Federal contracts require employee selection compliance

Selection practices that have an adverse impact on employment opportunities for individuals in the protected classes will be considered discriminatory unless justified by a business necessity. Adverse impact is defined as hiring, promoting or making any other employment decisions disadvantageous to people in those protected classes.

Each year, construction companies must conduct an adverse impact analysis of the selection process for each job or category of jobs. A practice is considered discriminatory if the selection rate is less than four-fifths of the group with the highest selection rate.

Adverse impact calculations consist of nine steps.

1. Determine the total number of Caucasian applicants and divide by the number hired to obtain the selection rate for Caucasians.

2. Determine the total number of Hispanic applicants and divide by the number hired to find the selection rate for Hispanics.

3. Determine the total number of black applicants and divide by the number hired to find the selection rate for that group.

4. Determine the number of American Indian applicants and divide by the number hired to find the selection rate of American Indians.

5. Determine the total number of Asian applicants and divide by the number hired to come up with the selection rate for Asians.

6. If any of the five groups stated above constitute less than 2 percent of the local work force, construction companies do not have to calculate adverse impact for those groups.

7. Determine which of the five groups have the highest selection rate.

8. Calculate impact ratios by dividing the selection rate for each group by the selection rate found in step seven.

9. If any group has a selection rate less than 80 percent of the highest group in step seven, adverse impact has been detected.

Dealing with adverse impact

If adverse impact is found, construction companies must eliminate any part of the selection process causing the adverse impact.

Review recruiting sources and telephone responses to applicant questions regarding positions. Assess the paper screening procedure, analyzing what criteria would indicate whether an individual should be further pursued. Critique phone screening techniques and the standards that determine whether an individual will receive a face-to-face interview. Re-examine any tests used to be sure each is valid and reliable. The definition of valid is that the test measures what it is supposed to measure. A test is reliable if the results can be repeated over time.

Be sure the questions asked during the interview process are legal and valid based upon the requirements of the job opening. Evaluate the reference-checking and background investigation review procedure.

If a business chooses to continue using the part of the selection process causing the adverse impact, the enterprise must show the use is valid, job-related for a particular position or justified by a business necessity.

Construction companies also must prepare an EEO-1 – an employer information report. The document must be submitted to the Equal Employment Opportunity Commission annually.

Compliance with this law is mandatory for construction companies whose size, sales and source of revenue fit the requirements of the statute.

Lynne Haggerman is president/owner of Haggerman & Associates, a firm specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@haggermanandassociates.com or haggermanandassociates.com.