To be honest, this is one hell of a loop hole that the employer has been able to find and use to their advantage. One, it doesn't violate any policies with Equal Employment Opportunity law/act because its not discriminating against the person, just their time of being unemployed. Also, they're only asking for employees who are current in their work so there will be less of a training process for new additions to their company.
On the downside though, it's pretty messed up that a lot of equally qualified people are unemployed but still can't land a job because of the stigma or the time they have been unemployed. There are a lot of people struggling to find a job that matches what they're best at/what they studied for, but now that some states are picking up this kind of hiring method, its going to make things a lot harder for them to find jobs.
I honestly think its harmful to only want people currently employed, would be a backlash to those coming out of school or training with no experience but their school knowledge.
~Shwa