November 16, 2006

DCI DECODES OFCCP’S NEW INTERNET APPLICANT FAQS

by David Cohen, President, DCI Consulting Group, Inc.

Hopefully by now everyone has had a chance to read through OFCCP’s 12 recently released FAQs on the Internet Applicant rule.

While most of these FAQs are fairly straightforward, a few may require some additional “decoding.” Following my conversations with senior OFCCP officials, I offer the following interpretation of what these key FAQs really mean and suggestions for how to comply with them. And, as a reminder, my discussion below is for your general information only, and is not intended to provide legal advice.

1. WITHDRAWAL FROM CONSIDERATION

Background: An individual must meet four criteria to be an Internet Applicant. The fourth requirement is that prior to receiving an offer of employment from the contractor, the individual has not removed himself or herself from “further consideration or otherwise indicate[d] that he or she is no longer interested in the position.”1 The contractor is not required to include those who have withdrawn from consideration in their adverse impact analyses, although their records must be maintained.2

The Internet Applicant rule further defines how a contractor can conclude that an individual has demonstrated their disinterest in a position. One way to show disinterest is based on “the individual’s passive demonstration of disinterest shown through repeated (emphasis added) non-responsiveness to inquiries from the contractor about interest in the position.”3 The new FAQ defines for contractors what is meant by the term “repeated.”

New FAQ: OFCCP tells contractors in the new FAQ that “repeated” means “after two or more non-responses to inquiries by the contractor.”4 While this sounds relatively simple, some contractors worry that two attempts to contact a job seeker could actually be quite burdensome, especially for large contractors that manage thousands, if not millions of resumes. Some contractors also say their applicant tracking systems are incapable of making more than one inquiry, so they wonder if they are now faced with the costs of changing their system, or considering manual systems to make a second contact.

Suggestions: Based on my recent informal conversations with OFCCP, I believe there are practical strategies contractors can consider that will satisfy the “repeated” requirement.

(1) Since neither the Internet Applicant Rule nor the FAQ defines how much time the contractor must give the job seeker to respond to each inquiry, arguably the contractor could make two inquiries to the job seeker within a short period of time and still meet the “repeated” requirement.

(2) For external job seekers, another suggested approach is to send an e-mail to the non-responsive job seeker along with a self-identification form. If there were no response, the contractor would still not be able to consider the person “withdrawn from consideration” because “repeated” means two or more inquiries. But the individual would not have to be included in the adverse impact analysis since their race and gender is unknown. And, for all practical purposes, the contractor has lived up to their obligation to solicit race and gender.

(3) The contractor could simply decide not to include individuals in the adverse impact analysis who did not respond after the first inquiry. During an audit, however, OFCCP could still require the contractor to include these non-responsive job seekers in the adverse impact analysis since only one inquiry was made. Those not counted should be coded appropriately so they can be easily identified when necessary.

Regardless of the strategy used, contractors should make their approach part of a consistent practice. It should also meet the needs of the contractor and live up to the spirit of the Internet Applicant regulation.

2. DATA MANAGEMENT

Background: The Internet Applicant rule permits contractors to limit the number of expressions of interest by “using data management techniques that do not depend on assessment of qualifications, such as random sampling or absolute numerical limits” (emphasis added).5

Such data management techniques can be applied to limit the number of people considered for a position but they must be applied before giving individuals consideration, must not depend on assessment of qualifications, must be representative of the total pool, and must not have an adverse impact.6

The Internet Applicant rule defines “considered” to mean the contractor “assesses the substantive information provided in the expression of interest with respect to any qualifications involved with a particular position.7 One example of “considered” is when a contractor runs a basic qualifications search that brings up an individual’s resume that shows the number of resume “hits.” OFCCP will conclude the contractor has “considered” the resumes that are a result of such a search because a search that displays the resume “hits” is an assessment of the individual’s qualifications,8 and consequently is not a data management technique.

New FAQs: The first new FAQ under Data Management9 discusses searches of large resume databases using software with a “hit” feature that identifies and ranks candidates who best match the basic qualifications. OFCCP states this type of software is NOT a data management technique and that the job seekers resulting from such a search have been “considered.” The rationale is that software that uses a “hit” feature that identifies and ranks candidates who best match the job qualification search criteria has “assessed qualifications,” and an assessment of qualifications is the definition of what being “considered” means.

