D.C. Councilmember John Ray is expected to announce today that he will introduce a bill to crack down on career-counseling services that accept advance fees from job seekers but fail to produce employment.
Ray said he will introduce the bill after the August recess and that, if it passes, the law will bring the District in line with 44 other states that already ban such operations.
"In this period of high unemployment, it is all the more urgent that we strengthen the law to ensure that job applicants get what they pay for when they turn to employment agencies for help," Ray declared.
Ray's bill would close a loophole in the present law that allows employment counselors to escape regulations that apply to employment agencies. Counselors would be subject to a $20 annual licence fee. Agencies currently pay $500 a year.
No employment agency could require a job applicant to pay a fee unless the agency has made an appointment with an employer. And no applicant would be required to sign any document obligating payment to an agency before accepting a job.
This prospective change in the law comes about as the result of stories in the print and broadcast media about career counseling firms that require advance payment of up to 10 percent of expected salary without promising to find the person a job.
One of the most egregious examples nationwide was found in the District. An expose' last year on CBS television's "60 Minutes" on a firm called National Executive Search brought a deluge of calls to the D.C. government and a $24 million class action filed by disgruntled clients.
NES filed for bankruptcy shortly afterward. But the principals apparently have continued the same type of enterprise under different names, John William Costello Associates and Outsearch Inc. John William Costello originally persuaded the city government in 1962 to exclude career counseling services from regulation.
According to the CBS expose', NES and other similar firms specialized in helping job seekers analyze their skills and write creative resumes. The firms would then mail the resumes to a large number of corporate personnel departments. Some of the clients interviewed complained they never even received a job interview, let alone a job, after having paid NES thousands of dollars.