Two Years Later - Are You Still at Risk?

The recruitment world changed for the majority of America's largest companies on February 6, 2006, when the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) defined what it means to be an applicant in the Internet age.

Since the Internet gave recruiters and companies access to greater pools of candidates, the Internet Applicant ruling was created to address the nuances of electronic recruitment. More candidates yield more data, and more data makes systemic discrimination more likely. In the past two years, the OFCCP has collected over $100 million in settlements from federal contractors related to poor recruitment and hiring practices.

Now, two years after the ruling went into effect, many companies have yet to modify their processes and vendor relationships to ensure compliant recruitment. The OFCCP doesn't simply focus on good faith efforts, but rather investigates recordkeeping to uncover systemic discrimination. More than 30 percent of its audits uncover poor recordkeeping, which illustrates an important aspect of the ruling — discrimination doesn't have to be intentional to cause a company significant damage. For example, a screening test may disproportionately reduce the number of female applicants, thus resulting in systemic discrimination.

Compliant recruitment is required from a regulatory standpoint, but the ill effects of discriminatory hiring can also be detrimental to a company's brand. The risks associated with non-compliance can cost a violator considerably, in fines and notoriety. Once systemic discrimination is identified, the OFCCP looks to the company to provide make-whole remedies to victims of discrimination. The direct cost can be in the millions and the damage to a company's reputation even greater.

Both employers and related vendors have had to alter or amend their processes to respond to the changes in recruitment governance to ensure compliant recruitment. Any company still utilizing the same recruitment processes used in 2005 must quickly reconsider its methods. The recruitment industry has changed, and recruitment processes should, too.

Audits on the Internet Applicant ruling are in their beginning stages, and they will increase as the ruling ages. Currently, about 70 percent of OFCCP auditors are relatively new to the agency. As they gain OFCCP-related experience and the settlements set precedence, recordkeeping audits will become more frequent and will include recruitment analysis in stages. Rather than waiting until the audits happen, companies should proactively evaluate their recruitment process to determine what enhancements can be made to increase compliance. The longer they wait to implement changes in the process, the more data the OFCCP will have to evaluate in uncovering systemic discrimination.

More information concerning OFCCP compliance and how a company can mitigate risk is available here.