[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Rules and Regulations]
[Pages 58946-58963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-20176]



[[Page 58945]]

-----------------------------------------------------------------------

Part VIII





Department of Labor





-----------------------------------------------------------------------



Office of Federal Contract Compliance Programs



-----------------------------------------------------------------------



41 CFR Part 60-1



Obligation To Solicit Race and Gender Data for Agency Enforcement 
Purposes; Final Rule

  Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Rules 
and Regulations  

[[Page 58946]]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs

41 CFR Part 60-1

RIN 1215-AB45


Obligation To Solicit Race and Gender Data for Agency Enforcement 
Purposes

AGENCY: Office of Federal Contract Compliance Programs, Employment 
Standards Administration, DOL.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Office of Federal Contract Compliance Programs (OFCCP) 
regulations require covered federal contractors and subcontractors to 
collect information about the gender, race and ethnicity of each 
``applicant'' for employment. The final rule published today modifies 
OFCCP applicant recordkeeping requirements to address challenges 
presented by the use of the Internet and electronic data technologies 
in contractors' recruiting and hiring processes. The final rule is 
intended to address recordkeeping requirements regarding ``Internet 
Applicants'' under all OFCCP recordkeeping and data collection 
requirements.

EFFECTIVE DATE: These regulations are effective February 6, 2006.

FOR FURTHER INFORMATION CONTACT: Director, Division of Policy, 
Planning, and Program Development, Office of Federal Contract 
Compliance Programs, 200 Constitution Avenue, NW., Room N3422, 
Washington, DC 20210. Telephone: (202) 693-0102 (voice) or (202) 693-
1337 (TTY). Copies of this final rule, including copies in alternative 
formats, may be obtained by calling OFCCP at (202) 693-0102 (voice) or 
(202) 693-1337 (TDD/TTY). The alternate formats available are large 
print, electronic file on computer disk and audiotape. This document 
also is available on the Internet at http://www.dol.gov/esa.

SUPPLEMENTARY INFORMATION:

I. Introduction

    OFCCP requires covered federal contractors to obtain gender, race, 
and ethnicity data on employees and, where possible, on applicants. See 
41 CFR 60-1.12(c). OFCCP requires this data collection activity for 
several purposes relating to contractors' administration of 
nondiscrimination and affirmative action requirements and OFCCP's role 
in monitoring compliance with OFCPP requirements. See 65 FR 68023 
(November 13, 2000); 65 FR 26091 (May 4, 2000). For example, 
contractors use gender, race, and ethnicity data in the ``job group 
analysis'' portion of their AAPs (41 CFR 60-2.12) and OFCCP uses the 
data to decide which contractor establishments to review and, among 
those reviewed, when to conduct an on-site investigation. Contractors 
must supply this information to OFCCP upon request. See 41 CFR 60-
1.12(c)(2).

II. Rulemaking History

    The Uniform Guidelines on Employee Selection Procedures (UGESP) 
were issued in 1978 by the Equal Employment Opportunity Commission, the 
Department of Labor, the Department of Justice, and the predecessor of 
the Office of Personnel Management (``UGESP agencies''). UGESP requires 
employers to keep certain kinds of information and details methods for 
validating tests and selection procedures that are found to have a 
disparate impact.
    The Department of Labor is a signatory to UGESP, which is codified 
in OFCCP regulations at 41 CFR part 60-3. Section 60-1.12, OFCCP's 
Executive Order 11246 record retention rule, was amended on November 
13, 2000, to require contractors to be able to identify, where 
possible, the gender, race, and ethnicity of each applicant for 
employment. OFCCP promulgated this regulatory requirement to govern 
OFCCP compliance monitoring and enforcement (e.g., to allow OFCCP to 
verify EEO data), consistent with the UGESP. Prior to these amendments, 
OFCCP regulations did not expressly require contractors to maintain, or 
submit to OFCCP, information about the gender, race, and ethnicity of 
applicants and employees. See 65 FR 26091 (NPRM May 4, 2000); 65 FR 
68023, 68042 (Final Rule Nov. 13, 2000). The pertinent provisions of 
the November 13, 2000 final rule were codified in OFCCP regulations at 
41 CFR 60-1.12(c).
    In 2000, the Office of Management and Budget instructed the Equal 
Employment Opportunity Commission to consult with the other UGESP 
agencies to address the ``issue of how use of the Internet by employers 
to fill jobs affects employer recordkeeping obligations'' under UGESP. 
See Notice of OMB Action, OMB No. 3046-0017 (July 31, 2000). In 
particular, the Office of Management and Budget instructed the agencies 
to ``evaluate the need for changes to the Questions and Answers 
accompanying the Uniform Guidelines necessitated by the growth of the 
Internet as a job search mechanism.'' Id.
    On March 4, 2004, the UGESP agencies issued a Notice in the Federal 
Register seeking comments under the Paperwork Reduction Act about the 
burdens and utility of interpretive guidance intended to clarify how 
UGESP applies in the context of the Internet and related electronic 
data technologies. 69 FR 10152 (March 4, 2004). The preamble to the new 
interpretive guidance discussed the need for clarification of UGESP 
obligations in the context of the Internet and related electronic data 
technologies. See 69 FR 10154-155. The UGESP agencies expressly 
contemplated that ``[e]ach agency may provide further information, as 
appropriate, through the issuance of additional guidance or regulations 
that will allow each agency to carry out its specific enforcement 
responsibilities.'' 69 FR 10153.
    On March 29, 2004, OFCCP published a Notice of Proposed Rulemaking 
proposing amendments to OFCCP regulations governing applicant 
recordkeeping requirements. 69 FR 16446, 16449 (March 29, 2004). OFCCP 
determined that additional regulations were required to clarify OFCCP 
applicant recordkeeping requirements in light of OFCCP's unique use of 
applicant data for compliance monitoring and other enforcement 
purposes.
    In the proposed rule, OFCCP proposed to amend OFCCP regulations at 
41 CFR 60-1.3 to add a definition of ``Internet Applicant.'' 69 FR 
16449. The proposed definition of ``Internet Applicant'' involved four 
criteria: (1) The job seeker has submitted an expression of interest in 
employment through the Internet or related electronic data 
technologies; (2) the employer considers the job seeker for employment 
in a particular open position; (3) the job seeker's expression of 
interest indicates the individual possesses the advertised, basic 
qualifications for the position; and, (4) the job seeker does not 
indicate that he or she is no longer interested in employment in the 
position for which the employer has considered the individual. 69 FR 
16449. Under the proposed rule, ``advertised, basic qualifications'' 
were qualifications that the employer advertises to potential 
applicants that they must possess in order to be considered for the 
position. 69 FR 16449. The proposed definition further provided that 
``advertised, basic qualifications'' must be noncomparative, objective, 
and job-related. 69 FR 16449-450.
    The proposed rule also would amend 41 CFR 60-1.12(a) to require 
contractors to retain records of all expressions of interest through 
the Internet or related electronic technologies. 69 FR 16450.

[[Page 58947]]

Lastly, the proposed rule would amend 41 CFR 60-1.12(c)(1)(ii) to 
incorporate the new category of ``Internet Applicant,'' as defined in 
the proposed amendment to section 60-1.3 and to distinguish between 
``applicants,'' i.e., expressions of interest in employment that are 
not submitted through the Internet and related electronic technologies, 
and ``Internet Applicants.'' 69 FR 16450.
    OFCCP received 46 comments from 45 entities: four individuals, nine 
interest groups, an academic organization, the Chairman of the U.S. 
House of Representatives Committee on Education and the Workforce's 
Subcommittee on Employer-Employee Relations, seventeen employers who 
are covered contractors within OFCCP's jurisdiction, three trade 
associations, one law firm that represents contractors, and nine 
consultants that represent contractors.
    The commenters offered a diverse array of views on the proposed 
rule. Almost all of the comments focused on four general areas: (1) The 
relationship between the proposed rule and the UGESP Additional 
Questions and Answers; (2) the specific criteria of the proposed 
``Internet Applicant'' definition, especially the part of the 
definition involving ``advertised, basic qualifications;'' (3) the 
recordkeeping requirements of the proposed rule; and (4) the treatment 
of ``traditional'' expressions of interest, i.e., those made through 
means other than the Internet or related electronic data technologies.
    Several commenters also addressed significant issues related to 
OFCCP compliance monitoring and enforcement activities under the 
proposed rule, including OFCCP's use of labor force statistics and the 
effective date of the final rule.

III. Summary and Explanation of the Final Rule

    The final rule, for the most part, adopts the text that was 
proposed in the March 29, 2004 NPRM. However, in response to the public 
comments, OFCCP has modified the proposed text in certain respects. The 
discussion which follows identifies the significant comments received 
in response to the NPRM, provides OFCCP's responses to those comments, 
and explains any resulting changes to the proposed rule.

Discussion of Comments and Revisions

Comments Regarding the Relationship Between the Proposed UGESP 
Additional Questions and Answers and the OFCCP Proposed Rule

    Many of the commenters expressed concern about the relationship 
between OFCCP's proposed rule and the Proposed UGESP Additional 
Questions and Answers. Most of these commenters argued that the 
proposals are not sufficiently coordinated, which could create 
confusion among employers, and could lead to inconsistent or even 
conflicting obligations.\1\ Many of these commenters, such as Society 
for Human Resources Management (SHRM), ORC Worldwide (ORC), National 
Association of Manufacturers (NAM), and National Industry Liaison Group 
(NILG), pointed out that this perceived lack of coordination could lead 
to inadequate compliance with either of the rules and enormous 
recordkeeping burdens for employers. The Equal Employment Advisory 
Council (EEAC) believed that the OFCCP proposal conflicts in several 
important respects with the proposed UGESP Additional Questions and 
Answers. Gaucher Associates believed that the OFCCP proposal conflicts 
with OFCCP's prior informal interpretation of UGESP.
---------------------------------------------------------------------------

    \1\ See, e.g., Blount International, Inc., Computer Associates 
International, Inc., Glenn Barlett Consulting Services, LLC, L-3 
Communications, Maly Consulting LLC, Motorola Corp., Society for 
Human Resource Management, Southwest Airlines Co., ORC Worldwide, 
National Association of Manufacturers, National Industry Liaison 
Group, Morgan, Lewis & Bockius LLP, Thomas Houston Associates, Inc., 
TOC Management Services, Nancy J. Purvis, Sentari Technologies, 
Inc., Society for Industrial and Organizational Psychology, 
Louisiana Pacific Corp., and Premier Health Partners.
---------------------------------------------------------------------------

    These commenters recommended an array of differing solutions for 
this coordination problem. Most of the commenters preferred that the 
UGESP agencies more explicitly adopt the ``basic qualifications'' 
component of the OFCCP applicant definition.\2\ Several commenters 
argued against the OFCCP proposed rule altogether and asserted a 
preference for the UGESP proposal.\3\
---------------------------------------------------------------------------

    \2\ See, e.g., American Bankers Association, Chairman of the 
U.S. House of Representatives Committee on Education and the 
Workforce's Subcommittee on Employer-Employee Relations, Computer 
Associates International, Inc., L-3 Communications, ORC Worldwide, 
Motorola, Inc., National Association of Manufacturers, National 
Industry Liaison Group, Morgan, Lewis & Bockius LLP, Sentari 
Technologies, Inc., Siemens USA, Society for Human Resource 
Management, Society for Industrial and Organizational Psychology, 
Southwest Airlines Co., Thomas Houston Associates, Inc., TOC 
Management Services, Louisiana Pacific Corp., and Premier Health 
Partners.
    \3\ See, e.g., Blount International, Inc., The Leadership 
Conference on Civil Rights, the National Women's Law Center, and the 
Lawyers' Committee for Civil Rights Under Law.
---------------------------------------------------------------------------

    OFCCP agrees with the commenters that coordination between this 
final rule and the proposed UGESP Additional Questions and Answers is 
desirable. While the Department believes that the NPRM was consistent 
with the proposed UGESP Additional Questions and Answers, the 
Department will work with the other UGESP agencies to coordinate the 
final UGESP Additional Questions and Answers to ensure that contractors 
do not face inconsistent applicant recordkeeping obligations.
    Morgan, Lewis & Bockius LLP asked how OFCCP interprets procedures 
for evaluating Internet Applicant recordkeeping obligations under 
section 60-1.12 and UGESP. To make clear OFCCP's interpretation of 
procedures regarding Internet Applicant recordkeeping under both rules, 
OFCCP has added a new regulatory provision, section 60-1.12(d), to the 
final rule. The new provision, captioned ``Adverse impact 
evaluations,'' explains that when evaluating whether a contractor has 
maintained information on impact and conducted an adverse impact 
analysis under Part 60-3 with respect to Internet hiring procedures, 
OFCCP will require only those records relating to the analyses of the 
impact of employee selection procedures on Internet Applicants and the 
impact of employment tests. As discussed below, OFCCP does not deem 
employment tests to be basic qualifications under the final rule and 
contractors must continue to collect and maintain records related to 
the impact of employment tests that are used as employee selection 
procedures, without regard to whether the tests were administered to 
Internet Applicants. However, OFCCP's compliance evaluations will not 
be limited to an evaluation of those records produced by the 
contractor. During compliance evaluations OFCCP will continue to look 
broadly at all aspects of a contractor's compliance with its 
obligations to refrain from discrimination in recruitment, hiring, and 
other employment practices, including the possible adverse impact of 
screens for basic qualifications.
    As a technical matter, today's rule redesignates the former section 
60-1.12(d), Failure to preserve records, as section 60-1.12(e), and 
removes former section 60-1.12(e), Applicability. The latter section 
was contained in the regulations merely to indicate the Office of 
Management and Budget's approval under the Paperwork Reduction Act of a 
previously published recordkeeping requirement. 62 FR 66971 (Dec. 22,

[[Page 58948]]

1997). Accordingly, it is no longer necessary.

