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Limiting the Applicant Data That Is Provided to OFCCP
Part 2 – Understanding Special Situations

In the first part of this two-part series, we discussed the fact that the applicant data that is provided to the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is a critical piece of information in any affirmative action compliance review. We discovered that OFCCP’s Internet Applicant rule provides a variety of ways to limit the applicant data that is submitted to OFCCP. We also identified a key idea in regard to the way that OFCCP examines applicant data:

  • 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.

In this article, we’re going to examine a number of important situations that affect the applicant data that should be submitted to OFCCP. Before we continue, though, here’s a short review of how the Internet Applicant rule works. 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 are:

  1. The individual submits an expression of interest in employment through the Internet or related electronic data technologies;
  2. The contractor considers the individual for employment in a particular position;
  3. The individual’s expression of interest indicates the individual possesses the basic qualifications for the position; 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.

The Difference Between Recruitment and Selection

In part 1 of this series, we noted that OFCCP is currently very interested in the outreach efforts that companies are making to find qualified minorities, females, veterans, and persons with disabilities. While OFCCP showed little interest in recruitment for a significant number of years, OFCCP now examines recruitment efforts very closely during compliance reviews, especially as they pertain to veterans and persons with disabilities.

OFCCP is generally careful to distinguish recruitment from selection. Companies are given wide latitude to determine which recruitment efforts are best for them, so long as these recruitment efforts are focused in part on drawing qualified minorities, females, veterans, and persons with disabilities into applicant pools. Conversely, OFCCP is very concerned about how specific selection decisions are made, and the agency expects that all selection decisions are aimed at hiring the best qualified candidate for each position. When companies fail to make sufficient outreach efforts, OFCCP typically requires additional outreach efforts. When companies fail to make appropriate selection decisions, OFCCP may bring discrimination claims on behalf of candidates that the agency believes were better qualified and who were not chosen because of their race, gender, veteran status, or disability status.

Some contractors have expressed concern that OFCCP might find discrimination involving their recruitment efforts. While it is possible for companies to show discrimination in recruitment, OFCCP’s discrimination cases are generally focused on the selection process. The simple fact that a recruitment source provides candidates who tend to fall into one specific class would more likely cause OFCCP to require a company to find a new recruitment source rather than cause the agency to bring a discrimination action.

Using Social Media to Find Candidates

The distinction between recruitment and selection becomes very important as companies turn more and more to various forms of social media to find candidates. As the use of Twitter, LinkedIn, and Facebook grow as means to find candidates, companies should be aware of the ways that they can control the flow of candidates found through these sources.

A social media site can be looked at as one of two things: an advertising platform or a database of potential candidates. Recruiters who troll through LinkedIn or Facebook looking for candidates are effectively turning these sites into giant job boards where candidates have posted information. In such a situation, OFCCP’s Internet Applicant rule would consider evaluations of candidates who are part of these social media sites as the examination of candidates in an external database, and thus the parts of the Internet Applicant rule regarding the collection and recording of information from an external database would apply. The relevant part of the Code of Federal Regulations concerning a search of an external database is as follows:

  • 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, and the resumes of job seekers who met the basic qualifications for the particular position who are considered by the contractor. (41 CFR 60-1.12)

Clearly, most recruiters are not looking to do extensive record-keeping when they use LinkedIn or Facebook to find candidates, and companies are not looking for ways to expand the pool of applicants where data must be provided to OFCCP.

There is a way to limit the applicant data associated with the use of social media sites. Rather than searching for candidates within these sites, companies are well-served to simply post positions on these sites and direct candidates to the standard application process used to collect information on interested candidates. For example, a Twitter posting could state that to receive consideration, an interested person must apply through the company’s careers site. Then, only candidates who applied through the company’s careers site could potentially be considered as applicants under part 2 of the test regarding who is an “Internet Applicant.”

  • Our recommendation: use social media as a recruitment tool, and require candidates found through social media to apply through the company’s standard application process used for considering candidates.

“Passive” Recruitment

A more interesting situation occurs when companies use “passive” recruitment to examine resumes and other information that individuals make available on social media and other internet sites. When passive recruitment is used, companies are typically searching for candidates for positions that are not yet open. Some of these candidates may then be considered when an opening actually occurs where these candidates might be a good fit.

