A government contractor watchdog’s new requirement for companies to disclose their recruitment and hiring technology tools, including those using artificial intelligence, has prompted concerns from employer-side lawyers over the request’s scope.
The Office of Federal Contract Compliance Programs’ updated supply and service scheduling setter and itemized listing, effective as of Aug. 24, requires government contractors the agency plans to audit to provide information on recruitment and hiring practices and systems including those using “artificial intelligence, algorithms, automated systems, or other technology-based selection procedures.”
This marks the first time the Labor Department agency that monitors federal contractors and subcontractors for compliance with workplace antibias laws has requested information on the tech tools used to recruit or hire employees through the scheduling letter it issues before audits.
Tech-based tools have become increasingly popular for companies recruiting and making hiring decisions. Nearly one in four organizations uses AI in an HR capacity, according to a 2022 Society for Human Resources Management survey.
Addressing how these systems can insert bias into hiring and employment decisions has been an expanding concern addressed by states as well as federal agencies such as the Equal Employment Opportunity Commission, which recently settled its first AI bias lawsuit.
David Cohen, founder and president of DCI Consulting, said he believes the OFCCP deliberately used broad language to describe the information required by the revised scheduling letter.
“I think they purposely made this vague to give them more wiggle room,” he said.
Concern about technology-based employment decisions stems from worries that it may make automated hiring moves that put protected classes at a disadvantage, in violation of civil rights laws.
“Obviously, the OFCCP is very concerned that somehow employers are using artificial intelligence to weed out candidates who would otherwise be qualified,” said Alissa Horvitz, an attorney at Roffman Horvitz PLC representing government contractors. “I just think that my clients don’t have a sense of what the artificial intelligence is.”
HR departments are using tech tools from resume scanners to video interview platforms and candidate testing software, many of which use components that could be deemed “AI.”
The definition of “other technology-based selection procedures” in the scheduling letter has also raised compliance questions, creating a “degree of ambiguity,” according to Craig Leen, a former OFCCP director under the Trump administration, now a partner at K&L Gates LLP.
Several employer-side attorneys said they are worried that the requirement could mean disclosing the use of any number of tools as long as they play some role in hiring, now matter how small.
Leen said contractors may now fear being out of compliance with the OFCCP just because they failed to disclose the use of relatively simple tech-based hiring tools like applicant tracking systems or Excel spreadsheets.
A DOL spokesperson said the information collected from the scheduling letter request “will allow OFCCP to assess contractors’ use of such technology to determine whether these tools are creating barriers to equal employment opportunity.” More guidance regarding the letter is forthcoming, the spokesperson said.
There is a need for the agency to expand on the new requirement through the Frequently Asked Questions section on its website and make clear that it is not taking an overall negative view “in the abstract” towards AI, Leen said.
OFCCP audits that find evidence of hiring bias can ultimately result in pre-litigation settlement payouts or in some cases, lawsuits against contractors.
The OFCCP’s longstanding memorandum of understandingwith the EEOC would mean that the commission also has access to this data. The EEOC has added an AI-based bias focus to its draft strategic enforcement plan, and released guidance putting employers on notice that tech tools can violate laws like the Americans With Disabilities Act and Title VII of the 1964 Civil Rights Act.
Both agenices are required under the agreement to share information including employers’ “affirmative action programs, annual employment reports, complaints, charges, investigative files, and compliance evaluation reports and files.”