EEO and OFCCP Compliance for Recruiters: What to Know and Do

Editor’s Note: This post was first published on February 29, 2024 and has been significantly expanded and updated to reflect Trump 2.0 and new legal rulings regarding the use of AI in recruiting practices.

Like it or not, recruiters need to be experts on a raft of regulations to avoid legal troubles. The hottest compliance issue right now concerns the regulations enforced by the Equal Employment Opportunities Commission (EEOC)—rules that are being reset by the Trump administration.

Recruiters have enough on their plates without having to learn the ins and outs of complex compliance laws. You might think that job boards and your recruiting technology will take care of those pesky regulations for you but, ultimately, it is the employer’s responsibility to ensure that all hiring practices are compliant.

As to what that means exactly, it’s tough to say. With the flick of a pen, Trump has been altering the landscape around affirmative action and diversity hiring, and raising questions about how aggressive (or not) EEOC enforcement will be.

It’s a fast-changing landscape. At some point in the next few months, the Office of Federal Contract Compliance Programs (OFCCP) is expected to release new regulations for federal contractors, which could include changes in reporting requirements and updates to the nondiscrimination disclosures that have been part of federal contracts since the 1960s. Until then, current OFCCP regulations, Equal Employment Opportunities (EEO) laws, and EEOC guidance apply. We’ll be going over those later in this article. 

Trump 2.0 is not the only change on the horizon this year. The same EEO / OFCCP compliance obligations that apply to traditional employment decisions also extend to employment decisions made with the use of AI. With complaints around algorithmic bias now hitting the courtrooms, recruiters might have to audit more than just their talent pools to stay compliant—their tech stack may also be under the microscope.

Here’s where the pressure is coming from and where you should focus as we move through 2025 and beyond.

OFCCP compliance: Trump rescinds affirmative action based on race and gender

Less than a day after assuming the presidency, Donald Trump announced major changes in the focus of the EEOC, scrapped federal Diversity Equity & Inclusion (DEI) initiatives, and enshrined “two sexes” in law.

In a wide-seeping Executive Order, he also rescinded a 60-year-old mandate that required federal contractors to practice affirmative action based on race and gender. Federal contract and grant recipients will now have to certify that they do not operate DEI programs that violate federal anti-discrimination laws.

We don’t know exactly what this means yet, but we do know the OFCCP has had its teeth pulled on enforcement concerning race and gender. Trump’s EO does not change the affirmative action regulations for individuals with disabilities and protected veterans, however. It’s likely we’ll see a pivot to focus more on the discrimination of these protected classes going forward.

What happens now?

1. Federal contractors are no longer required to maintain affirmative action programs based on race and sex. For a 90-day transition period (until April 21, 2025), contractors may continue to comply with the previous regulatory scheme if they choose to do so.
2. Government contractors are likely to have fewer OFCCP compliance burdens during Trump’s second term, which will be welcome news to most contractors.
3. While the suspension of federal DEI mandates does not impact private employers for now, the private sector should also pay close attention to these developments as they signal a shift in broader policy.
4. The policy changes may seem dramatic on the surface, but ‘affirmative action’ is one of those terms that means different things to different people. Anti-discrimination is still very much in focus, and the new rules should not deter organizations from using inclusive language in job ads, evaluating hiring processes for potential barriers to diverse candidates, or developing retention strategies that support equity. This is a great time to: 

• • Work with your legal team to evaluate DEI programs and design measures that achieve your diversity goals in a way that’s safe from scrutiny, and
  • Improve your foundational practices around inclusion and belonging. We expect to see a change in focus this year towards initiatives that benefit all employees.

1. States have different laws so keep them in your sights. As was the case during Trump 1.0, state and local laws that are more employee-friendly remain in effect (e.g. pay transparency or ‘ban the box’ laws which encourage fair hiring for individuals with criminal records). Employers that hire in multiple states have to contend with a spider web of regulations. Work with your legal team to figure out how best to operationalize your compliance across different jurisdictions — that might involve taking the most restrictive law and applying it across the enterprise, or something else.
2. Keep using metrics to track progress on pay, hiring, promotions, and terminations. Transparency builds trust and protects against legal scrutiny, and who knows whether this data will be required in the future?

AI has entered the chat

AI is dominating the tech stack right now to the point where every tool you’ve ever used now comes with an AI-powered option. Recruiting is no different. Everything from resume screening to sentiment analysis in video interviewing is faster and leaner with AI. The one thing we haven’t nailed to the door yet is accountability—who’s responsible if you delegate decisions to AI and it produces discriminatory decisions in your hiring and promotions?

Last spring, the California courts weighed in on this very question. Mobley v. Workday, a significant lawsuit addressing AI bias in hiring practices, was allowed to proceed based on the theory that Workday, as an AI vendor, could be directly liable for employment discrimination under federal anti-discrimination laws as an “agent” of employers. The lawsuit alleged that Workday’s AI-powered applicant screening tools discriminated based on race, age, and disability.

