$50,000.00 Will Do It!

Many employers have long believed that since they don't have a contract with the federal government that they are not required to have a written Affirmative Action Program (AAP) or be OFCCP compliant. However, these employers may be surprised to learn who the federal government considers to be a contractor required to have an AAP and comply with OFCCP regulations:

An entity that employs 50 or more individuals and provides $50,000.00 or more in products or services to organizations who utilize those products or services in the performance of a federal contract is considered a federal subcontractor and must comply with OFCCP requirements¹. Further, the subcontractor may be selected at random for a compliance audit by the OFCCP as a result of reports the prime contractor must provide to the federal government.
If a contractor or subcontractor is selected for an audit, it will likely undergo an initial "desk audit" review by the OFCCP. During the desk audit, the OFCCP compliance officer reviews the contractor's written affirmative action plan and supporting data to evaluate the employment activity of the contractor, particularly with respect to the hiring and promotion of minorities and females.
After the desk audit stage of the review, the compliance officer typically visits the contractor's facility to investigate the problems identified during the desk audit and review personnel policies, tour the facilities, inspect personnel files and conduct interviews with both management and non-management employees to determine if affirmative action efforts are being undertaken and if employment discrimination exists in the workplace.

To be prepared for an audit, contractors should have systems and guidelines in place that address the following:

Definition of an applicant
Written AAP including compensation equality
System to monitor compliance

Defining an Applicant

On February 6, 2006, the OFCCP's definition of an internet applicant and the associated regulations became effective. A subsequent 90 day extension to be in compliance with the new regulations was implemented. To be considered an applicant under the OFCCP definition, a person must meet the following criteria²:

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.
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.

To avoid having to keep records for each type of applicant, a contractor should put systems in place to differentiate an applicant from a jobseeker according to this definition. Based on the four criteria, employers subject to OFCCP compliance will need to develop or utilize systems that will allow them to solicit race and gender information - EEO data - for reporting the gender and racial makeup of the applicant pool. In addition, the OFCCP specifies record- keeping requirements for employers using the Internet or related electronic data technologies for recruiting and hiring.

OFCCP Applicant Log

The OFCCP has recently begun enforcing a little used compliance provision requiring that employers provide detailed applicant logs upon request during OFCCP desk reviews or audits. To comply with such requests, the OFCCP is requiring that the employers provide the OFCCP examiners applicant logs covering both job seekers and applicants, either as separate logs or as a combined log. If separate logs are desired, which we believe is preferable after consulting with the OFCCP and a prominent law firm, the job seeker log must show the following information:

Candidate Name
Date of application
Job applied for
Location applied for
Race
Sex
Disposition

Disposition refers to whether the candidate remained a job seeker due to lack of qualifications.

If a job seeker has the minimum qualifications for the job and thus becomes a qualified applicant, then the above information must be retained for each applicant and a log must track and record the disposition of the applicant for each step of the selection process until the applicant is hired, rejected or voluntarily withdraws from consideration.

NOTE: The entire step by step process for both job seekers and applicants must be documented and provided in the respective log(s).

In addition to the data reflected above, the OFCCP is now requiring employers to also prove that they have a system in place to collect and retain the usual data required by the OFCCP in addition to that required by the applicant logs.

To address this compliance issue, we at CRI are incorporating a new Applicant Log capability into our Applicant Management Systems. This feature will allow users of the CRI Applicant Management System to easily generate the logs as requested by the OFCCP and eliminate the need to maintain applicant logs manually.

Affirmative Action Program (AAP)

Affirmative Action Programs are designed to provide written guidelines to ensure that employers are not discriminating against protected groups (minorities and females) either in their selection practices or in compensation. While many contractors are required to have a written AAP for OFCCP compliance, simply having the AAP is not enough. OFCCP auditors will review not only the text of the AAP, but also whether the contractor is following it by analyzing the contractor's hiring practices with regard to race, age, sex and veteran status. Of particular importance to the OFCCP is compensation equality. The OFCCP will review employment practices to determine whether females and minorities are receiving compensation that is comparable to that of other employees in the same job category.

Monitoring Compliance

The OFCCP rules give companies the opportunity to restrict the size of their applicant pool through their definition of an Internet applicant, but employers must develop or utilize policies and procedures that will support this definition. Further, they must have systems in place that allow them to monitor adherence to the new policies and procedures and maintain the records as required by OFCCP regulations.

The Employment Center from CRI provides the tools needed to differentiate an applicant from jobseekers by the OFCCP definition and aids in compliance by allowing periodic monitoring of selection practices for adverse impact.

The Employment Center is a patent pending web based system that provides an employer a resource for attracting job candidates, qualifying them for job openings, and taking the candidate through the employer's application process. Additional screening and information gathering can be included in the process so that the employer has obtained all of the information needed to make a decision about the qualification of an individual for a job opening. All information is gathered online in an automated format utilizing no resources from the HR function until the data gathered is reviewed. Further, the Employment Center retains all applicant data and provides data analysis functions to help an employer monitor its selection process for compliance with hiring guidelines.

To ensure compliance with OFCCP regulations, a contractor, whether prime or a sub, should implement an Employment Center in conjunction with a written AAP. By taking these steps now, the contractor will be able to comply with the new regulations when the OFCCP begins enforcing them on May 5, 2006.

For more information, click on the links below:

To learn more about your obligations as a contractor subject to OFCCP jurisdiction, click here.
To learn more about the steps you can take to assist you in your compliance efforts, click here.

1 Executive Order 11246 (41 CFR 60-1)

2 41 CFR Part 60-1 as amended, published in the Federal Register Volume 70, No. 194, Friday, October 7, 2005