OFCCP: Friend or Foe?

If anything has ever kept a staffing director up at night, it’s worrying about an OFCCP audit. Or, worse yet, the fear of bad PR, or maybe even a lawsuit that may result from bad audit results. But the reality is that if your company truly believes in being an equal opportunity employer, then you have nothing to fear as long as you have in place (and are documenting) fair and consistent hiring practices across the board. Who is the OFCCP? Most staffing folks know this, but not all recruiters do. OFCCP stands for the Office of Federal Contract Compliance Programs. A very simple description of the OFCCP’s charter is that it ensures compliance with several Acts and an Executive Order, which prohibit discrimination in hiring or employment decisions if you do business with the federal government. It prohibits discrimination on the basis of race, color, gender, religion, and national origin. It also protects some veteran groups and individuals with disabilities against unfair hiring practices. By the way, the EEOC ? which stands for Equal Employment Opportunity Commission ? is a different agency that was established to enforce employment and pay discrimination. In its most basic sense, regulations of the EEOC apply to any company. This means that an individual can sue your company if they feel they have been discriminated against, period. The EEOC, however, does not perform audits to ensure compliance. For simplicity’s sake, we are only going to cover the OFCCP in this article. Who Needs To Follow OFCCP Regulations? Let’s face it. Hiring fairly is the responsibility of all recruiters and hiring managers. Not only is discrimination flat out wrong, it’s illegal. It’s also bad business! Who’s to say that the person you discriminated against wouldn’t have been the best employee your company ever had? However, OFCCP regulations really apply to companies who do business with the federal government, and can perform an audit on your company to verify compliance. If your company is ultimately found not to be compliant with the regulations, you can lose your government contracts, and with that you may find a watershed of lawsuits could ensue. “Alex, I will take “Applicant” in the Category “Vague” for $500 please…” During an audit, the OFCCP requires you to demonstrate that you have not discriminated against “applicants” seeking a job at your company. The fact that “applicant” is not clearly defined by the OFCCP makes this scenario a little problematic! To date, there have been no court decisions regarding a precise definition of “applicant,” although in McDonnell Douglas Corporation vs. Green, the U.S. Supreme Court said an applicant must prove that “he applied and was qualified for a job for which the employer was seeking applicants…” By this rationale, a candidate who applies for a job but doesn’t meet the minimum requirements is not an applicant. Only a qualified candidate becomes an applicant. Okay, problem solved! Well, not really. The real problem is that you have to prove the candidate did not meet the minimum requirements. (More on this later…) A New Definition Emerges Currently, the OFCCP’s definition of applicant allows employers a lot of leeway in creating their own recruiting, application, and hiring procedures. I have heard the OFCCP is revamping the definition of an “applicant” and the new guideline revisions are due out early next year (I have heard that before…). But don’t expect an instruction manual on “How To Avoid Lawsuits and Audits: A Step-By-Step Guide From The OFCCP.” (Now wouldn’t that be a nice gift for the holidays!) A well-informed OFCCP watcher recently told me that there is a push for a definition in which “a click does not an applicant make,” but there are no guarantees this will happen. Regardless of how the definition changes, consistency will remain the key element of ensuring compliance. The biggest hurdle that recruiters and HR professionals must overcome is developing clear policies that enable them to hire the best people, while reducing potential liability and limiting the number of “applicants” that must be tracked. In general, it is policies that are not clear that invite investigation from the OFCCP. Your best intentions (albeit a good place to start) don’t mean a whole heck of a lot when it comes to proving that you’re consistently hiring employees fairly. (Now, I know we could talk about good faith efforts, applicant availability, and all the other components, and I also know we can argue about the playing field not being level, but for the sake of this brief article lets just focus on compliance.) Play to Win, Don’t “CYA” Applicant tracking systems can be a great way to ensure compliance with OFCCP regulations. But take a step back and think about your reasons for buying an ATS. Is it because you truly want to track the progress of candidates and applicants through the hiring system because you want to hire the best people (fairly)? Or are you afraid of being audited by the OFCCP and want to cover your behind? It’s the difference between playing to win, and playing because you’re afraid of losing. You must play to win. What One Company Plans To Do A large (35,000-person) corporation I have consulted with has decided to put in place a strategic and consistent plan for tracking true applicants across their entire company. They want to ensure that any one of their divisions doesn’t get caught in a quagmire, so they are requiring that all divisions adopt these guidelines. As a rule, this company believes it will come to better business results and a higher quality of employee if it focuses on equal opportunity employment. They want to hire the best people, and they want to be able to showcase that they’re doing this by putting processes in place that encourage and enable this. They’ve decided that when they first receive a resume, associated with a job or not, it is considered only a candidate. Candidate, not “applicant.” In order to become a true applicant, the candidate must meet a minimum set of qualifications necessary to perform the job. They plan to determine whether or not an applicant has these minimum qualifications through an online questionnaire and a basic skills profile on their employment website. They intend to collect EEO information after they receive the questionnaire results. It is only after a candidate has shown they meet minimum qualifications that he or she is then ported from the “Candidate Relationship Management” database (which the company collected date for from the employment website) into the ATS (applicant tracking system). More testing and information gathering can be done at this point in order to choose (and track!) the right person for the job. There are, of course, a lot of procedural steps for this process that I have not outlined (i.e. how to capture candidates, and eventually applicants, without access to the Internet; what to do with resumes received not in association with a job; etc). However, due to lack of room in this article (and for fear of putting you into an even deeper sleep!) I will not outline all the details here. Knowing them would not necessarily help your company develop its own processes anyway. What Your Company Can Do To Ensure Compliance The best place to start is with good business sense. Make sure that there is a commitment from the top down to hire a wide range of people who can help make your company successful. If you can, you should also consider either hiring individuals dedicated to diversity hiring and OFCCP regulation monitoring or improving your own personal or in-house expertise. Knowledge will kill the fear and save you money. Next, it helps to have some automation in your processes and procedures, which mirror your intent and implement the ability to track them. I cannot give your company the Holy Grail for OFCCP compliance, but I can give you some food for thought when determining your company’s procedures. Be brave, all of these points below are things that are good recruiting and hiring practices for finding and hiring the best people, and also happen to be helpful in ensuring OFCCP compliance:

