From an I/O psychologist’s perspective, a number of thoughts occurred to me before even reading the article:
1. Since “employment status” is not an EEOC protected class, like race or sex, the practice of summarily rejecting applicants who are currently unemployed (either short or long-term), by itself, likely does not violate discrimination laws.
2. However, given that the ranks of the long-term unemployed are disproportionately filled by blacks and older workers, the EEOC, as well as state governments, are increasingly likely to give this issue some scrutiny.
3. To my knowledge, there is no evidence or data to indicate that “employment status”, by itself, is a statistically valid predictor of subsequent job performance. For example, let’s say we have two hypothetical job applicants who are similar on a number of dimensions that employers typically assess (e.g. personality traits, cognitive ability, learning agility, education, experience, etc.). One of the applicants has been out of work for seven months, and the other has been out of work for only one month (or is currently employed). By itself, would that data point mean much, if anything? The real answer is that we likely don’t know. We could posit that the applicant who has been out of work for a longer period of time has skills that have atrophied, perhaps especially in fast-moving and technology-intensive industries such as information technology, and that skill loss would indeed make that potential employee less valuable to the employer. However, it may be plausible to advance a counter narrative, that the applicant who has been unemployed for a longer period of time, and then lands a job, may have heightened work motivation and will simply work harder, thus offsetting any skill loss.
4. I also wonder what this practice may do to a company’s “employer brand.” It is important to remember that the manner by which a company’s staffing decisions are developed and implemented have a profound impact on a range of stakeholders – including future potential applicants, current employees and even current line managers.