General Comments on OFCCP's Proposed Definition of ``Internet 
Applicant''

    Most commenters provided comments specific to one or more of the 
parts and subparts of OFCCP's proposed definition of ``Internet 
Applicant.'' OFCCP discusses below these comments in relation to each 
specific part or subpart of the proposed ``Internet Applicant'' 
definition to which they apply.
    However, several commenters, including EEAC, NILG and Glenn Barlett 
Consulting Services, Inc. (GBCS), expressed general concern that 
OFCCP's proposed definition is too precise and prescriptive, in light 
of the variety of recruiting and selection practices that employers 
utilize. These commenters requested that OFCCP adopt more general 
guidelines that afford employers significant discretion in determining 
whether an individual qualifies as an ``applicant'' under the 
employer's own recruiting and selection systems. For example, GBCS 
argued that employers should be permitted to determine any point in the 
selection process in which race, ethnicity, and gender data would be 
collected. GBCS noted, ``[m]any contractors currently solicit race, 
ethnicity, and gender at the interview stage.''
    OFCCP disagrees with commenters that suggested that general 
guidelines are preferable to clear rules. OFCCP believes that general 
guidelines would not provide clear guidance on compliance requirements 
or ensure adequate protections for employees and applicants. As many 
commenters have pointed out, over the years, there has been significant 
controversy between OFCCP and the contractor community as to whether a 
particular applicant recordkeeping practice satisfies OFCCP 
requirements. This controversy was fueled by the lack of clear rules 
about applicant recordkeeping requirements, and, in particular, clear 
rules about applicant recordkeeping requirements in the context of the 
Internet and related electronic technologies. Without clear rules, 
OFCCP cannot secure general compliance with the requirements, either 
through compliance assistance or compliance monitoring.
    Northern California and Silicon Valley Industry Liaison Group 
requested that OFCCP expressly state in the final rule that the 
regulatory definition of ``Internet Applicant'' provides a minimum 
requirement for contractors, but also permits contractors to 
voluntarily implement a more expansive definition of ``applicant'' for 
OFCCP recordkeeping purposes.
    OFCCP is well aware that contractors utilize a variety of 
recruitment and selection practices. Nothing in the final rule alters 
contractors' discretion to determine their own recruitment and 
selection practices and procedures. Rather, the final rule simply 
requires contractors to maintain sufficient records to allow both the 
employer and OFCCP to monitor the contractor's selection practices for 
potential discrimination. OFCCP disagrees with the recommendation that 
contractors be afforded ultimate discretion to determine recordkeeping 
requirements. OFCCP prescribes recordkeeping standards in order to 
enforce E.O. 11246, which prohibits employment discrimination on the 
basis of race, color, national origin, religion, and sex. OFCCP 
regulations implementing E.O. 11246 require contractors to self audit 
their own selection practices to ensure nondiscrimination. See 41 CFR 
60-2.17, 60-3.4. OFCCP could not enforce E.O. 11246 effectively to 
ensure nondiscrimination if contractors are themselves the ultimate 
arbiters of whether sufficient records are available for OFCCP 
compliance monitoring activities. Nor, in OFCCP's judgment, could 
contractors adequately self audit their own selection practices without 
adequate applicant recordkeeping. Thus, the final rule establishes 
minimum standards for applicant recordkeeping in the context of the 
Internet and related electronic technologies. Contractors, however, may 
voluntarily adopt recordkeeping practices that are broader than those 
mandated by the final rule.

Comments on OFCCP's Proposed Definition of ``Internet Applicant''

Part 1: ``Submits an expression of interest in employment through the 
Internet or related electronic data technologies;''
    In the proposed rule, ``Internet Applicant'' was defined as any 
individual who satisfied four criteria. OFCCP has retained the four 
criteria in the final rule. The first criterion of the proposed 
definition required that the individual ``[s]ubmits an expression of 
interest in employment through the Internet or electronic data 
technologies.'' The preamble to the proposed rule made clear that this 
provision applied only to expressions of interest in employment through 
the Internet or related electronic data technologies and that the 
existing standards would apply to expressions of interest through 
traditional means.
    OFCCP solicited comments on this subject in the preamble of the 
proposed rule:

    The new interpretive guidelines promulgated by the UGESP 
agencies apply only to the Internet and related technologies. 
Because OFCCP relies on applicant data to determine whether to 
conduct an on-site audit of a contractor's workplace, OFCCP is 
concerned that the data allow for meaningful analysis. The proposed 
rule creates differing standards for data collection for traditional 
applicants versus Internet Applicants for the same job. Accordingly, 
if an employer's recruitment processes for a particular job involve 
both electronic data technologies, such as the Internet, and 
traditional want ads and mailed, paper submissions, the proposed 
rule would treat these submissions differently for that particular 
job. We are unsure whether this dual standard will provide OFCCP 
with meaningful contractor data to assess in determining whether to 
commit agency resources into an investigation of a contractor's 
employment practices. Therefore, OFCCP expressly solicits comments 
on this issue.

69 FR 16447 (March 29, 2004). OFCCP received many comments regarding 
whether the standard for ``Internet Applicant'' should be applied to 
individuals who submit an expression of interest through a means other 
than the Internet or related electronic data technologies. Many of the 
commenters addressed this subject and virtually all argued that the 
definition of applicant should not depend on the means by which an 
expression of interest comes into the employer's possession.\4\ Most of 
these commenters asserted that the differing definitions of applicant 
would cause confusion and impose significant burdens on employers who 
would have to maintain two different recordkeeping systems.\5\ Several 
of the commenters,

[[Page 58949]]

including HR Analytical Services, L-3 Communications, and the U.S. 
Chamber of Commerce, noted that the applicant data employers would 
obtain under the proposed rule would not provide for meaningful 
analysis of recruitment and hiring practices. Several commenters, such 
as Siemens USA (Siemens), Gaucher Associates, and SHRM, also asserted 
that a dual standard may create an incentive for employers not to 
consider expressions of interest through traditional means, such as 
mailing a paper resume, which would work to the disadvantage of persons 
who do not have ready access to the Internet.
---------------------------------------------------------------------------

    \4\ See, e.g., American Bankers Association, Chairman of the 
U.S. House of Representatives Committee on Education and the 
Workforce's Subcommittee on Employer-Employee Relations, Computer 
Associates International, Inc., Glenn Barlett Consulting Services, 
HR Analytical Services, Kairos Services, Inc., Lawyers' Committee 
for Civil Rights Under Law, Leadership Conference on Civil Rights, 
L-3 Communications, Lorillard, Inc., Maly Consulting LLC, Morgan, 
Lewis & Bockius LLP, Motorola Corp., ORC Worldwide, National Women's 
Law Center, National Industry Liaison Group, Northern California and 
Silicon Valley Industry Liaison Group, Siemens USA, Society for 
Human Resource Management, Society for Industrial and Organizational 
Psychology, Southwest Airlines Co., Thomas Houston Associates, Inc., 
TOC Management Services, and U.S. Chamber of Commerce. As discussed 
below, several of these commenters, including Lawyers' Committee for 
Civil Rights Under Law, Leadership Conference on Civil Rights, and 
National Women's Law Center, disagreed with the proposed rule's 
reference to ``basic qualifications'' in defining ``Internet 
Applicant.''
    \5\ See, e.g., American Bankers Association, Computer Associates 
International, Inc., Gaucher Associates, HR Analytical Services, L-3 
Communications, ORC Worldwide, Morgan, Lewis & Bockius LLP, Motorola 
Corp., Nancy J. Purvis, National Women's Law Center, Society for 
Human Resource Management, Society for Industrial and Organizational 
Psychology, Southwest Airlines Co., Thomas Houston Associates, Inc., 
and U.S. Chamber of Commerce.
---------------------------------------------------------------------------

    In response to the comments, OFCCP added a related provision in the 
final rule which eliminates the proposed rule's dual standard for 
Internet versus traditional applicants, but only as to positions for 
which the contractor considers expressions of interest through both the 
Internet and traditional means. To make this rule clearer, the final 
rule adds three examples that explain this new provision. In the first 
example, the contractor solicits potential applicants for a position 
that is posted on its Web site. The contractor's Web site encourages 
potential applicants to complete an on-line profile to express an 
interest in the position. The contractor's Web site also advises 
potential applicants that they can mail a hard-copy resume with a cover 
letter that identifies the position for which they would like to be 
considered. In this example the contractor considers individuals 
expressing interest in a position using on-line profiles, an Internet 
technology, and mailed hard-copy resumes, a traditional method of 
application. Since the contractor considers expressions of interest 
through both on-line profiles and mailed hard-copy resumes, the 
Internet Applicant rule applies to both types of expressions of 
interest. In the second example, the contractor posts an opening for a 
position on its Web site and encourages potential applicants to 
complete an on-line profile. The contractor also receives a large 
number of unsolicited hard-copy resumes in the mail each year. The 
contractor scans the hard-copy resumes into an internal database that 
also includes all the on-line profiles that individuals have completed 
for various jobs. The contractor uses this internal database to find 
potential applicants for a position posted on the contractor's Web 
site. In this example, the Internet Applicant rule applies to both the 
on-line profiles and the unsolicited paper resumes. In the third 
example, the contractor does not consider potential applicants using 
Internet or related technologies, and, therefore, the Internet 
Applicant rule does not apply.
    OFCCP agrees with the commenters that the bifurcated standard 
contained in the proposed rule would not have provided useful data 
where the contractor considers both types of expressions of interest 
for a particular position. Indeed, this bifurcated standard would 
result in essentially two applicant data pools--one describing 
individuals who possess the basic qualifications and another describing 
some individuals who do not possess those basic qualifications--
depending on the manner in which the employer obtained the expression 
of interest. Because the pools are composed differently, OFCCP could 
not draw meaningful conclusions from analysis of the combined pool. 
OFCCP also shares the concerns regarding the complexity of such a 
framework and the corresponding difficulty in achieving substantial 
compliance through compliance assistance and compliance monitoring. 
Thus, in the final rule, OFCCP eliminated the differing standards for 
data collection for traditional applicants versus Internet Applicants 
for the same job when the employer considers both types of applicants. 
Under the final rule, where the Internet Applicant standard applies to 
a particular position, a particular expression of interest that does 
not qualify as an ``Internet Applicant'' for that position (e.g., 
because the individual did not possess the basic qualifications for the 
position), will not qualify as an ``applicant'' for that position, as 
the term ``applicant'' is used in OFCCP regulations at 41 CFR 60-
1.12(c). Further, pursuant to section 60-1.12(d), where the Part 60-1 
Internet Applicant standard applies to a particular position, OFCCP 
will only require those records under Part 60-3 (other than those 
related to job seekers screened by a test used as a selection 
procedure) that relate to job seekers that are Internet Applicants as 
defined in 41 CFR 60-1.3. OFCCP modified the text of section 60-
1.12(c)(1)(ii) in the final rule to make clear that either the 
``applicant'' standard or the ``Internet Applicant'' standard would 
apply for a particular position, but not both. In the final rule, 
section 60-1.12(c) requires contractors to maintain records that 
identify ``where possible, the gender, race, and ethnicity of each 
applicant or ``Internet Applicant'' as defined in 41 CFR 60-1.3, 
whichever is applicable to the particular position.''
    However, OFCCP does not believe that these problems and concerns 
are present to the same extent, if at all, where the contractor 
considers only traditional expressions of interest for a particular 
position. In such a situation, a single standard is used to determine 
who is an applicant. For example, a manufacturer that hires for 
assembly line positions and considers only individuals who fill out and 
submit a hard copy application form has a single data pool--no member 
of which are Internet Applicants. This contractor can solicit race, 
ethnicity, and gender information through a voluntary self-
identification form provided with the application form. In this 
example, the applicant pool consists of those individuals who completed 
and submitted an application form, applying a single, traditional 
standard for who is an applicant.
    OFCCP received several other comments about this part of the 
proposed rule. The Leadership Conference on Civil Rights (LCCR) 
requested that OFCCP ``make clear that there are multiple ways for a 
potential applicant to submit an expression of interest in a particular 
position.'' LCCR's concern was that an employer might refuse to 
consider the expressions of interest of individuals who do not follow 
the employer's desired process for making such expressions of interest. 
LCCR also was concerned that employers might make ad hoc exceptions to 
their standard process for accepting expressions of interest. LCCR 
argued that ``any guidance that is developed should make clear that 
individuals who reasonably believe, based on the information they 
received from the employer, that they have applied for a particular 
position should be considered applicants for that position and recorded 
a (sic) such.''
    OFCCP has addressed these comments fully in the section that 
discusses the second criterion for the ``Internet Applicant'' 
definition. OFCCP agrees that contractors should not be permitted to 
selectively determine who will be considered for employment based on 
the qualifications information contained on an expression of interest. 
OFCCP has added an explicit definition of ``considers the individual 
for employment in a particular position.'' Under the final rule at 
subsection (3) of the definition of Internet Applicant, `` `considers 
the individual for employment in a particular position,' means that the 
contractor assesses the substantive information provided in the

