A Berkshire Expert Interprets Final Ruling on Internet Applicants
By: Sonia Chapin, PHR, CCP
On October 7, 2005, the Office of Federal Contract Compliance Programs (OFCCP) published its long-awaited final rule on the definition of an “Internet applicant.” This rule is intended to clarify contractor solicitation and recordkeeping requirements regarding applicants sourced through the Internet and related technologies. Contractors have 120 days to implement the new guidelines, which go into effect on February 6, 2006.
In an OFCCP press release, deputy assistant secretary Charles James, Sr. said, “This new rule provides clear guidance to allow us to better enforce the law. This final rule will enable OFCCP to effectively evaluate whether federal contractors are recruiting a diverse pool of qualified applicants and hiring new employees on a non-discriminatory basis. It also helps contractors by clarifying an ambiguity that, until now, left contractors guessing at what information they needed to collect from Internet applicants.”
In July of 2000, the Office of Management and Budget (OMB) directed the OFCCP and other agencies to clarify the recordkeeping requirements for applicants taking into account the Internet and other recent technological advances. The Uniform Guidelines on Employee Selection Procedures (UGESP) dated to 1978 and offered a definition of an applicant that was ambiguous and had become outdated with the growth of online résumé databases and e-mail. In March of 2004, the EEOC issued a proposed definition, which was refined by the OFCCP for its purposes later that month. The OFCCP solicited comments on its proposed definition, and has taken those comments into account for the final rule.
Under the final rule, there are four criteria and each condition must be met for a person to qualify as an Internet applicant:
- 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 objective qualifications for the position.
- 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.
If a job seeker (formerly referred to as “candidates” to distinguish them from “applicants”) meets all four of these criteria, contractors are obliged to solicit race, ethnicity and gender information from the individual. Contractors must also retain all expressions of interest by individuals considered and maintain specific information about internal and external résumé database searches. As expected, the OFCCP retained the express ability to assess if a contractor’s selection criteria are discriminatory.
Before we begin a review of each requirement of the definition, an example of an implementation of the rule from the OFCCP is helpful: “A job seeker must meet all of a contractor’s basic qualifications in order to be an Internet Applicant under today’s rule. For example, a contractor initially searches an external job database with 50,000 job seekers for 3 basic qualifications for a bi-lingual emergency room nursing supervisor job (a 4-year nursing degree, state certification as an RN, and fluency in English and Spanish). The initial screen for the first three basic qualifications narrows the pool to 10,000. The contractor then adds a fourth basic qualification, 3 years of emergency room nursing experience, and narrows the pool to 1,000. Finally, the contractor adds a fifth basic qualification, 2 years of supervisory experience, which results in a pool of 75 job seekers. Under this final rule, only the 75 job seekers meeting all five basic qualifications would be Internet Applicants, assuming other prongs of the definition were met.”
The OFCCP received 46 comments on its proposed rule and addressed specific comments and recommendations in the preamble to the final rule. Following is a discussion of each of the four points of the definition and guidance as it relates to each.
Requirement 1: The individual submits an expression of interest in employment through the Internet or related electronic data technologies.
If the contractor does not use the Internet or related technologies, and also does not accept any electronic submissions, the existing UGESP recordkeeping standards apply. If contractors accept résumés for a particular position using both paper-based and Internet-based methods, the Internet-based methods “trump” the paper-based and the Internet applicant rule applies. Citing the fast pace of change in this area, the OFCCP declined to provide a precise definition of “Internet related technologies,” but the agency did list e-mail, internal and external résumé databanks, job banks (e.g., America’s Job Bank or the contractor website), and applicant scanning technology and screeners as commonly used related technologies. Thus, if a contractor posts open positions on its company website, with America’s Job Bank in accordance with existing posting requirements, or even accepts résumés via e-mail, the Internet applicant definition applies. In short, for a given position, either the UGESP applicant definition or the Internet applicant definition would apply, but not both. Berkshire Associates recommends contractors take steps to ensure all applicants fall under this new rule, to avoid maintaining two separate applicant tracking policies.
Requirement 2: The contractor considers the individual for employment in a particular position.
