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Employment Practices: Law Prohibits Discrimination Against The Jobless


Employment Practices Law Prohibits Discrimination Against The JoblessThe Unemployed Becomes A Protected Class Against Employment Discrimination with NYC Law

The city of New York has recently enacted a law that will prohibit employers from discriminating against the unemployed in their hiring practices. This law will become effective July 11, 2013, and follows other jurisdictions, such as New Jersey, District of Columbia and Ohio, with another 18 states looking to amend their laws. In fact, New Jersey became the first state to adopt a law regarding discrimination on the basis of an applicant’s employment status. The Garden State prohibits employers and employment agencies from advertising job vacancies that include “currently employed” as a job qualification, or indicate that applications will be accepted only from currently employed people or that applications from the unemployed will not be accepted.

New York City’s Law

The new law amends the New York City Human Rights Law by making unemployment status similar to other protected classifications, such as race, gender, age, national origin and disability. The law defines “unemployed” or “unemployment” as “not having a job, being available for work, and seeking employment.” It applies to employers with four or more employees and was enacted despite Major Michael Bloomberg’s veto, who felt it was too broad and would lead to additional litigation.

Under the law, a New York City employer cannot refuse to hire an applicant for employment on the grounds that he or she is unemployed, unless there is a “substantially job-related reason” for doing so. In addition, the bill prohibits employers from basing an applicant’s compensation on his or her unemployment status. The new law, however, does not otherwise restrict an employer from inquiring into the circumstances surrounding the applicant’s separation from prior employment.

The law came under fire from Mayor Bloomberg because, in addition to prohibiting intentional discrimination against the unemployed, it also makes it unlawful for an employer to maintain a “facially neutral policy or practice that disparately impacts unemployed persons”. This is troubling to employers as it’s under this aspect of the new law that plaintiffs can end up suing employers by demonstrating that an employer’s group of hiring practices or policies, as a whole, result in a disparate impact, “without being required to demonstrate which specific policy or practice results in such disparate impact.” An employer could avoid liability, however, if it establishes an affirmative defense that the employer’s policy or practice is based on a substantially job-related qualification or otherwise did not contribute to the disparate impact. But, even if an employer makes such a showing, some legal experts feel that a plaintiff can still prevail if he or she “produces substantial evidence that an alternative policy or practice with less disparate impact is available to such entity and such entity fails to prove that such alternative policy or practice would not serve such entity as well.” Furthermore, unlike similar laws in other states that only permit administrative agency claims, New York City’s law permits aggrieved job applicants to file a private civil action in court seeking damages, injunctive relief, punitive damages, and reasonable attorneys’ fees and costs.

Taking Steps to Mitigate Risk

It’s important that as an employer you take steps to comply with the law and minimize the risk of litigation, including reviewing all recruiting policies and procedures, training personnel in interviewing and hiring so that they understand what types of questions are and aren’t permitted in an interview and on an application form. Questions should focus on an employee’s qualifications and not current employment status. Additionally, employers should review their job advertisements and recruiting-oriented web pages and remove any language that may give the impression of favoring employed over unemployed applicants. And, discrimination policies should be updated to include this new protected class.

Furthermore, it’s critical that Employment Practices Liability Insurance (EPLI) is in place in the event of a lawsuit alleging discrimination. Axis Insurance Services, LLC specializes in providing EPLI insurance and offers clients across all industries a competitive product designed to cover legal fees, settlements and damage awards that result from EPLI claims. Just give us a call at (877) 787-5258 to discuss your business and insurance needs.

Sources: Labor & Unemployment Law, Advisen

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Blogged on: May 8, 2013 by Mike Smith
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