The purpose of these frequently asked question is to provide clarifying and educational information about what constitutes a selection procedure that is subject to the Uniform Guidelines on Employee Selection Procedures (UGESP) at 41 CFR Part 60-3, how OFCCP identifies selection disparities, and how OFCCP investigates and reviews matters related to adverse impact caused by employee selection procedures.
- What is a selection procedure?
- What is validity?
- How are employee selection procedures validated?
- How does OFCCP identify disparities (adverse impact) caused by use of employee selection procedures?
- How does OFCCP investigate and review matters related to adverse impact caused by employee selection procedures?
- What about “new technology” screening devices like games, challenges, and video submissions that use artificial intelligence (AI) algorithms to assess qualifications?
What is a selection procedure?
A selection procedure is any measure, combination of measures, or procedure that a contractor uses to make employment decisions. There may be a passing score, and/or applicants may be ranked on the score, with selection made from the top-down. The following are common examples of selection procedures: mental ability (cognitive) tests, mechanical aptitude evaluations, personality inventories, interest and values inventories, interviews, scored background questionnaires, job knowledge exams, job simulations, measures of "job fit," physical ability tests, situational judgment scenarios, reading tests, medical or drug screening, credit checks, reference checks, typing tests, evaluations of voice quality, evaluations of personal appearance and grooming, etc.
What is validity?
The "validity" of a selection procedure refers to the extent to which there is empirical evidence or data that accurate inferences can be made from the score for a particular employment selection purpose.
How are employee selection procedures validated?
When a selection procedure has adverse impact on a protected group, the UGESP require evidence of validity from validity studies. There are three main approaches to validation: content validation, criterion-related validation, and construct validation. Evidence of the validity of a selection procedure by a content validity study consists of data showing that the content of the selection procedure is representative of important aspects of performance on the job for which candidates are to be evaluated. Criterion-related validation of a selection procedure consists of empirical data demonstrating that the selection procedure is predictive of or significantly correlated with important elements of job performance (criteria). Construct validation of a selection procedure consists of data showing that the procedure measures the degree to which candidates have identifiable characteristics which have been determined to be important in successful performance in the job for which the candidates are to be evaluated.
The UGESP require local validation at the organization’s facilities, with the exception that criterion-related validity evidence can be "borrowed" (validity transportability) from other organizations provided that job similarity is demonstrated and the validation studies conducted elsewhere are provided for OFCCP review and are found to meet UGESP requirements. Aside from this exception, contractors that use off-the-shelf tests that have adverse impact will not be able to defend their use of the tests unless they validate them at their own facilities. Claims by test sellers that their tests are "validated" or "EEO compliant" are not considered acceptable evidence of test validity.
How does OFCCP identify disparities (adverse impact) caused by use of employee selection procedures?
In practice, OFCCP uses the following statistical tests to assess contractors’ compliance with the UGESP:
- The favored group is determined by which group has the higher selection rate compared to the other groups in the analysis.
- The Impact Ratio is the disfavored group's selection rate divided by the favored group's selection rate. The Impact Ratio represents the difference in selection rates between the favored and disfavored groups. For example, if the disfavored group is women and the Impact Ratio is - 0.50, women were selected at half the rate of men. An Impact Ratio of less than 0.80 (i.e., the "Four-fifths Rule") is an initial indicator of adverse impact in selection under the UGESP. However, as an exercise of discretion, OFCCP generally would not pursue enforcement in a matter with such a disparity in selection rates without evidence that the disparity was also statistically and practically significant.
- The Two Independent-Sample Binomial Z-Test is OFCCP’s standard test to determine the statistical significance of the difference between the selection rates of two groups in a pool of 30 or more subjects. An absolute value of 2.0 or more is considered to be a statistically significant indicator of non-neutral selection.
- The Fisher’s Exact Test is OFCCP’s standard statistical test for groups with fewer than 30 subjects. OFCCP considers a p-value of less than 0.025 to be a statistically significant indicator of non-neutral selection, which is consistent with a 95% confidence interval.
How does OFCCP investigate and review matters related to adverse impact caused by employee selection procedures?
A finding of a selection rate for any race, sex, or ethnic group that is less than 80% of the selection rate for the group with the highest selection rate triggers the requirements of the UGESP. If there is adverse impact, the District/Area Office will attempt to identify the component(s) of the overall selection process that caused the impact. Then the Office will request that the contractor provide evidence of validity for those selection procedure(s) that caused the adverse impact, which should be one or more validation studies that conform to the UGESP’s documentation requirements. Upon receipt of the validation studies, OFCCP field staff will forward the validity evidence to the National Office for OFCCP’s testing experts to review. This review examines the extent to which the validity studies meet or do not meet the UGESP requirements. If the expert review determines that the UGESP requirements were not met, there will be a recommendation to continue investigating the employee selection part of the case, and the contractor may be liable to provide remedies to members of the affected class(es). If the UGESP requirements are met for every selection procedure that caused the adverse impact, there will be a recommendation to close the employee selection part of the case.
What about “new technology” screening devices like games, challenges, and video submissions that use artificial intelligence (AI) algorithms to assess qualifications?
Irrespective of the level of technical sophistication involved, OFCCP analyzes all selection devices for adverse impact. If OFCCP discovers that a contractor’s use of an AI-based selection procedure is having an adverse impact at a contractor’s establishment, the contractor will be required to validate the selection procedure using an appropriate validation strategy as described in the answer to question 3 above.
The contents of this document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.
Last updated on July 23, 2019