The Office of Federal Contract Compliance Programs' (OFCCP's) Internet applicant rule shapes the hiring process for employers that do business with the federal government.
The 15-year-old regulation dictates which job-applicant records federal contractors and subcontractors need to maintain, how to refine online applicant pools, and how to solicit required demographic data 
from online job applicants.
Sonia Chapin, SHRM-SCP, an expert on OFCCP audit support and managing consultant at Berkshire Associates, a consulting and technology firm focused on affirmative action compliance in Columbia, Md., reviews the basics of the rule below.
SHRM Online: What is the main purpose of the Internet applicant rule?
Chapin: It was created to specifically address recordkeeping for contractors' online applicants. It came about because applicant pools were growing as recruiting moved from paper to online in the early 2000s. Contractors were previously required to report on all applicants for a given position, including those without relevant experience for the jobs, and were getting more adverse impact flags with the larger pools. To narrow the pools presented to OFCCP, contractors moved the race and gender solicitations to the interview stage, which OFCCP maintained was too late in the process. Contractors then asked regulators for a standard way to narrow the pools. The Internet applicant rule went into effect in 2006. It only applies to federal contractors and subcontractors.
SHRM Online: For employers, is the main benefit of the rule the fact that it gives them a way to refine their large, online applicant pools?
Chapin: Yes, primarily by removing candidates who do not meet basic qualifications and allowing for data management techniques. Some contractors adopt a rule that candidates are reviewed in batches of 10 or 20, for example, or that every third candidate is reviewed until a predetermined number is reached, perhaps 30 candidates. That way, the candidates who are not considered can be excluded from the pool.
SHRM Online: What is the main reason to keep these applicant records? Is the data primarily used for OFCCP auditing, or for developing employers' affirmative action plans (AAPs)?
Chapin: These records are a required part of the contractor's AAP. OFCCP would like for contractors to use the data proactively, to drill down into the data to see what titles or steps in the process are driving adverse results, even if they are not under audit.
SHRM Online: Who is an Internet applicant under the rule?
Chapin: There are four prongs to the OFCCP definition: a person must submit an application or resume online or via electronic technology; the contractor must consider that person for a particular position; the candidate needs to possess the basic qualifications for the position; the candidate cannot withdraw from the position at any point prior to the offer being made.
Applicants are people who take an affirmative step to obtain a job by sending a resume, filling out an application, posting a resume on an external job board or completing pre-screening questions for an employer. The OFCCP definition effectively narrows down a larger pool of job seekers to the applicants actually being considered for a position.
SHRM Online: What types of records must be retained?
Chapin: Online resumes and applications and any outreach to job seekers regarding interest in a position need to be retained. If internal resume databases are searched, such as the employer's applicant tracking system (ATS), then a record of each resume and when it was added, the position for which each search was made, the search criteria used, and the date of the search must be retained. For external searches, any resumes that meet the basic qualifications and are considered for the position, the record of the position for each search, the search criteria, and the date of the search must be kept. Most ATSs and online job databases retain the applicant data you will need.
SHRM Online: What if you collect paper applications and resumes as well?
Chapin: If you only accept paper applications, then the Internet applicant definition does not apply, but all paper applications and candidate demographic information should still be retained for the OFCCP. Most federal contractors have moved to online ATSs and can apply the Internet applicant definition uniformly across their candidate pools. When a contractor considers expressions of interest for a position via both the Internet or related electronic data technologies and paper applications, the Internet applicant standard applies to the solicitation of demographic information from all applicants for that position.
SHRM Online: Employers are required to invite applicants to submit certain demographic data related to race/ethnicity and gender, and in certain cases, disability status and protected veteran status, before a job offer is made. The submission of that data is voluntary, correct? Does it ever become mandatory?
Chapin: Yes, it is voluntary. It does not ever become mandatory for applicants or employees to self-identify. However, once the person is an employee, the employer is permitted to report a visual observation of race and gender so the employee can be included in the EEO-1 report.
SHRM Online: Since the data submission is voluntary, how does an employer prove that self-identification surveys were offered?
Chapin: In audits I have supported, this is by submitting screenshots of the online applicant system.
SHRM Online: When is the ideal time in the recruitment process to collect the demographic information?
Chapin: I generally recommend as part of the candidate profile at the very beginning of the process. Note that the self-identification survey must be offered to applicants during the application process, and again after an offer has been extended but prior to the first day of work.
SHRM Online: Is capturing the stage in the recruitment process in which applicants are removed from consideration for a role required or just recommended?
Chapin: Just recommended. I recommend capturing when the candidate left the process and why the candidate left. Capturing the stage applicants are in allows for an analysis of the process at every step. This comes into play when conducting a more in-depth review of applicants considered for hire. The data allows employers to see if any particular stage is causing adverse impact.
SHRM Online: How long must contractors keep applicant records?
Chapin: Depending on the size of the company and contract, two or three years. We recommend keeping the current year's AAP and two years' prior. Demographic data that is solicited and maintained under this rule should not be visible to hiring managers and, ideally, should be kept separate from other recruiting files.
SHRM Online: Are contractors still responsible for complying with recordkeeping requirements when a third-party vendor is used to screen, recruit or select the candidates? In those cases, who maintains the required records?
Chapin: Yes, contractors are responsible for compliance and should verify their partners can provide applicant pools upon request. Either party can maintain the records. My most proactive client requests the pool with each successful placement. There are many times my clients have not been able to provide these records in audits, and it can result in OFCCP issuing a technical violation.