With the economic recovery taking longer than virtually anyone anticipated, unemployment remains a massive problem, both in Minnesota and across the country. The current U.S. unemployment rate is holding steady at approximately 9 percent. However, this is the officially reported rate; many analysts believe the true rate is much higher. Also, the rate of unemployment for some classes of employees is higher than the overall rate.
In many market segments, a lot of very good workers are out there, through no fault of their own. Unfortunately, some employers have responded to this situation with dubious and possibly illegal screening practices.
The Equal Employment Opportunity Commission (EEOC) recently held a hearing on a controversial strategy that some employers are using in their hiring practices. According to worker-advocacy groups, news reports and individual job seekers, some employers are including “unemployed need not apply” restrictions in their job postings.
The EEOC enforces federal employment discrimination laws. If it believes that it has found wrongdoing on the part of an employer, it may file a lawsuit against the employer. Persons subject to employment discrimination also can file private causes of action.
Federal Employment Law: Protected Classes
Federal law does not explicitly prohibit employment discrimination against people who are not working. The law does, however, prohibit the use of policies that ultimately discriminate against protected groups.
Under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act, it is illegal to discriminate against potential employees because of their race or their age, if they are 40 years old or older.
The restriction against unemployed job applicants raises concerns because the demographics of the unemployed include a disproportionate representation of these protected classes.
U.S. Unemployment Rates: Complex Numbers
While the unemployment rate of whites is approximately 8 percent, African-Americans’ unemployment rate is at more than 15 percent, and Hispanic unemployment is at nearly 12 percent. A government official testified at the EEOC hearing that filtering out unemployed applicants could reduce the chances of considering a minority applicant by as much as one-third.
In addition, one-third of the short-term and medium-term unemployed are at least 40 years old. One-half of the long-term unemployed are at least 40 years old.
Some employers argue that current employment is an important qualification for a job, however. Certain industries, especially those involving technology, evolve quickly. Current employment in such industries might very well be a legitimate prerequisite to ensure that an applicant is qualified for a position requiring an up-to-date knowledge base.
The EEOC is exploring whether a ban on unemployed job applicants has a disparate impact on these groups.