Final Regulations Regarding
Defining "APPLICANT" and "RECORDKEEPING" Issued
EEO-1 and VETS-100 Update
OFCCP Compliance Review Regulations Increase
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Final Regulations Regarding Defining "APPLICANT" and "RECORDKEEPING" Issued
On Friday, October 7, 2005 the US Department of Labor, Office of Federal Contract Compliance published the long awaited final regulation concerning who is an “applicant” and related recordkeeping provisions. The regulation that went into effect on February 6, 2006 is titled “41 CFR Part 60-1 Obligation To Solicit Race and Gender Data for Agency Enforcement Purposes; Final Rule” and is available online at http://www.dol.gov/esa/regs/fedreg/final/2005020176.pdf.
Several important changes in the final regulations were incorporated as a result of public comments by employers, individuals, an academic organization, trade organizations, consultants and interests groups. Northern California and Silicon Valley Industry Liaison Groups (NCILG and SVILG), SHRM and the Society of Industrial Organizational Psychologists (SIOP) each incorporated comments from our organization. These rules have the force and effect of law for “traditional” applicant process (e.g., paper, fax) and “Internet or related electronic technologies.”
The rules are intended to provide guidance to contractors in the definition of an applicant, their obligation to seek race and gender information, for record keeping and contractor adverse impact analysis requirements. The nineteen-page preamble to the final rule is very informative and reinforces the OFCCP stated enforcement policy of identifying and eliminating contractor “systemic discrimination.”
This final regulation will require contractors to:
► Review and adopt procedures that define an “applicant” within its recruitment and selection process
► Develop or assess procedures for tracking applicant data
► Determine if current or future hiring will have an electronic component so that the “internet definition” will apply
► Assess and update recordkeeping practices to capture required records
In section “60–1.3 Definitions” of the rules an Internet applicant is defined.
Internet Applicant. (1) Internet Applicant means any individual as to whom the following four criteria are satisfied:
SUMMARY EXPLANATION FOR THE INTERNET APPLICANT
The final rule establishes minimum standards for applicant recordkeeping for Internet and related technologies. This rule also permits contractors to voluntarily adopt recordkeeping practices that are more expansive than those in the final rule.
Includes all expressions of interest, regardless of the means or manner in which the expression of interest is made. OFCCP eliminated the differing standards for traditional applicants versus Internet Applicants for the same job when the employer considers both types of applicants. If a contractor considers only hard copy resumes or applications for a position then the Internet Applicant definition will not apply. If both Internet and traditional applications are accepted then the contractor can use the Internet definition. Examples are included in the preamble.
Considers The Individual For Employment In A Particular Position
This means that the contractor assesses the substantive information provided in the expression of interest with respect to any qualifications involved with a particular position.
A contractor may establish a set of procedures, which refrains from accepting applicants who do not follow established procedures or from accepting unsolicited resumes that are not submitted for a particular position.
The consideration of the individual includes a contractor assessing the substantive information provided in the expression of interest with respect to any qualifications with a particular position. It is the contractor’s actual practice with respect to a particular expression of interest that determines whether the contractor has ‘‘considered’’ that expression of interest and similar expressions of interest. Nothing in the definition of Internet Applicant precludes a contractor from engaging in multiple searches of a resume database, so long as each of the search criteria fall within the definition of ‘‘basic qualifications.’’
OFCCP expressly states in the final rule that if there are a large number of expressions of interest, the contractor does not ‘consider the individual for employment in a particular position’ by using data management techniques that do not depend on 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 in terms of the pool of those submitting expressions of interest.’’
Basic Qualifications For The Position
Means qualifications—
§ That the contractor advertises (e.g., posts on its web site a description of the job and the qualifications involved) to potential applicants that they must possess in order to be considered for the position, or
§ For which the contractor establishes criteria in advance
· The qualifications must be noncomparative features of a job seeker
· The qualifications must be objective; they do not depend on the contractor’s subjective judgment.