For this requirement of the definition, the OFCCP begins its discussion with some caveats to considering the job seeker for a position. The agency states that a contractor may establish a protocol or standard procedures for expressing interest, and may exclude from consideration résumés that do not comply with these standards. For example, the contractor can require a complete application or salary requirements in order for the job seeker to be considered. Additionally, the contractor may establish a policy of not considering résumés or other expressions of interest that are not for a particular job (i.e., unsolicited résumés) as long as it is uniformly applied to all job seekers. The agency also expressly gives permission to contractors to dispose of unsolicited résumés if the contractor’s policy is to do so and is applied to all unsolicited résumés. During audits, the OFCCP has learned that a contractor’s practice does not always follow its policy and there is a cautionary mention that the OFCCP will investigate actual hiring practices regardless of the policy in place. Berkshire recommends developing a policy that fits the current recruitment routines to make it easy to implement and follow. On an ongoing basis, monitor and audit the practice of the company to make sure it is in line with the stated policy.
The agency goes on to say that in order to “consider” a job seeker for a position, this is “an assessment of the job seeker’s qualifications against any qualifications of a particular position, including a determination of whether a job seeker meets the basic qualifications for the position.” Therefore, if a contractor reviews a job seeker’s résumé but decides the individual does not meet all four criteria to become an Internet applicant, the contractor must retain the résumé but does not have to solicit race and gender from the individual. If the job seeker meets all four requirements, the contractor must solicit race and gender first by self-identification and then has the option to identify through visual observation, but is not required to do so.
Also recommended in this section is the use of facially neutral data management techniques if there are a large number of résumés to review, particularly to help smaller contractors comply with the recordkeeping requirements without undue burden. The OFCCP specifically endorses two methods of data management: absolute numerical limits and random sampling. Absolute number limits are applied when the contractor reviews only a predetermined number of résumés received, such as the first 100. Random sampling is when the contractor narrows the pool of résumés by reviewing only a subset selected through a random number process.
Finally, the OFCCP outlines the information that should be retained when searching internal or external databases. When conducting searches of résumé databases, the contractor does not need to search on all basic qualifications for the position. However, if the search is broadly defined, the contractor will have the burden of collecting race and gender for a larger pool, as the number of job seekers who meet basic qualifications will be larger. Berkshire recommends including in the search as many basic qualifications as possible to manage the size of the applicant pool.
Requirement 3: The individual's expression of interest indicates the individual possesses the basic objective qualifications for the position.
“Basic qualifications” are those that are advertised or established prior to considering any expression of interest in the position. In a general sense, these requirements put a lot of pressure on the contractor’s pre-recruitment process. Accurate, easy to understand job descriptions are paramount to precisely convey the qualifications for the position. In a specific sense, the OFCCP defines a basic qualification as one “that is noncomparative, objective, and ‘relevant to performance of the particular position and enabl[ing] the contractor to accomplish business-related goals.’” To be noncomparative, the standard should be set prior to the receipt of any expressions of interest – for example, five years of experience rather than one of the 10 highest results in the pool of job seekers. The requirement must also be objective, or not subject to judgment – for example, a Bachelor’s degree in business, finance, or accounting rather than a business degree from a good school. Finally, the requirement should be relevant to the particular position and the overall business goals. This assumes the person evaluating the résumés has the same level of technical knowledge of the position and its requirements.
The OFCCP also reaffirms that job seekers who do not possess the basic requirements for a given position should not be included in the Internet applicant pool. Another important note in this section is that the agency indicates it will not assume that the contractor’s basic qualification screens are discriminatory, but if adverse impact exists, it may ask for additional information to investigate potential discrimination issues. “OFCCP itself may not rely on recordkeeping definitions to frame the appropriate analysis for liability or remedy purposes when alleging a violation of the nondiscrimination requirements of Executive Order 11246 (as opposed to recordkeeping requirements).” This is why the agency requires that all expressions of interest and basic qualifications used to refine the applicant pool be maintained so they know the composition of the larger applicant pool if they deem the contractor’s hiring methods inappropriate.
Requirement 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.
