Do you prefer applicants who are currently employed? EEOC says not so fast

by on February 21, 2011 · 0 Comment POSTED IN: HR Cafe

A very close look at your recruiting and hiring practices may be in order, given new scrutiny by the EEOC.

Last week, the employment discrimination watchdog fired another warning shot across employers’ bows. After warning late last year that relying on credit checks in hiring may be illegal in some cases, the agency has now turned a searchlight on employers who, when recruiting, require that applicants be currently employed.

Unbalanced impact
At a public hearing staged by the EEOC last week, pro-employee experts testified that this practice may create a disproportionate impact on racial minorities, disabled workers and older workers. These are all protected classes, of course, so the implication is that screening applicants out based on unemployment may be illegal in some situations.

One of the experts, Algernon Austin of the Economic Policy Institute, said unemployment rates for African-Americans, Hispanics and Native Americans are higher than those of whites. And he said that when you compare only college-educated workers, the unemployment rate for Asians is also higher than for whites.

So, Austin concluded, limiting your hiring pool to the currently employed could put a heavier burden on all those minority groups. Other experts said this effect would extend to disabled workers and workers over 40.

On whose say-so?
But wait a minute – does the EEOC even have the authority to challenge this kind of hiring practice?

Over at the relatively liberal Workplace Prof blog, Northern Kentucky U. law professor Richard Bale isn’t so sure. He sees only a “tenuous” potential link between an employer’s refusal to hire laid-off workers and the workers’ membership in a protected class.

Bale says looking at an applicant’s current employment status may indeed be job-related.

He put it this way: “A recent layoff – like a time gap on a resume or a recent conviction for theft – is relevant to an employer’s attempt to find the best possible employee for a given job, notwithstanding any possible disparate impact. It’s a red flag that should cause the employer to dig deeper.”

Widespread or not?
Many recruiters pay attention to whether an applicant is working or not. But just how prevalent is the practice of actually requiring candidates to be currently employed?

One of the experts at the hearing, U. of Colorado associate law prof Helen Norton, says she’s not aware of any statistical data. But, she says, she has seen employers advertise jobs ranging from electronic engineer to restaurant or grocery manager to mortgage underwriter with the stated caveat that only currently employed candidates will be considered.

“Some employers may use current employment as a signal of quality job performance,” Norton says. “But such a correlation is decidedly weak. A blanket reliance on current employment serves as a poor proxy for successful job performance.”

HR’s job
So what’s a careful HR person to think – and do?

  • First, remember that after the EEOC issued its warning about credit checks, it quickly followed up with a nationwide lawsuit against Kaplan Higher Education Corp., an education and testing service provider. So it’s possible this new focus on considering only the currently employed is also a harbinger of lawsuits soon to come. You don’t want to be out on a limb if the EEOC starts sawing.
  • But second, keep in mind that the EEOC seems to be aiming at employers who out-and-out exclude candidates who aren’t currently employed. You’re probably on safe ground if you use employment status as one of the factors you consider in hiring, along with demonstrated experience, performance on your own pre-employment tests, references, background checks and so forth.

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