· The qualifications must be relevant to performance of the particular position and enable the contractor to accomplish business-related goals
Nothing in the definition of Internet Applicant precludes a contractor from engaging in multiple searches of a resume database, so long as each of the search criteria fall within the definition of ‘‘basic qualifications.’’ Under the final rule, OFCCP can assess the impact of ‘‘basic qualifications’’ by comparing the demographics of the pool of ‘‘Internet Applicants’’ with statistics on the qualified labor force. Employment tests are not considered basic qualifications.Removes Himself Or Herself From Further Consideration
A contractor may conclude that an individual has removed himself or herself from further consideration, or has otherwise indicated that he or she is no longer interested in the position for which the contractor has considered the individual. Based on:
§ individual’s express statement that he or she is no longer interested in the position
§ the individual’s passive demonstration of disinterest shown through repeated non-responsiveness to inquiries from the contractor about interest in the position. (e.g. not returning a telephone call from a contractor)
A contractor also may determine that an individual has removed himself or herself from further consideration based on:
§ information the individual provided in the expression of interest,
· such as salary requirements, or
· preferences as to type of work or
· location of work,
Provided that the contractor has a uniformly and consistently applied policy or procedure of not considering similarly situated job seekers.Record Retention
The final rule simply requires contractors to maintain sufficient records to allow both the employer and OFCCP to monitor the contractor’s selection practices for potential discrimination. The final rule establishes minimum standards for applicant recordkeeping in the context of the Internet and related electronic technologies. Contractors, however, may voluntarily adopt recordkeeping practices that are broader than those mandated by the final rule.
The regulation includes reference to significant records such as:
§ Job advertisements and postings, applications, resumes, and any and all expressions of interest through the Internet or related electronic data technologies
§ On-line resumes or internal resume databases,
§ Records identifying job seekers contacted regarding their interest in a particular position
§ For purposes of recordkeeping with respect to internal resume databases, the contractor must maintain
· A record of each resume added to the database,
· A record of the date each resume was added to the database,
· The position for which each search of the database was made, and corresponding to each search, the substantive search criteria used and the date of the search
§ For external resume databases, the contractor must maintain
· 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,
· Resumes of job seekers who met the basic qualifications for the particular position who are considered by the contractor, regardless of whether the individual qualifies as an Internet Applicant
§ Tests and test results
§ And interview notes
This will require contractors maintain applications/resumes/”expressions of interest” for Internet applicants who do not have the “basic qualifications,” even if excluded from the applicant flow report and adverse impact analysis.
In addition OFCCP requires covered federal contractors to obtain gender, race, and ethnicity data on employees and, where possible, on applicants. It does not prohibit contractors from voluntarily collecting race, ethnicity or gender information from potential applicants, nor does E.O. 11246 preclude contractors from voluntarily obtaining this information from potential applicants, as long as such information is used only for purposes of the contractor’s affirmative action and nondiscrimination programs.
Adverse Impact Evaluations
When evaluating whether a contractor has maintained information on impact and conducted an adverse impact analysis with respect to Internet hiring procedures, OFCCP will require only those records relating to the analyses of the impact of employee selection procedures on Internet Applicants and those records relating to the analyses of the impact of employment tests that are used as employee selection procedures, without regard to whether the tests were administered to Internet Applicants.
Please feel free to contact us with any questions that you may have about the new regulations, your “applicant definition” and the procedures you use to track applicants.
Spring 2008 - Revised
By Stephen H. Kellerman, KELLERMAN AND ASSOCIATES
We appreciates the chance to comment on the proposed guidelines for self-evaluation of compensation practices for compliance with Executive Order 11246 with respect to systemic compensation discrimination.
The Silicon Valley Industry Liaison Group (SVILG) is a partnership of government and industry Equal Employment Opportunity (EEO) and Affirmative Action (AA) Professionals striving to positively change the equal opportunity employment climate in Silicon Valley of Northern California. Our members represent more than 200 government contractors and include EEO/AA company representatives, consultants, attorneys and representatives charged with the attainment of EEO/AA goals and compliance with governmental requirements. We desire to make a difference by providing a forum for members to raise questions, discuss real issues, exchange ideas and solutions, and receive information on EEO/AA trends and legislation.
OFCCP is to be praised for its effort to develop a suggested compensation evaluation methodology that is statistically rigorous, follows precedents consistent with Title VII and where possible evidence of discrimination exists. We are pleased that the agency states “…Directive is intended to provide suggested techniques for complying with the compensation self-evaluation requirement…” and “not required for compliance with Section 60 – 2.17(b)(3).” We ask that the use of the appropriate tests of statistical significance tests for the proper unit of measure (the job) plus anecdotal evidence of possible compensation discrimination be the decision of the employer and these evaluation method guidelines not be used as an enforcement tool.
SSEG’s
We are concerned about the introduction of a new concept “Similarly Situated Employee Groupings,” or “SSEG’s” as one of the self-evaluation units of measure that the contractor must perform annually.
The appropriate unit of measure for the contractor should be the job as the employer decides and defines. The proposed SSEG guidelines would create broad employee groups, which are not an appropriate unit of measure for analyzing pay differences since one of the main factors that affect pay differences within an organization is the job itself, and not these synthetic SSEG groups.
