The job requirements have appeared all around the country. One ad, placed by a Texas electronics company looking for an engineer, stated the company would not “consider/review anyone not currently employed regardless of the reason.” In New Jersey, a Craigslist ad for assistant restaurant managers required that applicants “must be currently employed.”

In this economy, many companies fortunate enough to be looking for new employees can find themselves overwhelmed by the number of applicants who respond. In their quest to find qualified workers, some employers are stating they will not consider the unemployed. While the “must-be-employed-to-apply” philosophy may make sense, federal regulators are examining such policies, and at least one state has made it illegal.

Earlier this year, the US Equal Employment Opportunity Commission (EEOC) held a public meeting to examine how employers are treating unemployed job applicants. At the meeting, advocates of the movement to prohibit unemployment discrimination testified that unemployment discrimination has a “disparate impact” on minority, older and disabled workers because they currently face higher-than-average unemployment rates. And given the surplus of applicants for many jobs, employers are refusing to consider unemployed applicants at an increasing rate.

In addition to possible future legal ramifications, employers also need to consider the reputational risks related to these types of policies.

Policy perils
While the EEOC has yet to rule on the practice, some experts claim must-be-employed rules are illegal. Speaking before the EEOC at its February hearing, Christine Owens, executive director of the National Employment Law Project, said the practice is discriminatory under both Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967.

The EEOC is monitoring the practice, and no company wants to be the Commission’s test case. While the practice is not specifically illegal now, that could change. The Fair Employment Act of 2011, which was introduced into the US House of Representatives in March, would amend the Civil Rights Act to prohibit discrimination on the basis of unemployment.

Regarding the must-be-employed rules, employers should ask themselves if the practice is effective, or whether it is reducing the applicant pool. Before implementing a must-be-employed policy, employers should consider other approaches that will allow them to target and hire the right candidates, such as:

? Advertising selectively – Many companies use sites like Craigslist because they are cheap, simple and reach a wide audience. But such sites make it easy for applicants to quickly find and apply for many jobs. A more targeted approach may want to be considered.

? Adopting a technological approach – If filling many positions or excessive turnover are issues, consider investing in software to make the screening process less cumbersome. Allow people to submit applications online, then use search terms to weed out those who are not qualified.

? Screen candidates carefully – Before interviewing candidates face-to-face, spend a few minutes on the phone with those who seem most promising. For obvious legal purposes, document those discussions.