Understanding The OFCCP s New Definition of Internet Applicant

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1 & ASSOCIATION OF CORPORATE COUNSEL PRESENT Understanding The OFCCP s New Definition of Internet Applicant Eileen A. Groves, Esq. United Space Alliance, LLC (281) Eileen.A.Groves@usa-spaceops.com PANELISTS: Matthew B. Halpern, Esq. Jackson Lewis LLP (631) halpernm@jacksonlewis.com Jackson Lewis All rights reserved. MODERATOR: Keith A. Rummer, Esq. Fifth Third Bank (513) Keith.Rummer@53.com November 30, 2005

2 At a Glance Final rule goes into effect February 6, Contractors only given 120 days from date regulation was issued to comply. March 2004 proposed regulation has been superseded. Page 2

3 Background For years, there has been significant controversy between OFCCP and the contractor community over the definition of applicant. Significant because contractors have an obligation to analyze adverse impact results in hiring practices. The obligation to solicit race and sex. The obligation to monitor the selection and rejection of applicants. Page 3

4 Background OFCCP (through U.S. DOL) is a signatory to the EEOC s 1978 Uniform Guidelines on Employee Selection Procedures and the interpretive Qs & As promulgated in This definition is very broad and according to Question 15 of the Qs & As: The definition of applicant depends upon the user s recruitment and selection procedures. The concept of an applicant is that of a person who has indicated interest in being considered for hiring, promotion or other employment opportunities. The interest might be expressed by completing an application form or might be expressed orally, depending upon the employer s practice. Page 4

5 Background The definition of applicant also determines the size of pools used for adverse impact analysis. Stage at which a contractor identifies an applicant is significant. Page 5

6 Background Identify early and the size of the pools (and thus potential liability) are greater; identify later and the size of the pools (and potential liability) decrease. Many contractors insisted on counting applicants at the interview stage because those were the true applicants who possessed minimum qualifications. The OFCCP insisted that this was too late in the process because a large number of individuals had already been screened out. Page 6

7 Background OFCCP s broad definition increased the size of the applicant pools (therefore, the potential for adverse impact). Since the OFCCP seeks make-whole relief (including back pay and job offers) based on adverse impact, the more inexplicable applicant rejections there are, the more likely liability will be found. Also, OFCCP did not have a uniform definition of applicant from office to office. Page 7

8 Background With that as a backdrop, shortly after the 2000 presidential election, a governmental inter-agency task force was created to examine the thorny issue of defining applicant. After a wait of almost four years, on March 2, 2004, the EEOC published in the Federal Register a proposed inter-agency guidance on the definition of applicant. Page 8

9 Background Shortly thereafter, on March 29, 2004, the OFCCP published its proposed definition of applicant. While the OFCCP s proposed definition included an element of minimum qualifications, the EEOC s did not. On October 7, 2005, despite the fact that the March, 2004 proposed guidance issued by the EEOC had yet to be finalized, the OFCCP issued its final rule. Page 9

10 Background OFCCP s final rule, largely adopts its rule as it was originally proposed with some important modifications. Page 10

11 OFCCP s New Definition 1. The individual submits an expression of interest in employment through the Internet or related electronic data technologies (same as proposed); 2. The contractor considers the individual for employment in a particular position (virtually the same as proposed, but removes the word open ); Page 11

12 3. The individual s expression of interest indicates the individual possesses the basic qualifications for the position (eliminates the word advertised from before basic qualifications ); and 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 (modifies the proposed rule which was phrased in the double negative and adds concept of removing one self from consideration). Page 12

13 Expressions of Interest Resolving the Dual Definition Dichotomy A number of public comments expressed concern over two different standards for defining applicant; one for internet and one for paper applicants. In fact, the OFCCP specifically solicited comments on this dichotomy during the comment period. Page 13

14 New Internet Applicant definition includes all expressions of interest, regardless of the means in which they are made, if the contractor considers expressions of interest made electronically in the recruiting or selection process for the particular position. If a contractor only accepts hard copy applications for a position, the old definition still applies to that position. Page 14

