cannot sue for an FCRA violation alone and instead must show that they suffered real harm. The ruling suggests that Illinois courts may no longer allow FCRA claims if the consumer cannot demonstrate actual injury.
What Illinois Employers Need to Know
While the court’s decision may limit no-injury claims in Illinois moving forward, it does not change employers’ obligations under the FCRA. Your organization must still comply with FCRA requirements, including disclosure, authorization, and adverse action procedures, when performing background checks.
Compliance remains essential, so make sure you maintain a consistent screening policy with proper documentation.
Keep Track of Changing Compliance Requirements with InCheck
These updates at the state and federal levels show how quickly compliance requirements can change. From new restrictions on credit history to changing federal guidelines, employers need to stay informed to manage risk and remain compliant.
Partnering with a trusted background screening provider can help take the guesswork out of compliance. InCheck works closely with employers to apply consistent screening practices and align background check programs with current requirements. We can offer supportive guidance to help you build a comprehensive, compliant background check program. Reach out today to learn more about partnering with InCheck.