Rule may complicate e-hiring

Online job applications are supposed to make hiring easier for everybody.

Employers use electronic job-filling functions to reduce paperwork and broadcast openings to a wider range of hiring prospects. Prospective employees can scan thousands of listings online, and submit résumés and applications from home.

But a new federal rule that requires companies to track the demographic makeup of online applicants is complicating electronic hiring for some businesses.

The U.S. Department of Labor is increasing enforcement of a year-old rule requiring federal contractors and subcontractors to monitor the gender, race and ethnic compositions of their online job pools. And though the regulation doesn't apply to private-sector operations that don't do business with the federal government, labor-law experts said all businesses could face growing scrutiny of their electronic job-filling procedures.

"As employers turn to the Internet and go paperless in adopting online application processes, you're going to see an increase in these types of claims," said Edwin Keller, an attorney and shareholder in the Las Vegas employment-law firm Kamer Zucker Abbott. "It's still new for a lot of people, and it's more impersonal. There's going to be a great deal of suspicion, and you're going to have applicants out there saying, 'You know what? I didn't get the job, and I'm in a protected group. I think there's something in that procedure that kept me from getting an interview.'"

Nick Crosby, an associate attorney with Marquis & Aurbach in Las Vegas, said he advises clients to keep track of changing federal rules, because those regulations often signal trends in labor law.

"I do foresee some more stringent requirements as far as the collection of demographic information on the part of private employers," Crosby said.

So what counts as an electronic job application?

Any application that happens over the Internet or via e-mail, for starters. Even scanning a hard copy of a résumé or application into a computer transforms that application into an electronic document under the new regulation. An initial query, sans résumé or application, into whether a company has jobs available will qualify the applicant as an electronic job seeker. And as technologies change, media such as voice-over-Internet-protocol phone services and fax machines could also fall under the electronic-application umbrella.

Following the new Department of Labor policy, which is advisory for businesses that aren't government contractors, could create "sizable administrative burdens," Keller said.

The rule says employers must gather and analyze the flow of applicants who send résumés in response to Internet job ads, looking for any underrepresentation of genders or races.

Disparate application rates could signal that a company is using questions or job criteria that screen out protected classes of employees, the Department of Labor says.

So businesses must establish mechanisms to track the stream of job applicants and perform a "validation study" to verify that test questions, job descriptions and hiring criteria are not discriminatory.

It can be a pricey prospect: One business that planned a local operation with 4,000 employees looked into validating all of its hiring questions and tests before staffing up, and found that setting up a validation system would cost $120,000, Keller said.

"They blinked and said, 'We don't think so,'" Keller said.

And then there are the technology expenses involved in tracking job applications. Businesses wanting a better handle on who's applying will often need to invest in new server capacity, buy additional storage space on remote servers and acquire software, Crosby said.

But businesses that don't yet need to follow the Department of Labor's rule can protect themselves from online discrimination claims in less expensive ways.

First, keep your hiring language as objective as possible. If a qualification doesn't pertain directly to the job description, consider ditching it, Crosby said.

Asking for less than two years' experience, for example, can be unfair to older workers who are protected under age-discrimination laws. Telling candidates they must have a bachelor's degree is OK, but demanding a degree from a high-profile school could cross the line, Crosby said. And noting that a hire must enjoy hunting or some other activity he'll be engaging in with company executives is also dangerous, and could come under attack in an investigation by the Equal Employment Opportunity Commission or other agencies.

Also, watch out for computer programs that promise to screen hiring prospects for traits such as honesty or work ethic. Such vetting software will pose a series of questions designed to determine which candidates are best suited to a company, and prospects who don't pass the test won't even make it to the interview round.

"If those tests and software programs haven't been validated, you may really be biting off legal liabilities you didn't anticipate," Keller said.

So make sure any screening software is validated according to the federal government's online-hiring rules.

Keeping details such as age and gender away from the managers who make hiring decisions could also help a company's case if executives are charged with online discrimination. Companies should be able to show federal officials that they collected demographic data only to monitor the diversity of their applicant pool and not to make hiring decisions. Proving your hiring supervisors didn't know candidates' ages when they were sifting through résumés and applications could bolster a defense against discrimination claims.

Consider initiatives that will narrow the "digital divide" as well. Broad swaths of people -- seniors and lower-income workers, for example -- either can't afford computers at home or haven't used high technology as often as younger, more affluent workers have. Companies that go paperless in hiring could be closing off entire groups to the application process.

Keller doesn't know of any lawsuits related to computer access, but he counsels clients to consider how they can help the less-tech-savvy apply for jobs via the Internet. Clients have set up hiring centers with computers and assistants who walk candidates through the application process, though those companies often find that prospects turn instead to computer-literate relatives or even libraries for guidance.

Crosby also suggested hiring an employment attorney to draft a company manual that details anti-discrimination policies, in addition to corporate rules on drug use, sexual harassment and retaliation.

Having a professional draw up company guidelines might cost $2,000 to $4,000, but it's less expensive than a discrimination lawsuit, which could carry penalties that come close to the damages awarded, Crosby said.

And make sure managers are trained to spot and avoid potential discrimination in hiring.

"Maybe over three years, you'll invest $10,000 in policy manuals and manager training," Crosby said.

"But it could be the difference between winning and losing a lawsuit if you can show you have policies, those policies have been followed, supervisors have documented their activities and your record-keeping is relatively flawless. A little work up front can help you at the back end."