Office of Federal Contract Compliance Programs Final Recordkeeping Rule for Internet-Based Job Applicants Takes Effect
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1 February 2006 ALBANY AMSTERDAM ATLANTA BOCA RATON BOSTON CHICAGO DALLAS DELAWARE DENVER FORT LAUDERDALE HOUSTON LAS VEGAS LOS ANGELES MIAMI NEW JERSEY NEW YORK ORANGE COUNTY ORLANDO PHILADELPHIA PHOENIX SACRAMENTO SILICON VALLEY TALLAHASSEE TOKYO TYSONS CORNER WASHINGTON, DC WEST PALM BEACH ZURICH Office of Federal Contract Compliance Programs Final Recordkeeping Rule for Internet-Based Job Applicants Takes Effect The Office of Federal Contract Compliance Programs ( OFCCP ), on October 7, 2005, issued its final rule regarding the definition of Internet applicant for covered federal government contractors data collection and recordkeeping obligations under Executive Order Fed. Reg (Oct. 7, 2005). The new rule defines an Internet Applicant from whom contractors must solicit certain demographic information, prescribes the records contractors must maintain for Internet Applicants, and identifies the records that the OFCCP will require contractors to produce when evaluating whether they have maintained information on adverse impact and conducted an impact analysis under the Uniform Guidelines on Employee Selection Procedures (UGESP). Effective Date and Grace Period The new rule becomes effective February 6, This means that the new data collection and recordkeeping requirements will apply to all hiring decisions made on or after February 6, However, under its enforcement discretion, the OFCCP will not cite a contractor for a purely technical recordkeeping violation of the final rule, provided that the contractor: Demonstrates that it is taking reasonable steps to update its systems to comply with the rule, including a projected date of compliance; and Collects and maintains records according to the established procedures consistent with the OFCCP s recordkeeping requirements that preexisted the new rule. Definition of Internet Applicant The new rule establishes the following four factor test to determine whether a job seeker is considered an Internet Applicant: The new rule defines an Internet Applicant from whom contractors must solicit certain demographic information, prescribes the records contractors must maintain for Internet Applicants, and identifies the records that the OFCCP will require contractors to produce when evaluating whether they have maintained information on adverse impact and conducted an impact analysis. 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 that the individual possesses the basic qualifications for the position; and The individual does not remove him/herself from consideration (or otherwise indicate that he/she no longer is interested in the position) before receiving an employment offer. All four factors must be satisfied in order for the individual to be deemed an Internet Applicant.
2 First Factor: What does Expression of Interest mean? Under the first factor, the job seeker must submit an expression of interest in employment through the Internet or related electronic data technologies. The rule does not specifically define this phrase, because the technologies are evolving so rapidly. However, the Preamble of the final rule provides the following examples: s, resume databases, job banks, electronic scanning technology, applicant tracking systems/service providers, and applicant screeners. It is important to understand that the final rule imposes a single standard on contractors who accept expressions of interest through both traditional (for example, by mail, facsimile, personal delivery) and Internet-based means. The definition of Internet Applicant expressly includes all expressions of interest for a particular position, regardless of the means in which made, if the contractor considers any expressions of interest made through the Internet or related electronic data technologies in the recruiting or selection processes for that particular position. In other words, if a contractor considers any expressions of interest for a particular position made through the Internet and related technologies, the contractor must treat all individuals who express interest in that particular position as Internet Applicants including any individuals who expressed interest through traditional means. In addition, an individual who submitted a resume by mail or other traditional means is an Internet Applicant if he/she learned of the opportunity on the contractor s website and the website process allowed job applicants to submit resumes through traditional means. Similarly, an individual who has submitted an unsolicited resume by mail or other traditional means is an Internet Applicant if the contractor subsequently reviews that resume for a position that the contractor has posted on its website. In short, in cases where contractors consider expressions of interest submitted both through the Internet and hard copy applications sent to their Human Resources managers, both sets of applicants will be treated as Internet Applicants. The only situation that would fall outside this prong of the definition is where the contractor only advertises job openings through non-electronic means (such as newspapers) and only considers resumes submitted through traditional, nonelectronic means (such as mail, facsimile or personal delivery). In those situations, the traditional OFCCP recordkeeping standards apply (that is, contractors must solicit demographic data from job seekers who are applicants under the definition contained in UGESP). Second Factor: What does Consider mean? The final rule states that a contractor is deemed to consider an individual for employment in a particular position if