[[Page 58950]]

expression of interest with respect to any qualifications involved with 
a particular position.'' This definition forecloses the possibility 
that a contractor could evaluate an individual's qualifications for a 
particular position without thereby having ``considered'' the 
individual.
    At the same time, OFCCP does not provide a blanket requirement that 
contractors must consider any and all expressions of interest they 
receive, regardless of the manner or nature of the expression of 
interest. OFCCP makes this clear in the final rule (subsection (3) of 
the Internet Applicant definition) through the definition of 
``considers the individual for employment in a particular position,'' 
which further provides that ``[a] contractor may establish a protocol 
under which it refrains from considering expressions of interest that 
are not submitted in accordance with standard procedures the contractor 
establishes. Likewise, a contractor may establish a protocol under 
which it refrains from considering expressions of interest, such as 
unsolicited resumes, that are not submitted with respect to a 
particular position.'' Under the final rule, it is the contractor's 
actual practice with respect to a particular expression of interest 
that determines whether the contractor has ``considered'' that 
expression of interest and similar expressions of interest. For 
example, if the contractor's policy is to accept expressions of 
interest only through its Web site, but its actual practice is to also 
review faxed resumes and scan those it is interested in into its 
database, the contractor's actual practice is to consider faxed resumes 
as well as expressions of interest received through its Web site. This 
is consistent with OFCCP's longstanding policy to permit contractor's 
to dispose of unsolicited resumes if the contractor has a consistently 
applied policy of not considering unsolicited resumes.
    OFCCP investigates whether a contractor has such a protocol by 
reviewing the contractor's hiring procedures and policies and by 
reviewing the contractor's hiring practices to determine whether those 
procedures and policies were consistently and uniformly followed.
    Several other commenters, including EEAC, Louisiana Pacific Corp., 
and Premier Health Partners, criticized the proposed rule for not 
including a requirement that the individual make an expression of 
interest in accordance with the employer's standard procedures for 
submitting applications.
    Several commenters, including EEAC, ORC, SHRM, and the Society for 
Industrial and Organizational Psychology (SIOP), requested that this 
part of the proposed definition expressly require that the expression 
of interest must be an expression for a particular position. Otherwise, 
these commenters argued, any expression of interest might qualify an 
individual as an applicant for any position, which would impose 
significant burdens on contractors if the potential applicant pool is 
voluminous. ORC offered the example of an employer that searches 
Monster.com and finds over 20,000 resumes of individuals who satisfy 
the basic qualifications for a particular position. ORC argued that all 
20,000 of these individuals would be applicants under OFCCP's proposed 
definition, unless the definition is somehow limited to those 
individuals who express an interest in the particular position for 
which the contractor is considering the individual. SIOP argued that 
contractors will face significant recordkeeping burdens if expressions 
of interest are not limited to those for a particular position because 
the proposed rule would require contractors to retain all expressions 
of interest, regardless of whether the individual qualifies as an 
Internet Applicant.
    OFCCP agrees that the proposed data collection and recordkeeping 
requirements would be unreasonable in the example ORC offered. To 
address these situations, the agency has modified or clarified several 
provisions of the proposed rule. Specifically, OFCCP expressly states 
in the final rule (subsection (3) of the definition of ``Internet 
Applicant'') that ``[i]f there are a large number of expressions of 
interest, the contractor does not `consider the individual for 
employment in a particular position' by using data management 
techniques that do not depend on assessment of qualifications, such as 
random sampling or absolute numerical limits to reduce the number of 
expressions of interest to be considered, provided that the sample is 
appropriate in terms of the pool of those submitting expressions of 
interest.'' Data management techniques are not ``appropriate'' under 
subsection (3) if they are not facially neutral or if they produce 
disparate impact based on race, gender, or ethnicity in the expressions 
of interest to be considered. Further, OFCCP modified the fourth part 
(subsection (1)(iv)) of the proposed definition of ``Internet 
Applicant'' to require that ``[t]he individual at no point in the 
contractor's selection process prior to receiving an offer of 
employment from the contractor, removes himself or herself from further 
consideration or otherwise indicates that he or she is no longer 
interested in the position.''
    OFCCP also added a related provision (subsection (5) of the 
definition of ``Internet Applicant'') to clarify that, ``a contractor 
may conclude that an individual has removed himself or herself from 
further consideration, or has otherwise indicated that he or she is no 
longer interested in the position for which the contractor has 
considered the individual, based on the individual's express statement 
that he or she is no longer interested in the position, or on the 
individual's passive demonstration of disinterest shown through 
repeated non-responsiveness to inquiries from the contractor about 
interest in the position. A contractor also may determine that an 
individual has removed himself or herself from further consideration or 
otherwise indicated that he or she is no longer interested in the 
position for which the contractor has considered the individual based 
on information the individual provided in the expression of interest, 
such as salary requirements or preferences as to type of work or 
location of work, provided that the contractor has a uniformly and 
consistently applied policy or procedure of not considering similarly 
situated job seekers. If a large number of individuals meet the basic 
qualifications for the position, a contractor may also use data 
management techniques, such as random sampling or absolute numerical 
limits, to limit the number of individuals who must be contacted to 
determine their interest in the position, provided that the sample is 
appropriate in terms of the pool of those meeting the basic 
qualifications.'' Data management techniques are not ``appropriate'' 
under subsection (5) if they are not facially neutral or if they 
produce adverse impact based on race, gender, or ethnicity in the job 
seekers that will be contacted by the contractor to discern interest in 
the job. Finally, in the final rule (Sec.  60-1.12(a)), OFCCP clarified 
that, when a contractor uses a third-party resume database, the 
contractor must retain the electronic resumes of job seekers who met 
the basic qualifications for the particular position who are considered 
by the contractor, not all the resumes contained in the third-party 
resume database, along with records identifying job seekers contacted 
regarding their interest in a particular position, a record of the 
position for which each search of the database was made, the 
substantive search criteria used, and the date of the search.
    Returning to ORC's example in light of these modifications, the 
contractor may reduce the burden from applicant

[[Page 58951]]

recordkeeping obligations by determining which of the 20,000 
individuals from Monster.com to contact through random sampling or an 
absolute numerical technique.\6\ The contractor could also limit 
burdens from recordkeeping obligations by determining which of the 
20,000 individuals are interested in the position through the 
individuals' stated preferences as to type or location of work, or 
salary requirements. The contractor would be required to retain only 
the resumes of job seekers who met the basic qualifications for the 
particular position and who were considered by the contractor, not 
20,000 resumes or all the resumes in the Monster.com database.
---------------------------------------------------------------------------

    \6\ Under a random sampling technique, the employer considers 
only a small subset of resumes drawn randomly from the 20,000 
resumes; many spreadsheets and database software packages offer 
random sampling functions. Under an absolute numerical limit, the 
employer reviews only a predesignated number of resumes, such as the 
first 100 resumes.
---------------------------------------------------------------------------

    Several commenters, including Gaucher Associates and Siemens USA 
(Siemens), argued that the term ``Internet and related electronic data 
technologies'' is vague and requested that OFCCP clarify the meaning of 
this term in the final rule. OFCCP will not provide a precise 
definition of this term in recognition of rapid changes in technology 
in this area. However, OFCCP does intend this term to include the types 
of technologies referenced in the preamble to the proposed UGESP 
Additional Questions and Answers as follows:

    Internet-related technologies and applications that are widely 
used in recruitment and selection today include:
    E-mail: Electronic mail allows for communication of large 
amounts of information to many sources with remarkable ease. 
Recruiters, employers, and job seekers use e-mail lists to share 
information about potential job matches. Recruiters send e-mails to 
lists of potential job seekers. These lists are obtained through 
various sources of information, such as trade or professional lists 
and employer Web site directories. Employers publish job 
announcements through e-mail to potential job seekers identified 
through similar means. Job seekers identify large lists of companies 
to receive electronic resumes through e-mail. E-mail allows all of 
these users to send the same information to one recipient or many, 
with little additional effort or cost.
    Resume databases: These are databases of personal profiles, 
usually in resume format. Employers, professional recruiters, and 
other third parties maintain resume databases. Some third-party 
resume databases include millions of resumes, each of which remains 
active for a limited period of time. Database information can be 
searched using various criteria to match job seekers to potential 
jobs in which they may be interested.
    Job Banks: The converse of the resume database are databases of 
jobs. Job seekers search these databases based on certain criteria 
to identify jobs for which they may have some level of interest. Job 
seekers may easily express interest in a large number of jobs with 
very little effort by using a job bank database. Third-party 
providers, such as America's Job Bank, may maintain job banks or 
companies may maintain their own job bank through their Web sites.
    Electronic Scanning Technology: This software scans resumes and 
individual profiles contained in a database to identify individuals 
with certain credentials.
    Applicant Tracking Systems/Applicant Service Providers: 
Applicant tracking systems began primarily to help alleviate 
employers' frustration with the large number of applications and 
resumes received in response to job postings. They also serve the 
wider purpose of allowing employers to collect and retrieve data on 
a large number of job seekers in an efficient manner. Whether in the 
form of custom-made software or an Internet service, the system 
receives and evaluates electronic applications and resumes on behalf 
of employers. For example, an employer could have the group of job 
seeker profiles from a third party provider's system searched, as 
well of those received on its own corporate Web site entered into 
one tracking system. The system would then pull a certain number of 
profiles that meet the employer-designated criteria (usually a 
particular skill set) and forward those profiles to the employer for 
consideration.
    Applicant Screeners: Applicant screeners include vendors that 
focus on skill tests and other vendors that focus on how to evaluate 
general skills. Executive recruiting sites emphasize matching job 
seekers with jobs using information about the individual's skills, 
interests, and personality.

69 FR 10155 (March 4, 2004).
Part 2: ``The employer considers the individual for employment in a 
particular open position;''
    In the proposed rule, the second criterion of the ``Internet 
Applicant'' definition required that ``[t]he employer considers the 
individual for employment in a particular open position.'' Subsection 
(1)(ii). OFCCP made one change to this text in the final rule; the word 
``open'' was deleted. The deletion was made to avoid confusion about 
whether the second criterion is met if an individual is considered for 
a position that may by open in the future, but is not currently open. 
Under subsection (1)(ii) it will be sufficient for a contractor to 
consider an individual for employment in a particular position.
    In response to comments received from the LCCR, EEAC and others 
discussed above, OFCCP added a related provision at subsection (3) of 
the definition of Internet Applicant in the final rule:

    For purposes of paragraph (1)(ii) of this definition, 
``considers the individual for employment in a particular 
position,'' means that the contractor assesses the substantive 
information provided in the expression of interest with respect to 
any qualifications involved with a particular position. A contractor 
may establish a protocol under which it refrains from considering 
expressions of interest that are not submitted in accordance with 
standard procedures the contractor establishes. Likewise, a 
contractor may establish a protocol under which it refrains from 
considering expressions of interest, such as unsolicited resumes, 
that are not submitted with respect to a particular position. If 
there are a large number of expressions of interest, the contractor 
does not ``consider the individual for employment in a particular 
position'' by using data management techniques that do not depend on 
assessment of qualifications, such as random sampling or absolute 
numerical limits, to reduce the number of expressions of interest to 
be considered, provided that the sample is appropriate in terms of 
the pool of those submitting expressions of interest.

    Subsection (3) explains that a contractor may establish a protocol 
under which it refrains from considering expressions of interest that 
are not submitted in accordance with standard procedures established by 
the contractor, or not submitted with respect to a particular position. 
However, the protocol must be uniformly and consistently applied to 
similarly situated job seekers. As previously mentioned, it is the 
contractor's actual practice that determines whether the contractor 
``considered'' the expression of interest. If a contractor's policy is 
to accept expressions of interest only through its Web site, but its 
actual practice is to review faxed resumes as well and to scan those it 
is interested in into its resume database, then the contractor 
``considers'' faxed resumes as well as expressions of interest received 
through its Web site.
    Subsection (3) also provides that if there are a large number of 
expressions of interest the contractor may use data management 
techniques to reduce the number of expressions of interest that must be 
considered, provided that the sample is appropriate in terms of the 
pool of those submitting expressions of interest. Data management 
techniques used to reduce the number of expressions of interest to be 
considered must be facially neutral in terms of race, ethnicity, gender 
or other protected factors. Data management techniques that produce 
adverse impact based on race, gender or ethnicity in the expressions of 
interest that will be considered by the contractor would not be 
appropriate.