15 If a contractor also solicits and accepts applications electronically for a position for which it accepts paper applications, the new rule applies. Contractors should include language in job advertisements indicating that it will accept resumes/applications electronically or in hard copy. Contractors do not have to consider any and all expressions of interest. Companies can use protocols as described next Page 15

16 Considering Individuals for Employment in a Particular Position An employer is not required to consider expressions of interest that either are not submitted in accordance with the contractor s standard procedures for applying for a job or that are not submitted with respect to a particular position. For example, if the contractor has consistently applied a practice of not accepting unsolicited resumes, it is under no obligation to start doing so following issuance of this rule. Page 16

17 The new definition also allows employers to draw the line at too many applicants. If there are a large number of expressions of interest, the employer has not considered the individual for employment in a particular position if it uses data management techniques that do not depend on an assessment of qualifications, (such as random sampling or absolute numerical limits to reduce the number of expressions of interest to be considered), provided that the sample is appropriate (reflective) in terms of the pool of those submitting expressions of interest. Page 17

18 In this regard, an employer is free to apply a data management process (to limit the number of expressions of interest that must be considered) that is facially neutral and does not produce disparate impact based on race, gender, or ethnicity in the expressions of interest to be considered. For example, an employer could decide it will only look at the first one hundred applicants or 10% of the applicants. Here, any above one hundred or the remaining 90%, respectively, would not be considered applicants. Page 18

19 Under the OFCCP s Old Definition OFCCP could insist that anyone who expressed an interest was an applicant regardless of whether they were minimally qualified. Page 19

20 Under the OFCCP s New Definition An applicant must meet all of the position s basic qualifications in order to be considered an Internet Applicant. Page 20

21 Basic Qualifications Refers to Those Qualifications: That the contractor advertises to potential applicants that they must possess in order to be considered for the position, or That are preset queries or criteria used by the contractor for positions not advertised, such as for pulling resumes off of an external resume database. Page 21

22 In addition to the foregoing, basic qualifications must meet each of the following three (3) conditions: 1. The qualifications must be noncomparative features of a job seeker (e.g., two year experience requirement would be acceptable; a requirement that the individual be one of the top five individuals in terms of experience would not be acceptable). Page 22

23 In addition to the foregoing, basic qualifications must meet each of the following three (3) conditions: cont. 2. The qualifications must be objective in that they do not depend on the contractor s subjective judgment (e.g., a requirement of a college degree in accounting is acceptable whereas a requirement that the individual have a degree from a good school would not be). Page 23

24 In addition to the foregoing, basic qualifications must meet each of the following three (3) conditions: cont. 3. The qualifications must be relevant to the performance of the particular position and enable the contractor to accomplish business-related goals (e.g., requirement of accounting degree may not be acceptable for a human resources position). Page 24

25 Take Note A job seeker must meet all of a company s basic qualifications in order to be an Internet Applicant. The OFCCP stresses the fact that employment tests used as employee selection procedures, including online tests, are not considered basic qualifications under the rule. Likewise, factors such as an individual s salary requirements, willingness to travel, willingness to work certain shifts, etc. are not basic qualifications, but Page 25

26 Individuals Who Remove Themselves From Consideration The new definition allows contractors to discount as applicants any individual who, prior to receiving an offer of employment from the contractor, removes himself or herself from consideration or otherwise indicates that he or she is no longer interested in the position. Page 26

27 In the past, companies used failure to show up for interviews or return phone calls as a reason for rejecting applicants. The new definition clarifies that such conduct means that the individual does not even have to be counted as an applicant. Even more significant, companies may infer lack of interest in the position from information it gleans from the applicant s resume or application form, such as salary requirements or shift availability. Page 27