This case is significant as it tests the boundaries of liability in hiring processes. Going forward, there may be much pressure on AI vendors that collect demographic data (e.g. for resume screening) to prove that their algorithms do not create disparate impacts on protected groups. This might include giving candidates the ability to opt out of demographic data collection—though that opens up another can of worms. What happens to the candidates who opt out of self-identification? Do they get relegated to the bottom of the pile, even if they’re the most qualified?

At this point, recruiters may feel stuck between a rock and a hard place. If you receive 300 applications overnight—a typical experience in some sectors—you have to rely on AI-driven scoring tools to prioritize the “best match” candidates which then go forward for human review. Either that, or hire more recruiters! 

We’re all waiting anxiously to see just what solutions AI vendors come up with that allow candidates the autonomy to not be analyzed by AI, while ensuring they have an equal chance at being considered for a position.

What happens now?

1. While some degree of legal liability may shift to AI vendors in the future, right now the buck still stops with employers when it comes to EEO/ OFCCP compliance. Just because an AI vendor says they’re not discriminating, doesn’t mean they’re right. The EEOC has already warned employers that they can be held legally liable if they fail to prevent screening software from having a discriminatory impact. You have to audit your outcomes!
2. Under OFCCP, applicants have the opportunity to voluntarily disclose their demographic information at the applicant level versus mandatory disclosure at the time of job offer. It’s that early disclosure stage where recruiters need to be especially careful, because once those questionnaires hit your ATS with all sorts of AI tools pulling the data and making decisions, the door is opened to potential discrimination risks.
3. Whether you use AI or not, it still has to be a fair process. Employers have to defend their outcomes, and that means you need to have a framework in place for recruiters to be able to explain why they prioritized certain applicants over others. The more time you spend getting your compliance house in order, the better off you will be in the long run.
4. We keep banging this drum but data, data, data. No matter who is making decisions, data is still king. Stay on top of your metrics to identify potential sources of bias in your processes before they become legal issues, and adjust accordingly. Don’t wait for complaints or enforcement actions.

EEO/ OFCCP Compliance: Where things stand 

Now that we have set the scene, let’s dig into the details. Here are some specific actions you can take to ensure EEO/OFCCP compliance in your recruiting process.

#1: Know your applicant

While most applicant tracking systems will support EEO/OFCCP compliance for applicants, that word has a specific definition in law. It’s really important as a recruiter to understand the definition of an applicant (or internet applicant), because those are the people you will be required to track and report on. You will have other types of candidates landing in your ATS who may or may not meet the regulatory definition. So, when you see a resume, you have to know if that person is an applicant or not.

Applicant: A person who has expressed an interest in a job, has the minimum qualifications, and has been presented with and completed an application process. An applicant will be tied to a specific requisition in your ATS.

Internet Applicant: A person who meets all four of the following criteria:

• The individual submitted an expression of interest in employment through the Internet or related technologies.
• The employer considered the individual for employment in a particular position.
• The individual’s expression of interest indicates the individual possesses the basic qualifications for the position.
• The individual has not removed themselves from further consideration or otherwise indicated that they are no longer interested in the position.

Candidate: A person who has been identified as being of interest for a particular position. They do not need to have expressed an interest, be qualified, or have applied. As such, the word ‘candidate’ covers a vast pool of potential talent, from someone who previously submitted a resume to someone who has simply interacted with your website or social media. They are simply leads who could become applicants if you converted them. Candidate is not a legally defined term.

Why does this matter?

• All applicants are candidates, but not all candidates are applicants. This may seem like semantics, but understanding the legal distinction between the two is critical when it comes to what the law says you need to do.
• The people applying for your jobs do not know there is a difference, nor why companies need to ensure that applicants are treated in such a way to align with legal requirements. Candidates think that, by hitting the “Apply Now” button on Indeed and other job boards, they have become an applicant, because they “applied.” But that’s not always the case. If the candidate does not meet the minimum qualifications for the job or they don’t complete your (not the job board’s) standard procedures for submitting applications, then they are still just a candidate.
• When it comes to OFCCP compliance, traditional ATSs automatically survey “applicants” who arrive via a careers page or (possibly) a job board. However, recruiters that circumvent this process, including the demographic surveys, leave a dangerous gap in accounting for candidates who never formally “apply” by the legal definition of the word. These candidates may be sourced, referred or agency prospects that you have in your network, or they might arrive through a click on a job site. If you interview and/or hire them without putting all considered candidates through an application with all the relevant OFCCP questions — whatever form they end up taking — that’s a problem. The fundamental point of these surveys is to understand if a company’s hiring practices are discriminatory, which can be determined only if all qualified candidates complete the survey to become applicants. 
• The legal definitions are even more critical when you have technology acting on your behalf. When AI tools take over some of the scanning and selection processes, how you define dispositions will be a critical factor in reviewing your outcomes at the end of the quarter or year.

#2: EEO Compliance: No material change from 2024

EEO or Equal Employment Opportunity is a principle that all employers should treat applicants and employees fairly, regardless of their race, color, religion, sex (including gender identity, sexual orientation, and pregnancy conditions), national origin, age, disability or genetic information.

