Can an employer refuse to hire you because you don’t already have a job? That question has been in the news for the last few years, as the troubled economy and continued high unemployment rate have taken a toll on hiring.
Currently, no federal law specifically prohibits unemployment discrimination. However, a few states have made it illegal to discriminate against the unemployed in hiring.
Federal Action to Protect the Unemployed
Early in 2011, the Equal Employment Opportunity Commission (EEOC) held a meeting and heard testimony on whether employers are unfairly screening out the unemployed in hiring. Speakers pointed to job postings that explicitly limit the applicant pool to those who already have a job; in other words, those who are out of work need not apply. Despite the apparent interest in the topic, however, the EEOC hasn’t so far taken action to protect the unemployed.
President Obama tried to protect the unemployed in his 2011 jobs bill. The proposal would have prohibited employers from posting job advertisements that exclude the unemployed or refusing to hire applicants because they are unemployed. Applicants who were discriminated against could sue for costs, an injunction (a court order requiring the employer to stop its illegal behavior), liquidated damages of $1,000 per day, and attorney fees. This effort also failed.
Federal Discrimination Claims Based on Unemployment
Even though these federal efforts have so far fallen short, that doesn’t allow employers to adopt a blanket practice of refusing to even consider anyone who is out of work. Although employment status isn't a protected category, like race, age, or gender, screening out the unemployed could still result in a discrimination claim. A disparate treatment charge -- alleging that the employer intentionally discriminated against members of a protected group -- could be brought against an employer who uses current employment as a factor in hiring only against certain applicants. For example, an employer who doesn't consider whether male applicants are currently employed but does look at job status for female applicants is discriminating based on gender.
A disparate impact charge -- alleging that an employer's apparently neutral selection practice has a disproportionately negative effect on protected applicants -- could also be brought against an employer who screens out those who are currently out of work. Even if the employer applies this factor consistently to screen all applicants, it could result in discrimination because unemployment rates are higher for African Americans, Native Americans, and Latinos. One speaker before the EEOC also testified that this type of practice could disproportionately exclude older women.
State and Local Laws on Unemployment Discrimination
New Jersey, Oregon, and the District of Columbia have all passed laws prohibiting employers from discriminating against those who are out of work. These laws prohibit employers from posting job advertisements that include a job requirement of current employment or state that applications will be considered only from those who are currently employed. New York City also prohibits employers from making job decisions based on an applicant’s unemployed status. To find out more about state-specific discrimination laws, see Nolo's articles on Employment Discrimination in Your State.