Consistent with its initiative to provide more compliance assistance to federal contractors and subcontractors, OFCCP released on Tuesday new FAQs on three different topics. The new FAQs provide guidance on the importance of validating tests for adverse impact, how OFCCP uses and measures “practical significance” during audits, and when to count freelance workers in an AAP.
The new FAQ defines what OFCCP considers an “employee selection procedure” and how it evaluates a selection procedure for adverse impact on a protected group.
Contractors should note that the definition goes beyond the usual job knowledge or skills assessment, personality test, physical ability tests, or medical/drug screening and extends into interviews, scored background questionnaires, measures of “job fit,” situational judgment scenarios, credit checks, reference checks, as well as evaluations of voice quality and personal appearance and grooming. This underscores the need for contractors to evaluate the various steps in their selection and hiring process to ensure they do not result in a lower selection rate for protected groups.
In this FAQ, OFCCP provides clarity on how it uses practical significance in evaluating discrimination cases during a compliance review and how it looks at practical significance vis-à-vis statistical significance. It’s worthwhile noting that though OFCCP may use practical significance measures to pursue observed disparity that might be below statistical thresholds, it may also use practical significance measures to discount disparity that might show up in statistical analysis.
This FAQ provides guidance to help contractors determine if a freelance worker or project-based worker is an independent contractor or an employee and whether they should be included in an affirmative action program. Based on the FAQ, workers performing temporary, flexible jobs, and are paid per service provided or task completed are typically classified as independent contractors rather than employees and therefore, should not be included in a contractor’s AAP. Contractors should keep in mind though, that there is a more exhaustive list of factors beyond those listed above, such as the Darden Factors, that they need to consider when determining if a worker is an employee or an independent contractor to avoid misclassifying employees. Some examples are the right to control how the individual performs the job, the extent of the individual’s discretion over when and how long to work, whether the work performed is part of the regular business of the contractor, and whether the contractor is in business for himself/herself, among others.