Regression Analysis
Using Regression Analysis may be a valuable tool for compensation evaluation, however it will require more time to conduct and will lead to greater costs for the contractor. It would be beneficial to both contractors and OFCCP if a less time-consuming statistically significant test is used as a primary test to analyze pay differences.
Winter 2004
On Friday, September 8, 2006, the Office of Federal Contract Compliance Programs (OFCCP) rescinded the Equal Opportunity Survey (EO Survey) because of the survey’s failure to provide value to either OFCCP enforcement or contractor compliance. The survey was developed in 1999 during the Clinton administration and implemented in 2000.
The EO Survey required company information about applicant flow, new hire, compensation, promotion, workforce and tenure data by race, ethnicity and gender, and certain Affirmative Action Program information, and was designed to further the goals of Executive Order 11246. To analyze the extent to which the EO Survey had accomplished its stated objectives, two studies focusing on the predictive ability of the EO survey were conducted. The first study found that the EO Survey was not a good predictor of noncompliance, and the second study, which examined whether the EO Survey data could be used to develop a model to more effectively target contractors engaging in systemic discrimination, found that the predictive power of the model was only slightly better than chance. Based on the results of the studies and the evaluation of new OFCCP initiatives designed to accomplish the same objectives as the EO Survey, OFCCP proposed to remove the EO Survey.
According to OFCCP estimates, the EO Survey took approximately 21 hours for respondents to complete and cost contractors an average of $6 million every year to track and file the survey data. We always believed that these time estimates were understated for this “mini-audit” survey completion. Agency officials say they will continue to develop “more useful and cost effective methods” to collect data and ensure businesses are complying with federal nondiscrimination rules and regulations. The final rule outlines the OFCCP goals for developing methods to gather information such as improving and expanding the agency’s active case management initiative.
OFCCP officials were careful to point out that eliminating the EO survey does not reflect a lack of commitment to enforce federal equal employment regulations. “OFCCP is deeply committed to improving the enforcement of equal employment opportunity laws by developing and implementing the most effective enforcement tools to identify and remedy discrimination,” the agency stated in the final rule. “It is precisely because of this commitment to effective enforcement that OFCCP is discontinuing the use of the EO Survey, a tool that failed to meet its objectives and often misidentified violators.” We believe the current efforts to eliminate “systemic discrimination” reflect the OFCCP stated policy and contractors are well advised to expand their attention to analyzing and preventing all prohibited discrimination.Fall 2006
EEO-1 and VETS-100 UPDATE
September 30 is the regular deadline for covered employers to file both the VETS-100 and EEO-1 reports.
Employer Information Report, Form EEO-1
Employers with (1) 100 or more employees; or (2) 50 or more employees and $50,000 or more in federal contracts must submit the EEO-1 form. The EEO-1 requires you to report, by gender and job classification, the ethnic and racial composition of your workforce.
The definitions of the categories are as follows:
Sample forms, filing instructions, and a Question & Answer section are online. First-time filers can register at the site to be added to the database and receive forms and special instructions.
General EEO-1 information is available online at http://www.eeoc.gov/eeo1survey/.
VETS-100 Filing Deadline Reminder
September 30 is the filing deadline date of the Federal Contractor's Veterans Employment Report (VETS-100). Companies should use the current defined categories to file this year.
The VETS-100 report has been revised to include a new category of "Recently Separated Veterans," "Armed Forces Service Medal Veterans," and "Other Protected Veterans." Recently Separated Veterans are defined by the U.S. Department of Labor as follows:
"Any veteran who served on active duty in the U.S. military, ground, naval or air service during the three-year period beginning on the date of such veteran's discharge or release from active duty."
To clarify, the definitions of the veteran categories are as follows:
Voluntary Self Identification Forms
Company Pre-Employment and Employment Voluntary Self Identification (VSID) forms need to be changed to collect this data because of the updated Veterans category. These VSID forms may also need to reflect the added minority census categories proposed on the future EEO-1. If your company completes the VETS-100 report, you must determine the best time to collect this new information from current employees and applicants. Some companies may want to change the forms and start gathering the data now.
After company pre- and post-employment self-identification forms have been revised with the race/ethnicity and veterans changes, we recommend re-surveying the current employee population and using the pre-employment self-identification form for all new applicants. All Kellerman And Associates affirmative action program clients will receive new VSIDs after the changes are announced.
Updated Summer 2008
OFCCP Compliance Review Regulations Increase Chance of Audit
By Stephen H. Kellerman, KELLERMAN AND ASSOCIATES
Compliance review procedures changed for the first time in 20 years in the new Department of Labor, Office of Contract Compliance Programs (OFCCP) Compliance Review Regulations. It appears the new compliance evaluation process will enable the agency to increase the chance of audits for a greater percentage of contractors and subcontractors where possible alleged discrimination may exist. OFCCP presented this change as a move to improve customer service, diminish red tape, and reduce contractor burden.
