United States: New York City Council Passes Law Prohibiting Discrimination Against Unemployed, Overriding Mayor's Veto

On March 13, 2013, the New York City Council voted to override Mayor Michael Bloomberg's veto of Bill Number 814-A, which prohibits employers from discriminating against job applicants on the basis of employment status. Although other jurisdictions, including New Jersey, Oregon and Washington D.C., have enacted similar legislation, New York City's new law, which permits an applicant to sue an employer directly for damages, is the most far-reaching of this kind of legislation enacted to date.

Background

In the wake of the most severe economic downturn since the Great Depression and news of persistently high unemployment, reports of widespread bias on the part of employers and recruitment agencies against hiring the unemployed have garnered national attention. Researchers at the UCLA Anderson School of Management documented the phenomenon in a recent study entitled "The Stigma of Unemployment: When Joblessness Leads to Being Jobless."1 In July of 2011, the National Law Project (NELP) also reported on the prevalence of job postings that expressly limit consideration to the "currently employed."2 These practices have been widely criticized by opponents for deepening the hardships faced by those struggling to return to the workforce and exacerbating the crisis levels of long-term unemployment that Americans across the county continue to face.

According to the New York City Council, New York City residents, in particular, are struggling to find work. According to the New York State Department of Labor, in 2012 the unemployment rate in New York City was 9.4 percent, exceeding both the national average (8.1 percent in 2012) and the New York State average (8.5 percent in 2012). Many of New York City's unemployed have found themselves without employment for prolonged periods of time. The Fiscal Policy Institute reported that in 2012 more than half (51 percent) of unemployed New York City residents had been seeking work actively for more than six months (compared to 39 percent nationally and 44.5 percent in New York State). Although long-term unemployment has taken a toll on all City residents, women and minorities, middleaged workers and the least-educated are seen as the most severely impacted.

Bill Number 814-A seeks to remove the disadvantage of unemployment for New York City's job-seeking unemployed by prohibiting employers from considering unemployment status when making employment decisions. Originally passed by New York's City Council in January, the bill was vetoed by Mayor Michael Bloomberg who, characterizing the bill as "misguided," predicted it would create more lawsuits than jobs.

Coverage

Bill Number 814-A will apply to employers and/or employment agencies in New York City with at least four employees.

Prohibitions

The law, which becomes effective on June 11, 2013, amends New York City's Human Rights Law, N.Y. Admin. § 8-102 to include provisions that make it unlawful to exclude the unemployed who are "available for work and seeking employment" from consideration for employment. Specifically, Bill Number 814-A expressly prohibits employers from: "

  • basing an employment decision related to hiring, compensation, or the terms, conditions or privileges of employment, on an applicant's unemployment status; and "
  • publishing an advertisement for any job vacancy that lists current employment as a requirement and/ or qualification for the job, or that unemployed individuals will not be considered for employment.

Exceptions

Despite the sweeping nature of the law, it does contain certain important exceptions. Among these are a right to consider an applicant's unemployment status (i) when there is a "substantially job-related reason for doing so," or (ii) when it is necessary to inquire into the "circumstances surrounding an applicant's separation from prior employment." Further, nothing in the law is to be interpreted as prohibiting an employer from considering any "substantially jobrelated qualifications," when making employment decisions with regard to hiring, compensation, or the terms, conditions or privileges of employment. These substantially job-related qualifications include: "current and valid professional or occupational licenses; a certificate, registration, permit or other credential; a minimum level of education or training; or a minimum level of professional, occupational or field experience." The new law also permits an employer to limit the applicant pool to its own current employees and to determine compensation based on actual level of experience.

Right of Action/Civil Penalties/Damages

Significantly, Bill Number 814-A permits a person who believes that he or she has been discriminated against because of unemployment status to bring an action in court for damages, injunctive relief and other appropriate remedies, or to make a complaint to the New York City Commission on Human Rights (Commission). Upon finding that an employer has unlawfully discriminated against an applicant because of unemployment, the Commission may order the employer to "cease and desist" from its discriminatory practices. The Commission also could require that the employer hire a prospective employee; award back pay and front pay; and/or pay compensatory damages.

In addition to damages, the Commission also may impose a civil penalty of $125,000 on an employer found to have engaged in an unlawful discriminatory practice. If it finds that the unlawful practice resulted from the employer's "willful, wanton or malicious act," the Commission may impose a civil penalty in an amount up to $250,000.

Failure to comply with an order of the Commission may result in a further civil penalty of $50,000 and imposition of additional penalties of no more than $100 per day. Further, any person found to have willfully violated an order of the Commission may be found guilty of a misdemeanor, punishable by imprisonment for up to one year and/or a fine of not more than $10,000.

Comparison to Similar Laws

New York City is only the fourth jurisdiction to have enacted legislation limiting consideration of unemployed status in the hiring process. However, New York's law appears to be the most sweeping and potentially consequential of the group.

