Recruiting is much different than it used to be. For starters, more companies are using remote hiring and virtual interviews than ever before and according to experts, it’s here to stay. Some challenges never change, though. HR professionals still need to be experts on recruiting compliance and avoid falling afoul of changing regulations as well as the agencies that oversee recruitment.
What Employers Need to Know
When it comes to recruiting compliance, there are five key areas employers need to be aware of and two agencies to get to know:
- Pay Equity
- Salary History
- Pre-Employment Drug Screening
Who Regulates Recruiting Compliance?
The Equal Employment Opportunity Commission (EEOC) and Office of Federal Contract Compliance Programs (OFCCP) requirements are put in place to ensure that companies’ hiring practices do not discriminate against certain protected classes of applicants. If recruiters fail to abide by these regulations, your company can be in big trouble, facing lawsuits, large fines, and often irreparable damage to your brand.
Another area of compliance on recruiters’ checklists relates to salaries. To date, 30 states have enacted laws either banning recruiters from asking applicants for salary histories and/or requiring companies to pay employees equally regardless of gender. It’s important to review your recruiting practices and implement training to ensure recruiters understand and don’t violate these new laws.
Pay Equity & Salary History
Employers employing women leaders should be especially mindful of compliance. In March 2022, the U.S. Government Accountability Office (GAO) released a study and found that in 2019, full-time managers across industries were most likely to have pay discrepancies. Women earned an average of 71 cents for every dollar a man earns. The pay gap was actually wider for older women and minority women in management.
Additionally, California employers with more than 100 employees must report pay and hours-worked data by establishment, job category, sex, race, and ethnicity to the Department of Fair Employment and Housing (DFEH) annually.
The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws outlawing the discrimination of job applicants and/or employees because of the person’s race, color, religion, sex (including pregnancy, transgender status, and sexual orientation), national origin, age (40 or older), disability, or genetic information.
Privately-owned companies, state agencies, and labor unions with 15 or more employees who have worked in that capacity for a minimum of 20 calendar weeks are required to comply with EEOC regulations. In 2023, more than 65,000 discrimination charges were filed with the EEOC, resulting in 143 discrimination lawsuits being filed by the agency (a more than 50% increase over 2022). They secured more than $513 million for victims of employment discrimination in private sector and state and local government workplaces.
All federal contractors who conduct business with the government in excess of $10,000, fall under the jurisdiction of the OFCCP and, as such, cannot discriminate against employees based on their race, color, religion, sex and national origin. The law also enforces affirmative action and mandates contractors to make efforts to employ qualified individuals with disabilities, Vietnam-era veterans and other covered veterans.
According to the OFCCP’s enforcement statistics, four frequently cited violations related to recruiters were found during compliance reviews:
- Job Listings: At a minimum, ALL job openings (including all union jobs) must be listed with local and state employment agencies except for:
- Executive and top management positions
- Positions that will be filled internally only
- Positions lasting three days or less
- Poor Outreach/Positive Recruitment: Ensure a good relationship is built with the outreach partners. This will make the process faster and easier when requesting referrals for qualified candidates and posting for positions.
- Poor evaluation of effectiveness of outreach and positive recruitment: Track referral sources from applicants and positive outreach activities to help better evaluate outreach and recruitment efforts. Although it’s not required, following the OFFCP’s Criteria for Evaluation to help evaluate the outreach and recruitment activities can keep you out of hot water.
- Criteria for Evaluation:
- Did the activity attract qualified applicants with disabilities and/or protected veterans?
- Did the activity result in the hiring of qualified individuals with disabilities and/or protected veterans?
- Did the activity expand company’s outreach to individuals with disabilities and/or protected veterans in the community?
- Did the activity increase company’s ability to include individuals with disabilities and/or protected veterans in its workforce?
- Criteria for Evaluation:
- Recordkeeping: Out of all the recordkeeping violations, applicant data is the most vulnerable due to the complexity of data tracking. Collecting and retaining proper applicant data has four primary components. In the event of an OFCCP audit, having applicant data on file can better tell the “story” for each applicant during the selection process (e.g., did not meet basic qualifications, phone screened, interviewed, offered, etc.).
To date, 37 states and 100+ cities and counties nationwide have adopted official efforts to “ban the box” or eliminate questions regarding convictions and arrest records so that employers consider a job candidate’s qualifications first. While ban-the-box laws primarily affect the private sector, a December 2021 law prohibits most federal agencies and contractors from requesting information about arrest and conviction records from a job applicant prior to a job offer.
Pre-Employment Drug Screening
Now that marijuana is legal for medical and/or recreational use or decriminalized in the majority of states, U.S. territories, and D.C., laws related to pre-employment drug screening have also changed. These laws also vary by state. Be sure to know how the laws impact candidates and new hires in the states where your employees work and live prior to the recruiting process.
Make Sure Recruiters Toe the Line
Discrimination during the recruiting process is typically not intentional; it’s often due to lack of training or sloppy policies. Inadvertent industry stereotypes can be a challenge, however. For example, highly qualified women often have a difficult time getting hired in fields such as engineering or construction.
As the number of violations and lawsuits continue to rise, it’s critical that employers educate recruiters on proper interview procedures. Plus, employers should conduct an audit of all job descriptions and requirements to remove possible biases. Doing so will help you meet recruiting compliance requirements down the road.
How Paycor Can Help
Paycor can help you navigate the ever-growing maze of recruiting laws and regulations. Our unique software solution was designed by recruiting experts who understand your needs. We built Paycor Recruiting to actually think and behave like a recruiter. Our system will help you create online career and application pages so you can find the best candidates available. You’ll be able to efficiently sort and track applications throughout the hiring process and communicate quickly with your leading candidates. You’ll also get valuable analytics and compliance reporting to make sure you’re staying in line with EEOC/OFCCP regulations.