“Must Be Currently Employed.” Is Unemployment Discrimination Legal?

As a hiring manager, you cringe when you see gaps in employment. Thoughts of laziness, poor work ethic, difficult personality, or even trustworthiness creep into your assumptions. To avoid wasting your time, you’ve specified that applicants must currently be employed.

But is this legal?

The short answer is there’s no federal law banning you from excluding those who are unemployed. However, implementing the practice could get you into legal trouble. Here’s what I mean.

Unemployment Discrimination Could Create a Disparate Impact

From a legal perspective, being unemployed isn’t a protected class under Title VII of the Civil Rights Act (think gender, race, color, national origin, religion, age, disability, pregnancy, sexual orientation, genetic information, and veteran status.). However, screening applicants based on employment status could create a disparate impact on those in a protected class.

Disparate impact is unintentional discrimination that affects a protected group of people, even if the rule or action appears to be neutral. For example, if there were a disproportionate number of minorities in your labor market who were unemployed, or stay-at-home moms who were now ready to re-enter the workforce, requiring someone to currently be employed to be considered for a job would create a disparate impact on these candidates.

The same could be said for recruiting “recent grads” and “digital natives” for your position. Although the intent is to get someone who knows the latest in technology, you unintentionally discriminate against older applicants who graduated decades ago and don’t fit the “digital native” generation.

Unemployment Discrimination is Discouraged and Illegal in Several States

While there’s currently no federal standard, the “Fair Employment Opportunity Act of 2014” tried to create a federal law prohibiting this type of discrimination. It died in Congress, but Pres. Obama issued a memorandum for federal agencies to lead by example and not deny employment opportunities to the unemployed.

Several states (New Jersey, New York, Oregon, District of Columbia) have implemented their own laws that prohibit discrimination against the unemployed, while other states have made recent or former attempts of passing similar laws. Before establishing an unemployment discrimination standard, be sure to check your state laws first.

A Better Approach: Focus on Skillset, Experience and Talent

The better approach with recruiting is to focus on what a candidate has to offer instead of excluding someone based on a non-job-related classification. After all, it’s possible your best candidate has taken time away from work to enhance their skillset and knowledge to become more marketable.

If you notice gaps in employment, look past your assumptions and allow the candidate to explain what they’ve done with their time outside of the workforce. For more information or resources, please contact your HR Consultant here at Stratus.hr or complete the form below.

To help your company stand out from the competition and attract key talent in today’s tight labor market, please check out our free Hiring Guide.

unemployment discrimination

Unemployment discrimination might not be illegal from a federal standpoint, but it’s not a good hiring practice.










    Laura Lancaster, PHR, SHRM-CP

    Author Laura Lancaster, PHR, SHRM-CP

    Along with being a Master of Human Resources, Laura is a master of communicating and provides her clients with world-class customer service. She can really cut some rug on the country swing dance floor and enjoys musical theater in between motorcycle rides.

    More posts by Laura Lancaster, PHR, SHRM-CP