The ECI Blog

We recently had a team discussion over whether a company with 50 or less employees and no government contracts needed to abide by OFCCP, EEO and Uniform Guidelines in its hiring criteria.  Who must comply and which federal guidelines should these clients follow in developing their selection standards?  You might be interested in this discussion, if you are developing selection standards for your company, or haven’t reviewed yours recently.  There are a variety of guidelines, legislation, and case law out there you should know about and some new issues that have been raised because of all the web sites offering candidates and employers the opportunity to find one another.

The first question is “Which program are you talking about?”   EEO and affirmative action?  Uniform Guidelines for Selection or the OFCCP?   And who needs to comply?  Are their organizational size limitations, government contracts needed to require compliance, or other things that are of importance?  Here are some citations for your reference that may help to answer, or confuse, you  on the matter.

1. OFCCP:  “The Executive Order prohibits federal contractors and federally-assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year, from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. The Executive Order also requires Government contractors to take affirmative action to insure that equal opportunity is provided in all aspects of their employment.”
2. EEO Guidelines:  Each Government contractor with 50 or more employees and $50,000 or more in government contracts is required to develop a written affirmative action program (AAP) for each of its establishments. This section also requires annual tracking and reporting of data about candidates being selected, promoted or released.
3. Uniform Guidelines for Employee Selection Procedures:  The Guidelines cover all employers with 15 or more employees.  They also apply to government contractors and subcontractors.  The Guidelines establish procedures for instituting all tests, selection processes and inventories used to make hiring decisions.

So the short answer is, if you have 15 or more employees, then you had better take a look at your selection process to ensure that it does not discriminate against protected classes and that you gather sufficient information in interviews, tests or inventories, reference checks, background screens or other procedures to avoid falling awry of the 4/5ths Rule. 

The 4/5ths Rule is part of the EEO Guidelines and says that no selection procedure may screen out individuals within protected classes at a rate of 80% of the rate at which it screens out the unprotected classes.

1. Does your company have more than 15 employees?  If so, then you must comply with the Uniform Guidelines and be sure to remember the 4/5ths Rule.  No government contracts mean you don’t need to worry about instituting the affirmative action plan just yet.  If you have $10K in government contracts, however, then you need to write the affirmative action plan and institute it.
2. Does your company have over 50 employees and $50K in government contracts?  If so, then you must comply with the Uniform Guidelines as above and also take action to institute an affirmative action program, including the written affirmative action policy and annual reporting.
3. Does your company have contracts with the government that yield $10K or more per year?  If so, then you must prepare and institute a written affirmative action policy.
4. Does your company use the internet to advertise your openings and gather resumes?  If so, then the newest OFCCP guidelines say you need to be soliciting information on race, gender, age, and ethnicity.  Your applicants get to decide whether they will provide the information, but you need to ask for it.  Also, it is a very good idea to respond electronically to every individual who submits interest in your position and ask them to verify that they are in fact interested.  A good practice is to ask them to return additional information to you.  Lack of a response documents that they are not an active candidate for your consideration. 

At the end of the day, rather than try to distinguish your accountabilities in devising selection criteria on your own, and what information you should be tracking, ask your company attorney to advise you.  And once you have your selection process in place, have your attorney review it and take his or her advice on how to improve it.  Business is tough enough these days without having to deal with a claim arising out of any of these laws, guidelines or agencies.