  • Sourcing. Make sure that you are getting your candidates from a variety of places and can prove it. How can you ensure that you’re hiring the best people if you’re not using a vast array of sourcing methods? I would even recommend targeting certain areas that you may be lacking in your corporate make-up.
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  • Internal competition. Reassure divisions that they will not be measured against other divisions when tracking hiring data. Share data and process. Don’t be afraid if you think your data is comparatively worse, it probably isn’t. If you don’t know what I’m talking about here, your company could quite possibly be the only corporation free of bureaucracy!
  • Communication. Candidates need to know what it takes to be considered for a position. Your employment website is a good place to do this. Let them know exactly what they need to know about you and what you need to know about them. Create a journey they can follow that yields the right information from both. Clearly tell candidates what your procedures are. Repeat them. Then, make sure that all candidates receive notification of where they are in the process.
  • Consistency of process. Subject all candidates to the same criteria. Don’t make exceptions here and there ? be fair to everyone, all the time.
  • Internal tracking. Implement procedures for tracking policy compliance (not just applicants) within your own company. Show due diligence in making sure that you’re following your own procedures! As long as you can prove that you are abiding by your own formal procedures, the question of who an “applicant” is becomes clear, and you reduce your liability.

OFCCP is Not a Four-Letter Word! I’ve sometimes felt that the OFCCP is mentioned like the word “cancer” is spoken in Terms of Endearment. (Or, for a timelier example, the way “Voldemort” is spoken in Harry Potter). This is quite a touchy subject, and not a lot of folks are willing to discuss their feelings about it for fear of drawing attention to their company. My intent of this article is to help you breathe easier by showing you that you can be in control of the situation. Place your best practices with consistent procedures and you should be okay. I sometimes see companies who spend their time and energy avoiding good hiring practices simply because they’re scared to death of an audit. They are afraid of marketing a candidate journey for fear they won’t be able to track it. Don’t spend your time covering your you-know-what. Instead, spend your time and energy identifying the best ways to hire a wide range of the best people available. Set in place policies and procedures to enable this to happen AND monitor to ensure that it does.