The OFCCP addresses the concern that a job seeker who does not respond to an employer’s inquiry would be considered under this standard by stating, “OFCCP does not intend for the language to imply a presumption that every individual who otherwise meets the definition of Internet Applicant is deemed by OFCCP to be automatically interested in the particular position, even before the contractor contacts the individual.” Rather, the person can remove himself or herself from consideration by an express statement (a declined job offer or interview) or passive demonstration of disinterest (repeated failure to return phone calls or e-mails). However, if race and gender information has been provided at the time of the removal from consideration, the contractor must retain it for reference purposes, even though that individual is no longer included in the pool of Internet applicants.
In addition, the contractor may make assumptions about a person’s potential interest in the job by reviewing stated salary and geographic requirements, assuming the same standard is applied to all job seekers. If the contractor stated before reviewing résumés that it was only considering individuals interested in working in the local geographic area, someone who did not have that geographic area listed in their profile does not have to be contacted and thus considered for the position.
Recordkeeping requirements: Contractors are required to maintain “any and all expressions of interest through the Internet or related electronic data technologies as to which the contractor considered the individual for a particular position, such as on-line résumés or internal résumé databases and records identifying job seekers contacted regarding their interest in a particular position… [and] contractors are not required to retain records regarding individuals who were never considered for a particular position.” In addition to these requirements, for internal databases, the following must be saved:
- Each résumé added to the database
- The date each résumé was added to the database
- The position for which each search of the database was made
- The substantive search criteria used
- The date of each search
With respect to external database searches, the following must be saved for each search:
- The position for which the search was made
- The substantive search criteria used
- The date of the search
- Résumés of the job seekers who met the basic qualifications for the particular position who are considered.
It is important to note these records must be maintained regardless of whether the individuals in the search qualify as Internet applicants. The agency also did not endorse a particular method of collecting the race and gender information or at what point in the recruitment process applicants should be solicited; it just maintained that it must be solicited for all Internet applicants. If an applicant chooses not to voluntarily self-identify, the contractor may perform a visual observation as to the person’s race and/or gender, but is not required to do so. If the applicant refuses to self-identify and there is no opportunity to perform the visual observation, the contractor’s obligation is complete.
One of the analyses the OFCCP has stated they will be undertaking is the comparison of the racial and gender makeup of the pool of applicants to the qualified labor force, and more generally to the contractor’s calculated availability for a given job group. Berkshire is recommending that proactive contractors compare their applicant pools and hiring rates to population or labor force statistics to ensure they are not statistically different by using the two standard deviation rule. Additionally, in the case of an audit, the contractor should consider the size of the potential affected class in its analysis, as the OFCCP has reserved the right to investigate areas where many individuals are affected but without a statistically significant difference.
An important note for employers who conduct employment tests is also included in the final rule. The OFCCP expressly says contractors must “collect and maintain records related to the impact of employment tests that are used as employee selection procedures” whether or not the job seeker subjected to the test meets the qualifications of an applicant if the test is used to narrow the applicant pool. As an example, “if 100 job seekers take an employment test, but the contractor only considers test results for the 50 who meet the basic qualifications for the job, demographic information must be solicited only for the 50 job seekers screened by test results because the test was used as a selection procedure only for those individuals. By contrast, if the contractor used the test results from 100 test takers to narrow the pool to 50 job seekers whose basic qualifications are considered, the test is used as a selection procedure and demographic information from all test takers must be solicited.” Berkshire recommends reviewing the use of employment tests by ensuring they have been validated for each job, reviewing job descriptions to ensure the jobs have not changed significantly since the validation study was conducted, and reviewing the test data collection process to ensure it meets the correct situation description described above.
Berkshire’s consultants are currently preparing an online webinar that will be offered in late November and December to outline the applicant definition and other OFCCP trends. If you are interested in reserving a space for the webinar, please contact our training department at 800.882.8904 extension 1220.
For more information about the final rule, including a full text version of the Federal Register publication, please visit our website at www.berkshireassociates.com. To talk with a consultant about implementing a compliant applicant system, please contact our experts at 800.882.8904 extension 2001.