Atlanta Business Chronicle - by Randy Southerland Contributing Writer

For hiring managers, the Internet and job boards such as Monster.com are a fast and easy source of job applicants.

But new federal regulations designed to prevent hiring discrimination may turn these sites into a costly trap.

Last year the Office of Federal Contract Compliance Programs (OFCCP) issued regulations defining a so-called "Internet applicant." Although companies that receive federal contracts had expected the rule, they were taken by surprise when it was coupled with a complex record-keeping requirement designed to let the agency keep closer tabs on hiring practices.

"If you're a government contractor, you know about this change," said Kurt Ronn, president and founder of HRworks. "We haven't run into a lot of people who actually understand in depth the implications and the requirements to hold individuals accountable to their actions."

The Equal Employment Opportunity Commission (EEOC) is seeking results at any stage in the talent acquisition process that have an adverse impact, perhaps a stage of the process that does not move enough women or minorities into the next phase. Companies are now required to gather more specific data on the candidates. The EEOC can then audit that information to see if discrimination, accidentally or otherwise, is taking place.

The agency completed nearly 4,000 compliance audits in 2006 and recovered $51.5 million for workers subjected to unlawful discrimination, up more than 78 percent from 2001. The audits are designed to ferret out obvious cases of hiring discrimination and also the more subtle forms of "systemic discrimination" that spring from the process itself rather than any calculated desire to exclude minorities and women.

The federal agency contends that the only way to judge whether a company is discriminating is to look at not just the final applicants, but the bigger universe of potential job candidates. For example, a company may consistently pick white males for jobs because it isn't giving enough attention to recruiting minorities and females.

A division of the U.S. Labor Department, the OFCCP oversees all vendors who supply goods and services to the government.

The OFCCP's new rules reflect a fundamental change in the way companies recruit and hire candidates. Where once a job-seeker would visit a company and hand in a résumé or perhaps mail it to a hiring manager, now open jobs can attract thousands and sometimes hundreds of thousands of applications through online job sites.

Companies seeking candidates to fill job slots are responsible not just for how they handle the hiring process, but for actions on their behalf by third-party recruitment services.

The agency formulated a definition of just what constitutes an "Internet applicant."

These include four basic requirements: the applicant expressed interest, was considered for the job, met the basic qualifications and stayed in the process through to hire.

The hiring process becomes like a pebble dropped into a pond. Companies only wanted to consider the first ripple, according to attorney Matt Halpern, a partner with Jackson Lewis LLP and head of the firm's affirmative action practice group. That first ripple is the final round before a candidate is hired, and therefore the number of potential candidates is much smaller than the entirety of the group that sent in résumés.

"[The requirement] extends out a few ripples from where the pebble struck the water instead of including the whole ocean [as OFCCP originally wanted]," said Halpern.

While companies welcomed this definition because it enabled them to exclude a significant portion of those applicants who initially expressed interest, it also carried a not-so-welcome record-keeping requirement. Companies must solicit race, gender and ethnicity information from those job-seekers. They must also keep records of how they conducted searches so that during audits the OFCCP can re-create the pool of candidates from which the company made its selection. That means hiring managers must be able to prove they considered other people for a particular job.

Companies are eager to be in compliance since not doing so could prove to be expensive. Last January an administrative law judge approved a consent decree between the OFCCP and Goodyear Tire & Rubber Co. requiring the company to pay $925,000 in back wages to 800 female job applicants who alleged hiring discrimination at a plant in Virginia. The company agreed to hire 60 of the women, conduct annual training for plant managers and provide semiannual reports to document compliance.

"If your discrimination occurred two years ago, there's two years of back pay to be recovered and paid to the individuals that were affected," said David Scheffler, director of recruitment compliance and sales engineering at HRworks.

At the heart of this increased activity is an active case management system that uses statistical tools to prioritize reviews of recruiting and employment practices.

Read original publication in the Atlanta Business Chronicle