An investigation is underway by the Equal Employment Opportunity Commission after news accounts last spring alleged companies were refusing to hire jobless applicants for open positions. The EEOC met Wednesday to determine if the practice is widespread and if it violates federal jobs discrimination laws, just a day before the Labor Department announced 410,000 people sought unemployment assistance last week, a jump of 25,000 over the previous week.
The overall unemployment rate is 9 percent, with 14 million people out of work, but the jobless rate is much higher for minorities and young adults. The investigation is zeroing in on whether excluding the unemployed has a greater effect on blacks, Latinos, and other ethnic minorities. The current jobless rate among blacks is 15.7 percent, 11.9 percent among Hispanics, according to the Bureau of Labor Statistics.
While the EEOC, which enforces job discrimination laws, has yet to make a ruling, outside groups testified Wednesday. Representatives from the National Employment Law Project, National Women’s Law Center, and Economic Policy Institute said that it’s probably discriminatory to not consider employing an unemployed individual, and that restricting applications to the currently employed disproportionately places a heavier burden on people of color, women, and disabled workers.
Representatives who spoke on behalf of the employers said they were unaware of a significant number of cases of this practice and that it has been exaggerated. They did acknowledge, however, that the automatic exclusion of the unemployed does not constitute “due diligence” in the screening of job applicants.
Representatives from the Labor Department say they are aware of anecdotal reports that some recent company advertisements have discouraged the unemployed from applying. One of the more prominent examples came from Sony Ericsson last year, which posted an advertisement for a job that was restricted to those currently employed. After the media found out, the company removed the restriction.
The issue is hard to quantify because many job postings remain internal and never go public, according to the Labor Department.