[[Page 58952]]

    Several commenters, including Maly Consulting LLC, ORC, Siemens, 
and the SIOP, commented generally that the term ``considers'' is 
ambiguous and requested that OFCCP clarify its meaning. ORC argued that 
``considers'' should include the determination of whether an individual 
meets the basic qualifications for the position.
    Siemens was concerned that the term ``considers'' could be 
interpreted to preclude contractors from searching an internal resume 
database using successively more precise qualification searches to 
narrow the pool of potential applicants to a manageable number. Siemens 
argued that the term ``considers'' should be interpreted to permit 
contractors to use database searches to narrow a large pool of 
potential applicants down to a manageable number for individual 
evaluation. Siemens also recommended that ``considers'' be restricted 
to the stage in which ``the recruiter or hiring manager evaluates an 
actual applicant against the employer's requirements and makes a 
judgment as to which individuals should continue in the process.'' 
Similarly, SIOP argued that the term ``considers'' should not include 
searching an external resume database or ``querying an internal 
database of recruit profiles.''
    The U.S. Chamber of Commerce (the Chamber) recommended that the 
term ``considers'' be interpreted to permit an employer to count as 
``applicants'' for OFCCP purposes only ``those individuals best 
qualified to fill its positions.'' The Chamber argued that this 
interpretation of ``considers'' is necessary to permit employers to 
manage large volumes of expressions of interest while retaining their 
prerogative to select only the best qualified candidates. The Chamber 
offered an example of how its recommended interpretation of 
``considers'' might be applied: ``Hospital A'' has an opening for an 
emergency room nurse position and advertises that it is seeking 
registered nurses with hospital experience; Hospital A obtains fifty 
expressions of interest that meet the advertised, basic qualifications 
of registered nurse with hospital experience; Hospital A lacks the time 
or resources to ``consider'' all 50 of these expressions of interest, 
so it assesses which of the 50 expressions of interest indicate 
emergency room nursing experience, and finds that 20 of the 50 
expressions of interest indicate such experience; Hospital A then looks 
at 10 out of these 20 expressions of interest with emergency room 
nursing experience, determines that they are ``good candidates for the 
job,'' and submits those ten candidates for ``consideration.'' Thus, 
under the Chamber's recommended interpretation, Hospital A has 
``considered'' only the ten individuals whose expressions of interest 
indicate they are ``good candidates for the job.''
    OFCCP agrees with the commenters who recommended that the agency 
provide clear rules on applicant recordkeeping requirements. It is the 
agency's intent to provide clear rules for applicant recordkeeping that 
will allow OFCCP to enforce these requirements and that will provide 
contractors with meaningful guidance on how to comply with them. 
Therefore, OFCCP has included an express definition of ``considers the 
individual for employment in a particular position'' in subsection (3) 
of the definition of ``Internet Applicant'' in the final rule. Under 
this definition, ``considers'' involves an assessment of the job 
seeker's qualifications against any qualifications of a particular 
position, including a determination of whether a job seeker meets the 
basic qualifications for the position.
    With respect to Siemens' concern about searching a resume database, 
nothing in the definition of Internet Applicant precludes a contractor 
from engaging in multiple searches of a resume database, so long as 
each of the search criteria fall within the definition of ``basic 
qualifications.'' Moreover, a contractor need not search for all of the 
qualifications that constitute the ``basic qualifications'' for a 
particular position. If the contractor chooses not to search for all of 
the ``basic qualifications'' of the position, then it will collect race 
and gender information from a broader pool than that framed by search 
criteria that included all of the ``basic qualifications'' for the 
position. The final rule provides minimum standards for applicant 
recordkeeping. It does not prohibit contractors from voluntarily 
collecting race, ethnicity or gender information from potential 
applicants, nor does E.O. 11246 preclude contractors from voluntarily 
obtaining this information from potential applicants, as long as such 
information is used only for purposes of the contractor's affirmative 
action and nondiscrimination programs.
    However, OFCCP disagrees with Siemens, SIOP and the Chamber with 
respect to their proposals essentially to eliminate the conditions on 
``basic qualifications'' (i.e., that basic qualifications must be 
noncomparative, objective, and ``relevant to performance of the 
particular position * * *'') from the proposed definition of Internet 
Applicant. OFCCP would not have sufficient records to evaluate 
contractors' recruiting and hiring practices under E.O. 11246 if 
contractors collected race and gender information in accordance with 
the recommendations of these commenters. Under these recommendations, 
OFCCP would be unable to assess a significant portion of a contractor's 
recruiting and hiring practices, including the impact of basic 
qualifications \7\ and the comparative assessment of candidates. In the 
Chamber's example, only 10 individuals would be Internet Applicants 
under their proposal, while 50 would be under the final rule. Under 
some of these recommendations, OFCCP would be able to assess only the 
final stages of the contractor's hiring process, leaving open whether 
there was discrimination at any of the prior stages in the hiring or 
recruiting processes. Further, many of the recommendations were far too 
vague to provide a clear rule that OFCCP could enforce or that 
contractors could apply to their particular recruiting and hiring 
procedures.
---------------------------------------------------------------------------

    \7\ By contrast, under the final rule, OFCCP can assess the 
impact of ``basic qualifications'' by comparing the demographics of 
the pool of ``Internet Applicants'' with statistics on the qualified 
labor force. See discussion under ``Basic Qualifications,'' below.
---------------------------------------------------------------------------

    In addition to the comments from LCCR discussed above, LCCR and the 
National Women's Law Center (NWLC) also expressed concern that the 
proposed rule leaves to the employer's discretion whom to ``consider'' 
for a particular position and argued that OFCCP should require 
employers to ``consider'' all individuals who are similarly situated 
with respect to the manner of making their expressions of interest. 
LCCR also noted concern that an employer might make exceptions to its 
internal procedures: ``[a] misguided employer could decide that he/she 
only wanted to ``consider'' applicants with certain credentials, or 
from a particular community, regardless of their actual qualifications 
for a job.''
    As noted above, OFCCP agrees that, for purposes of defining 
applicant recordkeeping requirements, contractors should not be 
permitted to selectively determine who will be considered for 
employment based on the qualification information contained on an 
expression of interest. Otherwise, OFCCP would not have sufficient 
information to assess contractors' hiring practices for potential 
discrimination. As discussed above, OFCCP has addressed this concern 
through an explicit definition of ``considers the individual for 
employment in a particular position'' under which contractors do not 
have

[[Page 58953]]

discretion to assess information about a potential applicant's 
credentials against any qualification of a particular position without 
thereby having ``considered'' the potential applicant.
    In addition, the final rule (at Sec.  60-1.12(a)) requires 
contractors to retain records of qualifications used in the hiring 
process and any and all expressions of interest through the Internet or 
related electronic data technologies as to which the contractor 
considered the individual for a position, including records such as on-
line resumes or internal resume databases and records identifying job 
seekers contacted regarding their interest in a particular position. 
The rule also specifies that with respect to internal resume databases, 
the contractor must maintain a record of each resume added to the 
database, a record of the date each resume was added to the database, 
the position for which each search of the database was made, and 
corresponding to each search, the substantive search criteria used and 
the date of the search. In addition, with respect to external resume 
databases, the contractor must maintain a record of the position for 
which each search of the database was made, and corresponding to each 
search, the substantive search criteria used, the date of the search, 
and the resumes of job seekers who met the basic qualifications for the 
particular position who are considered by the contractor. These records 
are to be maintained regardless of whether the individual qualifies as 
an Internet Applicant under 41 CFR 60-1.3. Existing recordkeeping 
requirements (under Sec.  60-1.7 and 1.12) and OFCCP's investigative 
rights (under Sec.  60-1.20) enable OFCCP to determine whether a 
qualification actually was used for a particular position. The 
recordkeeping requirements embodied in the final rule combined with the 
existing OFCCP recordkeeping requirements will ensure that OFCCP has 
adequate information to assess whether employers are selectively 
``considering'' only certain candidates or imposing qualification 
standards that do not meet the definition of ``basic qualifications'' 
under the final rule.
Part 3: ``The individual's expression of interest indicates the 
individual possesses the advertised, basic qualifications for the 
position;''
    In the proposed rule, the third criterion of the ``Internet 
Applicant'' definition required that ``[t]he individual's expression of 
interest indicates that the individual possesses the advertised, basic 
qualifications for the position.'' 69 FR 16446, 16447 (March 29, 2004). 
The proposed rule defined ``advertised, basic qualifications'' as 
``qualifications that the employer advertises (e.g., posts a 
description of the job and necessary qualifications on its Web site) to 
potential applicants that they must possess in order to be considered 
for the position and that meet all of the following three conditions * 
* *.'' Id. at 16449.
A. ``Advertised, basic qualifications''
1. ``Advertised''
    Several commenters argued that the ``advertised'' component of the 
proposed definition of Internet Applicant conflicts with the way 
employers recruit for employees in many instances. EEAC argued that 
many employers use ``broadcast recruitment,'' under which the employer 
permits job seekers to submit a resume or register an expression of 
interest ``in being considered for a range of positions, a broad 
category of positions, or in some cases simply any position for which 
the employer might currently or at some time in the future consider the 
individual to be a good candidate.'' Siemens asserted that the proposed 
requirement that the basic qualifications be advertised could place 
``undue emphasis on the drafting of the initial announcement of the 
vacancy and qualifications.'' Siemens argued that employers cannot know 
in advance whether an advertised qualification will produce too few or 
too many candidates who meet the basic qualifications, and recommended 
that the final rule afford contractors flexibility to be able to ensure 
an adequate, but manageable applicant pool. SIOP provided comments 
similar to both EEAC and Siemens. HR Analytical Services noted that 
employers may at times truncate qualifications listed in an 
advertisement or job posting to save cost or space. ORC, SHRM, and 
Thomas Houston Associates, Inc. argued that many job seekers submit 
expressions of interest without ever viewing an advertisement for a 
specific position. Most of these commenters suggested that OFCCP revise 
the proposed definition of Internet Applicant to include qualifications 
that are ``advertised or established.''
    OFCCP acknowledges that in certain circumstances a contractor may 
not have an opportunity because of emergent business conditions to 
advertise a position before hiring a new employee. To address this 
issue, the final rule provides an alternative for qualifications that 
are not advertised. The final rule provides that if the contractor does 
not advertise for the position, the contractor may use ``an alternative 
device to find individuals for consideration (for example, through an 
external resume database),'' and establish the qualification criteria 
by making and maintaining a record of such qualifications for the 
position prior to considering any expression of interest for that 
position. Contractors must retain records of these established 
qualifications in accordance with section 60-1.12(a).
    In response to the comments, OFCCP modified this part in the final 
rule by eliminating the word ``advertised.'' Thus, subsection (1)(iii) 
of the definition of ``Internet Applicant'' in the final rule provides, 
``[t]he individual's expression of interest indicates the individual 
possesses the basic qualifications for the position. * * *''
2. ``Basic Qualifications''
    Many commenters expressed general approval of the ``basic 
qualifications'' component of the proposed rule.\8\ Several commenters 
approved generally of the concept of ``basic qualifications,'' but 
requested modifications of the proposed rule. For example, several 
commenters, such as HR Analytical Services, SHRM, and Thomas Houston 
Associates, Inc., argued that the term ``basic qualifications'' would 
cause confusion because it is not a term that is commonly used by 
employers, job seekers, or recruiters. These commenters recommended 
that the term ``minimum qualifications'' be used instead of ``basic 
qualifications,'' and argued that employers, job seekers, and 
recruiters already understand and use the term ``minimum 
qualifications.''
---------------------------------------------------------------------------

    \8\ See note 4, above.
---------------------------------------------------------------------------

    SHRM and HR Analytical Services also expressed concern that the 
word ``basic'' in the term ``basic qualifications'' somehow could be 
interpreted as a substantive limit on the types of qualifications that 
could qualify under the definition, over and above the substantive 
limits contained in the proposed definition of ``basic 
qualifications,'' i.e., that they are noncomparative, objective, and 
job related. SHRM and SIOP recommended that OFCCP provide more guidance 
on what qualifications are ``basic'' in the final rule.
    OFCCP disagrees with these commenters that a term other than 
``basic qualifications'' is desirable for purposes of the final rule. 
OFCCP believes that borrowing a term from common usage would cause more 
confusion, not less. The term ``basic qualifications'' is carefully 
defined in

[[Page 58954]]

