National unemployment statistics remain dire. The Labor Department’s most recent Report reveals that unemployment has risen for each of the last four months, and now stands at 9.2 percent. More than 14 million Americans are officially unemployed — and this number does not even include those who have given up looking for work. In this environment, a number of employers is using recruitment and hiring policies that screen out the unemployed, simply because they are not currently working. Several months ago, the EEOC concluded (http://tinyurl.com/4x2wq5x) that such practices may violate Title VII of the Civil Rights Act, and the EEOC chair questioned whether such practices are compliant with federal law outlawing discrimination.
The basis of such a claim of discrimination would be the following: As severe as the unemployment figures are, they are disproportionately higher for a number of protected classes. Thus, some commentators have observed that women, and particularly older women, have suffered more severely in the current recession and form a disproportionately large sector of the unemployed. Others have noted that the practice of excluding unemployed applicants may have a disproportionate effect on certain racial and ethnic minority members of the community who also have experienced loss of employment in far greater numbers than national averages. Accordingly, refusing to consider unemployed applicants could have a discriminatory “disparate impact” on those protected groups.
Mindful of this situation, two members of Congress have introduced the Fair Employment Opportunity Act of 2011 which, if passed, would prohibit employers and employment agencies from refusing to consider job applicants solely because they were unemployed. Whether or not federal legislators approve such new legislation, some states are already taking action to prohibit the use of such criteria. For example, New Jersey recently passed legislation that makes it illegal for employers and staffing firms to publish job postings that exclude the unemployed from consideration. Similar legislation is pending in New York.
Whether the federal bill will pass is open to question in the current anti-regulatory political environment in Washington. However, this legislative activity, allied with state legislation and an increasing focus on the legality of excluding applicants based on their employment status, emphasizes that this issue is gaining greater attention; and employers would be well advised to review their hiring policies and determine what risks they may be taking by screening out applicants simply because they are not currently employed.