New York City has amended its Administrative Code to create a new protected class of workers. Beginning in June 2013, the New York City Administrative Code will prohibit discrimination based on an individual’s unemployment status.

Bill number 814-A makes it unlawful for a New York City employer to refuse to hire an applicant for employment on the grounds that he or she is unemployed, unless there is a “substantially job-related reason” for doing so. In addition, the Bill prohibits New York City employers from basing an applicant’s compensation on the applicant’s unemployment status. The Bill also makes it unlawful to state in a job advertisement that current employment is a requirement or qualification for the job, or that the employer will not consider individuals that are currently unemployed.

The new law, however, does not otherwise restrict an employer from inquiring into the circumstances surrounding the applicant’s separation from prior employment. Employers may also advertise and consider “substantially job-related qualifications,” 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. The Bill also does not prohibit an employer from hiring only its incumbent employees or otherwise give hiring priority to employees currently employed by the employer.

The new law also provides for a disparate impact claim under the theory of liability that the employer’s policies or practices resulted in a disparate impact on the unemployed. An employer could escape liability, however, if it establishes an affirmative defense that the employer’s policy or practice is based on a substantially job-related qualification (defined above) or otherwise did not contribute to the disparate impact. Where an aggrieved applicant is able to establish a disparate impact, the applicant will not be required to specifically identify which of the employer’s policies or practices caused the disparate impact. Unlike similar laws in New Jersey, Oregon, and the District of Columbia that only permit administrative agency claims, New York City’s law permits aggrieved job applicants to file a private civil action in court seeking damages, injunctive relief, punitive damages, and reasonable attorneys’ fees and costs.

New York City’s Mayor Michael Bloomberg had previously vetoed the Bill and called it “misguided” in its use of the subjective “substantially job related” standard. The Mayor was concerned that the Bill provides insufficient guidance to employers on how to engage in the hiring process without running afoul of the new law, and he warned of an impending flood of potentially baseless and costly litigation likely to result if the Bill were passed. Nevertheless, the City Council passed the Bill over the Mayor’s veto.

Over the next three months, New York City employers would be well advised to review their applications and job advertisements and to train their managers and hiring decision makers to avoid making decisions or imposing conditions that might violate this new law.