the final rule to satisfy OFCCP compliance monitoring purposes. Under 
this definition, any qualification that is noncomparative, objective, 
and ``relevant to performance of the particular position and enabl[ing] 
the contractor to accomplish business-related goals'' may be a ``basic 
qualification.'' However, employment tests used as employee selection 
procedures, including on-line tests, are not considered basic 
qualifications under the final rule. Contractors are required to retain 
records about the gender, race and ethnicity of employment test takers 
who take an employment test used to screen them for employment, 
regardless of whether test takers are Internet Applicants under section 
60-1.3. For example, if 100 job seekers take an employment test, but 
the contractor only considers test results for the 50 who meet the 
basic qualifications for the job, demographic information must be 
solicited only for the 50 job seekers screened by test results because 
the test was used as a selection procedure only for those individuals. 
By contrast, if the contractor used the test results from 100 test 
takers to narrow the pool to 50 job seekers whose basic qualifications 
are considered, the test is used as a selection procedure and 
demographic information from all test takers must be solicited.
    The term ``basic'' is not intended to provide any substantive limit 
on the type or range of qualifications that could meet this definition. 
Rather than offer examples of qualifications that meet the definition 
of ``basic qualifications'' for particular jobs--which would require 
OFCCP to describe the actual duties and responsibilities corresponding 
to the job titles referenced in such examples--OFCCP provides 
additional discussion of the components (i.e., noncomparative, 
objective, and ``relevant to performance of the particular position * * 
*'') of the definition in response to comments under separate headings 
below.
    A job seeker must meet all of a contractor's basic qualifications 
in order to be an Internet Applicant under today's rule. For example, a 
contractor initially searches an external job database with 50,000 job 
seekers for 3 basic qualifications for a bi-lingual emergency room 
nursing supervisor job (a 4-year nursing degree, state certification as 
an RN, and fluency in English and Spanish). The initial screen for the 
first three basic qualifications narrows the pool to 10,000. The 
contractor then adds a fourth basic qualification, 3 years of emergency 
room nursing experience, and narrows the pool to 1,000. Finally, the 
contractor adds a fifth basic qualification, 2 years of supervisory 
experience, which results in a pool of 75 job seekers. Under this final 
rule, only the 75 job seekers meeting all five basic qualifications 
would be Internet Applicants, assuming other prongs of the definition 
were met.
    Several other commenters asserted that OFCCP's proposal was unclear 
about whether screening for criteria other than qualifications would be 
deemed ``basic qualifications'' under the definition of Internet 
Applicant. For example, Morgan Lewis & Bockius LLP asked whether job 
seekers' salary requirements used to define the applicant pool would be 
deemed ``basic qualifications.'' SIOP questioned whether ``willingness 
to work in a specific geographic location,'' ``willingness to travel a 
certain percentage of time,'' and ``willingness to work certain days or 
shifts'' would qualify as ``basic qualifications.'' Several commenters, 
such as NAM and Maly Consulting LLC, asked whether contractors' use of 
random sampling or specific numerical limits (e.g., first 30 reviewed 
out of 10,000) to manage large volumes of expressions of interest would 
be deemed ``basic qualifications.''
    OFCCP recognizes that contractors may gauge a job seeker's 
willingness to work in the particular position through information the 
individual has provided about salary requirements and willingness to 
work in certain types of positions or certain geographic areas, 
provided that the contractor has a uniformly and consistently applied 
policy or procedure of not considering similarly situated job seekers. 
OFCCP also recognizes that contractors may need to use additional data 
management techniques (such as random sampling or numerical limits) to 
develop a reasonable applicant pool out of a large volume of job 
seekers who possess the basic qualifications for the particular 
position. OFCCP does not view use of such information or techniques to 
determine who is interested in a particular position to be 
consideration of ``basic qualifications,'' provided that the sample is 
appropriate in terms of the pool of those meeting the basic 
qualifications. OFCCP addressed these comments in the final rule by 
modifying the fourth part of the Internet Applicant definition to 
require that ``[t]he individual at no point in the contractor's 
selection process * * * removes himself or herself from further 
consideration or otherwise indicates that he or she is no longer 
interested in the position.'' The final rule includes a provision 
(subsection (5) of the definition of ``Internet Applicant'') under 
which ``a contractor may determine that an individual has removed 
himself or herself from further consideration * * * based on 
information the individual provided in the expression of interest, such 
as salary requirements or preferences as to type of work or location of 
work, provided that the contactor has a uniformly and consistently 
applied policy or procedure of not considering similarly situated job 
seekers.'' In addition, as discussed above with regard to Part 2 of the 
Internet Applicant definition (subsection (1)(ii)), OFCCP added a 
definition of ``considers the individual for employment in a particular 
position,'' which also addresses these issues.
    In response to the comments, OFCCP modified subsection (4) of the 
definition of ``Internet Applicant'' by defining ``basic 
qualifications'' as: ``qualifications (i)(A) that the contractor 
advertises (e.g., posts on its web site a description of the job and 
the qualifications involved) to potential applicants that they must 
possess in order to be considered for the position, or (B) for which 
the contractor establishes criteria in advance by making and 
maintaining a record of such qualifications for the position prior to 
considering any expression of interest for that particular position, if 
the contractor does not advertise for the position but instead uses an 
alternative device to find individuals for consideration (e.g., through 
an external resume database), and (ii) that meet all of the following 
three conditions * * *'' In the final rule, OFCCP retained most of the 
text of the proposed rule with respect to the ``three conditions'' 
referenced in the definition of ``basic qualifications.'' Thus, the 
final rule provides:

    (A) The qualifications must be noncomparative features of a job 
seeker. For example, a qualification of three years' experience in a 
particular position is a noncomparative qualification; a 
qualification that an individual have one of the top five number of 
years' experience among a pool of job seekers is a comparative 
qualification.
    (B) The qualifications must be objective; they do not depend on 
the contractor's subjective judgment. For example, ``a Bachelor's 
degree in Accounting'' is objective, while ``a technical degree from 
a good school'' is not. A basic qualification is objective if a 
third-party, with the contactor's technical knowledge, would be able 
to evaluate whether the job seeker possesses the qualification 
without more information about the contractor's judgment.
    (C) The qualifications must be relevant to performance of the 
particular position and enable the contractor to accomplish 
business-related goals.


[[Page 58955]]


    Several commenters opposed the use of ``basic qualifications'' in 
defining ``Internet Applicant'' for purposes of OFCCP recordkeeping 
requirements. The Leadership Conference on Civil Rights, the National 
Women's Law Center, and the Lawyers' Committee for Civil Rights Under 
Law generally offered three arguments against the use of ``basic 
qualifications'' as a way to determine applicant recordkeeping 
obligations: (1) Established nondiscrimination legal standards do not 
require an individual to be qualified for a job in order to be an 
applicant for the job; (2) employers could use the ``basic 
qualifications'' to manipulate the composition of the applicant pool, 
exclude qualified individuals, and mask discrimination; and (3) the 
purpose of applicant recordkeeping is to ensure that the qualifications 
standards employers use, including ``basic qualifications,'' do not 
discriminate against individuals on the basis of race, ethnicity or 
sex. In sum, these commenters essentially were concerned that OFCCP 
would not be able to find and remedy particular cases of hiring 
discrimination under the proposed rule.
    OFCCP disagrees with the three arguments presented by these 
commenters. As to the commenters' first argument, OFCCP is proposing a 
definition of applicant for the limited purposes of OFCCP recordkeeping 
and data collection requirements pursuant to Executive Order 11246. 
Accordingly, OFCCP is not purporting to define who is an applicant for 
any purposes which would affect the substantive interests of any 
individual, such as for purposes of litigation of employment 
discrimination claims under any federal, state, or local 
antidiscrimination statute. Moreover, OFCCP is not aware of any case in 
which a court relied on OFCCP's recordkeeping definitions for purposes 
of determining liability or remedy under Title VII or any other 
federal, state or local antidiscrimination statute. OFCCP itself may 
not rely on recordkeeping definitions to frame the appropriate analysis 
for liability or remedy purposes when alleging a violation of the 
nondiscrimination requirements of Executive Order 11246 (as opposed to 
recordkeeping requirements).
    As to the commenters' second argument, contractors will not be able 
to manipulate basic qualifications in order to effectuate 
discrimination, because the final rule provides adequate safeguards 
against this problem. First, the final rule requires a contractor to 
retain all the expressions of interest it considered, even those of 
individuals who are not Internet Applicants.\9\ OFCCP will have access 
to these records during a compliance evaluation and will review them as 
appropriate to determine if discrimination exists. Second, OFCCP has 
carefully defined ``basic qualifications'' in the final rule, requiring 
that they be noncomparative, objective, and ``relevant to the 
performance of the particular position and enabl[ing] the contractor to 
accomplish business-related goals.'' Under the final rule, a contractor 
must retain records of all such basic qualifications used to develop a 
pool of Internet Applicants. Again, OFCCP will have access to these 
records during a compliance evaluation.
---------------------------------------------------------------------------

    \9\ With the exception of expressions of interest from external 
resume databases, where the massive volume of resumes makes such a 
requirement impracticable. As noted below, as of January, 2005, 
Monster.com reported that it had over 41 million resumes in its 
database.
---------------------------------------------------------------------------

    Finally, OFCCP will rely on Census and other labor market data to 
assess contractors' hiring practices for potential discrimination and 
will carefully review the basic qualifications themselves. The Supreme 
Court of the United States has authorized the use of comparisons 
between actual hiring rates and population or labor force statistics to 
prove hiring discrimination. See Int'l Bhd. of Teamsters v. United 
States, 431 U.S. 324, 339 n.20 (1977) (population statistics); 
Hazelwood Sch. Dist. v. United States, 433 U.S. 299, 307 n.12 (1977) 
(labor force statistics). As noted in the preamble of the proposed 
rule, hiring discrimination cases frequently rely on population and 
labor force statistics. See, e.g., Griggs v. Duke Power Co., 401 U.S. 
424, 430 n.6, 431 (1971) (relying on Census data about the general 
population to find that a high school degree requirement had a 
disparate impact on African-Americans); Dothard v. Rawlinson, 433 U.S. 
321, 329-330 (1977) ( ``The application process itself might not 
adequately reflect the actual potential applicant pool, since otherwise 
qualified people might be discouraged from applying because of a self-
recognized inability to meet the very standards challenged as being 
discriminatory.''); E.E.O.C. v. Joint Apprenticeship Comm. of Joint 
Industrial Bd. of Elec. Indus., 186 F.3d 110, 119 (2d Cir. 1999) 
(general population and qualified labor market data ``often form the 
initial basis of a disparate impact claim * * *''). OFCCP also will 
directly review whether the qualifications appear to be relevant to the 
position at issue and whether they are of a type that have been subject 
to disparate impact litigation, such as requirements as to height and 
weight, arrest records, and high school degree or GED. See, e.g., 41 
CFR 60-3.4(C) (requiring users to evaluate individual components of 
hiring process ``where the weight of court decisions or administrative 
interpretations hold that a specific procedure (such as height or 
weight requirements or no-arrest records) is not job related in the 
same or similar circumstances'').
    As to the commenters' third argument against ``basic 
qualifications''--that OFCCP will miss particular cases of disparate 
impact discrimination--OFCCP disagrees that the proposed applicant 
recordkeeping standards will make OFCCP less effective at finding and 
remedying hiring discrimination. Indeed, OFCCP has determined that 
applicant data under the proposed definition of Internet Applicant will 
make the agency much more effective at finding and remedying hiring 
discrimination across the range of cases. OFCCP's rationale can be 
appreciated only through an understanding of how the agency uses 
applicant data. OFCCP's use of applicant data is broader than 
determining whether a particular contractor has engaged in hiring 
discrimination. The distinction in uses of applicant data reflects 
OFCCP's historical mission of focusing on systemic workplace 
discrimination. In Reynolds Metal Co. v. Rumsfeld, 564 F.2d 663, 668 
(4th Cir. 1977), the court described OFCCP's mission and contrasted it 
with the EEOC's:

    Both agencies are charged with the responsibility of eliminating 
employment discrimination, but their specific missions differ. The 
compliance office monitors government contractors to determine 
whether they are meeting their commitments as equal opportunity 
employers. It gives priority to the eradication of systemic 
discrimination rather than to the investigation and resolution of 
complaints about isolated instances of discrimination.

    In keeping with its unique mission, OFCCP uses applicant data 
broadly to deter all contractors under its jurisdiction from engaging 
in systemic hiring discrimination, either in the form of disparate 
impact or disparate treatment discrimination. OFCCP deters contractors 
in two ways: (1) By monitoring all contractors through a tiered-review 
approach that effectively targets contractors who have engaged in 
hiring discrimination; and (2) by effectively investigating contractors 
who have engaged in systemic hiring discrimination and obtaining 
significant financial awards (along with instatement obligations) to 
remedy such discrimination.

[[Page 58956]]