The second new FAQ under Data Management10 addresses the issue of how to limit the number of resumes that might result from a basic qualifications search of a large database. OFCCP recommends two methods. First, the contractor can implement data management techniques that do not depend on an assessment of qualifications to reduce the number of resumes produced, such as absolute numerical limit.

Secondly, a contractor can establish a search protocol that initially searches the database for resumes indicating an interest in the position, such as type of position, location or salary sought by the job seeker. OFCCP would not conclude the resumes produced from such a search as having been “considered” because there has been no assessment of the individual’s qualifications involved with a particular position. After this initial search, the contractor could then “consider” the subset of job seekers indicating an interest in the position to identify those meeting the basic qualifications for the job.

Suggestions: Here are a few examples that should clarify these two FAQs as well as some special twists involving search technology.

Example 1:

  • Contractor conducts a basic qualifications search of a large resume database.
  • The search is by resume “hits” that results in a ranking of resumes.
  • The search produces 100 resumes that are rank ordered, and the ranking and the hit ratio is displayed to the contractor.

Question: Can the contractor only “consider” the resumes that have a hit ratio of 80% and above?

Answer: No. All 100 resumes would need to be “considered” to determine if they truly met the basic qualifications because (1) the search was not a data management technique since the resumes were rank ordered and the ranking was visible to the contractor; and, (2) OFCCP interprets rank ordering of resumes as an assessment of qualifications, hence, the resumes were “considered.”

Note: Remember, for external resume databases, only those resumes considered AND meet the basic qualifications need to be retained.

Example 2:

  • Contractor conducts a basic qualifications search of a large resume database.
  • The search is by resume “hits.”
  • The search produces 100 resumes that are rank ordered, but the ranking is not displayed to the contractor.

Question: Can the contractor only “consider” the top 20 resumes and not the remaining 80?

Answer: This is a gray area. If the ranking is not displayed to the contractor, then arguably the contractor does not know what the relative qualifications are. There is a good argument here that contractor could “consider” just the first 20 resumes and not the remaining 80 because the contractor is unaware of the algorithm (the formula) being used to determine the hit ratio. The hit ratios are not displayed, and the contractor uses a legitimate data management technique, e.g., an absolute numerical limit to determine those who will be considered.

Example 3:

  • Contractor conducts a basic qualifications search of a large resume database.
  • The search produces 1000 resumes.
  • Before the contractor “considered” any individuals, it then runs another search of the 1000 using random sampling.
  • The second search produces 100 resumes.

Question: Can the contractor only “consider” the 100 resumes that were the result of random sampling?

Answer: Yes. The contractor conducted the data management technique before individual consideration of the resumes, and the random sampling did not depend on the assessment of qualifications.

In short, it is important to remember that:

  • “Data management techniques” are an acceptable way to limit the number of resumes. Resumes that result from data management techniques have not been “considered.”
  • For external job seekers, a contractor only has to retain records of those who are “considered” and meet the basic qualifications. Contractors do not need to retain the records on those job seekers that are “considered” but do not meet the basic qualifications.
  • Searches that use a hit feature that identifies and ranks resumes are not a data management technique. Resumes that result from such searches will be “considered” because there has been an assessment of qualification.
  • Certain search technologies will rank resumes even if random sampling or absolute numerical limit searches are conducted and there are no visible rankings displayed. The new FAQs do not address this situation. However, based on my conversations with OFCCP officials, I believe it is correct to say that if the technology ranks the resumes, but the ranking is not visibly displayed or made known to the contractor, then there has been no assessment of qualifications and no consideration of the resumes.

3. RECORDKEEPING

Background: Many contractors use third party employment agencies or recruiters to assist them in their recruiting efforts. In many cases, the employment agency or recruiter is performing similar functions covered by the Internet Applicant rule. However, the Internet Applicant rule does not directly address who is responsible for maintaining those records.

