By Brendan O'Brien

Feb 12 (Reuters) - A proposed law that would prohibit employers in New York City from discriminating against job seekers who are out of work would present new challenges for employers, legal experts said.

The bill, if enacted, would prohibit employers from using an applicant's employment status to make a hiring decision and would allow individuals to file a civil lawsuit rather than taking their claim to a regulatory body.

The New York City Council passed the bill 44-4 on Jan. 23. Mayor Michael Bloomberg has said he plans to veto the bill, but supporters of the measure have the required votes needed to override a veto.

Barbara Hoey, a shareholder at Littler Mendelson, said the law could open a flood of claims.

"This gives every disgruntled applicant who is unemployed the right to bring a claim," Hoey said.

If the law is enacted, employers may shy away from asking candidates questions about gaps in their resume for fear of being sued, according to Hoey.

"There are a dozen legitimate things you could have been doing while you weren't working, but I don't want to hire you if you have been laying on your mother's couch eating Cheetos," she said.

The law would also make it illegal for employers to post job advertisements requiring candidates to be currently employed. It makes exceptions for employers who require an applicant to have a valid professional license or a minimum level of education or training.

Employers could be liable for back pay, front pay, a civil penalty of up to $250,000 and injunctive relief, such as a cease and desist order.

Derek Smith, of the Derek T. Smith Law Group, who represents employees in discrimination cases, said he supported the law, saying it would not lead to a spike in litigation. This is because any lawsuit would need to overcome evidentiary thresholds, a difficult standard.

"In this day and age, with this economy, being unemployed doesn't have the stigma that it used to have when our economy was better," Smith said.

The seasonally adjusted unemployment rate in New York City was 8.8 percent in December, 1 percentage point higher than the national rate, according to the Department of Labor.

The proposed measure in New York would be an amendment to the city's human rights law. Private right of action is one of the enforcement mechanisms allowed in the city's human rights law.

Lawmakers in the District of Columbia, New Jersey and Oregon have passed similar legislation, although those laws do not allow an individual private right of action. Nor do they allow a local body such as the city's Commission on Human Rights to take action.

Instead, laws in Washington, New Jersey and Oregon are enforced by state or district regulatory bodies. Lawmakers in more than a dozen states such as California and Florida have considered or are considering similar legislation.

The bill is Int. No. 814 in the New York City Council.

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