Final regulations also include changes to record keeping, sanctions, maintenance of nonsegregated facilities, preaward audits and other aspects of enforcement.
What is a "compliance evaluation?"
Prior to the new regulations, OFCCP conducted only full on-site compliance reviews that were preceded by an off-site "desk audit." These audits were the "all or nothing" compliance review. "Compliance evaluation," the new term for all types of audits, is any one or a combination of actions OFCCP takes to examine a contractor or subcontractor. OFCCP has said it plans to establish implementation standards and publish them in the department’s compliance manual.
The types of compliance evaluations include the following:
Compliance review - Desk audit of a written affirmative action plan (AAP) and documentation; on-site review of problems and documentation; off-site review to measure results of AAP efforts in most comprehensive evaluation method
Off-site review - Analysis and evaluation of written AAP (or part of the plan ) and support documentation, personnel policies, and compliance action (similar to the previous "desk audit" phase of the compliance review)
Compliance check - Establishment visit to investigate accuracy and appropriateness of specific data and information previously submitted plus assess compliance with regulations for developing a written AAP (Later administratively withdrawn from use)
Focused review - On-site review restricted to one or more components of a contractor’s organization or aspect of employment practices
Corporate Management review - ( a.k.a. "glass ceiling review") A comprehensive audit of the management of equal employment opportunity throughout a corporation.
When notified by the agency, Contractors will have the full 30 day period after notification of a "compliance review" for submitting an AAP.
The new rule greatly expands the scope of records contractors must keep to two years or more. Most contractors will be required to keep all employment or personnel records for not less than two years from the date of making the personnel action. Computerized records are added to the items that contractors will permit the agency to inspect, copy and remove for off-site review. These computer records are in addition to other books, materials, accounts and records relevant to an investigation and compliance with the Executive Order.
Contractors that employ less than 150 employees or have a government contract of less than $150,000 only need to keep records for at least one year. However, government contractors or subcontractors of 50 employees and $50,000 or more in contracts must maintain their current AAP and good faith documentation plus the immediately preceding year AAP and documentation, unless not covered in the prior year. When notified of a filed complaint, compliance evaluation or enforcement action, the contractor must preserve all relevant personnel records until final disposition of the action.
Where the contractor has destroyed or failed to preserve records as required by the regulations, there may be a presumption that the information destroyed or not preserved would have been unfavorable to the contractor, provided that the failure to preserve was not outside the contractor’s control. Failure to preserve complete and accurate records will constitute noncompliance leading to debarment (banned from receiving federal contracts) for six months or more.
Non-Segregated Facility Obligations
Prime contractors and subcontractors are relieved of their obligation to obtain written certification of non-segregated facilities but companies must ensure facilities are not segregated by race, color, religion, sex, or national origin. Separate or single-user restrooms and necessary dressing or sleeping areas must be provided to assure privacy between the sexes, an expansion of the previous regulations.
Standard Affirmative Action Formats for Multiple Establishments
Each prime contractor or sub-contractor with 50 or more employees and a contract of $50,000 or more is required to develop a written affirmative action program for each of its establishments. Contractors may reach agreement with OFCCP on nationwide AAP formats or on frequency of updating statistics. The preaward contract review threshold increased from $1 million to $10 million.
Confidentiality by coding is permitted but the coding key has to be made available to a compliance officer when conducting an evaluation. A great deal of concern has been expressed by contractors anxious about the copying, release and removal of sensitive, confidential business information.
Sanctions that may be ordered by the Secretary of Labor are increased from an indefinite period that could be subject to reinstatement to a fixed minimum or indefinite period. Sanctions may be exercised only by or with approval of the Deputy Assistant Secretary of Labor. Reinstatement of ineligible contractors would be authorized after a compliance evaluation. Interest on back pay awards by OFCCP will be calculated from the date of the loss and compounded quarterly at the percentage rate established by the Internal Revenue Service.
Documentation to support affirmative action good faith efforts and accurate personnel record keeping are now more important than ever before. Employers will need to continue to evaluate recruiting, hiring, interviewing, placement, promotion, termination and compensation practices for potential violation of OFCCP regulations. The measurement and explanation of "problem areas" must be diligently measured and reasonable good faith efforts explained in detail. To avoid potential risks, preventive steps should include a thorough audit of the job screening process, definition of an applicant and maintenance of accurate applicant flow information, compensation, hiring, terminations and promotion analysis at least once a year.
These rules and regulations became effective December 22, 1997 as 41 CFR 60-1.
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