New FAQs: There are two new FAQs11 that clarify the confusing issue of who should retain the records (and what records should be kept) when a contractor uses an employment agency or outside recruiters. OFCCP makes clear in these FAQs that contractors are still responsible for recordkeeping even if they contract with an employment agency or a recruiting firm to screen and refer job seekers. OFCCP’s position is clearly stated in these FAQs – the contractor is responsible to ensure the agency keeps for it whatever records the contractor will be expected to have. OFCCP believes it would be prudent for contractors to expressly state in its contract with the employment agency the records the agency should maintain when making searches on the contractor’s behalf.

Suggestions: Whether or not OFCCP would actually require contractors during an audit to produce records generated by their employment agencies or outside recruiters is a separate matter. However, I believe contractors cannot simply ignore this possibility. They should take immediate steps to address their obligations in this regard by:

  • Alerting internal company personnel, including employment counsel, about OFCCP’s recordkeeping requirements when contractors use employment agencies or outside recruiters.
  • Identifying the employment agencies and recruiters their companies use and for what positions.
  • Involving employment counsel in drafting appropriate language in agreements with employment agencies and recruiters that address OFCCP recordkeeping obligations.
  • Seeking advice from legal counsel on the feasibility of periodically monitoring your employment agencies and recruiters’ compliance with its agreement to retain records, and the level of training to insure employment agencies and recruiters are maintaining records on your behalf in compliance with OFCCP’s requirements.

RECOMMENDATIONS:

(1) Determine whether your applicant tracking system and external job boards display hit ratios when searches are run. If hit ratios are displayed, then determine what strategy and approach your company wants to take. As discussed above, it might be easier in certain circumstances to limit the number of resumes that are “considered” if hit ratios and rankings are not displayed.

(2) Work with your legal counsel to develop appropriate language for contracts with employment agencies and other third-party recruiters regarding their obligation to maintain the appropriate records and to produce them when required.

(3) Develop a consistent approach on how many contacts your company will make to non-responsive job seekers before you conclude they are disinterested and withdraw them from consideration.

We will continue to post updates on additional FAQs on OFCCP’s Internet applicant rule. In the meantime, please contact me if you have any questions at david.cohen@dciconsult.com.


1Obligation to Solicit Race and Gender Data For Agency Enforcement Purposes, 70 Fed.Reg. 58,961 (2005) at §60-1.3(1)(iv).

2For guidance on record retention, reference OFCCP FAQ under “Withdrawal From Consideration”: “What records must be retained about Internet Applicants who withdraw from consideration?”

370 Fed. Reg. 58,961 (2005) at §60-1.3(5).

4OFCCP FAQ under “Withdrawal From Consideration”: “Section 60-1.3(5) of the Internet Applicant rule states that one way a contractor can conclude that a job seeker is not interested in a position is the individual’s passive demonstration of disinterest shown through repeated non-responsiveness to inquiries from the contractor about interest in the position. How many times must a contractor attempt to contact an individual to conclude that he or she has shown disinterest through “repeated non-responsiveness to inquiries?”

570 Fed. Reg. 58,962 (2005) at §60-1.3(3).

6OFCCP FAQ under “Data Management”: “ Can contractors use data management techniques as part of the database search to limit the number of resumes to be considered?”

770 Fed. Reg. 58, 962 (2005) at §60-1.3(3).

8OFCCP FAQ under “Consideration of Job Seekers”: “Does a contractor “consider” an individual merely by running a (basic qualifications) search that brings up the individual’s resume, if the contractor never opens the resume?”

9OFCCP FAQ under “Data Management”: “A contractor uses software to search a large resume database for job seekers who are the “best fit” for the qualifications required for a particular position. The software uses a “hit” feature that identifies and ranks candidates who best match the job qualification search criteria. Is the software a data management technique such that resumes reviewed by the software have not been considered for a particular position?”

10OFCCP FAQ under “Data Management”: “If a contractor believes that a search of a large external resume database will identify a large number of resumes meeting the basic qualifications for a position, how may the contractor reduce the number of resumes it will be required to retain as a result of the search?”

11OFCCP FAQs under “Recordkeeping”: “If a covered employer contracts with an employment agency to screen and refer job seekers using the employer’s selection procedures, what records must be maintained?” and “Can a contractor ask a recruiting firm to keep, on its behalf, the records required by the Internet Applicant Final Rule?”

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