On March 13, 2013,  the New York City Council, over Mayor Bloomberg’s veto, passed a law prohibiting discrimination against the unemployed in hiring.  The law, effective June 11, 2013, amends the New York City Human Rights Law to expand the class of protected individuals to include the unemployed.  The law applies to employers in New York City who employ four or more persons (including employees and/or independent contractors).  The law defines an unemployed person as someone “not having a job, being available for work, and seeking employment” and prohibits covered employers from basing employment decisions “with regard to hiring, compensation or the terms, conditions or privileges of employment on an applicant’s unemployment.”  Additionally, it prohibits all employers from advertising that a particular position requires applicants to be currently employed or that the employer will not consider applicants who are unemployed.

The law contains several exceptions to the prohibition against discrimination on the basis of unemployment, allowing employers to consider unemployment when there is a “substantially job-related reason for doing so,” to inquire into the circumstances surrounding the applicant’s separation from prior employment, to consider and give priority to the employer’s current employees, and to negotiate and establish compensation or terms and conditions of employment based on the applicant’s level of experience. A particularly interesting and potentially significant portion of the law provides that plaintiffs can sue under a disparate impact theory.  Thus, if plaintiffs can prove that an employer’s facially neutral policy or practice had the effect of excluding the unemployed, then the employer must plead and prove as an affirmative defense that the policy or practice is based on a “substantially job-related qualification or does not contribute to the disparate impact.” 

Employers who employ employees in New York City should take steps to ensure that they comply with this new law.  These measures can include communicating with recruiting companies and human resources personnel to ensure they are properly trained to interview and screen candidates, and reviewing job postings to avoid prohibited statements regarding unemployment status.