by Jackson Lewis
On October 7, 2005, the Office of Federal Contract Compliance
Programs issued its long awaited final rule regarding the definition of
an Internet Applicant entitled "Obligation To Solicit Race and Gender
Data for Agency Enforcement Purposes." The final rule will go into effect on February 6, 2006. Note: Although
the OFCCP has announced it will not extend the February 6, 2006
effective date of the new Internet Applicant rule, it will not cite contractors for 90 days following
the effective date for technical recordkeeping violations if the
contractor can demonstrate efforts towards compliance.
Specifically, a contractor will not be cited for failure to comply with
the rule's provisions provided it: (1) demonstrates that it is taking
reasonable steps to update its systems to comply with the rule,
including a projected date of compliance, and (2) collects and
maintains records according to the established procedures consistent
with OFCCP's pre-Internet Applicant rule recordkeeping requirements.
Under the final rule, an individual is considered an "Internet Applicant" if the following four criteria are met:
- The individual submits an expression of interest in employment through the Internet or related electronic data technologies ;
- The contractor considers the individual for employment in a particular position;
- The individual's expression of interest indicates the individual possesses the basic qualifications for the position; and
- The
individual at no point in the contractor's selection process prior to
receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position.
Background
For years the contractor community and the OFCCP were divided on the
definition of applicant. Since the definition of applicant determines
the size of the pools used for adverse impact analysis, the stage at
which a contractor identifies an applicant is significant: identify
early and the size of the pools (and thus potential liability) are
greater; identify later and the size of the pools (and potential
liability) decrease.
Many contractors insisted on counting applicants at the interview
stage, which was the first point they could observe the race and gender
of the applicant. This also was consistent with the belief of many
contractors that "true" applicants were only those who were "minimally
qualified." The OFCCP, on the other hand, insisted this was too late
in the process because too many individuals already had been screened
out. The "pre-minimally qualified" were applicants too, the OFCCP
argued, just not as qualified. Instead, it maintained the definition
had to start earlier and that anyone who expressed an interest in
employment was an applicant. This broad definition, the OFCCP
asserted, could include all unsolicited resumes or everyone in an
electronic applicant database. Not only did this exponentially
increase the size of the applicant pool (and therefore, the potential
for adverse impact), but it made collection of race and sex information
very difficult. Adding to the confusion, the definition of applicant
was not uniformly applied among the OFCCP's various offices.
With that as a backdrop, in late 2000 a governmental inter-agency
task force, (consisting of the OFCCP, Equal Employment Opportunity
Commission, the Civil Rights Division of the Department of Justice, and
Office of Personnel Management), was created to examine the thorny
issue of defining "applicant." After a wait of over three years, on
March 2, 2004, the EEOC published in the Federal Register a proposed
inter-agency guidance on the definition of applicant entitled "Adoption
of Additional Questions and Answers to Clarify and Provide a Common
Interpretation of the Uniform Guidelines of Employee Selection
Procedures as They Relate to the Internet and Related Technologies."
Shortly thereafter, on March 29, 2004, the OFCCP published in the
Federal Register a "Notice of Proposed Rulemaking; Request for
Comments" containing its own definition of "Internet Applicant." The
OFCCP's proposed definition, unlike the EEOC's, included an element of
"minimum qualifications." During the public comment period, the OFCCP
received a total of 46 comments. On Friday, October 7 th , despite the
fact that the March, 2004 proposed joint guidance issued by the EEOC,
had yet to be finalized, the OFCCP issued its final rule. The OFCCP's
final rule largely adopts its original proposal with some important
modifications.
Explanation Of The Final Definition
While the final rule establishes minimum standards for applicant
recordkeeping for Internet and related electronic technologies, the
OFCCP states that contractors may "voluntarily adopt recordkeeping
practices that are broader than those mandated by the final rule."
The Final Rule Addresses Contractor Concerns Over The Separate Definitions For Paper And Electronic Applicants.
A number of public comments expressed concern over having two
different standards for defining applicant; one for internet and one
for paper applicants. The OFCCP addressed this issue in the final
rule.
Under the final rule, " submits an expression of interest in employment through the Internet or related technologies " includes:
all expressions of interest, regardless of the means or manner in which the expression of interest is made, if the contractor considers expressions
of interest made through the Internet or related electronic
technologies in the recruiting or selection processes for that
particular position. (emphasis added).
Thus, the OFCCP eliminates the dual standard for those positions for
which the contractor considers expressions of interest through both the Internet and traditional means. In other words, if the contractor accepts only hard copy resumes/applications for a position, then the final rule does not apply to that position. However,
if the contractor solicits and accepts applications or resumes for the
position via the Internet or other related electronic technologies, as
well as in hard copy, the new rule applies. Therefore, if an employer
advertises a job opening and states in the advertisement that it will
accept resumes/applications electronically or in hard copy, the new
rule applies to both the electronic and hard copy applications.
