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U.S. Adopts New Hiring Rules

October 14, 2005

The federal government has issued new rules on how federal contractors, including colleges and universities, must define who is considered an "applicant" as they hire employees. The question matters because employers must collect demographic information about all applicants as part of their annual affirmative action reporting to the government, and the shift of recruiting onto the Internet has complicated that process.

The new rules from the Department of Labor's Office of Federal Contract Compliance Programs, which were published in the October 7 Federal Register, conclude a five-year process in which companies and other entities that provide contracted services to the U.S. government have sought more clarity about their obligations under federal nondiscrimination laws.

Contractors to the government are required to collect information about the race, gender and ethnicity of each applicant, so that the government can assess whether the employers' hiring and promotion policies have an "adverse impact" on members of underrepresented groups. But the contract compliance office had never issued regulations that defined the term "applicant" in a clear way, to the consternation of many employers.

In March 2004, the contract compliance office issued proposed rules that defined the term "applicant," and after receiving comments from dozens of organizations and employers, it issued the new final rules on Friday. They take effect February 6, 2006.

“This new rule provides clear guidance to allow us to better enforce the law,” said Charles E. James, Jr., deputy assistant secretary of labor for the federal contract office. “This final rule will enable OFCCP to effectively evaluate whether federal contractors are recruiting a diverse pool of qualified applicants and hiring new employees on a nondiscriminatory basis. It also helps contractors by clarifying an ambiguity that, until now, left contractors guessing at what information they needed to collect from Internet applicants.”

Under those regulations, the government defines an “applicant” as someone who:

(1) submits an expression of interest in employment through the Internet or related electronic data technologies.

(2) is considered for employment in a particular position;

(3) possesses the basic objective qualifications for the position; and

(4) does not remove him or herself from consideration for the position before receiving an offer of employment from the contractor.

The new rule applies to any jobs for which the employer accepts expressions of interest via the Internet and related technologies, such as e-mail, commercial and internal resume databanks, as well as employers’ own Web sites. For jobs that are not posted on the Internet, the agency’s existing recordkeeping standards apply. (If an employer accepts applications for a position over the Internet but also gets paper applications, the new standards apply.)

Kris D. Meade, a lawyer at Crowell and Moring and an expert on employment law, said that employers had pushed the federal contract office to include the third criteria, to try to ensure that employers would have to collect demographic information only on those job candidates who meet the qualifications set out by the employer for the job, as opposed to completely unqualified people who might just have expressed interest in a position.

The tricky thing about that for colleges and other employers going forward will be deciding how specific to be in setting out those job qualifications, Meade said. The fewer qualifications that an employer lists for candidates to meet, the more applicants are likely to meet them and the more information the employer will have to collect, “opening the floodgates,” he said. But “by trotting out a whole bunch of required qualifications, you can deter or disqualify folks who might be really well qualified.”

Most employers are likely to respond to this rule not by establishing too many basic qualifications – “most will want the net to be cast as broadly as possible” – but by making rigorous distinctions on applicants’ relative qualifications going forward, Meade said.

The other challenge that the new rule poses to colleges and other potential federal contractors, Meade said, will be to “have very tight tracking processes in place” to collect information about applicants. Employers will need to collect demographic information about not only those qualified applicants who respond to Internet postings but those whom an employer identifies in searches of resume databases.

“There will be a major onus on contractors to get processes established and implemented by February 6,” when the new rule becomes effective, Meade said. “The timing stinks.”

 

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