    OFCCP primarily uses applicant data with respect to the first part 
of the two-part deterrence model. OFCCP uses the data to target OFCCP 
investigations at workplaces in which hiring discrimination is likely 
to exist. OFCCP initially selects a contractors establishment for a 
compliance evaluation based, in part, on a statistical analysis of 
workforce demographic data the contractor submits on annual EEO-1 
reports. Once OFCCP selects a contractor's establishment for a 
compliance evaluation, OFCCP sends the contractor a ``scheduling 
letter'' that asks the contractor to submit data on, among other 
things, applicants and hires for a specified period. After receiving 
the contractor's data, OFCCP analyzes the ratio of applicants and 
hires, and, based on this analysis, determines whether to investigate 
the contractor's hiring practices. This initial analysis of applicant 
and hire data is a part of the compliance evaluation process known as 
the ``desk audit.'' OFCCP considers desk audit results when determining 
whether to conduct an on-site investigation, and the scope of any such 
on-site investigation. OFCCP typically conducts many more desk audits 
than on-site reviews, and uses the desk audit analysis to allocate 
agency investigation resources toward workplaces where the likelihood 
of a discrimination problem is highest.
    Thus, inclusion of basic qualifications in the definition of 
Internet Applicant under section 60-1.3 furthers OFCCP's goal of 
targeting for in-depth reviews contractor's that are potentially the 
worst offenders. If, during the desk audit, OFCCP were to target 
contractors for more in-depth review based on Internet applicant data 
that includes job seekers not meeting basic qualifications, OFCCP would 
select contractors that rejected a high proportion of job seekers 
because they were not even minimally qualified for the job. The result 
would be that OFCCP would waste finite resources by focusing its on-
site reviews on contractors that were not the worst offenders. Under 
the OFCCP approach, targeting will be based on a contractor's rejection 
rate of qualified applicants, a better predictor of worst offenders. In 
determining who are potentially the worst offenders for more in-depth 
reviews, OFCCP will also analyze whether the contractor potentially 
discriminated in hiring by comparing the demographic characteristics of 
the applicants hired to the demographic characteristics of the 
qualified labor market. During an in-depth review, OFCCP will be able 
to analyze the contractor's use of basic qualifications by comparing 
the demographic characteristics of Internet applicants meeting basic 
qualifications with labor market data. Consequently, including basic 
qualifications in the definition of Internet Applicant furthers OFCCP's 
goal of focusing investigative resources on potentially the worst 
offenders, while preserving OFCCP's ability to efficiently and 
effectively review a contractor's hiring practices for discrimination.
    In addition to the fact that such data would not permit meaningful 
analysis to guide OFCCP resource allocation decisions, some practical 
limits must be placed on collecting race, ethnicity, and gender 
information in this context because of the massive numbers of resumes 
in these databases. Otherwise, the applicant recordkeeping burdens 
would be excessive. Several commenters proposed various alternative 
definitions for ``basic qualifications'' that appeared to be attempts 
to address these practical problems. For example, Gaucher Associates 
contended that contractors could use sampling techniques to obtain 
race, ethnicity and gender data where there are large numbers of 
applicants. In limited circumstances contractors may use appropriate 
sampling techniques to collect information required by these 
regulations (See 41 CFR 60-3.4.A). However, sampling is not always 
appropriate. For example, a random sample that includes many 
individuals in a large resume database who have no interest in, nor 
basic qualifications for, a particular position would provide far less 
useful information than labor force statistics that are tailored for 
the position and geographic location.
    One commenter, ChevronTexaco Federal Credit Union (CTFCU), argued 
that the proposed rule would impose undue burdens on small contractors 
where a significant number of individuals who meet the basic 
qualifications submit an expression of interest.
    CTFCU contended that small contractors cannot afford automated 
applicant tracking systems and they cannot manually consider all 
individuals who meet the basic qualifications. CTFCU recommended that 
OFCCP apply the proposed ``Internet Applicant'' definition and 
associated obligations only to ``employees showing underutilization of 
women and/or minorities,'' based on workforce demographic data from 
EEO-1 reports.
    OFCCP believes that data management techniques such as random 
sampling or absolute numerical limits, discussed above, will enable 
small contractors to comply with applicant recordkeeping requirements 
without undue burden. OFCCP does not agree that CTFCU's recommendation 
would necessarily help small businesses because the burden involved 
with this proposal depends entirely on the amount of 
``underutilization.'' Nor would this proposal provide records that 
OFCCP requires to enforce E.O. 11246 for job categories in which there 
was no ``underutilization.'' As OFCCP understands this proposal, 
contractors would not be required to collect race, ethnicity or gender 
information about any individuals considered for positions in job 
categories that are not ``underutilized.'' However, the fact that a 
broad occupational category, such as an AAP job group or EEO-1 job 
category, is ``utilized'' does not necessarily imply that there is not 
a discrimination problem in the recruiting or hiring process for the 
jobs that make up those occupational categories.
3. ``Non-comparative''
    In the proposed rule, OFCCP provided that ``basic qualifications'' 
must be ``non-comparative.'' The proposed rule provided examples of 
qualifications that would and would not qualify as ``non-
comparative''': ``a qualification of three years' experience in a 
particular position is a noncomparative qualification; a qualification 
that an individual have one of the top five number of years' experience 
among a pool of job seekers is a comparative qualification.'' OFCCP 
retained this provision in the final rule.
    The Chamber argued that ``[e]stablished caselaw permits employers 
to set job qualifications `as high as [they] like [],' based on current 
business needs, and permits employers to craft selection procedures 
that enable them to identify the best-qualified candidates for the 
job.'' Based on this argument, the Chamber asserted that the 
``noncomparative'' component of the proposed rule should not be 
interpreted ``to imply that a candidate becomes an ``applicant'' simply 
because he or she possesses the `basic' qualifications for the 
position.''
    OFCCP disagrees with the Chamber's comments. OFCCP's proposed 
definition of Internet Applicant determines contractors' recordkeeping 
obligations, it does not impose substantive limits on the 
qualifications a contractor may use to select employees. Under the 
interpretation suggested by the Chamber, OFCCP would not have 
sufficient records or information to evaluate whether a contractor's 
hiring practices were discriminatory. In particular, OFCCP

[[Page 58957]]

would not be in a position to evaluate a contractor's comparative 
assessment of applicants' qualifications. Therefore, OFCCP retained in 
the final rule the requirement that ``basic qualifications'' must be 
noncomparative.
4. ``Objective''
    In the proposed rule, OFCCP provided that ``basic qualifications'' 
must be ``objective'' and not depend on the employer's subjective 
judgment. OFCCP used the term ``third party'' in the proposed rule to 
describe how to determine whether a qualification is objective: ``One 
way to tell an advertised, basic qualification is objective is that a 
third-party, unfamiliar with the employer's operation, would be able to 
evaluate whether the job seeker possesses the qualification without 
more information about the employer's judgment.''
    ORC expressed concern that the term ``third party'' is ambiguous 
and that OFCCP's proposed definition does not provide meaningful 
guidance about whether a qualification is ``objective.'' Similarly, 
Nancy J. Purvis argued that the reference to ``third parties'' would 
not work in ``situations where only someone with sufficient technical 
knowledge (of the company, of the industry, of the job, etc.) will be 
able to evaluate whether or not an applicant meets the basic 
requirements.''
    OFCCP agrees with these commenters that, as described in the 
proposed rule, the term ``objective'' left unanswered whether the 
referenced ``third-party'' has the necessary technical expertise to 
understand whether a candidate possesses a technical qualification. It 
is not OFCCP's intent to preclude technical qualifications from being 
``basic qualifications.'' Accordingly, OFCCP modified the second 
sentence of subsection (4)(b) to provide that a basic qualification is 
objective if a third party, with the contractor's technical knowledge, 
would be able to evaluate whether the job seeker possesses the 
qualification without more information about the contractor's judgment.
5. ``Job related''
    In the proposed rule, OFCCP provided that ``basic qualifications'' 
must be ``job-related.'' The proposed rule defined ``job-related'' as 
``relevant to performance of the job at hand and enabl[ing] the 
employer to accomplish business-related goals.'' In response to the 
comments, OFCCP eliminated the term ``job-related'' and replaced it 
with the phrase, ``relevant to the performance of the particular 
position and enabl[ing] the contractor to accomplish business-related 
goals`` at subsection (4)(c) of the definition of ``Internet 
Applicant''.
    The Lawyers' Committee for Civil Rights Under Law and the 
Leadership Conference on Civil Rights (LCCR) criticized the requirement 
in the proposed rule that ``basic qualifications'' must be ``job 
related.'' They noted that the Civil Rights Act of 1991 provides a 
defense to disparate impact claims if the criteria having the disparate 
impact can be shown to be ``job related for the position in question'' 
and ``consistent with business necessity.'' \10\ These commenters 
argued that OFCCP's proposed rule leaves out the requirement that the 
basic qualifications must be ``consistent with business necessity.'' 
LCCR further argued that ``the explanation of what is meant by `job-
related' seems to understate what the law requires by suggesting that 
any `relevant' job criteria is sufficient to satisfy the legal 
standard.''
---------------------------------------------------------------------------

    \10\ The Lawyers' Committee for Civil Rights Under Law joined in 
LCCR's comments. However, the Lawyers' Committee did not expressly 
reference the Civil Rights Act of 1991 in its comments, but referred 
only to ``established legal precedent.'' We understand the Lawyers' 
Committee to be referencing the Civil Rights Act of 1991 with 
respect to the standard for defense of a disparate impact claim.
---------------------------------------------------------------------------

    OFCCP agrees with these commenters that use of the term ``job-
related'' in the proposed definition of ``Internet Applicant'' could 
cause confusion because the term is also used in the Civil Rights Act 
of 1991. Indeed, there is uncertainty as to the meaning of ``job 
related'' under the Civil Rights Act of 1991.\11\ Therefore, OFCCP has 
eliminated the term in the final rule and replaced it with the phrase, 
``relevant to performance of the particular position and enabl[ing] the 
contractor to accomplish business-related goals.''
---------------------------------------------------------------------------

    \11\ The Civil Rights Act of 1991 does not define the terms 
``job related'' or ``business necessity.'' Nor have the federal 
courts of appeals agreed upon any single explanation of these terms. 
Compare Bew v. City of Chicago, 252 F.3d 891, 894 (7th Cir. 2001) 
(finding that the Civil Rights Act of 1991 adopted the Griggs 
standard and noting that ``Griggs does not distinguish business 
necessity and job relatedness as two separate standards. It states 
that: `The touchstone is business necessity. If an employment 
practice which operates to exclude [a protected group] cannot be 
shown to be related to job performance, the practice is prohibited.' 
To satisfy the standard, an employment test must `bear a 
demonstrable relationship to successful performance of the jobs for 
which it was used.' '' (citations omitted)), with Ass'n of Mexican-
American Educators v. State of California, 231 F.3d 572, 585 (9th 
Cir. 2000) (en banc) (explaining that a `job related' test measures 
``skills, knowledge or ability required for successful performance 
of the job''), with Lanning v. Southeastern Pa. Transp. Auth., 181 
F.3d 478, 489 (3d Cir. 1999) (``Our conclusion that the Act 
incorporates this standard is further supported by the business 
necessity language adopted by the Act. Congress chose the terms `job 
related for the position in question' and `consistent with business 
necessity.' Judicial application of a standard focusing solely on 
whether the qualities measured by an entry level exam bear some 
relationship to the job in question would impermissibly write out 
the business necessity prong of the Act's chosen standard.'').
---------------------------------------------------------------------------

    OFCCP disagrees with the commenters' suggestion that the ``business 
necessity'' standard should be incorporated into the definition of 
``basic qualifications.'' OFCCP does not intend to limit the 
qualifications that could be ``basic qualifications'' only to those 
which meet the ``business necessity'' standard. That standard is 
applicable as a defense where a disparate impact has already been 
proven. By including the ``relevant to performance of the particular 
position * * *'' standard in the final rule as a limitation on 
qualifications that could qualify as ``basic qualifications,'' OFCCP 
intends to provide a reasonable limit on the nature of the 
qualifications used only to define recordkeeping obligations. OFCCP 
does not intend to define recordkeeping obligations through a 
presumption that every putative ``basic qualification'' involves a 
disparate impact. Of course, once it is established that a criterion 
caused a disparate impact, the contractor has the burden of justifying 
that the criterion is job related and consistent with business 
necessity.
Part 4: ``The individual does not indicate that he or she is no longer 
interested in employment in the position for which the employer has 
considered the individual.''
    In the proposed rule, the fourth part of the ``Internet Applicant'' 
definition provided that ``[t]he individual does not indicate that he 
or she is no longer interested in employment in the position for which 
the employer considered the individual.''
    Several commenters, including EEAC, Morgan, Lewis & Bockius LLP, 
and the Chamber, argued against the negative phrasing of this part of 
the proposed definition of ``Internet Applicant'' because it implies 
that an individual is presumed to be interested in a particular 
position even before the employer contacts the individual. These 
commenters expressed concern that an individual who does not respond to 
an employer's inquiry would automatically qualify as an Internet 
Applicant because the individual has not indicated ``that he or she is 
no longer interested in the position.''
    OFCCP does not believe that the negative phrasing of this part of 
the proposed rule implies--and OFCCP does not intend for the language 
to imply--a presumption that every individual who otherwise meets the

[[Page 58958]]

definition of Internet Applicant is deemed by OFCCP to be automatically 
interested in the particular position, even before the contractor 
contacts the individual. Subsection (5) explains that a contractor may 
conclude that an individual has removed himself or herself from the 
selection process or has otherwise indicated lack of interest in the 
position based on the individual's express statement or on the 
individual's passive demonstration of disinterest. For example, if an 
individual declines a contractor's invitation for a job interview, he 
or she has removed himself or herself from the selection process. If 
the individual declines a job offer he or she has expressly shown 
disinterest in the job. If an individual repeatedly fails to respond to 
a contractor's telephone inquiries or emails asking about his or her 
interest in a job, the individual has passively shown disinterest in 
the job. In addition to determining an individual's abandonment of 
interest through an express or passive negative response to the 
contractor's inquiry as to whether the individual is interested in the 
position, a contractor may also presume a lack of continuing interest 
based on a review of the expression of interest. Statements pertaining 
to the individual's interest in the specific position or type of 
position at issue, the location of work, and his or her salary 
requirements may provide the basis for determining the individual is no 
longer interested in the position, provided that the contractor has a 
uniformly and consistently applied policy or procedure of not 
considering similarly situated job seekers. If the potential applicant 
withdraws from further consideration after the point at which the 
individual already has qualified as an ``Internet Applicant'' under 
this final rule, the employer must retain any race, ethnicity, or 
gender information which the individual already provided, as well as 
the individual's expression of interest.
    In response to the comments, which expressed concern with the 
clarity of the proposed rule, OFCCP has slightly modified this part 
(subsection (1)(iv)) in the final rule to read: ``(iv) The individual 
at no point in the contractor's selection process prior to receiving an 
offer of employment from the contractor, removes himself or herself 
from further consideration or otherwise indicates that he or she is no 
longer interested in the position.'' OFCCP also explained in subsection 
(5) of the definition of ``Internet Applicant'' in the final rule that 
a contractor may determine whether an individual has removed himself or 
herself from consideration based on information the individual provided 
in the expression of interest, such as salary requirements or 
preferences as to type of work or location of work, provided that the 
contractor has a uniformly and consistently applied policy or procedure 
of not considering similarly situated job seekers. Subsection (5) 
further explains that if a large number of individuals meet the basic 
qualifications for the position, a contractor may also use data 
management techniques, such as random sampling or absolute numerical 
limits, to limit the number of individuals who must be contacted to 
determine their interest in the position, provided that the sample is 
appropriate in terms of the pool of those meeting the basic 
qualifications.