Under The New Rule, It Is Up To The Contractor Whether It " Considers The Individual For Employment In A Particular Position."
Under the final rule, carrying over a concept from the proposed rule, the phrase " the contractor considers the individual for employment in a particular position "
means that the contractor assesses the substantive information provided
in the expression of interest with respect to any qualifications
involved with a particular position. Thus, an employer is not required
to consider expressions of interest that either are not submitted in
accordance with the contractor's standard procedures for applying for a
job or that are not submitted with respect to a particular position.
For example, if the contractor has consistently applied a practice of
not accepting unsolicited resumes, it is under no obligation to start
doing so under this final rule.
In addition, the new rule allows employers to draw the line at too
many applicants. The rule provides that if there are a large number of
expressions of interest, the employer has not "considered the
individual for employment in a particular position" if it uses data
management techniques that do not depend on an assessment of qualifications ,
such as random sampling or absolute numerical limits to reduce the
number of expressions of interest to be considered, provided that the
sample is appropriate in terms of the pool of those submitting
expressions of interest. In this regard, an employer is free
to apply a data management process (to limit the number of expressions
of interest that must be considered) that is facially neutral and does
not produce disparate impact based on race, gender or ethnicity in the
expressions of interest to be considered. For example, an
employer could decide it will only look at the first one hundred
applicants or 10% of the applicants. Any above one hundred or the
remaining 90% would not be considered applicants.
The Final Rule Makes It Clear That An "Applicant" Must Meet All Of
The Position's Basic Qualifications In Order To Satisfy The Element
That "The Individual's Expression Of Interest Indicates The Individual
Possesses The Basic Qualifications For The Position."
Pursuant to the final rule, " Basic Qualifications" refers to qualifications:
- That the contractor advertises to potential applicants that they must possess in order to be considered for the position, or
- For
which the contractor establishes criteria in advance by making and
maintaining a record of such qualifications for the position prior to
considering any expression of interest for that particular position if
the contractor does not advertise for the position but instead uses an
alternative device to find individuals for consideration ( e.g. , use of an external resume database), and
In addition to the foregoing, "basic qualifications" must meet each of the following three (3) conditions:
- The qualifications must be noncomparative features of a job seeker ( e.g. ,
two year experience requirement would be acceptable; a requirement that
the individual be one of the top five individuals in terms of
experience would not be acceptable).
- The qualifications must be objective in that they do not depend on the contractor's subjective judgment ( e.g. ,
a requirement of a college degree in accounting is acceptable whereas a
requirement that the individual have a degree from a "good school"
would not be).
- The qualifications must be relevant to performance of the particular position and enable the contractor to accomplish business-related goals ( e.g. , requirement of an accounting degree may not be acceptable for a human resources position).
To reiterate, a job seeker must meet all of a company's
basic qualifications in order to be an Internet Applicant under the
final rule.
SPECIAL NOTE: The OFCCP stresses the fact that employment tests used
as employee selection procedures, including on-line tests, are not
considered basic qualifications under the final rule. Also, factors
such as an individual's salary requirements, willingness to travel, willingness to work certain shifts, etc .are not basic qualifications. These factors are contemplated in the fourth criteria of the Internet Applicant definition – the individual at no point removes himself or herself from consideration .
The Final Rule Allows Contractors To Discount As Applicants Any
Individual Who, Prior To Receiving An Offer Of Employment From The
Contractor, Removes Him Or Herself From Further Consideration Or
Otherwise Indicates That He Or She Is No Longer Interested In The
Position.
In the past, contractors used failure to show up for interviews or
return telephone calls as a reason for rejecting applicants. The new
rule clarifies that such conduct means the individual does not even
have to be counted as an applicant. Even more significant is that the
final rule allows contractors to infer lack of interest in the position
from information it gleans from the resume or application form, such as
salary requirements or shift availability. Thus, the final rule
provides that a company may conclude that an individual has removed him
or herself from consideration:
- if the individual has indicated that he or she is no longer
interested in the position for which the contractor has considered the
individual, based on the individual's express statement that they are
no longer interested; or
- on the
individual's passive demonstration of disinterest shown through
repeated non-responsiveness to inquiries from the contractor about the
position in question ( e.g. , fails to respond to telephone calls, letters, etc. ); or
- based on information the individual provided in the initial expression of interest ( e.g. , salary requirements, shift availability, etc .) provided that the employer has been consistent in not considering similarly situated individuals [1]
To take advantage of this criteria, contractors must be sure to
fully document and retain any documentation regarding an applicant's
withdrawal from the applicant process; an applicant's lack of response
to the employer's efforts to contact them; and conditions contained in
the applicant's initial expression of interest ( e.g. , salary requirements, etc. )
in anticipation of scrutiny by the OFCCP during a compliance review.
