One of the more insidious catch-22s to invade the financial jobs market is the fact that some companies refuse to hire anyone who is currently unemployed. To put it another way, to get a job at that company, you have to have a job somewhere else. Fortunately, for the hundreds of thousands of financial services professionals who have lost their jobs in the past few years, many states are considering rules to make that illegal.
More than a dozen states are considering legislation to make it illegal for companies to discriminate against the unemployed, the Wall Street Journal reports, saying proposals from Connecticut to California range in scope from banning advertisements that require current employment to allowing unsuccessful job candidates to sue businesses under the same discrimination laws that apply to bias on the basis of religion, race, gender or national origin.
Not all banks and other financial firms seek out employees who are working rather than pounding the pavement. One recruiter says her clients like at least some of their new recruits to come from a work environment.
“I haven’t personally experienced a client specifying that unemployed need not apply and I don’t think companies have ‘policies’ against the unemployed,” Jo Bennett tells eFinancialCareers. Bennett is a partner with executive search firm Amrop Battalia Winston in New York City who focuses on financial and professional services.
“Clients do not like search firms to present a whole slate of unemployed people," she admits. “Rather, they want to know that they are being shown the best of the best—both unemployed as well as employed."
All the same, state regulators say they see a bias growing at a time when the U.S. has an 8.3 percent unemployment rate. Some companies have gone as far as to explicitly advertise that they won't hire someone who isn't currently employed.
Some states are hoping to pass laws to prevent that, as did President Obama in a federal jobs package that failed to find favor with Congress last year.
Critics of the laws say they'll place undue burdens on businesses. "Creating a protected class of people who bring lawsuits is just going to benefit the people who bring the lawsuits," Robert Topel, a labor economist at the University of Chicago Booth School of Business, told the Journal.
But in New Jersey—the first state to pass this kind of legislation—it is no longer legal for employers to state in their job ads that they will refuse to hire unemployed candidates. Employers will face a $1,000 penalty for the first offense and $5,000 for subsequent offenses.
Only one company—industrial cleaning systems manufacturer Crestek, Inc.—has been cited for allegedly violating the law since it went into effect last June.
"We are challenging this,” Crestek attorney Robin Lord, told the Journal. “As a private employer, the government has no right in legislating how you hire and what's in your business's best interest."