Comments on OFCCP's Proposed Revisions To Record Retention Requirements 
Section 60-1.12(a): Record Retention

    In the proposed rule, OFCCP added to existing recordkeeping 
requirements a provision which would require contractors to maintain 
``any and all employment submissions through the Internet or related 
electronic technologies, such as on-line resumes or resume databases 
(regardless of whether an individual qualifies as an Internet Applicant 
under 41 CFR 60-1.3).''
    Many commenters expressed concern that the proposed record 
retention requirements would impose significant burdens on contractors, 
due to the massive volume of expressions of interest.\12\ TOC 
Management Services (TOC) contended that the proposed rule would 
require employers to maintain all unsolicited expressions of interest, 
even those that were never considered by the employer. TOC asserted 
that this proposed requirement runs contrary to OFCCP's longstanding 
practice of allowing an employer to dispose of unsolicited expressions 
of interest if the employer adheres to a general policy of not 
considering them. The Chamber argued that the proposed recordkeeping 
provision ``would require employers to search all the computer and 
paper files of each of its employees to identify any expressions of 
interest that were sent to someone in the company but were never routed 
through the appropriate channels to those responsible for recruitment 
and hiring.'' Kairos Services, Inc. suggested that contractors should 
be required only to maintain records on individuals who qualify as 
``Internet Applicants'' under the proposed rule.
---------------------------------------------------------------------------

    \12\ See, e.g., Chairman of the U.S. House of Representatives 
Committee on Education and the Workforce's Subcommittee on Employer-
Employee Relations, Kairos Services, Inc., Louisiana Pacific Corp., 
ORC Worldwide, Morgan, Lewis & Bockius LLP, National Association of 
Manufacturers, and U.S. Chamber of Commerce.
---------------------------------------------------------------------------

    In response to the comments, OFCCP modified section 60-1.12(a) of 
the final rule to require contractors to maintain any and all 
expressions of interest through the Internet or related electronic data 
technologies as to which the contractor considered the individual for a 
particular position, such as on-line resumes or internal resume 
databases and records identifying job seekers contacted regarding their 
interest in a particular position. In addition, for internal resume 
databases, the contractor must maintain a record of each resume added 
to the database, a record of the date each resume was added to the 
database, the position for which each search of the database was made, 
and corresponding to each search, the substantive search criteria used 
and the date of the search. Also, for external resume databases, the 
contractor must maintain a record of the position for which each search 
of the database was made, and corresponding to each search, the 
substantive search criteria used, the date of the search, and the 
resumes of any job seekers who met the basic qualifications for the 
particular position who are considered by the contractor. These records 
must be maintained regardless of whether the individual qualifies as an 
Internet Applicant under 41 CFR 60-1.3.
    OFCCP agrees that the proposed rule could present unwarranted 
recordkeeping burdens if the contractor receives a large number of 
expressions of interest. Therefore, OFCCP modified this provision in 
the final rule to clarify that contractors must maintain ``expressions 
of interest through the Internet or related electronic data 
technologies as to which the contractor considered the individual for a 
particular position * * *'' [emphasis added]. ``Considers the 
individual for employment in a particular position'' (as defined in 
subsection 3 of the definition of ``Internet Applicant'') means that 
the contractor assesses the substantive information provided in the 
expression of interest with respect to any qualifications involved with 
a particular position. A contractor may establish a protocol under 
which it refrains from considering expressions of interest that are not 
submitted in accordance with standard procedures the contractor 
establishes. Likewise, a contractor may establish a protocol under 
which it refrains from considering expressions of interest, such as 
unsolicited resumes, that are not

[[Page 58959]]

submitted with respect to a particular position.
    If there are a large number of expressions of interest to be 
considered, the contractor does not ``consider'' the individual for 
employment in a particular position'' by using data management 
techniques that do not depend on assessment of qualifications, such as 
random sampling or absolute numerical limits, to reduce the number of 
expressions of interest to be considered, provided that the sample is 
appropriate in terms of the pool of those submitting expressions of 
interest.
    Under section 60-1.12(a), contractors avoid significant burdens 
even if there are large numbers of expressions of interest, because 
contractors are not required to retain records regarding individuals 
who were never considered for a particular position. However, OFCCP 
disagrees with the suggestion that contractors be required to maintain 
only expressions of interest of individuals who qualify as ``Internet 
Applicants.'' Part of the reason that OFCCP requires contractors to 
maintain such records is to ensure that they are actually complying 
with the definition of ``Internet Applicant.'' OFCCP could not verify 
the contractor's compliance with the ``Internet Applicant'' definition 
if the agency did not have access to records of individuals whom the 
contractor contends did not meet that definition.
    Several commenters, including NAM, Siemens, and TOC, were also 
concerned that the proposed rule would require contractors to maintain 
a ``snapshot'' of the resume database for each search. These commenters 
suggested that OFCCP require employers to retain any resume databases, 
specific search terms used in each search, and the date of each search.
    OFCCP agrees with these commenters and believes that their 
recommended approach avoids recordkeeping burdens and affords OFCCP 
adequate records to ensure compliance. Therefore, OFCCP added a 
provision to section 60-1.12(a) of the final rule which requires 
contractors to maintain the following information from internal resume 
databases: ``A record of each resume added to the database, a record of 
the date each resume was added to the database, the position for which 
each search of the database was made, and corresponding to each search, 
the substantive search criteria used and the date of the search * * 
*.''
    Maly Consulting LLC was concerned that the proposed rule would 
require contractors to download and retain all resumes on a third-party 
resume database, whenever the contractor searched the database for 
potential applicants. OFCCP agrees that it would be unreasonable to 
require an employer to maintain a copy of every record on a third-party 
resume database. For example, Monster.com reported that as of January, 
2005, it had over 41 million resumes in its resume database. Therefore, 
in the context of a third-party resume database, the final rule 
requires contractors to retain resumes only of job seekers who met the 
basic qualifications for the particular position who are considered by 
the contractor, and records identifying job seekers contacted regarding 
their interest in a particular position, along with a record of the 
position for which each search of the database was made, the 
substantive search criteria used, and the date of the search.

Section 60-1.12(c)(1)(ii): ``Where possible, the gender, race, and 
ethnicity of each applicant (i.e., submissions that are not through the 
Internet and related electronic technologies) and Internet Applicant as 
defined in 41 CFR 60-1.3.''

    In the proposed rule, OFCCP added the term ``Internet Applicant'' 
into an existing provision of OFCCP regulations which requires 
contractors to identify ``where possible, the gender, race, and 
ethnicity of each applicant.'' As discussed under Part 1 of the 
definition of Internet Applicant above, OFCCP modified this provision 
in the final rule to eliminate dual standards when the contractor 
accepts or considers expressions of interest submitted through either 
the Internet or traditional means for a particular position. Thus, 
under the final rule, the contractor must identify, ``where possible, 
the gender, race, and ethnicity of each applicant or Internet Applicant 
as defined in 41 CFR 60-1.3, whichever is applicable to the particular 
position.''

Obligation To Solicit Race, Ethnicity and Gender Data

    Northern California and Silicon Valley Industry Liaison Group 
(NCILG) argued that neither UGESP nor existing OFCCP regulations 
required contractors to solicit or obtain race, ethnicity, and gender 
data and that OFCCP misinterpreted UGESP and existing OFCCP regulations 
by asserting such a requirement in the preamble of the proposed rule. 
NCILG further contended that UGESP and OFCCP's existing regulations 
required only that contractors ``maintain'' race, ethnicity, and gender 
data, but there was no affirmative obligation to obtain or solicit such 
data. NCILG and Affirmative Action Partners, Inc. objected to any 
requirement that contractors solicit race, ethnicity, or gender 
information from applicants.
    OFCCP disagrees with these commenters. OFCCP historically has taken 
the position that contractors have some obligation to collect race, 
ethnicity, and gender information from applicants. OFCCP intends to 
make clear that, under the final rule, contractors are required to 
solicit race, ethnicity, and gender information from ``applicants'' or 
``Internet Applicants,'' whichever is applicable to the particular 
position. OFCCP intends this to be a mandate, not an option, because 
OFCCP requires this information to enforce E.O. 11246, as discussed 
throughout this preamble.
    SHRM argued that requiring employers to collect race, ethnicity, 
and gender data from all Internet Applicants would impose significant 
burdens on employers. OFCCP disagrees that the final rule imposes 
significant burdens on contractors compared with existing recordkeeping 
requirements. The final rule draws an appropriate balance between, on 
the one hand, the need of OFCCP and the contractor for certain 
information and records to enforce and comply with E.O. 11246, and, on 
the other hand, the practical realities of Internet recruiting.
    Several commenters, including GBCS, NILG, and SIOP, expressed 
concern that the OFCCP proposal does not clearly identify the point in 
the employment process at which contractors are required to collect 
race, ethnicity and gender data. Under the final rule, contractors are 
required to solicit race, ethnicity, and gender data from all 
individuals who meet the definition of Internet Applicant. OFCCP does 
not mandate a specific time or point in the employment process that 
contractors must solicit this information, so long as the information 
is solicited from all Internet Applicants.

Methods for Complying With the Rule

    Several commenters, including NILG, Thomas Houston Associates, 
Inc., and SHRM, expressed concern that the OFCCP proposal does not 
provide clear guidance on permissible methods for collecting race, 
ethnicity, and gender data. NCILG requested that OFCCP ``reaffirm'' 
that contractors have no obligation to somehow obtain race, ethnicity 
or gender data from individuals who refuse to voluntarily disclose such 
information in response to the contractor's solicitation. GBCS 
questioned whether contractors would be required to make a visual 
observation of individuals who refuse to voluntarily disclose race, 
ethnicity or gender information on a written solicitation

[[Page 58960]]

form. Nancy J. Purvis argued that contractors should be permitted to 
continue to use visual observation as a means of identifying the race, 
ethnicity and gender of applicants. SHRM recommended that employers be 
permitted to gather race, ethnicity, and gender data through either 
visual observation or self-identification. Affirmative Action Partners, 
Inc. (AAPI) offered several problems with collecting and maintaining 
race, ethnicity, and gender data on job applicants. In particular, AAPI 
noted that it does not promote EEO compliance to allow hiring managers 
to have access to candidates' race, ethnicity, or gender.
    OFCCP agrees with these commenters that further clarification of 
these issues would promote compliance with applicant recordkeeping 
requirements. OFCCP recently issued a Policy Directive on this subject. 
See ADM 04-1, ``Contractor Data Tracking Responsibilities,'' which is 
available on OFCCP's Web site at http://www.dol.gov/esa/regs/compliance/ofccp/directives/dir265.htm. The Directive was prompted by 
the Office of Management and Budget's (OMB) 1997 Revision to the 
Standards for the Classification of Federal Data on Race and Ethnicity 
(62 FR 58782) and its Provisional Guidance on the Implementation of the 
1997 Standards for Federal Data on Race and Ethnicity (2000). The OMB 
Standards and Provisional Guidance emphasize self-reporting or self-
identification as the preferred method for collecting data on race and 
ethnicity. In situations where self-reporting is not practicable or 
feasible, observer information may be used to identify race and 
ethnicity. Prior to the 1997 Standards, the position of the Federal 
Government was that the preferred method of collecting race and ethnic 
data was visual observation and that self-reporting was not encouraged.
    OFCCP issued the Directive on Contractor Data Tracking 
Responsibilities to make OFCCP's policy on collection of demographic 
information on applicants consistent with OMB's 1997 Standards. The 
Directive is applicable to collection of race, ethnic and gender 
information about applicants under all of OFCCP's regulations, 
including 41 CFR 60-1.12(c) and 41 CFR Part 60-3. The Directive 
encourages contractors to use tear off sheets, post cards, or short 
forms to request demographic information from applicants. These methods 
can be adapted to electronic formats for recordkeeping regarding 
Internet Applicants. For example, some contractors have developed 
``electronic tear off sheets'' for use with electronic applications 
that separate reported demographic information to be maintained for 
record keeping from electronic applications reviewed by employers. 
Other contractors have sent e-mails to individuals submitting 
electronic applications, requesting additional information necessary to 
process the application, including demographic information. The 
contractor's invitation to an applicant to self-identify his or her 
race, ethnicity or gender is always to state that the provision of such 
information is voluntary. Visual observation may be used when the 
applicant appears in person and declines to self-identify his or her 
race, ethnicity or gender.

Use of Labor Force Statistics and Census Data

    In the NPRM, OFCCP noted that it will ``compare the proportion of 
women and minorities in the contractor's relevant applicant pool with 
labor force statistics or other data on the percentage of women and 
minorities in the relevant labor force. If there is a significant 
difference between these figures, OFCCP will investigate further as to 
whether the contractor's recruitment and hiring practices conform with 
E.O. 11246 standards.''
    Several commenters, including EEAC, ORC, and the Chamber, expressed 
concern about OFCCP's proposed use of labor force statistics and Census 
data under the proposed rule. ORC, Gaucher Associates, and the Chamber 
argued that Census and workforce data may not provide a valid basis for 
assessing contractors' recruitment or hiring practices because these 
data do not reflect current labor market conditions or because the 
Census occupational categories are too general to provide accurate 
workforce data for specific jobs. ORC recommended that OFCCP should 
rely on each contractor's own availability statistics as a basis for 
assessing the contractor's recruitment and hiring practices.
    OFCCP disagrees with these commenters that appropriate Census and 
other labor market data are not reliable benchmarks for assessing 
contractors' recruitment and hiring practices. As noted above, courts 
frequently approve of this type of data in recruitment and hiring 
discrimination cases under Title VII. OFCCP intends to use such data 
during compliance reviews to determine whether basic qualifications 
have an adverse impact on the basis of race, ethnicity, or gender. 
OFCCP does not agree that it should rely exclusively on availability 
data compiled by contractors, although OFCCP will generally consider 
such data. OFCCP must ensure that such data is accurate for compliance 
monitoring and enforcement purposes.
    The NCILG urged OFCCP to rescind the requirement that contractors 
conduct adverse impact analyses of their hiring practices. OFCCP 
believes such self-analyses are important steps for achieving and 
maintaining an equal opportunity workplace. Furthermore, the final rule 
relates to recordkeeping and solicitation of demographic information 
under section 60-1.12. Accordingly, this final rule would not be the 
appropriate vehicle for amending UGESP, even if the agency were 
inclined to do so. A commenter raised concerns about how OFCCP will 
interpret procedures regarding Internet Applicant recordkeeping under 
both section 1.12 and UGESP. OFCCP has addressed these concerns by 
adding a new regulatory provision, section 60-1.12(d), to the final 
rule, as discussed above.
    ORC requested that OFCCP clarify what ``significant difference'' 
means and recommended that it be defined as two standard deviations or 
more. OFCCP agrees that the minimum standard for what is statistically 
significant is generally accepted to be two standard deviations, 
although the agency may allocate its investigative resources by 
focusing on larger statistical disparities or other factors, such as 
the size of the potential affected class.

