Wednesday, May 22, 2019

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III. LEGISLATIVE AND ADMINISTRATIVE PROPOSED REMEDIES TO THE UNEMPLOYMENT DISCRIMINATION PROBLEM

A. Employment Development Programs

Several programmatic solutions have been proposed to address the problem of unemployment discrimination. One potential solution is a program that allows individuals to work for potential employers free of charge for a set number of hours in hope that the individual will become employed. Georgia implemented such a program. The Georgia Works Program allows job seekers to train with potential employers and work up to twenty-four hours a week for as long as eight weeks on a volunteer basis. The program gives potential employers an opportunity to assess the applicants at no cost and there is no obligation to hire a trainee. According to the Georgia Department of Labor website, about sixty percent of participants have received paying jobs through the program.

President Obama proposed a similar program as part of the 2011 American Jobs Act titled the Bridge to Work Program. The Act provides funds and guidelines for states to set up programs similar to the Georgia Works Program that allow people receiving unemployment benefits to become part of a work-training program and work at no cost to employers, preparing them to potentially become employed after a specified time period.

A program of this type has great potential to help remedy the unemployment disparity. The training and experience can make the job candidate more marketable for future opportunities. It may also help close the gap in a candidate's work history if he or she has been unemployed for an extended period of time. Although the purpose of the program is not to give employers free labor, employers benefit in being able to assess potential employees in a more practical and realistic setting. Potential employees are less likely to be denied based on superficial grounds and more likely to be assessed for their actual demonstrated work ability.

B. Employer Tax Incentives

Another potentially successful remedy to address the unemployment disparity issue is tax incentives for hiring long-term unemployed individuals. This is not a new concept. In 2010 Congress enacted the Hiring Incentive to Restore Employment Act (HIRE Act). Under that statute employers who hired unemployed workers before the end of the year could qualify for a 6.2% payroll tax incentive. The statute had the effect of exempting participating employers from their share of Social Security taxes on wages paid to newly hired workers who were previously unemployed and hired after a specified date.

The 2011 American Jobs Act proposed a $4,000 tax credit to employers for hiring individuals who have been looking for employment for over six months. This solution has tremendous potential to be successful. It is well documented that the government has great power to affect the behavior of its citizens through its power of taxation. However, this provision has also been aggressively criticized. In its current state, the provision allows the employer a tax break only for the year the long-term unemployed individual was hired. This creates a paradox because it gives the employer an incentive to then let go of the employee and hire a new unemployed candidate in order to continue to take advantage of the tax break. This issue can be remedied by potentially redistributing the current tax incentive so that instead of a $4,000 tax break for the year the employee is hired, the employer can instead receive a decreased tax break over the course of several years. A less persuasive remedy to this paradox would be to only allow employers to be eligible for a limited number of these particular tax breaks in order to deter employers from firing and hiring to repeatedly take advantage of the incentive.

C. Prohibiting Express Preference for Employed Applicants

Several states have enacted legislation making job advertisements that express a preference for currently employed applicants illegal. New Jersey passed such a law, and it became effective on June 1, 2011. Violators are subject to a fine no more than $1,000 for the first offense, $5,000 for the second offense, and $10,000 for each subsequent offense. The governor's message attached to the statute states that nothing in the act creates a private cause of action or allows an individual to sue an employer for violation of the act. While on its face this statute provides less protection for individuals by precluding a cause of action, this approach to ending unemployment discrimination is favored because it avoids increased litigation for employers and the challenge of defining a plaintiff's burden to be successful under such a cause of action. New Jersey legislators recognize that the statute may be a challenge to enforce, but it sends a message that such discrimination will not be tolerated. The 2011 Jobs Act also proposes a similar provision on the federal level.

Legislation banning a company from overtly expressing preference for currently employed applicants should be refined and enacted. The penalty perhaps should be somewhat harsher in order to encourage compliance and to effectively deter discrimination. Also, refinement is required to include companies that may not advertise a preference for employed applicants but utilize it as a major consideration for hiring. It would be unfair to impose an expensive burden on employers to report hiring strategies and require employers to keep records on all applicants. However, perhaps a more reasonable yet persuasive penalty would be to subject repeat violators to close monitoring of the company's hiring practices in order to look for patterns of discrimination based on employment status.

 

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