the contractor assesses the substantive information provided in the expression of interest with respect to any qualifications involved in a particular position. The Preamble makes clear that considers involves the assessment of the job seeker s qualifications against any qualifications of a particular position, including [but not limited to] a determination of whether a job seeker meets the basic qualifications for the position. However, the final rule permits contractors to establish procedures by which they will refrain from considering certain expressions of interest, thereby not triggering the rule s recordkeeping requirements. In particular, the rule states that contractors may refrain from considering expressions of interest where: (1) the expression of interest is not submitted in accordance with the contractor s established application procedures; and/or (2) the expression of interest is not submitted for a particular position. Recordkeeping Rule for Internet-Based Job Applicants Takes Effect Page 2
3 Furthermore, in those situations where a contractor receives a large number of expressions of interest, the contractor may use data management techniques to reduce the number to a manageable size. Examples of such data management techniques include: absolute numerical limits and random sampling. Contractors must, however, ensure that all such procedures and techniques are uniformly and consistently applied to similarly situated job seekers, and are facially neutral and do not produce a disparate impact based on race, ethnicity or gender. Any deviations from a contractor s stated policies may raise questions as to whether that contractor has actually considered an applicant. Third Factor: What does Basic Qualifications mean? As stated above, the third factor requires that the expression of interest indicate that the job seeker possesses the basic qualifications for a particular position. The final rule defines the basic qualifications of a particular position as: (1) those qualifications that the contractor advertises to potential applicants as necessary in order to be considered for the position; and (2) if the position is not advertised, those qualifications that the contractor establishes in advance of the application process by making and maintaining a record before considering any expression of interest for that particular position (including external database searching). Additionally, to qualify as basic qualifications, the particular job qualifications must be: (1) objective; (2) non-comparative; and (3) job-related. A qualification is objective if it does not depend on the contractor s subjective judgment, and can be evaluated and applied by a third-party with the contractor s same technical knowledge. For example, requiring a four-year college degree is a permissible objective qualification, while requiring a four-year college degree from a top school is not. A qualification is non-comparative if it does not require the contractor to compare an applicant with others in the applicant pool. For example, requiring two years of experience is a permissible non-comparative qualification, while requiring the applicant to be one of the top three applicants is an impermissible comparative qualification. Finally, a qualification is job-related if it is relevant to the performance of the particular position and enables the contractor to accomplish business-related goals. Fourth Factor: What does Continued Interest mean? As stated above, the fourth factor requires that the individual not remove him/herself from consideration or otherwise indicate that he/she no longer is interested in the position at any point in the contractor s selection process before receiving an offer of employment from the contractor. Lack of continued interest can take several forms. An express statement of no interest is the most obvious. Examples include an individual affirmatively declining an actual job offer or even to be interviewed for the position. In addition, a contractor may infer an individual s lack of continued interest in several ways. For example, an individual s failure to respond to the contractor s inquiries can constitute a lack of continued interest. In addition, a contractor may infer an individual s lack of interest in the particular position based on information contained in the expression of interest itself. For example, statements made in the expression of interest indicating incompatible salary requirements, or preferences as to position, type of work, or location of work, can constitute a lack of interest. In such cases, however, the contractor must be sure to have a uniform and consistently applied policy of eliminating individuals from consideration based on such statements. Recordkeeping Rule for Internet-Based Job Applicants Takes Effect Page 3
4 Recordkeeping Requirements The new rule requires that contractors must, for a period of two years, retain records of all expressions of interest made through the Internet or related electronic data technologies provided that the contractor considered the individual for a particular position. The rule draws a distinction between expressions of interest from internal resume databases and those from external resume databases (perhaps the most well-known of which is Monster.com), and provides different recordkeeping requirements for each. For external resume databases, contractors must retain records of all expressions of interest considered for individuals who meet the basic qualifications for a particular position, even those of individuals who are not Internet Applicants. Where a contractor considers applicants for a position through the use of internal resume databases, it must retain records of the following: Each