Effective Date

    Several commenters, such as EEAC and NILG, requested that 
contractors be afforded sufficient time to implement the new applicant 
recordkeeping standards to be promulgated in the final rule. These 
commenters noted that contractors will have to make significant changes 
in technology and personnel practices in order to implement the new 
requirements. For example, NILG asserted that ``[f]or some companies, 
this will involve an extensive process of clarifying need, requesting 
information from possible vendors, seeking proposals from vendors, 
allowing a period for vendor evaluation, selection and subsequent 
company customization, implementation and system testing.''
    OFCCP agrees with these commenters that contractors should be 
afforded sufficient time to implement the recordkeeping requirements of 
the final rule. Therefore, OFCCP has established an effective date of 
one-hundred twenty days after the date of the publication of the final 
rule in the Federal Register.

[[Page 58961]]

Regulatory Procedures

Executive Order 12866

    The Department is issuing this final rule in conformance with 
Executive Order 12866. As noted in the preamble to the NPRM, this rule 
constitutes a ``significant regulatory action'' within the meaning of 
Executive Order 12866 (although not an economically significant 
regulatory action under the Order). As such, this rule is subject to 
review by the Office of Management and Budget (``OMB''). However, the 
Department has determined that this rule will not have an annual effect 
on the economy of $100 million or more, or adversely affect in a 
material way the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities. Therefore, the Department 
has concluded that this final rule is not ``economically significant'' 
as defined in section 3(f)(1) of EO 12866. As a result, the cost-
benefit analysis called for under section 6(a)(3)(C) of the Executive 
Order is not required.

Congressional Review Act

    This regulation is not a major rule for purposes of the 
Congressional Review Act.

Executive Order 13132 (Federalism)

    OFCCP has reviewed this rule in accordance with Executive Order 
13132 regarding federalism, and has determined that it does not have 
``federalism implications.'' The rule does not ``have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''

Regulatory Flexibility Act

    As explained in the Proposed Rule, this final rule will not change, 
but instead will help to clarify, existing obligations for Federal 
contractors. Consequently, under the RFA, as amended, 5 U.S.C. 605(b), 
it is certified that this rule will not have a significant economic 
impact on a substantial number of small entities.

Unfunded Mandates Reform Act

    This final rule does not include any Federal mandate that may 
result in increased expenditures by state, local and tribal 
governments, or by the private sector, of $100,000,000 or more in any 
one year.

Paperwork Reduction Act

    This final rule does not introduce any new information collection 
requirements. It simply clarifies existing requirements already 
approved by the Office of Management and Budget under the Paperwork 
Reduction Act of 1995. The information collection requirements for 41 
CFR Part 60-1 are approved under OMB control numbers 1215-0072 (Supply 
and Service) and 1215-0163 (Construction).

Executive Order 13175 (Consultation and Coordination With Indian Tribal 
Governments)

    The Department certifies that this final rule does not impose 
substantial direct compliance costs on Indian tribal governments.

Executive Order 12988 (Civil Justice Reform)

    This final rule has been drafted and reviewed in accordance with 
Executive Order 12988, Civil Justice Reform, and will not unduly burden 
the Federal court system. The final rule has been written so as to 
minimize litigation and provide a clear legal standard for affected 
conduct, and has been reviewed carefully to eliminate drafting errors 
and ambiguities.

List of Subjects in 41 CFR Part 60-1

    Administrative practice and procedure, Civil rights, Employment, 
Equal employment opportunity, Government contracts, Government 
procurement, Investigations, Reporting and recordkeeping requirements.

    Signed at Washington, DC, this 3rd day of October, 2005.
Victoria A. Lipnic,
Assistant Secretary for Employment Standards.
Charles E. James, Sr.,
Deputy Assistant Secretary for Federal Contract Compliance.

0
Accordingly, part 60-1 of Title 41 of the Code of Federal Regulations 
is amended as follows:

PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS

0
1. The authority citation for part 60-1 continues to read as follows:

    Authority: Section 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-
1965 Comp., p. 399, as amended by E.O. 11375, 32 FR 14303, 3 CFR, 
1966-1970 Comp., p. 684, E.O. 12086, 43 FR 46501, 3 CFR, 1978 Comp., 
p. 230 and E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258.

0
2. In Sec.  60-1.3, a new definition is added below ``government 
contract'' and above ``minority group'' to read as follows:


Sec.  60-1.3  Definitions.

* * * * *
    Internet Applicant. (1) Internet Applicant means any individual as 
to whom the following four criteria are satisfied:
    (i) The individual submits an expression of interest in employment 
through the Internet or related electronic data technologies;
    (ii) The contractor considers the individual for employment in a 
particular position;
    (iii) The individual's expression of interest indicates the 
individual possesses the basic qualifications for the position; and,
    (iv) The individual at no point in the contractor's selection 
process prior to receiving an offer of employment from the contractor, 
removes himself or herself from further consideration or otherwise 
indicates that he or she is no longer interested in the position.
    (2) For purposes of paragraph (1)(i) of this definition, ``submits 
an expression of interest in employment through the Internet or related 
electronic data technologies,'' includes all expressions of interest, 
regardless of the means or manner in which the expression of interest 
is made, if the contractor considers expressions of interest made 
through the Internet or related electronic data technologies in the 
recruiting or selection processes for that particular position.

    (i) Example A: Contractor A posts on its web site an opening for 
a Mechanical Engineer position and encourages potential applicants 
to complete an on-line profile if they are interested in being 
considered for that position. The web site also advises potential 
applicants that they can send a hard copy resume to the HR Manager 
with a cover letter identifying the position for which they would 
like to be considered. Because Contractor A considers both Internet 
and traditional expressions of interest for the Mechanical Engineer 
position, both the individuals who completed a personal profile and 
those who sent a paper resume and cover letter to Contractor A meet 
this part of the definition of Internet Applicant for this position.
    (ii) Example B: Contractor B posts on its web site an opening 
for the Accountant II position and encourages potential applicants 
to complete an on-line profile if they are interested in being 
considered for that position. Contractor B also receives a large 
number of unsolicited paper resumes in the mail each year. 
Contractor B scans these paper resumes into an internal resume 
database that also includes all the on-line profiles that 
individuals completed for various jobs (including possibly for the 
Accountant II position) throughout the year. To find potential 
applicants for the

[[Page 58962]]

Accountant II position, Contractor B searches the internal resume 
database for individuals who have the basic qualifications for the 
Accountant II position. Because Contractor B considers both Internet 
and traditional expressions of interest for the Accountant II 
position, both the individuals who completed a personal profile and 
those who sent a paper resume and cover letter to the employer meet 
this part of the definition of Internet Applicant for this position.
    (iii) Example C: Contractor C advertises for Mechanics in a 
local newspaper and instructs interested candidates to mail their 
resumes to the employer's address. Walk-in applications also are 
permitted. Contractor C considers only paper resumes and application 
forms for the Mechanic position, therefore no individual meets this 
part of the definition of an Internet Applicant for this position.
    (3) For purposes of paragraph (1)(ii) of this definition, 
``considers the individual for employment in a particular position,'' 
means that the contractor assesses the substantive information provided 
in the expression of interest with respect to any qualifications 
involved with a particular position. A contractor may establish a 
protocol under which it refrains from considering expressions of 
interest that are not submitted in accordance with standard procedures 
the contractor establishes. Likewise, a contractor may establish a 
protocol under which it refrains from considering expressions of 
interest, such as unsolicited resumes, that are not submitted with 
respect to a particular position. If there are a large number of 
expressions of interest, the contractor does not ``consider the 
individual for employment in a particular position'' by using data 
management techniques that do not depend on assessment of 
qualifications, such as random sampling or absolute numerical limits, 
to reduce the number of expressions of interest to be considered, 
provided that the sample is appropriate in terms of the pool of those 
submitting expressions of interest.
    (4) For purposes of paragraph (1)(iii) of this definition, ``basic 
qualifications'' means qualifications--
    (i)(A) That the contractor advertises (e.g., posts on its web site 
a description of the job and the qualifications involved) to potential 
applicants that they must possess in order to be considered for the 
position, or
    (B) For which the contractor establishes criteria in advance by 
making and maintaining a record of such qualifications for the position 
prior to considering any expression of interest for that particular 
position if the contractor does not advertise for the position but 
instead uses an alternative device to find individuals for 
consideration (e.g., through an external resume database), and
    (ii) That meet all of the following three conditions:
    (A) The qualifications must be noncomparative features of a job 
seeker. For example, a qualification of three years' experience in a 
particular position is a noncomparative qualification; a qualification 
that an individual have one of the top five number of years' experience 
among a pool of job seekers is a comparative qualification.
    (B) The qualifications must be objective; they do not depend on the 
contractor's subjective judgment. For example, ``a Bachelor's degree in 
Accounting'' is objective, while ``a technical degree from a good 
school'' is not. A basic qualification is objective if a third-party, 
with the contractor's technical knowledge, would be able to evaluate 
whether the job seeker possesses the qualification without more 
information about the contractor's judgment.
    (C) The qualifications must be relevant to performance of the 
particular position and enable the contractor to accomplish business-
related goals.
    (5) For purposes of paragraph (1)(iv) of this definition, a 
contractor may conclude that an individual has removed himself or 
herself from further consideration, or has otherwise indicated that he 
or she is no longer interested in the position for which the contractor 
has considered the individual, based on the individual's express 
statement that he or she is no longer interested in the position, or on 
the individual's passive demonstration of disinterest shown through 
repeated non-responsiveness to inquiries from the contractor about 
interest in the position. A contractor also may determine that an 
individual has removed himself or herself from further consideration or 
otherwise indicated that he or she is no longer interested in the 
position for which the contractor has considered the individual based 
on information the individual provided in the expression of interest, 
such as salary requirements or preferences as to type of work or 
location of work, provided that the contractor has a uniformly and 
consistently applied policy or procedure of not considering similarly 
situated job seekers. If a large number of individuals meet the basic 
qualifications for the position, a contractor may also use data 
management techniques, such as random sampling or absolute numerical 
limits, to limit the number of individuals who must be contacted to 
determine their interest in the position, provided that the sample is 
appropriate in terms of the pool of those meeting the basic 
qualifications.
* * * * *

0
3. In Sec.  60-1.12:
0
A. The third sentence in paragraph (a) is revised;
0
B. Paragraph (c)(1)(ii) is revised;
0
C. Paragraph (e) is removed;
0
D. Paragraph (d) is redesignated as paragraph (e); and
0
E. A new paragraph (d) is added.
    The revisions and addition read as follows:


Sec.  60-1.12  Record retention.

    (a) General requirements. * * * Such records include, but are not 
necessarily limited to, records pertaining to hiring, assignment, 
promotion, demotion, transfer, lay off or termination, rates of pay or 
other terms of compensation, and selection for training or 
apprenticeship, and other records having to do with requests for 
reasonable accommodation, the results of any physical examination, job 
advertisements and postings, applications, resumes, and any and all 
expressions of interest through the Internet or related electronic data 
technologies as to which the contractor considered the individual for a 
particular position, such as on-line resumes or internal resume 
databases, records identifying job seekers contacted regarding their 
interest in a particular position (for purposes of recordkeeping with 
respect to internal resume databases, the contractor must maintain a 
record of each resume added to the database, a record of the date each 
resume was added to the database, the position for which each search of 
the database was made, and corresponding to each search, the 
substantive search criteria used and the date of the search; for 
purposes of recordkeeping with respect to external resume databases, 
the contractor must maintain a record of the position for which each 
search of the database was made, and corresponding to each search, the 
substantive search criteria used, the date of the search, and the 
resumes of job seekers who met the basic qualifications for the 
particular position who are considered by the contractor), regardless 
of whether the individual qualifies as an Internet Applicant under 41 
CFR 60-1.3, tests and test results, and interview notes. * * *
* * * * *
    (c) * * *
    (1) * * *
    (ii) Where possible, the gender, race, and ethnicity of each 
applicant or Internet Applicant as defined in 41 CFR 60-1.3, whichever 
is applicable to the particular position.
* * * * *

[[Page 58963]]

    (d) Adverse impact evaluations. When evaluating whether a 
contractor has maintained information on impact and conducted an 
adverse impact analysis under part 60-3 with respect to Internet hiring 
procedures, OFCCP will require only those records relating to the 
analyses of the impact of employee selection procedures on Internet 
Applicants, as defined in 41 CFR 60-1.3, and those records relating to 
the analyses of the impact of employment tests that are used as 
employee selection procedures, without regard to whether the tests were 
administered to Internet Applicants, as defined in 41 CFR 60-1.3.
* * * * *
[FR Doc. 05-20176 Filed 10-6-05; 8:45 am]
BILLING CODE 4510-CM-P