Jobs Act Would Prohibit Discrimination Based on Unemployment Status

President Barack Obama’s American Jobs Act, introduced this week, includes provisions that would prohibit discrimination against job applicants on the basis of their unemployment status and that would levy fines of up to $1,000 a day.

However, one expert says he sees little chance of the proposal’s passage by Congress.

The unemployment discrimination proposal begins with Section 371 of the Jobs Act, which calls the proposal the Fair Employment Opportunity Act of 2011. It states,

“Congress finds that denial of employment opportunities to individuals because of their status as unemployed is discriminatory and burdens commerce” by “reducing personal consumption and undermining economic stability,” among other impacts.

The proposal states the act’s purpose includes prohibiting employers from disqualifying individuals because of their unemployed status.

Under the act’s provisions, employers and employment agencies would be prohibited from publishing in any medium an ad for an employee for any job that disqualifies unemployed individuals, or provides they will not be considered for positions. Firms still would be able to consider individuals’ employment histories and examine the reasons for their unemployment.

Fines for violating the act would include liquidated damages of up to $1,000 for each day’s violation and attorneys’ fees and costs. The act would pre-empt state laws.

Philip K. Miles III, an associate with the McQuaide Blasko law firm in State College, Pennsylvania, said he sees little chance of the proposal’s passage, either as a free-standing bill or as part of the overall jobs act. The proposal “essentially creates a new protected class and also creates a new litigation risk for employers seeking to hire employees,” he said.

“I think Congress would be very hesitant to increase risks in the hiring process because it may have some chilling effect on businesses’ hiring, and of course there’s a very partisan divide” over any White House proposal right now, Miles said.

In February, the Equal Employment Opportunity Commission held a hearing on the issue of whether employers are hiring only the employed, and if this has had a disparate impact on protected groups.

Judy Greenwald writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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