This will allow removal of such individuals from any adverse impact
analysis.
Under The Final Rule, In Addition To Substantial Recordkeeping
Obligations, The Contractor Also Must Maintain Records Of Those It Does
Not Consider As Applicants So That If Necessary, The OFCCP Can Review
Whether The Contractor's Applicant Definition Is Lawful.
The final rule mandates that companies retain substantial documentation relating to Internet Applicants as follows:
- Any and all expressions of interest through the internet or related electronic data technologies as to which the contractor considered the individuals for a particular position including on-line resumes and internal resume databases;
- All records identifying job seekers contacted regarding their interest in a particular position;
- For
internal resume databases, a record of each resume that was added to
the database (and the date it was added), the position for which each
search of the database was made, and corresponding to each search, the
substantive search criteria used and the date of the search.
- For
external resume databases, a record of the position for which each
search of the database was made, and corresponding to each search, the
substantive search criteria used, the date of the search, and the
resumes of any job seekers who met the basic qualifications for the
particular position who are considered by the company.
The OFCCP states that the records listed above must be maintained
regardless of whether the individual qualifies as an Internet
Applicant. Although the OFCCP's final rule allows companies to
determine themselves who possesses basic qualifications, employers may
fully expect the OFCCP to closely scrutinize companies' practices in
this area to ensure equal employment opportunity. Employers
must therefore maintain applications/resumes for Internet Applicants
who do not possess minimum qualifications, even if these applicants are
not included in the applicant flow report and resulting adverse impact
analysis.
The New Rule Requires Contractors To Solicit Race, Gender,
And Ethnicity Data From All Individuals Who Meet The Definition Of
Applicant And Permits Contractors To Make Identification Based On
Visual Observation For Applicants Who Decline To Self-Identify.
Under the final rule, companies are required to solicit race, gender, and ethnicity data from all individuals
who meet the definition of Internet Applicant. The OFCCP further states
that visual observation is permissible when the applicant appears in person and declines to self-identify their race, gender or ethnicity. The Rule does not ,
however, mandate a specific time in the employment process at which
such information must be solicited. The OFCCP continues to encourage
the use of applicant self-identification methods such as tear-off
sheets, auto responses, etc .
To Make Sure A Contractor's Applicant Definition Is Not
Having An Adverse Impact, The OFCCP Can Review The Impact Of The
Definition Using Labor Force Statistics And Census Data.
The OFCCP has always expressed concern that the definition of
"applicant" used by a company not be so limited that it destroys
opportunities for minorities and females. With the adoption of the new
basic qualifications standard, the OFCCP's concern is magnified. The
OFCCP had stated in the proposed rule that "the application process
itself might not adequately reflect the actual potential applicant
pool, since otherwise qualified people might be discouraged from
applying because of a self-recognized inability to meet the very
standards challenged as being discriminatory." Continuing its concern,
the OFCCP states in the introduction to the final rule that it will
refer to Census and "other labor market data" during compliance reviews
to determine whether basic qualifications have an adverse impact on the
basis of race, ethnicity, or gender. [2]
In other words, an applicant definition cannot itself have an adverse
impact on minorities or females. To determine if this is occurring,
the OFCCP may compare the composition of minorities or females in the
resulting applicant pool, with their availability in the appropriate
segment of the Census.
What Can Employers Do Now?
As discussed above, the OFCCP is providing a relatively short 120
days (or until February 6, 2006) for employers to implement systems
that will comply with the final rule. It is imperative that
contractors immediately take steps to address these developments.
Companies may wish to consider the following preemptive efforts:
- Reevaluate the definition of applicant and procedures for tracking applicant data in light of the final rule;
- Consider
what impact dual definitions of Internet Applicant and traditional
applicant will have on current or future hiring and recordkeeping
practices and consider always having an electronic component to any
position opening to bring all openings within the electronic
definition;
- Review recordkeeping policies and test HRIS
systems to determine whether the company has the technological capacity
to comply with the new recordkeeping requirements;
- Compare
existing applicant flow data with availability data to identify areas
of significant difference and consider broadening good faith outreach
efforts in those areas to ensure that the company's applicant flow data
reflects surrounding Census and other labor market data; and
- Provide training to human resources and recruitment staff regarding the new requirements.
Footnotes:
[1] The final rule adds
that if a large number of individuals meet the basic qualifications for
a job, a company may employ data management techniques (described
above) to limit the number of individuals an employer has to contact to
determine the individuals' continued interest provided that the sample
is appropriate in terms of the pool of those meeting the basic
qualifications.
[2] If the OFCCP identifies a
"significant" difference between the labor market data and the hiring
activity of the company it will further investigate to ensure
compliance with Executive Order 11246. The OFCCP confirms in the
introduction to the final rule that it will use the traditional two
standard deviation threshold for determining statistical significance.