Organizations that provide products or services to the government are subject to the rules outlined by the Office of Federal Contract Compliance Programs. They face unique challenges in hiring and onboarding that generally don’t apply to private businesses. Affirmative action plans are still a central part of these programs for contractors with 50 employees or more. Non-discrimination policies must be created and followed by smaller businesses with fewer than 50 workers.

Since this agency focuses on widespread discrimination rather than case-by-case issues, any audit may result in huge settlements, fines, and loss of contract that can devastate a business. In 2009, Gerber Products Company was forced to pay out almost 1 million dollars for non-compliance. In all, 94 contractors reimbursed employees and applicants a total of $9,300,000 in back pay last year – and that’s the companies who weren’t actually sued by the OFCCP.

Typical Issues That Raise Flags

Much of the discrimination found in these audits occurred during the application and onboarding phase. Problems come to light in many different areas including the following:

  • Failure to advertise the job equally to all categories of applicants internally and externally
  • Use of applicant testing that is not relevant to job skills/requirements
  • Starting new hires at different salary levels for the same type of position
  • Use of criminal background checks that ask about arrests rather than just about convictions that are directly relevant to the job
  • Failure to proactively seek out and hire individuals in protected categories to fulfill AAP requirements

A 2008 article from Workforce Management reveals that companies with multiple locations are most at risk for non-compliance. That’s because the policies enforced at headquarters may not be followed by hiring managers and HR staff at each satellite facility. Labor law attorney Julia Judish recommends that employers conduct a self-audit to discover any areas of non-compliance. However, she cautions that this type of internal review should only be done under the supervision of legal counsel. This puts the results off limits to government auditors who could otherwise use the information against the employer.

Areas Where Onboarding Software Can Aid Compliance

There are a couple of areas where our Universal Onboarding can make an immediate difference in compliance. First, there is the use of e-Verify. All federal contractors must now use this free online USCIS tool to verify worker eligibility. Our software can be readily interfaced with e-Verify, eliminating the need to pay a third party to process I9s.

Second, the OFCCP requires that employers who post workplace notices electronically must add the new NRLA notice to their library by June 19th. With our solution, updated notices can be added to the onboarding module at any time to keep new hires apprised of all their workplace rights on both a state and federal level.

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