Good news and bad news: Workers are back

The latest government statistics show that unemployment is falling as the economy recovers. It’s a trend that both helps and hurts employers.

The Department of Labor in January reported that the economy added a robust 284,000 jobs per month during the last quarter of 2015. The unemployment rate was just 5% in December. But those are just the headline numbers.

Another DOL report—the Household Survey—showed that,  compared to just a few years ago, more people are now attached to the labor force. During the Great Recession, labor market participation rates fell 3.1%, reaching a historic low of 62.8%. However, the latest Household Survey report shows that 996,000 individuals rejoined the workforce in 2015. Many simply stopped looking for work in the depths of the recession.

For employers, the rebound is both good news and bad news. The good news: There are now more people vying for the jobs that are open. The law of supply and demand says that will help moderate wage growth pressure on employers. The bad news: More job applicants almost inevitably means more employment-related lawsuits, especially those alleging some form of bias.

It’s more important than ever for employers to be careful about how they advertise jobs and screen and interview applicants.

Hiring for Attitude D

For example, applicants who have been out of work may have stale skills that would make an employer think twice before offering a job. That can be risky because returning workers in some regions tend to skew older. And that can open up charges of age discrimination.

Employers should also make sure that the states in which they operate haven’t enacted bans against discriminating against the long-term unemployed. For example, New Jersey made discriminating against the unemployed illegal in 2011. Oregon followed suit in 2012. In addition, some municipalities, such as New York City, have done the same.

Make sure you are up to speed on new employment laws enacted in your state in 2015. Check out the National Conference of State Legislatures state-by-state reference guide.