Achieving Antidiscrimination Objectives through 'Safe Harbor' Rules for Cases of Chronic Hiring Aversion

13 Pages Posted: 30 Aug 2016 Last revised: 20 Jun 2017

Date Written: February 4, 2017

Abstract

This paper urges government agencies responsible for enforcing antidiscrimination laws to use existing authority to promulgate “safe harbor” rules to encourage employment of individuals who are unlikely to obtain employment because of the risks to employers of an erroneous hiring, coupled with the improbability of enforcement. Such perennially frustrated job seekers include individuals aged 65 and over, individuals with obvious disabilities whose employment entails significant accommodation costs, and individuals convicted of serious crimes.

Without detracting from traditional education and enforcement activities, the responsible administrative agencies should promulgate “safe harbors” for employers willing to hire individuals from these categories of high employment risk. The safe harbor would be in the form of a regulation, promulgated after notice and opportunity for public comment, that individuals from these categories may be hired as probationary employees for a defined, say three-year, period, during which they may be discharged without cause or consequence for the employer. (Other provisions of the antidiscrimination laws would be unchanged). If such employees are retained beyond the probationary period, they would be treated the same as other employees in all respects, including the full force of the antidiscrimination laws.

The benefit of the safe-harbor approach is that it directly addresses the concerns that motivate the employer’s non-hiring decision. The employer is given a relatively cost-free opportunity to evaluate whether engaging the employee from the high-risk category will in fact entail the predicted risks or whether an employee’s actual performance will belie the predicted concern. There are three principal objections to the safe-harbor approach. The first is that the standard may be set too low – that employers will be given a safe harbor when reliance on conventional antidiscrimination activities would yield the same employment outcomes for the workers in question. Stating the point in the somewhat different way, the concern is that the safe harbor will increase the incentive for noncompliance.

This kind of objection has less force in the present context because the safe harbor, under this proposal, would be available only for chronically unemployed or underemployed individuals in high-risk groups. Promulgation would occur only after considerable experience with conventional antidiscrimination enforcement. The second objection is a moral objection – that a safe-harbor approach recognizes and legitimates discrimination against individuals in the high-risk group. There is, of course, some force to this point but it ignores the fact that the underlying objective of the law is to promote the employment of individuals from discriminated-against groups. In addition, after the probationary period, the full force of the antidiscrimination laws will be restored.

The third objection is based on the projected inutility of the safe-harbor approach. Here, the argument is that employers will hire strategically to take advantage of the probationary period with no intention to retain these employees as potential regular employees at the end of that period. This is largely an empirical objection to be evaluated in the course of actual experience with safe-harbor induced probationary employment. In addition, it is difficult to understand what benefits would accrue to the employer in engaging in such a strategy. Hiring a new employee always entails training and workforce-integration costs, which most employers will not want to incur unless they hope to recoup that investment over the course of sustained employment.

This is a preliminary look at the potential benefits of a “safe harbor” approach to antidiscrimination goals. Creation of carefully cabined regulatory safe harbors for hiring employees from high-risk categories has the potential to spur improved utilization of such employees with limited harm to the moral force of the antidiscrimination regime.

Keywords: Discrimination, Employment, Civil Rights, Safe Harbor Rules, Hiring Bias, Employment Discrimination, Unemployment, Job Search, Uncertainty, Risk Aversion

JEL Classification: J64, J71, J78, J83, J88

Suggested Citation

Estreicher, Samuel, Achieving Antidiscrimination Objectives through 'Safe Harbor' Rules for Cases of Chronic Hiring Aversion (February 4, 2017). NYU School of Law, Public Law Research Paper No. 16-35; 2 Journal of Law & Public Affairs 1 (2017); NYU School of Law, Public Law Research Paper No. 16-35; NYU Law and Economics Research Paper No. 16-34. Available at SSRN: https://ssrn.com/abstract=2831149 or http://dx.doi.org/10.2139/ssrn.2831149

Samuel Estreicher (Contact Author)

New York University Law School ( email )

40 Washington Square South
New York, NY 10012-1099
United States
(212) 998-6226 (Phone)
(212) 995-4341 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
58
Abstract Views
746
rank
365,060
PlumX Metrics