OFCCP has issued no firm guidance regarding passive recruitment. However, we can again use the test regarding who is an “Internet Applicant” to limit the applicant data to be provided to OFCCP. If a company searches LinkedIn or Monster or other websites and identifies candidates for positions that are not yet open, an argument can be made that there is no showing of interest under part 1 of the test. More importantly, if the company requires that candidates found through passive recruitment must ultimately use the company’s standard application process to express interest when an opening actually occurs, the only persons who would be considered applicants are the persons who expressed interest using the company’s standard application process. The remaining passive candidates would not be considered applicants and would not appear in data provided to OFCCP.

A major issue with passive recruitment involves the manner in which potential candidates are made aware of openings. If a company has reviewed LinkedIn information on hundreds of people prior to the time it has actual openings, and then invites only a handful to apply when real openings occur, OFCCP may argue that the hundreds whose information was reviewed should be considered as applicants. However, OFCCP will have a difficult time showing that all of these individuals should be considered applicants if (a) they were never considered for specific positions, and (b) they never formally expressed interest in specific positions through the company’s standard application process.

  • Our recommendation: when considering candidates found through passive recruitment, require them to apply through the company’s standard application process before considering them for open positions.

Situations Where There is No Hire

Passive recruiting can lead to situations where there are candidates, but there is no hire. There are a variety of other situations where there are candidates, but there is no hire. These include situations where a requisition is cancelled because of a lack of funding or a requisition is put on hold. It can also include situations where no suitable candidate is found despite the company’s efforts to find such a candidate.

We would suggest that candidates who express interest in positions where there is no hire should never be included in applicant data provided to OFCCP. This is true even if candidates followed the proper protocols to apply for an opening, met the minimum qualifications, and did not withdraw from consideration. The issue in these situations is not necessarily that there are no viable candidates; the issue is that there is no hire to use for comparison purposes. Remember: the Internet Applicant rule is basically meant to provide a way for OFCCP to compare data on the persons who could be hired to the persons who were actually hired. If no one was hired, there is no basis for comparison. OFCCP cannot say that one or more candidates were the subject of discrimination when no one was selected for an opening, and thus any applicant data for these positions is entirely irrelevant.

The only “no hire” situation where OFCCP might be able to find discrimination is the situation where a well-qualified candidate is not hired, and that person can demonstrate that the only reason he or she was not hired is because he or she was a member of a protected classification. In this situation, the issue is not about developing applicant pools or providing data to OFCCP; the issue is about the failure of a company to properly follow its selection process in regard to one specific candidate. Data on the other applicants who may have been part of this pool is again irrelevant.

  • Our recommendation: omit from applicant data provided to OFCCP any candidates who expressed interest in positions where there was no hire.

What to Do About Internal Candidates

There is one group of candidates who we believe can consistently be eliminated from all applicant data provided to OFCCP: candidates who are already employees of the company. This may be considered a somewhat controversial declaration, and a recent study by the Center for Corporate Equality reached a different view. However, our experience with OFCCP and our study of the Internet Applicant rule suggest that internal and external candidates should not be mixed in the same data set and should not be compared to the pool of persons who were hired for open positions. Simply put, external candidates are hired; internal candidates are promoted. The pools, circumstances, and qualifications surrounding these two types of candidates are not the same.

Much of the discussion on what to do with internal candidates centers on information in the Uniform Guidelines on Employee Selection Procedures (found in the Code of Federal Regulations at 41 CFR Chapter 60-3). The Uniform Guidelines do not make distinctions between internal and external candidates when discussing selection decisions. However, the history of the Internet Applicant rule and the wording of the rule itself clearly suggest that when OFCCP speaks of “applicants,” it is talking about external applicants who might be hired into a company, and not employees who might be seeking promotion to another position. The Internet Applicant rule is, in part, an outgrowth of concerns raised by the Office of Management and Budget in the early 2000’s about how federal agencies would deal with the growing use of the Internet as a source for finding candidates. When the rule was finalized in 2005, it was clearly aimed at persons who were seeking to enter positions at a company through the use of the Internet, not at persons already employed by a company who had other mechanisms to seek new positions.

