Will ‘Unemployed Discrimination’ Become Illegal?

(Editor’s Note: This is the first in a series of guest blog posts about contract staffing, courtesy of Top Echelon Contracting, the recruiter’s back-office solution.  Similar posts will appear in future issues of The Pinnacle Newsletter Blog.)

The recent practice where employers specifically state in job postings that they will not accept unemployed candidates has ignited a firestorm and has some crying “discrimination.” Some lawmakers are even moving to make banning unemployed job candidates illegal.

In fact, New Jersey has already passed a law forbidding job ads that are found to discriminate against the unemployed, according to The Employer Handbook, a blog by attorney Eric B. Meyer. The law states that job advertisements can’t include provisions stating that current employment is a job qualification, that the company won’t consider applications submitted by unemployed candidates, or that they will only consider applications from currently employed candidates, according to the blog.

On the federal level, the Equal Employment Opportunity Commission (EEOC) recently held a hearing to determine how prevalent banning unemployed candidates is and if it is discriminatory, according to employment attorney Lisa Yankowitz’s weekly Informed Workplace video.  While unemployed individuals are not specifically protected under any federal anti-discrimination laws, these practices could be considered discriminatory if they create a disparate impact against a protected class.

Disparate impact occurs when a policy that seems neutral on its face disproportionately impacts members of protected classes. Considering that certain protected groups, such as African-Americans, Hispanics, and the disabled, have a much higher unemployment rate than the national average, it is quite possible that a company policy against hiring the unemployed could create a disparate impact, Yankowitz says in the video.

According to Yankowitz and the Huffington Post, unemployed individuals will be specifically protected under federal law if Rep. Hank Johnson (D-Ga.) has his way.  He has introduced The Fair Employment Act of 2011 which would amend the Civil Rights Act to make it illegal for companies to make hiring decisions based on a candidate’s employment status.

It will be interesting to see where this goes.  Will more states pass laws banning ads discriminating against the unemployed? Or will federal legislators beat them to the punch and make the unemployed a protected class? Either way, it appears this is a topic that will be sticking around for awhile and could result in more legal restrictions for employers.

While most of your clients have probably not published job ads specifically banning the unemployed, chances are you may have encountered situations where a client has told you not to present unemployed candidates.  You may want to make them aware of the growing legal movement against his practice and remind them that there could be very good candidates out there who happen to be unemployed, particularly now in the wake of “The Great Recession.”

And you can offer to let them try your currently unemployed candidates by starting them on a contract basis before they “buy,” or extend the direct-hire offer.  Not only will they keep themselves out of potential legal hot water, but they may also find that some of the best employees are still on the unemployment lines.

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