For any organization working with the U.S federal government, compliance with the OFCCP guidelines around workforce and hiring practices is essential. Non-compliance can result in significant fines.
Discriminatory practices could cost you up to $9 million in fines
The OFCCP has issued over $200m in violation fines to over 430 companies and this is increasing. $45 million in fines were issued in 2020 alone, up over 30% on 2019 and a 110% increase from 2018 - with an average fine of $460,000 and larger fines reaching over
Desk Audits cost over $23 million in time and resourcing
It’s not just the financial burden of a violation fine, however, there are also the ‘hidden costs’ of administering an OFCCP audit. In addition to investigating complaints, the OFCCP conducts audits to determine whether the Federal contractor (the employer) is fulfilling the obligation to maintain non-discriminatory employment practices.
As a result, the OFCCP can issue a request to conduct a desk audit at any time, where they will review your data, policies and practices to determine whether you are fulfilling the obligation to maintain non-discriminatory employment practices.
Over the course of 2021, the OFCCP expects to conduct over 3,000 audits annually. According to industry experts, the average audit lasts 720 days and costs US companies a total of $23,910,884 in time and resources.
In summary, organizations are paying a heavy price for poor practices and non-compliance. To further this point, the OFCCP keeps a record of these violations and they are retained on the organization’s procurement record for all prospective federal government customers to see.
The average OFCCP audit lasts 720 days and cost US companies a total of $23,910,884 in time and resources
How you design, manage and report on the inclusivity of your jobs has a huge impact on ensuring OCCCP compliance and plays a vital role in the data provided in an OFCCP compliance audit. If you are not prepared, it can cost you millions in unnecessary time and resources.
STEP 1: Integrate a systematic review of Job Qualifications into your recruitment process
The first area is job qualifications. Code 60-300.44 states the requirement for processes that provide for careful, thorough, systematic consideration of job qualifications with a schedule for periodic review.
What this means is that, as an employer, you need to be able to show every single job posting has been evaluated to ensure that the requirements listed are essential to perform the role.
You are also required to show a process for systematic review. In this you must show when your most recent assessment happened, including the date the assessment was performed and any actions taken or made as a result of this assessment along with the date of the next assessment.
Many employers, in a rush to hire, will simply use the same job description they used when the position was last posted, but there is a high probability that the role might have changed several times since it was last reviewed. If the job requirements on your job descriptions are not an accurate reflection of the actual job then you are in potentially in violation of the OFCCP regulations.
Many organizations have thousands and thousands of job descriptions. To conduct a systematic, periodic review of all your job descriptions is a monumental undertaking.
The key to avoiding non-compliant job descriptions and the burden of conducting a wholesale review of your job descriptions is to integrate this review into your recruitment process.
So, every time a role goes live, your recruiter puts a step in the job briefing process to give ‘conscious consideration’ to, and assessment of, the job qualifications. Any alterations and adjustments made are then captured.
STEP 2: Ensure candidates are selected and hired based on valid job qualifications
The second compliance code is 60-300.44 where you are required to demonstrate that all employment decisions are based on valid job requirements and that these requirements are related to the job and consistent with business necessity.
Recruiters and managers need to show how they have determined candidates have met the minimum qualifications, experience, capabilities and skills required for the role, and more importantly why those not selected have not.
The challenges with most recruitment processes is that there is often a disconnect between what is on a job description and what is ultimately screened and hired for. In many instances the process of capturing interview data is inconsistent (if captured at all).
You might have a validated or ‘de-biased’ list of requirements on a job descriptions, but if these are not used by recruiters and managers to select candidates, you are opening yourself up to potential bias and ultimately discrimination in the process.
The OFCCP requires federal contractors to maintain records of interview notes on how candidates were selected. In the course of a compliance review, these records may well be requested.
The only true way to ensure all employment decisions are based on valid job requirements is to have a process that connects the validated job requirements into a structured interview template.
Recruiters and managers should use these templates consistently with every candidate to assess suitability and capture evidence of suitability and decisions made.
STEP 3: Put an equality statement on all job postings
This one is straightforward, the OFCCP requires all employers to include an Equal Employment Opportunity (EEO) statement in all job postings 60.300.44
STEP 4: Ensure gender neutral job descriptions
While not tied to a specific compliance code, the OFCCP recommends, as best practice, to avoid the use of gender-specific job titles where there are gender-neutral alternatives.
