March 8, 2012

Believe it or not, employment ads by businesses and recruiters are increasingly showing up with phrases like these: No unemployed candidates will be considered. Applicants must be currently employed.

While there is no hard data on the prevalence of such ads, a survey by the National Employment Law Project of heavily trafficked job sites, such as and, found numerous ads with some variation of the above phrasing.

not hiring

There is currently no federal law against excluding the unemployed from your job applicant pool, but that may be changing. The Equal Employment Opportunity Commission, which enforces job discrimination laws, is looking into the practice.

While the unemployed are not a protected group, excluding them from job consideration could invite a lawsuit for disparate impact discrimination. That’s because blacks, Hispanics and Native Americans have higher rates of unemployment than whites. The disabled and older people may also be disproportionately affected by such policies.

New Jersey recently passed a law that would fine employers up to $10,000 for posting job ads that explicitly discriminate against the jobless. New York and Michigan are also considering such laws. The Fair Employment Opportunity Act of 2011 was recently introduced in the U.S. House of Representatives. The purpose of the law, known as H.R. 2501, is to protect unemployed job seekers by prohibiting employers and employment agencies from excluding applicants solely because they are not currently employed.

Besides legal concerns, some experts have raised questions about the ethics and business sense of such a practice. The assumption behind such policies is presumably that employers don’t lay off their best employees, so people who lose their jobs must be somehow inferior.

But that line of thinking may not hold water in a long-term down economy when large numbers of layoffs have been caused by the economic environment. Many people are unemployed for reasons not related to their job performance, and excluding the unemployed from your applicant pool may mean that you are not always getting the best person for the job.

This article was originally posted on March 8, 2012 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at