New and likely legislation means you should review your hiring policies—and prepare for a spike in contingent labor.
By Michael Beygelman
Last year we broke the story about the lingering effects of high unemployment and the news that the Equal Employment Opportunity Commission (EEOC) was hearing testimony about potential discrimination against unemployed people. The commissioners were considering adding the unemployed as a protected class, meaning a group that is eligible to claim discrimination.
We warned HR departments to take note of EEOC developments and to begin looking internally at their companies’ hiring practices to understand what is really going on. Data to analyze whether or not a company is hiring a fair demographic of unemployed people is fairly easy to isolate, because most companies use an applicant tracking system (ATS), and some even have more stringent OFCCP requirements that would require them to track and store applicant information.
Well, our predictions have come true. Earlier this month the District of Columbia, and the states of New Jersey and Oregon, enacted laws that prohibit employers and employment agencies from discriminating against job applicants based on their status as unemployed. These laws apply to all classes of employees, and observers expect that other states will enact similar legislation soon.
The New Jersey and Oregon laws are limited to discrimination in job advertisements on the basis of unemployment. More specifically, the laws prohibit all employers from publishing (in print or on the Internet) an advertisement for any job vacancy in the states of New Jersey and Oregon that contains any provision directly stating or otherwise suggesting that the qualifications for a job include current employment, or employer will not consider or review an application for employment submitted by any job applicant currently unemployed, or employer will only review applications for employment submitted by job applicants who are currently employed.
However, both New Jersey and Oregon still permit advertisements that contain qualifications for a job vacancy including, holding a current and valid professional or occupation license, certificate, registration, permit or other credential, or a minimum level of education or training or professional occupation or field experience, or stating that only applicants who are current employees of the employer will be considered for the position (internal job postings).
The District of Columbia, however, has gone one step further. In addition to prohibiting discrimination in job advertisements, it also has enacted prohibition of discrimination in hiring or refusing to hire on the basis of unemployment status.
While the intentions of these recently enacted laws are truly to benefit unemployed job seekers, the unintended consequence of these rulings could very well be that companies will have to institute a much greater degree of scrutiny of their hiring practices. Take, for example, the case in which a person who has been unemployed for two years applies for a job and is not selected over a person who is equally skilled but is currently employed; rejected candidates might be able to file discrimination claims against employers, claiming that they were denied employment because they were unemployed.
We strongly urge all HR leaders to review your policies and procedures, forms, applications and training materials, which may be impacted by this new legislation. The speed with which these actions are being enacted into law suggests that many states might just copy and paste the approach of Washington, D.C., and move to enact it quickly within their own states.
Another unintended consequence or benefit, depending on which side of the argument you find yourself, will be the increased use of contingent workers. Companies might now have even more reasons why they don’t want to hire permanent employees, so staffing agencies and managed service providers might see a significant uptick in demand and use of contingent workers.
Time will tell whether these laws will help to reemploy America. Will they increase permanent employment opportunities for the unemployed, or will they actually increase temporary arrangements instead? Either way, one thing is for sure: The longer it takes for the economy to recover, the more likely we are to see government legislation step in to try to help.
Michael Beygelman is the global practice leader and president, North America RPO, at Adecco Group. He can be reached at email@example.com