New York City Employers Beware – New Law Prohibiting Unemployment Discrimination to Take Effect in June

The New York City Council has enacted sweeping legislation that amends New York City's Human Rights Law (NYCHRL) by adding unemployment status as a new protected category. Introductory Bill No. 0814-2012-A.Pursuant to this new unemployment discrimination law ("Law"), which applies to employers with four or more employees and takes effect on June 11, 2013, "an employer, employment agency, or agent thereof shall not base an employment decision with regard to hiring, compensation or the terms, conditions or privileges of employment on an applicant's unemployment." The Law further prohibits employers and employment agencies covered by the NYCHRL from including in an advertisement for any job vacancy provisions indicating that "being currently employed is a requirement or qualification for the job" or that individuals will not be considered for employment "based on their unemployment." Under this Law, the terms "unemployed" and "unemployment" are defined as "not having a job, being available for work, and seeking employment."

In enacting the Law and amending the NYCHRL, the New York City Council has placed an individual's unemployment status on equal footing with other protected classifications, such as age, race, creed, national origin, and disability. Individuals who contend that they have been discriminated against on the basis of their unemployment status will have the right to file a charge of discrimination with the New York City Commission on Human Rights or to pursue a private action in court.

Individuals claiming to be victims of discrimination based on their unemployment status will also be able to pursue discrimination claims based on a disparate impact theory. Employers may avoid disparate impact liability by pleading and proving an affirmative defense that the complained-of policy or practice "has as its basis a substantially job-related qualification or does not contribute to the disparate impact." A "substantially job-related qualification" includes, but is not limited to, "a current and valid professional or occupational license; a certificate, registration, permit, or other credential; a minimum level of education or training; or a minimum level of professional, occupational, or field experience." Notably, unemployment discrimination claimants who demonstrate that a group of policies or practices results in a disparate impact need not demonstrate which specific policies or practices result in disparate impact. If such claimants produce substantial evidence that an alternative policy or practice resulting in less disparate impact is available to the employer, they will prevail unless the employer proves that such alternative policy or practice would not serve it as well.

An exception to the new Law's broad prohibitions permits employers to consider an applicant's unemployment "where there is a substantially job-related reason for doing so." The Law also allows employers to inquire "into the circumstances surrounding an applicant's separation from prior employment." Employers, moreover, are not precluded from considering or advertising "any substantially job-related qualifications, including but not limited to: a current and valid professional or occupational license; 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 Law further permits employers to give priority to current employees when filling vacant positions or setting compensation, and to set compensation and other terms or conditions of employment based on an applicant's "actual amount of experience."

Employers in New York City, as well as those otherwise engaging in recruitment activities there, should ensure that their hiring practices and employment advertising policies comport with the requirements of this new unemployment discrimination law. Position descriptions, employment ads and other recruitment-related documents should be carefully reviewed and, where applicable, revised accordingly. Employers should also inform human resources professionals, hiring managers and all those who fulfill that role in New York City about the requirements of the new Law. In this way, employers can take effective steps in order to ensure that employment decisions are not based on unemployment status.