resume added to the database; The date each resume was added to the database; The position for which each search of the database was made; The substantive search criteria used in the database search; and The date on which the database search was performed. Where a contractor considers applicants for a position through the use of external resume databases, it must retain records of the following: The position for which each search was made; The substantive search criteria used in each search; The date of the search; and The resumes or other expressions of interest of those applicants who met the basic qualifications for the particular position and who were considered for the position (even if they do not qualify as Internet Applicants). Additionally, to permit the OFCCP to review any potential adverse impact of a contractor s hiring procedures, contractors must retain all tests and test results; all interview notes; records identifying those job seekers contacted regarding their expressions of interest in a particular position; and the race, ethnicity and gender of each applicant or Internet Applicant, whichever is applicable. Solicitation and Collection of Demographic Information The new rule requires contractors to engage in all reasonable efforts to solicit race, ethnicity and gender data from all job seekers traditional applicants and Internet Applicants alike. Such information may only be used for purposes of the contractor s affirmative action and equal employment opportunity programs, and not for hiring decisions. The rule does not require contractors to solicit demographic data at any specific stage in the selection process. However, the best practice is to gather such data at the beginning of the process (that is, no later than when the individual satisfies the definition of Internet Applicant based on the four factors set forth above). The rule also does not require the contractor to gather race, ethnicity and gender information in any particular manner. The OFCCP recommends self-identification as the preferred method; however, the OFCCP also states that when self-identification is not practicable, such information may be gathered through observation or other means. If the contractor asks for such information, it must expressly state that the individual s disclosure of such information is purely voluntary, that the contractor will keep the information separate from Recordkeeping Rule for Internet-Based Job Applicants Takes Effect Page 4
5 the individual s expression of interest, and that such information will not affect the contractor s hiring decision. Compliance Guidelines Although the new rule imposes a number of additional requirements on contractors, the burdens imposed by these requirements can be reduced by taking immediate, systematic steps to ensure compliance. The following are some steps that contractors should consider: Establish policies and procedures to accurately identify Internet Applicants, and to effectively coordinate between Internet Applicants and traditional applicants; Establish protocols by which to avoid considering certain expressions of interest (for example: ask applicants to identify salary demands, willingness to relocate, etc.; and/or reject applicants who fail to follow application procedures); Establish data management procedures and techniques to reduce numbers of expressions of interest to consider and/or numbers of applicants with basic qualifications; In advertised positions set forth all basic qualifications; for unadvertised positions set forth all basic qualifications in writing before considering any expressions of interest; make sure all basic qualifications are non-comparative, objective and job-related; Treat all applicants as Internet Applicants to avoid having to maintain separate recordkeeping policies (unless you only engage in traditional job search means); Review and revise your existing recordkeeping system to make sure it records all data required under the new rule (for example, the data requirements for internal and external resume database searches); Make sure your recordkeeping system can track all applicants for a particular position and identify why an applicant is removed from consideration (for example, if applicant expresses lack of interest); Review and, as necessary, update your existing Affirmative Action Plan; audit your existing race, ethnicity and gender data collection policies and practices; evaluate whether you are maintaining adequate adverse impact information; and conduct an adverse impact analysis; Train all hiring and promotion managers on affirmative action obligations generally and the new rule specifically; designate qualified personnel for OFCCP compliance oversight responsibility, and provide them with adequate training and resources. Make sure all applicable policies are uniform, and are applied consistently and without adverse impact. Contractors can obtain additional information about the OFCCP s new Internet Applicant Recordkeeping Rule by visiting the OFCCP s website at Footnote 1 The Preamble to the the final rule makes clear that OFCCP s definition of applicant is for the limited purposes of OFCCP data collection and recordkeeping requirements pursuant to Executive Order and does not affect the substantive interests of any individual, such as for purposes of litigation of employment discrimination claims or under any federal, state or local antidiscrimination statute. The Equal Employment Opportunity Commission currently is considering regulations similar to the final rule adopted by the OFCCP. These regulations are expected to be released shortly. Recordkeeping Rule for Internet-Based Job Applicants Takes Effect Page 5
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