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A recent informal study by the National Employment Law Project found numerous online job postings that said, “must be currently employed.” Employers can’t put restrictions on race, religion or gender in a help wanted ad, but now a new category, employment status, may also be prohibited in employment advertisements in California.

California Assembly Bill No. 1450, would make it against the law for an employer or employment agencies to advertise, refuse to consider, or to disqualify applicants based upon their employment status. The only exception would be based on a bona fide occupational qualification or other provision of the law. If a business violated the law, it could be fined $1,000 for the first violation, $5,000 for the second violation and up to $10,000 for each subsequent violation.

Michael Allen filed AB 1450, which at the end of January was before a committee in the Assembly.  The Democrat from Santa Rosa said, “It’s the same as excluding a particular religion or minority group – it’s wrong.” Allen feels the “unemployed” groups that would also be affected include groups such as recent college graduates, veterans, and other military personnel.

Opponents to AB 1450 feel Sacramento is tying business’ hands as they try to recruit top talent for their company in a flooded job market. In a recent interview, Joel Fox, president of the Small Business Action Committee, said, “The Legislature shouldn’t be running their business for them.”

In testimony before the U.S. Equal Employment Opportunity Commission, Helen Norton, associate law professor at the University of Colorado said she has seen the “employed only apply” ads from engineers to grocery store workers. “Some employers may use current employment as a signal of quality job performance,” Norton testified. “But such a correlation is decidedly weak. A blanket reliance on current employment serves as a poor proxy for successful job performance.”

California would become the second state in the country that would prohibit “employed only” job advertisements if AB 1450 passes. New Jersey passed a similar law against that type of recruiting.

In November, a Ewing, New Jersey manufacturer of ultrasonic cleaning equipment was the first in the nation to be fined $1,000 for violating the help-wanted ad law in a posting for a service manager. The ad read in part, "Must be currently employed" because the owner wanted someone "at the top of his or her game” and not people who have been unemployed for 18 months.

The business owner is contesting the fine because he says he was not notified by the state about the new requirement. The business was not caught by a state agency monitoring help wanted ads, but instead by the mother of an unemployed man who had clipped the job posting out of the newspaper and sent it off to state officials.

New Jersey, and now California, are not the only governments discussing the treatment of the unemployed.  The issue is getting national attention as well. Part of President Barack Obama’s jobs bill that has stalled in Congress would prohibit businesses with 15 or more employees from refusing to either consider or to even offer a job to someone who is unemployed. It would also apply to headhunters or other employment agencies by prohibiting them from disqualifying job applicants because they did not currently have a job.

The downturn in the economy has cost a lot of qualified workers their jobs. Currently, according to the US Department of Labor, California’s unemployment rate is at 11%, which is the second highest in the country. Neighboring Nevada has the highest unemployment in the nation at 12.6%. The national unemployment rate at the end of 2011 was at 8.5%. California’s unemployment rate peaked in September of 2010 at 12.5%.

Even if AB 1450 fails to make to the Governor’s desk, it’s makes good legal sense and a smart business decision for a company to not put a requirement on employment status in a help wanted ad.  It could open up your business to a discrimination lawsuit, since certain groups of society have higher unemployment rates than others.

Top Floor Legal is a boutique business law firm providing general counsel services on a fixed monthly fee. With our model, your business can take care of your legal needs with no worry about how much it is going to cost or whether you are fully protected. Because our engagements are month-to-month, we are forced to please you every month by providing you with constant communication, quick turnaround times, and risk conservative expert advice.


Bill 1450 in California Assembly

EEOC Hearings on Treatment of Unemployed
National Employment Law Project Study

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