28 Thus, the new definition provides that a company may conclude that an individual has removed himself or herself from consideration if the individual has indicated that he or she is no longer interested in the position for which the contractor has considered the individual, based on the individual s: express statement that they are no longer interested; or passive demonstration of disinterest shown through repeated non-responsiveness to inquiries from the contractor about the position in question (e.g., fails to respond to telephone calls, letters, etc.). Page 28

29 Also, a company may conclude lack of interest based on the individual s initial expression of interest and the information contained therein (e.g., salary requirements, shift availability, etc.) provided that the employer has been consistent in not considering similarly situated individuals. Page 29

30 Take Note To take advantage of the removed himself or herself criteria, contractors must be sure to fully document and retain any documentation regarding an applicant s withdrawal from the applicant process; an applicant s lack of response to the employer s efforts to contact them; and conditions contained in the applicant s initial expression of interest (e.g., salary requirements) in anticipation of scrutiny by the OFCCP during a compliance review. Page 30

31 Take Note This will allow for the removal of these individuals from the resulting adverse impact analysis. Page 31

32 New Recordkeeping Obligations Any and all expressions of interest submitted through the internet or related electronic data technologies as to which the contractor considered the individuals for a particular position including on-line resumes and internal resume databases; All records identifying job seekers contacted regarding their interest in a particular position; Page 32

33 For internal resume databases, a record of each resume that was added to the database (and the date it was added), the position for which each search of the database was made, and corresponding to each search, the substantive criteria used and the date of the search; and Page 33

34 For external resume databases, a record of the position for which each search of the database was made, and corresponding to each search, the substantive search criteria used, the date of the search, and the resumes of any job seekers who met the basic qualifications for the particular position who are considered by the company. Page 34

35 Take Note All of the records detailed above must be retained regardless of whether the individual qualifies as an Internet Applicant. Although the new definition allows companies to determine themselves who possesses basic qualifications, employers may fully expect the OFCCP to closely scrutinize its practices in this area to ensure equal employment opportunity. Page 35

36 Take Note Employers must therefore maintain applications/resumes for individuals who do not possess the basic qualifications, even if these individuals are not included on the applicant flow report and resulting adverse impact analysis. Page 36

37 Solicitation of Race, Gender, and Ethnicity The new rule requires companies to solicit race, gender, and ethnicity data from all individuals who meet the definition of applicant. The new rule permits companies to make identification based on visual observation for applicants who appear in person and decline to self-identify. Page 37

38 The new rule does not, however, mandate a specific time in the employment process at which such information must be solicited. The OFCCP continues to encourage the use of applicant self-identification methods such as tear-off sheets, auto responses, etc. Page 38

39 Use of Labor Force Statistics and Census Data To ensure a company s applicant definition is not having an adverse impact, the OFCCP may review the contractor s definition for adverse impact using labor force statistics and census data. If the OFCCP identifies a significant difference between the labor market data and the hiring activity of the company, it will further investigate to ensure compliance with Executive Order Page 39

40 Use of Labor Force Statistics and Census Data The OFCCP confirms in the introduction to the final rule that it will use the traditional two standard deviation threshold for determining statistical significance. Page 40

41 What Should You Do Now? Reevaluate your definition of applicant and procedures for tracking applicant data in light of the new rule; Consider what impact dual definitions of Internet and Traditional Applicant will have on current or future hiring and recordkeeping practices and consider always adding an electronic component to any position opening to bring all openings within the electronic definition; Page 41

42 What Should You Do Now? Review recordkeeping policies and test HRIS systems to determine whether the company has the technological capacity to comply with the new recordkeeping requirements, such as the obligation to keep search criteria and the dates resumes enter a database; Page 42

43 Compare existing applicant flow data with availability data to identify areas of significant difference and consider broadening good faith efforts in those areas to ensure that the company s applicant flow data reflects surrounding census and other labor market data; and Provide training to human resources and recruitment staff regarding the new requirements. Page 43

44 End of Presentation & ASSOCIATION OF CORPORATE COUNSEL Thank you for viewing 2003 Jackson Lewis All rights reserved.

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