On March 13, 2013, one year after we first introduced you to the idea that an individual’s unemployed status may be considered a protected characteristic, the New York City Council, voted into law legislation preventing companies from discriminating, in job advertisements or in the hiring process, against a job applicant who is unemployed. While New Jersey, Oregon and the District of Columbia have enacted similar laws, New York City has broken ground with Bill 814-A by granting unemployed applicants a private right of action, allowing them to sue alleged violators for damages in court – literally creating a new protected class of job applicants: the unemployed.

The new law, which is set to take effect on June 11, 2013, amends the New York City Human Rights Law (“NYCHRL”). Specifically, the law protects those “not having a job, being available for work, and seeking employment.” It prohibits employers from advertising job vacancies that, in any manner, make current employment a prerequisite for consideration or state that unemployed candidates will not be considered for the position. The law also makes it illegal for employers to consider a job applicant’s unemployment status in hiring and other employment decisions unless the employer has a “substantially job-related” reason for doing so. A “substantially job-related qualification” is defined by the law as 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.” According to the law, an employer is allowed to inquire in to the circumstances surrounding an applicant’s separation from prior employment. It is worth noting that 814-A does not apply to actions taken pursuant to a collective bargaining agreement.

Importantly, because 814-A amends the NYCHRL, an unemployed job applicant who brings a claim alleging that he/she was discriminated against because of his/her unemployment status can avail him/herself of all of the privileges, protections and remedies available under the NYCHRL. Therefore, an unemployed job applicant, who believes he/she has been discriminated against on the basis of his/her unemployed status, may file an administrative complaint with the City Commission on Human Rights (“CCHR”) or sue in court. If a complaint is filed with the CCHR, the CCHR can order that the employer cease and desist from maintaining discriminatory hiring practices, force an employer to hire the aggrieved candidate and order back and front pay awards, including compensatory damages for emotional distress and other nonmonetary damages. The CCHR can also impose maximum civil penalties ranging from $125,000 to $250,000 per violation, depending on the nature of the employer’s conduct. Moreover, if the unemployed job applicant chooses to go to court, the aggrieved party can, in addition to the damages recoverable above, recover punitive damages, injunctive relief and be awarded attorney’s fees and costs at the court’s discretion.

Employers should also be aware that a claim alleging that an employer’s hiring practices disparately impact the unemployed may be brought on a class-wide basis without the unemployed needing to identify the specific offending policies or practices. This may leave many employers open to class actions while subjecting the plaintiff to minimal pleading standards. An aggrieved applicant or class may also defeat an employer’s legitimate hiring practice if he or she can prove that a better suited “alternative policy or practice with a less disparate impact is available” and the employer cannot establish that the plaintiff’s proposed alternative would not serve the entity as well.

As a result of New York City’s high unemployment rate, this is likely going to be a highly litigated area of the law. Employers should look at their job advertisements and hiring practices to ensure compliance with this new legislation. Specifically, an employer’s recruiting practices, interview techniques, and job requirement postings should be reviewed.