NEW YORK (MainStreet) – The American Jobs Act, President Obama’s $447 billion jobs bill, aims to put a serious dent in the country’s high unemployment rate by offering a variety of incentives to employers. Among them are various tax credits, including the temporary elimination of payroll taxes for new hires and a $4,000 credit for hiring long-term unemployed workers.
But in addition to those carrots, the bill also wields a big stick: It would prohibit employers from discriminating based on a person’s employment status. That means that an employer could not legally consider the fact that an applicant is currently unemployed when making a hiring decision.
The decision to add employment status to the list of protected classes is especially important because many employers have significant reservations about hiring applicants who are among the approximately 14 million unemployed Americans. In fact, many businesses explicitly say in their job postings that only employed applicants will be considered for a position, a practice that would become illegal under the proposed law.
Such job postings would, of course, go the way of “No Irish need apply” signs if the bill becomes law. But without such explicit signals of discrimination, could a rejected applicant really prove that he or she was discriminated against for not having a job?
“In the absence of direct evidence of discrimination, the individual will be required to show that he or she was qualified for a position that he or she did not receive, and that the employer rejected this person’s candidacy, and continued to look for similarly qualified candidates, or in fact hired another individual not of the protected class,” says Michele Randazzo, an employment lawyer with the law firm Kopelman and Paige PC. “Presuming that the employer provides facially credible reasons… I think it is going to be pretty hard to prove that an employer didn’t hire someone simply because he or she was unemployed.”
That doesn’t mean that rejected applicants won’t file lawsuits and try to prove that they were passed over for being unemployed. And that could get very costly for employers.
“As I understand it, the [Equal Employment Opportunity Commission] is going to enforce this,” says Jason Carney, director of human resources at WorkSmart Systems, a human resources outsourcing firm. “To answer an EEOC charge, the cost to do it right starts in the thousands.”
Of course, there’s no denying that unemployment discrimination is a real problem, and the fact that a company may have to pay to defend against discrimination lawsuits is not reason enough to deny protection to the unemployed. But critics also say there’s a big difference between discriminating on the basis of race or gender and considering gaps in an applicant’s employment – the latter of which they say is a legitimate avenue of inquiry.
“I can understand the concern being raised about this proposal, as someone’s employment history… is normally part of an employer’s consideration when making hiring determinations,” says Randazzo. “Gaps in a resume, such as unexplained lengthy periods of employment, often do raise ‘red flags’ for employers.”
Carney agrees, noting that the law would mean employers could no longer ask applicants to explain employment gaps – which could, ironically, wind up hurting applicants who have a good explanation for why they’re out of work.
For these reasons, Carney says that he doesn’t expect this part of the law to pass, though he says that a good compromise may be to simply prohibit job postings that say that unemployed applicants won’t be considered. While that won’t do much to remove the inherent biases that many employers have against the long-term unemployed, it would at least provide more of an opportunity for the unfortunate 9.1% to get their foot in the door and impress their interviewer.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.