New Jersey and Oregon Laws

New Jersey and Oregon were the first to enact legislation on the subject, in June 2011 and March 2012, respectively. Unlike the New York City law, both of these earlier laws were limited to regulating the content of job advertisements. The New Jersey law, NJSA 34:8B-1, declared it unlawful for a job vacancy advertisement to include current employment as a qualification for the position, or state that a currently unemployed applicant would not be considered or that only employed applicants would be considered. An employer that violates the law is subject to a civil penalty of $1,000 for a first violation, $5,000 for a second violation, and $10,000 for each subsequent violation. However, penalties are to be collected by the Commissioner of Labor and Workforce Development, and not by an affected employee. Further, the statute expressly declares it is not to be construed as creating a private cause of action against an employer. The Oregon law, ORS Ch. 659A, contains similar prohibitions and likewise is enforced strictly by an agency, the Commissioner of the Bureau of Labor and Industries, which assesses civil penalties for violations that are limited to $1,000 for each violation.

The District of Columbia Law

The District of Columbia enacted the "Unemployed Anti-Discrimination Act of 2012," which became effective on May 31, 2012. Like the New Jersey and Oregon laws, the D.C. Act also bans job advertisements that identify unemployment as a disqualifying factor for a job candidate. Unlike the laws of New Jersey and Oregon, the D.C. Act prohibits employers from failing or refusing to consider or hire an applicant because he is unemployed — which is defined as one who "does not have a job, is available for work, and is seeking employment." However D.C.'s law contains an important limiting sentence: it is not intended "to preclude an employer or employer agency from examining the reasons underlying an individual's status as unemployed, in assessing an individual's ability to perform a job or in otherwise making employment decisions about that individual." The law also makes unlawful retaliation against those who oppose an unlawful practice under its provisions.

Like New Jersey and Oregon, the D.C. law created no private right of action. Complaints of violation are filed with and investigated by the Office of Human Rights, which also has authority to assess penalties where it finds violations. Penalties per claimant are set at $1,000 and $5,000 for first and second violations and $10,000 per claimant for a third violation, but are capped at $20,000 irrespective of the number of claimants affected by a violation. Unlike the two earlier laws discussed above, penalties collected by the Office of Human Rights are distributed to the affected claimants.

Implications of the New York Law

New York's new law banning discrimination against the unemployed is the most consequential of the legislative enactments on the subject to date. It stands alone among them in offering unsuccessful candidates both the right to sue in court and the opportunity to collect damages.

It also raises questions that for now are unanswered. The law broadly forbids basing employment decisions regarding hiring, compensation, or the terms, conditions or privileges of employment, on the unemployment status of an applicant. Will this injunction preclude employers from considering periods of unemployment when considering a person's level of experience in deciding how much to compensate a new hire or current employee? Will an employer be forbidden from viewing an applicant with recent volunteer experience, but no employment, more favorably than an unemployed candidate who has nothing on his/her resume for the same period preceding the application? Will these circumstances qualify as "substantially jobrelated reason[s]" for considering the applicant's or employee's periods of current or past unemployment in making decisions on whether to hire, or on compensation or other terms and conditions?

On a more practical plane, will the law, its manner of enforcement or its application by the courts effectively penalize employers for their knowledge of the unemployed status of applicants? It is inevitable that employers who are aware of an applicant's unemployed status will be at some greater risk of a finding that they considered it as a factor in rejecting that applicant for employment. However, until the Commission begins making findings and the courts have construed the law, it is difficult to predict the degree of risk that employers will assume by their knowledge of an applicant's unemployment, much less by the background checking and other activities in which they engaged that uncovered the information about the applicant's unemployment.

It would be imprudent for employers in New York City, in the absence of a record of draconian enforcement and/or interpretation of the new law, to take any drastic measures in response (such as discontinuing or limiting reasonable background check practices or ignoring gaps in resumes and applications). However, in the period that precedes its mid-June effective date employers have an opportunity to eliminate recruitment and hiring practices and documents that would create an unnecessary risk of liability even under a reasonable interpretation of the law. Among the actions that New York City employers should consider taking before June are:

  • Examining all current and scheduled job advertisements to ensure no requirement of current employment is stated.
  • Review recruitment and hiring procedures, instructions, scripts and policies to ensure that no reference to a requirement or qualification of current employment is made as a condition for hire.
  • Instruct (preferably in writing) recruiters and all those involved in the hiring process in New York City to avoid discussion or comment during interviews on the unemployment status of any applicant unless deemed job-related in advance by Human Resources, preferably with advice of counsel.
  • Review internally and with counsel practices, such as background and reference checking, that likely would disclose current employment status and confirm that the practice can be justified;
  • consider if and how information on unemployment status can be withheld from hiring decision- makers; and
  • identify in advance, where possible, instances where substantial job related reasons will exist for discussing unemployment status with applicant.

Now is the best time to consider whether and how changes are needed to current practice and/or procedure in order to comply. Consult your regular Schnader lawyer to prepare your company's compliance with this new law.

Footnotes

1 Ho, Geoffrey C.; Shih, Margaret; Walters, Daniel J.; and Pittinsky, Todd L. (2011). "The Stigma of Unemployment: When Joblessness Leads to Being Jobless." UC Los Angeles: The Institute for Research on Labor and Employment. Retrieved from: http://www.escholarship. org/uc/item/7nh039h1.

2 National Employment Law Project, "Hiring Discrimination Against the Unemployed," July 12, 2011, http:// unemployedworkers.org/page/-/UI/2011/unemployed. discrimination.7.12.2011.pdf?nocdn=1. NELP is an advocacy group supporting the interests of employees.

www.schnader.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions