|Limiting the Applicant Data That Is Provided to OFCCP|
|Part 1 – The Rule Regarding Applicant Data|
Most of the recent discussion about affirmative action compliance reviews by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) tends to focus on two areas: (1) OFCCP’s investigation of possible compensation discrimination by federal contractors and subcontractors, and (2) issues concerning veterans and persons with disabilities, especially in regard to outreach to find members of these two groups. There is no question that these two areas have been priorities for OFCCP. Yet, the majority of the back pay settlements growing out of affirmative action compliance reviews still involve hiring disparities, especially in entry-level positions. A quick look at OFCCP’s website as of mid-January in 2013 substantiates this. Three recent press releases reported on OFCCP’s website show that companies paid between $300,000 and $439,000 to groups of minorities or females applying for entry-level jobs, and there are no recent press releases concerning compensation settlements or problems involving veterans and persons with disabilities.
What does this mean for federal contractors and subcontractors? It means that the applicant data that is provided to OFCCP is a critical piece of information in any compliance review. (By “applicant data”, we mean the numerical data concerning applicants that is provided to OFCCP on personnel activity reports and other statistical reports.) There are a variety of ways in which companies fail to understand how OFCCP reviews applicant data. In this two-part series, we will examine the ways in which companies can more effectively control the applicant data they provide to OFCCP. In this first article, we will give some background on the way that OFCCP reviews applicant data and we will discuss some basic ways to limit applicant data that is provided to OFCCP. In part 2 of this series, we will deal with some of the more complex issues regarding the ways contractors can limit applicant data.
OFCCP’s Guidance Regarding Applicants – The Internet Applicant Rule
Unlike its approach to compensation investigations, where OFCCP has provided limited and problematic instruction, OFCCP has provided contractors and subcontractors with extensive guidance on how to deal with applicant data. That guidance takes a number of forms:
- OFCCP’s Internet Applicant rule (found in the Code of Federal Regulations at 41 CFR 60-1.3)
- The preamble materials published in October of 2005 with the final version of OFCCP’s Internet Applicant rule
- OFCCP’s frequently asked questions concerning its Internet Applicant rule that are found on OFCCP’s website
There are many white papers and other informational materials written by attorneys and consultants on OFCCP’s Internet Applicant rule and the ramifications of the Internet Applicant rule. However, a short history of the Internet Applicant rule is important in understanding OFCCP’s expectations regarding applicant data.
OFCCP’s Internet Applicant rule is ostensibly a set of regulations concerned with record-keeping. However, it is clear from the history of the Internet Applicant rule that the rule was put in place to help OFCCP determine where discrimination was occurring. For many years prior to the advent of the Internet Applicant rule, OFCCP fought numerous battles with federal contractors over the question “Who is an applicant?” OFCCP routinely took the position that anyone who vaguely expressed interest in any manner for a company’s positions was an applicant. Companies fought back by excluding those persons who didn’t meet minimum qualifications, persons who applied for positions that were not formally open, persons who withdrew from consideration, and so on from applicant data provided to OFCCP.
By the early 2000s, two things were true. First, OFCCP had decided that it wanted to focus its limited resources on reviewing applicant data for candidates who could possibly be victims of discrimination. Second, OFCCP had decided that it wanted to focus on finding situations where there was discrimination involving a relatively large number of applicants, preferably by using numerical data to find a statistically significant showing of disparity. At the time OFCCP published the final version of its Internet Applicant rule in 2005, the agency was sending a clear message to federal contractors and subcontractors: OFCCP no longer wanted to look at the entire universe of a company’s job seekers during a compliance review.
The Value of the Internet Applicant Rule to OFCCP and to Contractors
Much of what has been written by OFCCP or by experts in the affirmative action field suggests that OFCCP’s approach to applicant data is very complicated. However, the Internet Applicant rule and OFCCP’s general approach to examining applicant data can be boiled down to one very simple idea:
|OFCCP is interested in comparing data on the persons who could be hired for a company’s positions to the persons who actually were hired.|
Thought of in a different way, OFCCP has no interest in spending its time examining data and reviewing the credentials of applicants who could never be hired for an open position. With the advent of the Internet Applicant rule, OFCCP can spend its time focusing on individuals who could actually be hired and thus could potentially be the victims of discrimination.
The Internet Applicant rule provides a four-prong test to determine which job seekers should be counted as applicants and should thus appear in statistical reports provided to OFCCP. These four prongs as found in 41 CFR 60-1.3(1) are:
- 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.
Each of the prongs in the test described above helps OFCCP determine whether an individual is an “Internet Applicant” (i.e. someone who could actually be hired for an open position and thus should be included in statistical reports on applicants that are provided to OFCCP). Each of these prongs can also help to reduce the number of job seekers who should be counted as applicants. This is important to contractors for the following reasons.
- With a smaller number of applicants, OFCCP has fewer opportunities to question whether an employer’s decisions are the result of unlawful discrimination.
- A smaller number of applicants means that it is less likely there will be a statistically significant disparity involving any two groups of applicants.
After a number of years where OFCCP was focused solely on finding a class of applicants where there is disparity in investigating possible instances of discrimination, OFCCP has recently resumed asking questions about situations where there were a small number of applicants and/or hires. However, this does not mean that OFCCP’s Internet Applicant rule or the guidance provided by OFCCP regarding the Internet Applicant rule is unhelpful. While the Internet Applicant rule and its outgrowths may be especially relevant to situations where there are a large number of applicants, the basic provisions of the rule are associated with any situation where there is hiring.
The Internet Applicant Rule and OFCCP’s Recent Focus on Outreach
OFCCP’s recent attention to outreach efforts made by federal contractors and subcontractors may suggest the agency is interested in seeing applicant data on a broad spectrum of job seekers. However, companies should understand that questions concerning outreach are fundamentally different than questions concerning applicant data.
- Questions concerning outreach are associated with the traditional concept of affirmative action, where companies are asked to make good faith efforts to try and find qualified minorities, females, veterans, and persons with disabilities. The failure to make sufficient affirmative action efforts may result in an agreement with OFCCP to increase outreach.
- Questions concerning applicant data are generally associated with the idea that a company has failed to provide equal opportunity to some group of applicants. The failure to provide equal opportunity may result in a back pay settlement in which a company is required to provide monetary damages to one or more applicants.
The type of questions OFCCP is currently posing regarding outreach efforts are not answered as much by applicant data as they are answered by reports detailing the specific efforts that companies have made to find minorities, females, veterans, and persons with disabilities. The failure to find a large number of qualified minorities, females, veterans, and persons with disabilities may be the result of many factors that have nothing to do with a lack of outreach efforts. The level of specialization required for a position, the geographic area where a position is located, the pay associated with a position, and many other factors may limit the number of persons who express interest in a position even when a company has made specific and extensive outreach efforts.
Using the Four-Prong Test to Limit Applicant Data
Each of the four prongs in OFCCP’s test to determine whether an individual is an “Internet Applicant” is important in limiting the number of individuals who should appear in applicant data submitted to OFCCP. For example, prong one requires that a job seeker express interest in employment with the company. However, prong one is unusual in that it also potentially expands the number of individuals who should be included in applicant data. While prong one states that an individual must express interest in a position through some form of technology, OFCCP has indicated that if one individual uses technology to express interest in a particular opening, then all individuals expressing interest in that opening may be “Internet Applicants” even if they do not use some form of technology in the application process. This idea is becoming less and less relevant in an age when almost all candidates are required to submit expressions of interest through a company’s website, e-mail, a kiosk, or some other technological tool. Since most employers want to use the other limitations of the Internet Applicant rule, employers are well-served by requiring ALL applicants to apply via the company website or through some other technological tool.
Prong three of the test to be an “Internet Applicant” is generally considered one of the Internet Applicant rule’s greatest benefits to employers, as it allows employers to provide applicant data to OFCCP only on those candidates who meet basic (i.e. minimum) qualifications. We have written previously about basic qualifications (see the March 2012 edition of The OFCCP Digest), and thus will simply state again here that employers should ensure that all open positions have well-defined basic and preferred qualifications, and that all basic qualifications are objective, non-comparative, and job related.
Prong four of the Internet Applicant rule is often underused by employers. Under prong four, job seekers who withdraw from consideration are no longer included in applicant data submitted to OFCCP. While there are many instances where candidates have obviously withdrawn, either through stating their intent to withdraw or by failing to respond to company inquiries, there are other ways to withdraw that are just as important. Any action that a candidate takes to demonstrate that the candidate has a requirement the company cannot meet acts as a form of withdrawal. For example, a candidate whose salary requirements are too high for an open position should be considered to have withdrawn. Similarly, a candidate who requires a certain location where there is no open position should be considered to have withdrawn. These types of withdrawals should be well documented, as they can substantially limit the number of individuals showing as applicants for positions that have a low salary, unusual geographical or physical requirements, or other characteristics that candidates refuse to meet.
It is prong two that is the most under-used prong when it comes to limiting the applicant data to be provided to OFCCP. The actual words in the rule (i.e. “The contractor considers the individual for employment in a particular position”) don’t properly convey the full meaning of this prong. OFCCP’s explanatory materials regarding this prong make it clear that federal contractors are allowed to establish procedural barriers that limit the number of individuals who should be shown as part of the company’s applicant data. For example, a company may state that in order to receive consideration under prong two of the test to be an “Internet Applicant,” a job seeker must apply via the company’s website. In such a situation, an individual who applies to the company via e-mail is not “considered”, and thus even though the individual may meet prongs 1, 3, and 4 of the “Internet Applicant” test, the individual cannot be hired and thus should not be shown in applicant data provided to OFCCP. Similarly, a company may state that in order to receive consideration, a job seeker must apply by a certain deadline. Individuals who fail to meet the deadline are not “Internet Applicants,” cannot be hired for the open position, and should not be shown in any materials provided to OFCCP.
There are an extensive number of legitimate procedural barriers that companies are allowed to establish. These procedural barriers simply need to be neutrally applied to all candidates. Typically, OFCCP will not question these procedural barriers so long as they have some rational relationship to the job and are consistently applied by the employer.
OFCCP goes so far as to allow employers to limit the number of job seekers considered for a position through the use of a data management technique. A data management technique is a procedure where an employer uses a random selection process to review a defined subset of job seekers. For example, an employer could establish a data management technique where only the first 50 persons expressing interest in an open position are considered. Alternately, an employer could establish a data management technique where every third person applying for a position is considered. Data management techniques can be layered, so that an employer could consider the first 50 persons expressing interest, and then move on to the next 50 persons if no one in the first 50 is a viable candidate. Employers need to take care in how they use data management techniques, but these data management techniques can dramatically limit the number of persons appearing in applicant data provided to OFCCP.
While the use of data management techniques can get complicated, the basic idea in prong 2 that employers should have protocols for consideration is both incredibly helpful in limiting applicant data and absolutely critical in an environment where employers routinely receive inquiries from hundreds of job seekers for an open position. In part 2 of this series, we will see how prong 2 can be very important to employers who make extensive use of social media to find candidates for open jobs. We will also discuss various situations where the totality of the Internet Applicant rule makes it clear that entire applicant pools should be excluded from data to be submitted to OFCCP. Finally, we will discuss how the Internet Applicant rule applies to situations involving individuals working for a company through temporary services.
For more information on OFCCP’s Internet Applicant rule, contact Bill Osterndorf at firstname.lastname@example.org. A copy of the rule and OFCCP’s commentary published in 2005 is available on the HR Analytical Services website at http://www.hranalytical.com/documents.html.
Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc. 2013