By Kurt Ronn

Learning the ins and outs of new legal requirements is always serious business. Contractors are now grappling with the nuances of the Office of Federal Contract Compliance Programs (OFCCP) Internet applicant rule, to name just one. Sharing his insight is guest expert Kurt Ronn, president and founder of HRworks, a national recruitment firm.

First, let’s run down the basics. OFCCP regulations require contractors to solicit gender, race, and ethnicity data for “applicants” and to keep the data to prove they are complying with affirmative action mandates. The challenge with compliance, not to mention the confusion,
grew with the advent of Internet and electronic recruiting. Does a person become an “applicant” when he or she sends in a résumé via the Internet? What if the résumé is unsolicited? OFCCP hopes that defining “Internet applicant” will make it easier for employers to determine when data collecting and recordkeeping obligations kick in.

An “Internet applicant” is a person who meets these four criteria:

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 he or she possesses the basic qualifications for the position.
4. The individual at no point in the contractor’s selection process before 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 definition pertains to “expressions of interest in employment” conveyed by the Internet and “related electronic data technologies.”

Q: OFCCP has begun auditing contractor compliance with the Internet applicant ruling and the results are a concern for recruitment departments and third-party search firms.What steps can companies take now to ensure compliance with the OFCCP’s Internet applicant rule?

A: OFCCP is responsible for overseeing the Internet applicant rule, which took effect February 2006. The Internet applicant guidelines were implemented because of the changing landscape of the recruitment industry, driven by the increase in electronic recruiting. The guidelines define what it means to be an “Internet applicant.” The ruling specifically defines electronic data techniques, creates a new “basic qualification” standard, and establishes recordkeeping requirements. 

Since 2006, the responsibility has been on individual employers and their HR departments to ensure they comply with the ruling and maintain the appropriate records for an OFCCP review. However, the honeymoon is over, and OFCCP has begun audits of companies’ compliance with the ruling.

What does this mean for HR professionals? Poor recordkeeping compliance and inconsistent recruitment practices can result in conciliation agreements and significant financial loss. Companies that fail an OFCCP audit could face a number of unpleasant and costly consequences, including back pay settlements and a tarnished reputation. Thus, taking precise steps now to ensure compliance is more important than ever.

So, how can smart companies prevent the downside of noncompliance? I suggest an internal audit of your hiring processes be conducted by a qualified third party to get an accurate read on both effectiveness and compliance. Among the areas evaluated would be the recordkeeping, selection by recruitment stage, data management techniques, and online recruiting methodology.

Comprehensive audits need to include internal recruitment practices of recruiters and hiring managers as well as third-party search firms. Once the internal audit is complete, consider solutions to any exposed problems and develop a strategy for implementing any corrections or changes.

Careful selection of the right advisor for your internal audit is important. Waiting for OFCCP to audit is not an option. Working with an experienced partner can improve your performance, enable you to minimize liability for noncompliance, and help you continue to attract the necessary talent to build your business.

Practice Tip: Although known as the “Internet applicant rule,” the regulation also applies to jobseekers who use “related electronic data technologies.” OFCCP explains that this includes e-mail, internal and external databases, job banks, electronic scanning technology, applicant tracking systems and service providers, and applicant screeners that use various means to evaluate or test skills.

View original publication in Business and Legal Report's Affirmative Action Solutions Newsletter Sept 2007, Issue 181