States Considering Bills Barring Bias Against Unemployed Applicants

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Oregon has enacted a new law that prohibits overt unemployment discrimination in job advertisements, becoming only the second state—after New Jersey—to prohibit this practice.

The new ban, signed into law by Gov. John Kitzhaber on March 27, 2012, is limited in scope. It prohibits employers from publishing job advertisements that include language indicating that unemployed individuals should not apply for the job or that they will not be considered for the position.

An employer whose job advertisements feature language such as “unemployed applicants not considered” or “all applicants must currently be employed” would violate the law. But the new law does not bar employers from considering an applicant’s employment status during the course of the hiring process.

Also, the law does not allow disgruntled job applicants to sue employers. Instead, only the commissioner of the Bureau of Labor and Industries (BOLI) can pursue a violation. The law caps any penalties the BOLI commissioner may assess at $1,000 per violation, with the penalties going to the government rather than to individual applicants.

However, despite its limited scope, “employers should rightfully be concerned” that this new law “could lead Oregon down a slippery slope resulting in a ban of discrimination against unemployed individuals,” according to Richard Meneghello, an attorney in Fisher & Phillips’ Portland, Ore., office. Such a law could easily be abused, he said, and potential lawsuits could be difficult to defend.

Laws Would Add Unemployed Status to Protected Classes

Exactly this type of broader law has been considered in state legislatures around in the country in their 2012 legislative sessions.

For example, a proposal in Connecticut would make it a discriminatory practice to refuse to hire someone who is unemployed, including it in the same equal employment opportunity statutes that protect classes such as gender and race. Prospective employees could sue to recover damages and attorneys’ fees.

The bill is unlikely to pass this time around, Daniel Schwartz, a partner and employment law specialist with the law firm of Pullman and Comley in Hartford, Conn., told SHRM Online. “Numerous legislators have pointed to holes or flaws in the legislation,” he said. It would be difficult to prove bias under the law, he noted, and passing such a proposal could lead to many claims against employers.

But as long as unemployment remains high, state legislatures are likely to continue to revisit this issue.

“I think it emphasizes further that employers ought to document the reasons why they are selecting candidates,” Schwartz said.

As to the wisdom of such laws, he noted that “Everyone can agree that getting people back to work is a lofty goal. The real issue is the means for doing that.”

Gaps in a person’s resume, he added, may give rise to some legitimate questions about that person. “The fact that someone is unemployed may not mean anything, or it may mean something. The employer is looking for a person with job skills; it may be relevant. This has usually been left up to employers, not legislators,” Schwartz said.

States can pursue their interest in getting people back to work by providing tax incentives for employers to hire unemployed workers, as Connecticut has done. “These provide an incentive for an employer without resulting in more litigation,” Schwartz added.

A bill that would have added unemployment status to the protected classes under Maryland’s fair employment practices law was also considered by the Maryland legislature. Although that proposal, like the one in Connecticut, appears unlikely to pass this year, according to Christine Walters, SPHR, an HR consultant with FiveL Co. in Westminster, Md., employers need to be aware that these proposals are out there and may return next year.

Adding another protected status creates more liability for employers, Walters said, commenting that “My concern is that it can create a presumption that is difficult to disprove.”

Employers should also be cognizant of the fiscal implications of such legislation. The fiscal note of Maryland’s bill, for example, indicates that the small-business effect is potentially meaningful, Walters noted. “Small businesses may experience increased legal costs to the extent that more individuals allege discrimination based on employment status.”

She said her main concern is not unemployed status in and of itself. “But if you’ve been unemployed for a long time, your experience and abilities may be staler than those of someone who is employed,” she explained.

She added that, “We always want to try to hire the most qualified candidate. I’m not sure that employed or unemployed status has a direct correlation.” But, “I’m not sure it’s realistic that an employer is not going to take into account the length of time someone is unemployed.”

As to what employers should do in the face of potential new laws, Walters advised that “Whether we are talking about discrimination based on race” or any other protected status, the same practices should apply. “You want to demonstrate why the person you chose is the best candidate. You want to show more years of experience, more knowledge,” more applicable job skills.

The existence of these bills makes it important for HR professionals and business owners to make sure they are communicating with their state legislatures on a day-to-day basis “about well-intended legislation with practical negative consequences,” Walters concluded.

“These bills are out there,” and they are “another sign that employers really need to keep track of legislative developments and speak out” before they are passed in their current form, Schwartz said, echoing Walter’s advice.

Number of States Weigh Proposals

At least a dozen other states are considering, or have considered, some sort of protection for unemployed job applicants during their 2012 sessions, including California, Florida, Illinois, Iowa, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio, Pennsylvania and Tennessee.

The proposals range in scope from banning advertisements that require current employment, similar to the law passed in Oregon, to allowing unsuccessful job candidates to sue businesses under the same discrimination laws that apply to bias on the basis of religion, race, gender or national origin.

The proposal in California, for example, contains a broad prohibition barring an employer with 15 or more employees from refusing to consider an individual or offer employment because of the individual’s employment status, unless the decision is based on a bona fide occupational qualification. However, the California bill contains no private right of action. Instead, an employer that violates the law would be subject to a civil penalty of up to $1,000 for the first violation, enforceable by the state Division of Labor Standards Enforcement.

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.  To view the original article, please click here.