Question:

I own a business and I am currently hiring. I have received a large number of applications, but many of the applicants have been unemployed for months or even years. Does the law allow me to restrict my hiring to applicants who are currently employed?

Answer:

Although there is no state or federal law expressly prohibiting hiring employees who are currently unemployed, a claim could be made against your company that a policy against hiring unemployed applicants has a disparate impact on applicants who are protected from discrimination, such as women, minorities, and older workers.

California currently has the second-highest unemployment rate in the nation at 12%. Given the large number of job applicants, some employers have implemented hiring policies that exclude applicants who are unemployed from consideration for a position, often because applicants who are employed are considered “up to date” on technology and business trends and may be more prepared to begin their employment with little training.

Federal and state laws prohibit any employment practice that has a disparate impact on a protected group. California’s Fair Employment and Housing Act (FEHA) prohibits employers from using a practice that either expressly prohibits or disproportionately excludes applicants based upon race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, mental and physical disability, medical condition, and age. Similarly, Title VII of the federal Civil Rights Act of 1964 prohibits employers from using a practice that either expressly prohibits or disproportionately excludes applicants based upon their sex, race, national origin, or religion. Finally, the federal Age Discrimination in Employment Act (ADEA) prohibits employers from using a practice that either expressly prohibits or that has a disparate impact on workers aged 40 and over unless the employer adopts the practice based on a “reasonable factor, other than age.”

Thus, although unemployed persons are not expressly protected under the FEHA, Title VII, or the ADEA, any hiring practice that disproportionately affects protected persons may violate these laws. For example, recent data from the United States Department of Labor indicates that 15.6% of African-Americans are unemployed and 12.3 % of Hispanics are unemployed. In contrast, 8.7 percent of Caucasians are unemployed. Thus, a policy that automatically excludes unemployed applicants from consideration may have a disproportionate effect by excluding African-American and Hispanic applicants. The United States Equal Employment Opportunity Commission (EEOC) recently held hearings to investigate whether banning unemployed applicants is unlawful under federal antidiscrimination laws because minorities, women and older Americans, who tend to have higher rates of unemployment, are likely to suffer the most from employers who exclude unemployed applicants. Finally, federal legislation (the “Fair Employment Opportunity Act of 2011”) was introduced in Congress in July and, if passed, would prohibit employers from refusing to consider job applicants because they are unemployed.

For additional information, please visit the Bureau of Labor Statistics (http://www.bls.gov/news.release/pdf/empsit.pdf), the California Department of Fair Employment and Housing
(http://www.dfeh.ca.gov/), and the United States Equal
Employment Opportunity Commission (http://www.eeoc.gov/).
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