STEP 5: Job Family diversity analysis and reporting
Compliance code 60-2.12 required employers to compile and submit an “EEO-1” report each year on job group and job title analysis that shows the % representation of minorities and women employed across job groupings. The objective of this report is to demonstrate how the employers is meeting affirmative action and non-discrimination requirements.
If you already have guidelines in place around how jobs are assigned to levels or job families, it is essential that job descriptions reflect those differences and contains clear content that establishes the proper classification of jobs within the employer’s compensation structure.
However, you need to be specific. Generic job descriptions that do not differentiate - in terms of essential functions or minimum objective qualifications - will often hinder an employer. Particularly in cases defending against claims of discrimination where employees in one job title are paid less than those in a different job title.
Compensation data. The OFCCP will determine if you are paying your employees equivalently for the same or substantially same position, and without regard to race or gender. The OFCCP will look at base compensation, as well as bonuses, commissions, and other incentive pay.
STEP 6: Quick access to accurate job descriptions for desk audits
The OFCCP requires federal contractors to maintain records about their workforce, specifically relating to jobs they require accurate records of job descriptions and Job postings/advertisements.
In the course of a compliance review, the OFCCP submits data requests and will often ask for copies of your job descriptions. Depending on the issues presented in the compliance review, job descriptions can be critical to establishing the employer’s defence to a claim of discrimination.
These OFCCP reviews will often combine applicant flow data for different jobs, without considering whether each job requires distinct minimum qualifications. They will assume that an applicant for one job is equally qualified and should be considered for other jobs that the agency views as similar.
Employers need to ensure that their internal job descriptions correspond with external job postings. The OFCCP can request copies of all job descriptions to determine whether job descriptions are screening candidates out of the process unnecessarily; for example, when the actual functions of the position don’t match the specific job requirements.
Quick access to Job descriptions can establish that positions are materially different and applicant and hiring pools should not be aggregated together in a disparity analysis.
Achieving compliance can be a challenge and not as straightforward as it could be, due to a host of issues, such as scale and size, as well as fragmented systems and processes.
Keep comprehensive records of applicant data, employee data, promotions and terminations. Ensure that you are keeping detailed records of each and every effort that you put forth to recruit qualified personnel.
Record Keeping: Interview Questions
Transparency and traceability are essential to the OFCCP, so keep track of every stage of the hiring process. From records of JDs, lists of your employment tests and interview questions to copies of transcripts and references that applicants provided – everything must be recorded and backed-up in a remote server.
By far one of the most critical elements of the hiring process is keeping a record of all hiring practices. For recruiters and human-resources leaders, it can be especially challenging to help everyone involved in the hiring process understand why this is important, and to keep everyone on track.
This doesn’t mean simply keeping a record of applications and resumes that have been received. This also includes tracking each interview and when it took place, and even more importantly, tracking the interview questions that were used and the notes that were taken.
Employers should always be using consistent practices with each applicant, which means asking the same basic interview questions to each candidate being considered, taking notes, and saving those notes in a candidate’s file.
If you don’t already have a clear hiring process, and your hiring managers are conducting interviews that are potentially problematic.
Leaving OFCCP compliance up to the recruiting team or hiring managers is risky. If you don’t have a standard process, and even more difficult if the hiring practices in your office are largely done manually.
The same rules apply to auditing, reporting and storage of job libraries. Having a central point or repository not only means good governance but also ensures you’re meeting expected requirements for OFCCP spot audits.
Long-term view, not a Band-aid approach
For organizations proactively looking to make copy more neutral as part of improving hiring practice, it’s clear that making a few adjustments to debias language in a job ad is great for a quick fix, but it's not a long-term, sustainable solution – something businesses are increasingly starting to realize on their compliance journey.
Ultimately, good hiring practice has to start with job design and automating processes. Getting job ads compliant and futureproofed has to come from the core of the issue, not a copy-tweak at the end of a process.
The RoleMapper platform has a range of modules that adhere to all requirements and enables you to, not just standardize and digitize your library, but also debias roles, job ads and descriptions, access data-led insights and practice good governance with a range of reporting features.
With RoleMapper, businesses are able to Digitize, Standardize, Optimize, Connect and Manage job families, libraries, ads and recruitment practices.
If you’re looking to improve compliance across the enterprise, why not book a demo and find out how we can help your organization.