Many federal contractors use outside staffing agencies to fulfill the labor demands of their workplaces – whether it is temporary staffing or recruiters for regular employees. While a valid and useful way to staff an organization, this practice can present several challenges for federal contractors who must comply with various recordkeeping requirements. The OFCCP’s regulations do not directly address this practice, which leaves many contractors confused and uncertain regarding how to ensure compliance. Let’s address a few issues that frequently arise in this scenario.

Hiring Temp to Perm

When preparing an Affirmative Action Plan, it is not difficult to spot a contractor who routinely hires employees from a pool of temporary workers. You know what I’m talking about – the dreaded 100% hiring rate! You’re comparing the applicants to hires and see, especially in the entry-level jobs, that everyone who applied was hired. This often means one of three things: (1) the contractor was not keeping records of all applicants or not all applicants are included in the data; (2) the contractor did not effectively recruit for the position; or (3) the contractor filled the position with temporary workers. The first two issues are topics for another article, so let’s focus on #3.

First, there is nothing wrong with hiring your temporary workers. One reason employers utilize temps is to vet their ability to perform the job while potentially saving money and limiting liability. The question for contractors is “who are the applicants for this position?” Although the answer may vary depending on the circumstances, generally, the applicant pool is all the temporary workers who are being vetted or considered for movement from temporary to permanent status. Those are often the individuals being “considered” for employment. Thus, it may be appropriate to count those temporary workers as applicants in your impact ratio analysis. However, there are many factors to consider before doing so, such as whether to include individuals who have not technically applied for employment, and a discussion with legal counsel is advised to determine the best course of action for your organization. Contractors would be well-advised, though, to consider this issue early to ensure that appropriate records are maintained on the temporary workers, as needed.

Recruitment Obligations

Assuming those temporary workers are your applicants, though, the next question is often “how were they recruited?” Did the staffing agency endeavor to recruit females, minorities, individuals with a disability, and protected veterans for those temporary jobs? Were the jobs listed with the local state unemployment office? If not, the OFCCP might conclude that the contractor failed to meet its recruitment obligations for those positions, as those are the individuals filling the contractor’s permanent jobs. In addition, if you are filling permanent positions with temporary workers and the staffing agency has already conducted the requisite recruitment, then you are not faced with the dilemma of whether you should conduct external recruitment when you have no intention of considering external applicants for the jobs.

Another issue is whether outside recruiters seeking regular employees for your organization are effectively recruiting females, minorities, individuals with a disability, and protected veterans and listing the jobs with the state unemployment agency. Contractors should be cognizant that the obligation to recruit females, minorities, individuals with a disability, and protected veterans and to list jobs with the state applies in these circumstances. Thus, they should ensure that such recruitment is done by either the recruiting agency or its own internal staff. (Note, however, that positions do not have to be listed with the state unemployment agency if they are filled internally, are for less than 3 days, or are an executive or senior management job).

Tracking Applicants

A third question that often arises is whether and how to track those individuals who are recruited or considered by a staffing company for openings with your organization. For example, if a recruiting agency (after conducting good faith recruitment efforts on your behalf) receives 25 candidates for a position with your organization and sends 5 of them to you to interview, who are the applicants that must be tracked and counted? What records must be kept?

Assuming that the internet applicant definition applies, generally, all of the candidates out of the 25 individuals who met the internet applicant definition would be considered applicants and must be included in your impact ratio analysis. This means that they should be asked to provide self-identification information on race, gender, and disability and protected veteran status. In addition, you are required to maintain records on all of the individuals considered, even if they do not meet all of the elements of the internet applicant definition. Thus, you will need to know the reason that all of the candidates were not hired, so appropriate disposition codes must be applied to each individual. Whether this information is collected and maintained by the recruiting agency or your organization does not matter, as long as it is done.

Recommendations

Before retaining a recruiting firm to solicit and screen candidates for your organization, and before routinely hiring temporary workers without a competitive selection process, you should consider various questions and develop a protocol for ensuring that all recordkeeping requirements are being satisfied.

  • Who are the applicants for our positions?
  • Who is being considered for our positions?
  • Who is responsible for actively recruiting females, minorities, individuals with a disability, and protected veterans?
  • Who will maintain records of the recruitment efforts?
  • Who is soliciting voluntary self-identification information and maintaining those records?
  • Who will maintain records of all candidates who were considered?
  • Who will record the reasons for not selecting the candidates?
  • If any of these tasks are delegated to an outside agency, do you want periodic reports to ensure the records are sufficient?

As the OFCCP has frequently reiterated, contractors are free to delegate any or all of their regulatory obligations to another entity; however, the responsibility and liability for compliance ultimately lies with the contractor. Any failure on the part of the delegate will be the contractor’s responsibility. Thus, a contractor should seek to ensure that the staffing or recruiting agency with which it does business has a clear understanding of exactly what is being delegated. This should be accomplished through a written agreement that explicitly sets forth those tasks, such as tracking applicants, soliciting self-identification information, documenting recruitment efforts, etc.

This article has been prepared for informational purposes only and does not constitute legal advice. Please consult a lawyer with your individual factual circumstances to determine the best course of action.