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Did you know that if you’re unemployed, some employers may automatically disqualify you for available positions?

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In the summer of last year, reports surfaced that Sony Ericsson was expanding operations in Georgia and had posted a job announcement for a marketing position that explicitly stated “No Unemployed Candidates Will Be Considered At All.” Some think that this was the beginning of a new trend – excluding unemployed applicants from candidate pools.

Recently, the U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting to examine the impact of only considering employed applicants for job vacancies. Regarding this meeting, EEOC Chair Jacqueline Berrien stated:

“Throughout its 45 year history, the EEOC has identified and remedied discrimination in hiring and remains committed to ensuring job applicants are treated fairly. [The] meeting gave the Commission an important opportunity to learn about the emerging practice of excluding unemployed persons from applicant pools.”

During this public meeting, several experts offered their opinions. Christine Owens, the Executive Director of the National Employment Law Project, recounted some examples of individuals who had been told they would not be referred or considered for employment once recruiters or potential employers learned they were currently not working.

There is no official data on how often unemployed job seekers are excluded from applicant pools. But according to Ms. Owens, advertisements such as those by Sony Ericsson and the experiences of unemployed job seekers seen by NELP, the practice is fairly common, and may be increasing in popularity.

Others, however, disagree with Ms. Owens. Fernan Cepero, who testified on behalf of the Society for Human Resource Management (SHRM), noted that SHRM, the U.S. Chamber of Commerce, and the Equal Employment Advisory Council are unaware of widespread recruiting practices involving blanket exclusion of unemployed candidates. He emphasized that using such a blanket exclusion would prevent organizations from accessing some of the best available knowledge, skills, and abilities in a given labor force.

During the meeting, the EEOC also heard testimony about how this practice has the potential for discrimination. Because of differences in participation and unemployment rates by gender, race and ethnicity, age, and disability status, automatically excluding unemployed applicants from candidate pools may have an adverse impact on some protected groups. For example, in some occupations, women have higher unemployment rates than men. Among individuals with a Bachelor’s Degree or higher, all racial and ethnic minorities have higher rates of unemployment than their white counterparts. Because of these differences, the use of such a blanket restriction may inadvertently
discriminate against these groups.

Unemployment Rates By Gender and Broad Occupational GroupUnemploymentRatesbySex

 

2010 Annual Unemployment Rate for Individuals with Bachelor's or Higher Degree

25 years and older

UnemploymentRatewDegree

Whether or not the practice of excluding unemployed candidates from applicant pools is widespread or not, it’s certainly drawing some attention. There is already proposed legislation that would effectively ban the practice. On March 16, 2011, Representative Hank Johnson introduced The Fair Employment Act of 2011 (H.R. 1113). This Act would amend Title VII of the Civil Rights Act to include “unemployment status” as a protected characteristic. The Act would effectively make it illegal for employers to refuse to hire or hire at a lower rate of compensation based on employment status. The Fair Employment Act of 2011 is currently in the House Committee on Education and the Workforce.

There are a lot of unanswered questions about excluding unemployed applicants from candidate pools: how widespread the practice is, whether it really discriminates against protected groups, etc. But one thing is clear – this issue is going to receive quite a bit of attention in the coming months.

 


Stephanie R. Thomas, Ph.D., is the founder of Thomas Econometrics. She specializes in the quantitative analysis of equal employment opportunity issues and discrimination. For more information, please visit www.thomasecon.com

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