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The Amazing, Confusing and Sometimes Shocking World of Government Compliance

By Kathy Barton, March 8, 2007

In theory there is no difference between theory and practice. In practice there is. - Yogi Berra

Now that the OFCCP's Definition of an Internet Applicant is starting to be tested in audits, confusion continues to reign around what companies should and shouldn't be doing to comply with the regulations. The best source for answers to this is the OFCCP itself. Here's a link to their continually updated FAQ. For those who want a little background, here's an overview of what the OFCCP said and some ways to make compliance easier.

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First, for those of you who are wondering, OFCCP stands for Office of Federal Contract Compliance Programs. As the name indicates, they are in charge of making sure that federal contractors - employers with at least 50 employees who do more than $50,000 per year of business with the government - are complying with the three laws that govern equal employment opportunity. These laws "prohibit Federal contractors and subcontractors from discriminating on the basis of race, color, religion, sex, national origin, disability, and protected veteran status. They also require Federal contractors and subcontractors to take affirmative action to ensure equal employment opportunity in their employment processes." (Unless otherwise stated, all quotes are from the OFCCP website).

The reporting that the OFCCP requires from federal contractors compares the diversity of the employee population, at a given location, to census data detailing the diversity of the available labor market in the reasonable recruiting area. Companies that have significant differences between these two things could be subject to an audit to make sure they aren't discriminating in employment practices. Don't assume that audits are rare; as any large government contractor can tell you they deal with multiple audits every year.

Why is the definition of an applicant so important? The OFCCP requires contractors to solicit EEO information (i.e., race and gender) on all applicants and report the race and gender makeup of their applicant pools. This is why EEO information - or Equal Employment Opportunity data on race, gender and ethnicity - is collected when someone applies for a job. The OFCCP can then track the diversity of the applicant pool throughout the process until hire. So if your original applicant pool is 35% minority, but your hires are only 5% minority, then the OFCCP is going to want to look into this.

Companies need to know who the OFCCP considers an applicant because they are required to ask for EEO data from those people and keep that data for two years. Pre-Internet, the definition of an applicant was stated in the Uniform Guidelines on Employee Selection Q & A as "a person who has indicated an interest in being considered for hiring, promotion or other employment opportunity". Now picture the post-Internet world. Companies are flooded with thousands of resumes from people applying for jobs. (In pre-Internet days, these people didn't even know about most of these jobs and in many cases were unqualified.) They've definitely expressed an interest in an employment opportunity, which has made them an applicant. Federal contractors are faced with keeping exponentially more data on these "applicants" and are also concerned that the diversity composition of these applicant pools might not be a true representation of the qualified talent that are actually hired. The Definition of an Internet Applicant is intended to address these problems and be applicable to the hiring process over the Internet.

The OFCCP's final rule boils down to four things:

1. The individual submits an expression of interest in employment through the Internet or related electronic data technologies.
2. The contractor considers the individual for employment in a particular position.
3. The individual's expression of interest indicates the individual possesses the basic qualifications for the position.
4. 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.

A critical thing to remember about the ruling is that the OFCCP gives companies the ability to further define what they consider to be an applicant, as long as the definition is clearly stated and applied consistently. So, companies can state that they will only accept applications through their website - or the individual must apply to a specific position. What's important is to define the process through which an individual becomes an applicant and make sure it is consistently applied.

Many federal contractors were hoping for the statement that an individual must possess the basic qualifications for the position. This could help them cut down on their recordkeeping. Unfortunately, along with this, the OFCCP defined that records must be maintained for the Internet or "related electronic data technologies". It then continued to explain the records the OFCCP will require contractors to produce during an audit. The issue of recordkeeping has become a major headache both for companies and recruiters, because it requires companies to keep records on individuals that have been considered for a job - not just on applicants. The issue of consideration of individuals is an entire article in itself and will be covered in next week's article. For almost all companies, the definition of an Internet applicant was simply a needed refinement of the previous definition of an applicant. The recordkeeping around who is considered, however, continues to be a significant issue and a new burden of administration on recruiters who source candidates.

Here are some recommendations around determining who is an applicant:

1. Develop a written definition of who your organization considers an applicant. I highly recommend that you define an Internet applicant as someone who applies over the Internet and applies to a specific job. This allows recruiters to network and talk to people that might fit into the company in some role. However, since they aren't applying or being considered for a specific job, the OFCCP doesn't require the same recordkeeping.
2. Create splash pages on the web for certain categories of jobs, but not specific jobs. (It might be IT jobs, or Finance jobs, or sales jobs.) Then ask people to express interest in a category of jobs. (As in, "Hey, I'm interested in sales jobs.") You don't have to keep records on these folks because you aren't considering them for a specific job.
3. Decide how your organization defines withdrawal from consideration. The OFCCP allows you to compare a person's work preferences to the job requirements to determine if the person has withdrawn. These preferences include location, type of work, or salary requirements. For example, if the job is in Dallas and the candidate is in Chicago - unwilling to relocate - then they've withdrawn themselves from consideration based on location preference. Also, if the individual doesn't respond to your attempts to contact them, the OFCCP says that you can classify them as a withdrawal, as long as you try to contact them at least twice.
4. Define basic qualifications for each job. This will become very important next week when we talk about what it means to consider an individual and the records you need to keep about who is considered.
5. If your organization uses employment tests - or assessments of any type - administer the test after the person has become an Internet Applicant and not before. You'll minimize your reporting, since you MUST ask for EEO data from everyone who takes the test. It doesn't matter whether the test taker meets the Definition of an Internet Applicant yet or not. This has been clearly defined by the OFCCP and the new regulations don't change this.
6. These regulations only apply to federal contractors (about 23% of the US workforce). If you aren't a federal contractor, then you don't have to comply with them. However, a taskforce led by the EEOC (Equal Employment Opportunity Commission) is expected to release its own ruling on this subject, which will apply to virtually all companies. (If you want to get a jump on this read the legal overview for Performance-based Hiring^sm.)

With these steps, you can minimize your reporting requirements, while attracting the best diverse group of top people possible.