OFCCP’s current approach to analyzing applicant data also suggests that the agency is seeking to compare external applicants to hires. In the current scheduling letter and itemized listing that federal contractors receive at the start of an affirmative action compliance review, contractors are asked to provide data on applicants and hires, and are separately asked to provide data on promotions. The agency’s proposed revisions to the itemized listing are more explicit, asking for data on the pools of employees considered for positions filled through promotion just like the agency currently requests data on the pools of applicants considered for positions filled through hire. If the agency wanted internal and external candidates to be included in one applicant pool, the language used to request this data would be fundamentally different than the language found in the current and proposed itemized listings.

This idea that internal candidates should be excluded from applicant pools is potentially a major change for some federal contractors and subcontractors. Companies will need to develop a mechanism to distinguish current employees from other candidates who express interest in an opening. However, the exclusion of internal candidates seems to make good sense from a practical perspective, as it limits the number of individuals in an applicant pool and thus limits the situations where OFCCP may find statistically significant adverse impact. It also seems to make good sense from a historical sense, as it conforms to the way that OFCCP appears to think about the question “Who is an applicant?”

  • Our recommendation: omit from applicant data provided to OFCCP any candidates who are current employees.

Temporary and Contract Workers

There is an interesting set of “employees” who do not fall neatly into the exclusion noted above. This is the pool of individuals who are working for the company through a temporary service or as some type of contract worker. When temporary or contract workers are converted to regular positions, many companies consider the applicant pool for these situations to be the pool of all individuals originally considered for the temporary or contract position. As a general rule, we do not believe this is correct. When a temporary or contract worker is converted to a regular position, we believe there is typically only one applicant for the relevant opening.

To understand our thinking in this regard, it is important to understand how OFCCP should (and typically does) look at individuals working for a company through a temporary service or employment agency. If these individuals are not part of the contractor’s regular payroll, OFCCP does not consider these individuals to be employees of the federal contractor or subcontractor. Instead, OFCCP considers these individuals to be the employees of the temporary service or employment agency. Individuals who were initially considered for these temporary positions are thus applicants of the temporary service or employment agency, and not applicants of the federal contractor or subcontractor. When an individual in a temporary position is converted to a position on the federal contractor’s regular payroll, the federal contractor now has an opening. However, the contractor typically considers only the one candidate for this opening, and thus there is only one applicant who should be reported to OFCCP.

OFCCP is not fond of situations where there is only one candidate considered for an opening, and thus may question situations where applicant and hire data show a one-to-one relationship between applicants and hires. However, it is our experience that OFCCP generally understands that when the company has an individual who has successfully worked for a company through a temporary service or employment agency, it makes no sense to consider a variety of other candidates. If OFCCP does have concerns in these situations, they tend to be concerns about how recruitment was conducted (asking, for example, whether the temporary service provides a broad array of diverse candidates and whether the temporary service uses the state employment service as one source to find candidates for its openings).

The situation with temporary and contract workers is much different if these workers are actually on a federal contractor’s regular payroll. In that case, these employees belong to the contractor, and data on the applicants for these temporary positions must be included in data provided to OFCCP as per the provisions of the Internet Applicant rule. The situation with temporary workers may also be complicated by situations where a contractor has multiple temporaries from which to choose for a regular opening. In such a case, the pool of applicants is not the initial pool of individuals considered for the temporary jobs, but instead is the pool of temporaries actually working for the company who are actively considered for an open position. Issues with temporary workers can be further complicated by situations where both temporaries and other candidates are considered for openings, and situations where a company’s managers or HR staff are involved in making recommendations to temporary services on the individuals that the temporary services are asked to provide for certain jobs.

Our general recommendation about the simple situation where a temporary or contractor worker who is not directly employed by a company is hired onto the regular payroll is as follows:

  • Our recommendation: the only applicant who should be included in applicant data provided to OFCCP when a temporary or contract worker not on an employer’s regular payroll is moved to a position on the employer’s regular payroll is that particular temporary or contract worker.

In Conclusion:

Companies should find ways to legitimately limit the number of applicants who appear in data submitted to OFCCP during affirmative action compliance reviews. By requiring candidates to use the company’s standard application process to express interest in open positions and by recognizing that there are certain large groups of candidates who should typically be excluded from applicant data submitted to OFCCP, federal contractors and subcontractors can limit their exposure and raise their chances of having a successful compliance review.

For more information on finding ways to limit the applicant data to be submitted to OFCCP, contact Bill Osterndorf at [email protected]. While our clients have experienced great success following the suggestions noted above, your company’s specific situation may require the input of legal counsel or other professional advisors.

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



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