Is "Unemployment" the Next New Protected Class?

Is "Unemployment" the Next New Protected Class?

While the economy continues to add new private sector jobs, the unemployment rate was 6.2% in July. There’s a good chance that some of the applicants you see are currently unemployed. Depending on where you do business, that status may make that particular applicant fall into a protected class under local city or state law, in addition to current protections for race, color, religion, sex or national origin. Failure to follow these new laws may result in fines or even civil complaints.

Back in 2011, the Obama Administration introduced the Fair Employment Opportunity Act. This legislation stated that it was unlawful to refuse employment to applicants solely because they are currently unemployed. It also would have made it illegal to include in a job listing that unemployed persons would not be considered. The law allowed for individuals to sue for damages for violations, just as someone could under Title VII, when an employer discriminates on the basis of race, color, religion, sex or national origin. The Act specified that an employer could still consider an applicant’s employment history, as well as the details underlying their unemployed status or the reasons for separation from their previous employer.

While this legislation has not been passed due to concerns over increased litigation costs for small businesses, the reason for the law comes down to what’s called “disparate impact.”

Disparate impact means that although the hiring criteria may seem unbiased and non-discriminatory on the surface, it may disproportionately impact certain protected classes. In this case, the unemployed statistically tend to be a higher number of African American, Hispanics, older workers and disabled individuals. Because each of these is a protected class, the Equal Employment Opportunity Commission (EEOC) argues that taking employment status into consideration unlawfully discriminates against these protected categories.

Several city and state governments agree. Madison, WI voted in December 2013 to include “unemployment” as a protected class. In June 2013, New York City amended its Human Rights Law to prohibit discrimination based on employment status (with four narrow exceptions). Employers must have a “substantially job-related reason” for refusing to hire an applicant. In New Jersey, Oregon, Washington DC, and Chicago, you can’t post job ads that include current employment as a job requirement.  

Some laws allow individuals to bring civil complaints and the ability to sue for damages against employers who reject them based on their unemployed status, whereas other laws allow only for complaints to be lodged wherein the employer may face fines.

Alderman Anita Weier of Madison, WI supported Madison’s version of the law. “Anybody who has been unemployed knows that there’s discrimination. It’s very hard to find a job if you’re unemployed, and there’s a much larger class of people who have been in that situation for quite a time because of the recession, because of cut backs, that are really no fault of their own,” says Weier.

Other states considering such legislation, or have considered and rejected it, include Arizona, California, Colorado, Connecticut, Missouri, Maryland, Florida, Indiana, Iowa, Illinois, Michigan, Minnesota, Nebraska, Ohio, Pennsylvania, South Dakota, Tennessee, West Virginia, and Wisconsin. 

The trend appears to be leaning toward “unemployment” as a protected class, in which case experts suggest an employer’s safest bet is to eliminate direct questions about employment status in job postings or the interview or application process. In any case where you decide not to hire an individual, document everything, including specific reasons as to why an individual was not hired, in case you are challenged.

Tricom Funding will continue to provide updates as legislation passes on city or state levels. Watch our Legislative Updates page for future news!