The United States Department of Labor’s Office of Federal Contract Compliance Programs ("OFCCP") has issued a final rule on the definition of "Internet applicant," which impacts recordkeeping and data collection requirements for federal contractors. 70 Fed. Reg. 58946 (Oct. 7, 2005). Despite the large number of comments received from industry members in response to the proposed rule issued in March 2005 (69 Fed. Reg. 16445 (March 29, 2004)), the final rule is not substantially different from the proposed rule.

Pursuant to Executive Order 11246 and its implementing regulations, federal contractors are tasked with maintaining equal employment opportunity for all individuals through nondiscriminatory recruitment and employment practices. As part of these obligations, federal contractors must retain all application-related company records along with other employment records.

For federal contractors that are also required to develop affirmative action programs, they must monitor and improve efforts to employ minorities and women, as well as the disabled and veterans. This includes maintaining "applicant flow data" for all applicants and soliciting gender, race and ethnicity data from those individuals.

Effective February 6, 2006, federal contractors will be subject to broader recordkeeping and data collection requirements. The new regulations expand the category of "applicants" for whom federal contractors must retain records and collect gender, race and ethnicity data. This may increase the time and effort expended by federal contractors in complying with OFCCP requirements.

To the extent that the final rule expands the category of those individuals who are considered "applicants," federal contractors will have to comply with all OFCCP regulations regarding record retention and data collection for those applicants.

Definition of an "Internet Applicant"

Under the final rule issued by OFCCP, federal contractors must retain records for and solicit gender, race and ethnicity data from every "Internet applicant." In order to be classified as an Internet applicant, an individual must meet all of the following criteria:

• The individual submits an expression of interest in employment through the Internet or related electronic data technologies;
• The contractor considers the individual for employment in a particular position;
• The individual’s expression of interest indicates the individual possesses the basic qualifications for the position; and
• At no point in the selection process prior to receiving an offer of employment from the contractor does the individual remove himself or herself from further consideration or otherwise indicate that he or she is no longer interested in the position.

In addition, the final rule will require contractors to treat all individuals regardless of how they applied as "Internet applicants" so long as they meet the other definition criteria and the contractor accepts some applications for that position via the Internet. In other words, when a contractor advertises an open position and invites applicants to submit expressions of interest via either the Internet or mail, all applicants for that position must now be considered "Internet applicants" for purposes of recordkeeping and data collection obligations.

Excluding Individuals from the Applicant Pool

While OFCCP may have broadened the category of "applicants" for which contractors must maintain information, the final rule also allows contractors to exclude certain categories of individuals from an applicant pool.

The final rule allows contractors to exclude from an applicant pool all individuals who submit unsolicited resumes. Similarly, individuals who fail to comply with standard application procedures – such as identifying a specific position for which the individual seeks to be considered – may also be excluded. Contractors may also exclude individuals who fail to meet the minimum qualifications established for a particular position – so long as the minimum qualifications are objective and relevant to the performance of the position.

Finally, contractors may also exclude from the applicant pool individuals who fail to respond to a contractor’s repeated inquiries regarding his or her interest in the open position.

While OFCCP allows contractors to exclude job seekers from the applicant pool for the aforementioned reasons, the agency cautions that contractors must be uniform and consistent in applying such policies and procedures.

Use of Search Criteria and Random Sampling to Limit Applicant Pool

OFCCP recognizes that in some instances there may be such a large number of individuals expressing interest in a job opening – particularly via the Internet – that the contractor may seek to limit the number of individuals considered for employment. OFCCP has identified several instances in which employers will be allowed to limit the number of individuals for whom it must maintain records and solicit gender, race and ethnicity data.

The final rule requires a federal contractor that utilizes internal resume database to maintain a record of each resume added to its database, including the date each resume was added. In order to lessen the burden on contractors, the final rule will allow contractors that utilize search criteria to limit the number of individuals considered for employment.

In turn, the contractor will not be required to maintain records for all resumes in the database. Instead, the contractor must keep a record of all search criteria, date of each search, and all individuals identified through each search and who also meet the definition of an "Internet applicant."

If a contractor utilizes an external resume database – such as an Internet-based resume clearinghouse – the contractor must maintain records of those searches as well, including search criteria and date of search. The contractor must keep records of all individuals identified through the search who meet the "Internet applicant" definition.

In addition, the contractor must keep records of identified individuals who may not meet the definition of an "Internet applicant" but nonetheless possess the basic qualifications for the particular position and are considered by the contractor for the position.

Lastly, contractors may consider "random sampling" of resumes received via the Internet as another means of reducing the number of resumes to be considered, and thus limiting the contractor’s recordkeeping burden. This would likely prove helpful only where a contractor receives an excessively large volume of job inquiries via the Internet for which the use of search criteria would not be effective in limiting the number of resumes to be considered. A contractor that uses random sampling is required to contact only the randomly selected individuals to determine their interest in the position.

In addition, the contractor would be required to retain records and collect gender, race and ethnicity data only for the randomly selected individuals, not for the entire pool of resumes received.

Recordkeeping and Data Collection Requirements

The final rule leaves untouched the remainder of the employment record retention requirements for federal contractors. Federal contractors must retain all records relating to employment decisions for two years (or one year if the contractor has less than 150 employees or no contract of at least $150,000). See 29 C.F.R. § 60-1.12(a).

Records that must be retained include, for example: advertisements, job postings, applications, resumes, interview notes, requests for reasonable accommodations, tests and test results, personnel files, rates of pay and other compensation, selection for training or apprenticeship, and other information regarding hiring, transfers, promotions, layoffs and terminations. As part of their record retention obligations, federal contractors will now have to retain records relating to all individuals who meet the criteria of "Internet applicant," along with other employment records.

Once the final rule becomes effective, federal contractors subject to affirmative action requirements will also be obligated to seek to collect gender, race and ethnicity information from all Internet applicants, just as they are currently obligated to collect for other types of applicants. Federal contractors solicit this information from applicants through an "invitation to self-identify" disseminated to applicants pursuant to existing OFCCP regulations. See 29 C.F.R. § 60-1.12(c).

Next Steps

It is significant that OFCCP has issued the final rule at this time while a proposed rule issued by the Equal Employment Opportunity Commission on the same subject is still pending. See 69 Fed. Reg. 10152 (March 3, 2004). As a result, federal contractors should be alert to future federal rulemaking that may further alter their recordkeeping obligations for job applicants.

In the meantime, OFCCP’s final rule becomes effective February 6, 2006. Federal contractors should take this opportunity to assess their compliance with OFCCP requirements regarding record retention, data collection, and compilation of applicant flow information. Particularly for those contractors that accept resumes via the Internet, the final rule defining an "Internet applicant" may require changes in current record retention and data collection methods. To the extent that OFCCP conducts audits of contractors’ affirmative action programs, OFCCP reviews applicant flow data maintained by contractors in light of the number of female and minority applicants available in that particular geographical area and industry.

However, for those contractors using resume databases, the final rule may lead OFCCP to review availability of gender and minority applicants based on the content of the database, rather than by geographical area. Finally, contractors should be aware that Internet search criteria must otherwise comply with the Uniform Guidelines on Employee Selection Procedures. See 29 C.F.R. § 60-3.2. As a result, OFCCP may also review whether contractors have conducted gender and race-neutral searches and random sampling of resume databases.

If you are interested in learning more about federal contractors’ affirmative action requirements, including the collection and retention of applicant information, please contact either of the Arent Fox attorneys indicated below.

Kristine Dunne 
202-857-6385
dunne.kristine@arentfox.com

Stewart Manela
202-857-6364
manela.stewart@arentfox.com