A proposed Michigan bill, “The Fair Consideration of the Unemployed Act” (PDF) would prohibit discrimination against the unemployed when it comes to job postings. This bill was introduced by State Representative Jim Ananich, D-Flint.
If signed into law employers could face a $5,000 fine for a first violation and a $10,000 for each subsequent violation.
As proposed, the Michigan Fair Consideration Act would prohibit an employer or its agent, from publishing job postings “stating or suggesting” that:
- Current employment is a job qualification;
- An application from a job applicant who is currently unemployed will not be reviewed and the applicant will not be considered for an interview or be hired; and
- Only applications for employment from applicants who are currently employed will be considered or reviewed.
Similar legislation was passed in New Jersey and was introduced in the U.S. House in June.
Is There a Need for Unemployment Discrimination Legislation?
A recent article in the New York Times, The Help-Wanted Sign Comes With a Frustrating Asterisk (by Catherine Rampell) seems to substantiate there is some bias against the unemployed. That article noted:
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
Current Protection for the Unemployed
Under Michigan and federal law, the practice of excluding unemployed people from job applications does not facially violate discrimination laws because unemployment is not a protected status, like age or race.
This practice, however, may have a disproportionate impact on older workers and minorities. In this regard, the Equal Employment Opportunity Commission held a hearing earlier this year to examine the practice of excluding currently unemployed people from job applicant pools. According to Department of Labor records, 33.8% of unemployed workers are 40 or older and this number jumps to 52% among the long term unemployed. Latinos and African Americans are also over represented in the pool of the unemployed.
The Michigan legislation did not move forward in committee prior to taking its summer recess. So Michigan employers may use employment/unemployment status in screening applicants. But that does not mean that this practice is recommended.
First, an employer screening applicants based on unemployment status could face a claim that such a practice has an unlawful disparate impact on applicants falling under a protected category, e.g., age or race. It is, therefore, prudent to carefully review all current and prospective job postings to determine if employment status is listed or referenced as a criteria for applying.
Second, the unemployment rate has steadily risen since 2001 (going from 4.2% in January 2001 to the current 9.1% rate). This translates to approximately 14 million people being unemployed. While the practice of automatically excluding 14 million applicants based on unemployment status may not be illegal, it hardly constitutes “due diligence” in screening job applicants. Similar issues were also discussed about rejecting applicants based on a past bankruptcy filing.
Third, employers already face a well-developed regulatory landscape when it comes to unlawful discrimination in hiring and other employment decisions. But adding the restriction proposed in Michigan’s Fair Consideration Act – if strictly limited to job postings – provides a sufficiently bright-line restriction. That restriction should be easily implemented and does not impose on employers any new record keeping requirements.
We will continue to monitor this legislation and would appreciate hearing perspectives from both job applicants and hiring professionals on this topic, whether you think it is needed, and if you have an personal experience with either.