This umbrella of workplace protection includes various federal laws such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, to name a few. It’s enforced by the Equal Employment Opportunity Commission (EEOC).

Why should you care?

EEO exists to ensure fair, equitable, and inclusive hiring practices that eliminate biases against protected classes. It’s about ensuring non-discriminatory outcomes in your employee base. An individual can sue your company if they feel they have been discriminated against. Discrimination based on race, sex, age, disability, or other protected categories remains part of Trump’s agenda and continues to be a top enforcement priority for the EEOC.

Who must comply?

Private companies and state and local government employers with 15 or more employees, as well as federal agencies, must comply with EEO laws. You’ll need to submit an EEO-1 report if you employ 100 or more employees.

How do you make your recruiting process compliant?

While you DO NOT have to ask EEO during the application process, you will still have to ask every employee as part of the hiring process. If you fall under OFCCP, you will have to ask EEO questions of every applicant. 

There are a handful of general best practices you should follow regardless of when you collect the demographic information:

• Ask every applicant the same questions the same way.
• Remember to gather EEO data after training or other changes in job classification that might create selection disparities.
• File EEO reports annually.

If you ask EEO survey questions at the application stage there are some best practices you should follow:

• Separate ‘qualifying’ questions from your EEO data collection—it’s a best practice to ensure you do not conflate the two.
• Either make the questions optional or provide a ‘choose not to disclose’ option.

If you choose to wait to ask the questions, there are still some best practices to adopt at the recruiting stage that will help ensure unbiased outcomes in your employee base:

• Use observation if employees don’t volunteer EEO information. Answering is voluntary, but asking is not.
• Ensure you have gathered the required EEO data after an offer is extended and prior to employment.

#3: OFCCP compliance: Keep watch, the rules may change

The Office of Federal Contract Compliance Programs is part of the EEOC. It holds those who do business with the federal government (contractors and subcontractors) responsible for providing equal employment opportunities. While the use of affirmative action to employ and advance workers on the basis of race and gender has been removed, the principles of non-discrimination on the basis of race, color, sex, sexual orientation, religion, national origin, disability, or status as a protected veteran still apply.

Why should you care?

While EEOC focuses on anti-discrimination in the employee base, OFCCP promotes anti-discrimination in hiring practices. Contractors that are not compliant can be audited, sued, and lose their government contracts, this includes access to Medicare and Medicaid payments. You need to take this seriously!

Before the new EOs, if you were investigated, the OFCCP would ask you to demonstrate that you had both attempted to diversify your applicant pool and prove that you had not discriminated against “applicants” seeking a job at your company. That’s changing to a merit-based approach. Federal contractors will now have to certify that their diversity and inclusion practices do not discriminate against any protected class — more details are expected to be released later in the year.

Who must comply?

Only employers who meet certain thresholds are considered federal contractors and are required to adhere to the OFCCP procedures. Construction contractors have special requirements that differ from service providers. The Department of Labor has published extensive resources to help contractors understand their requirements — expect a flurry of new literature when details of upcoming changes are released.

How do you make your recruiting process compliant?

Given many open questions left by the EO (including how exactly it will be carried out), contractors may consider taking advantage of the 90-day grace period before changing their approach.

Under the current regime, employers MUST ask for OFCCP data during the application process, so the distinction between a candidate and an applicant is critical. You MUST NOT recruit candidates, whether they are leads, ‘Apply Nows’, or sourced candidates, until they have been through a full application process and OFCCP questionnaire. To ensure that happens: 

• Put an equality statement on all job postings.
• Consider ALL recruitment channels when thinking about OFCCP.
• Ask OFCCP questions as early as possible in the hiring process—do not wait until you are ready to hire them to have a candidate complete an application and OFCCP questionnaire.
• Ask every applicant all the same questions the same way.
• Separate ‘qualifying’ questions from your OFCCP data collection—it’s a best practice to ensure that you do not conflate the two.
• Make your online application process accessible to individuals with disabilities.
• If you are within OFCCP, collect the EEO data at the same time.

Make your technology work for you, not against you

These tips relate specifically to your recruiting practices. Obviously, there will be more general things your company needs to do, such as training your staff in anti-discrimination practices and creating an internal audit and reporting system for tracking policy compliance. And keep up on changes that will come following Trump’s EOs!

Fundamentally though, the key to staying out of trouble is to ensure your data can withstand scrutiny. If your technology can pull your OFCCP form and data capture directly from the ATS and emulate them natively on the job board application for candidates, you’ll get a singular source of truth for all your data. The question of who an “applicant” is becomes clear, and you reduce your liability.

That’s why JobSync is here—to help you minimize risk. With compliance built-in for EEO and OFCCP (as well as GDPR, CCPA, and TCPA), you can trust JobSync to connect and optimize all the systems and platforms you use so nothing falls between the cracks. You’ll get fully complete, qualified, and compliant applications working inside your systems, so you can make better hires, faster. Want a demo? Get in touch with us today!