Recruiting is much different than it used to be. For starters, more companies are using remote hiring and virtual interviews than ever before. Some challenges never change, though. HR professionals still need to be experts on recruiting compliance, which requires staying up to date on changing regulations and the agencies that oversee recruitment. The following guide provides insight into the latest regulations recruiters should know to avoid breaking the law and incurring steep penalties.
What Employers Need to Know
When it comes to recruiting compliance, there are five key areas employers need to be aware of and two agencies to get to know:
Compliance Focus Areas
- Discrimination
- Pay equity
- Salary history
- Ban the box
- Pre-employment drug screening
Compliance Agencies
- Equal Employment Opportunity Commission (EEOC)
- Office of Federal Contract Compliance Programs (OFCCP)
Who Regulates Recruiting Compliance?
The EEOC and OFCCP requirements are put in place to ensure that companies’ hiring practices do not discriminate against protected classes of applicants. If recruiters fail to abide by these regulations, your company may face lawsuits, large fines, and irreparable brand damage.
EEOC
The EEOC enforces federal laws outlawing the discrimination of job applicants and/or employees because of a person’s race, color, religion, sex (including pregnancy, transgender status, and sexual orientation), national origin, age (40 or older), disability, or genetic information.
Most employers with 15 or more employees, as well as labor unions and employment agencies, are required to comply with EEOC regulations. In 2024, the agency filed 110 lawsuits challenging unlawful employment discrimination. Five of those cases were filed under the Pregnant Workers Fairness Act (PWFA), which went into effect June 27, 2023, and requires employers to provide workplace accommodations to employees who have a limitation due to pregnancy, childbirth, or a related medical condition, including lactation.
OFCCP
All federal contractors who conduct business with the government in excess of $10,000 fall under the jurisdiction of the OFCCP and, as such, cannot discriminate against employees based on their race, color, religion, sex and national origin. The law also enforces affirmative action and mandates contractors to make efforts to employ qualified individuals with disabilities, Vietnam-era veterans, and other covered veterans.
Common violations include:
- Insufficient outreach: Contractors are required to make proactive efforts to recruit and hire veterans and disabled individuals. OFCCP often finds that companies fall short in outreach efforts, either due to inadequate recruitment efforts or lack of tracking of outreach activities.
- Recordkeeping: The OFCCP has specific recordkeeping requirements that outline which records should be kept and for how long. Failing to retain required employment and affirmative action plan records or not documenting hiring decisions and employment actions properly makes it difficult for the OFCCP to assess compliance, increasing the likelihood of penalties.
- Inadequate affirmative action plans: Federal contractors are required to develop, maintain, and update affirmative action plans annually. Many contractors fail to create a compliant AAP or update it with current data, which includes analyses of their workforce and hiring practices.
- Pay discrimination: The OFCCP prohibits discrimination in compensation based on race, sex, or other protected categories. Pay discrepancies between employees performing similar work can lead to an OFCCP investigation, especially if contractors lack consistent policies for determining salaries, bonuses, and promotions.
Pay Equity and Salary History
Another area of compliance on recruiters’ checklists relates to salaries. To date, 30 states have enacted laws either banning recruiters from asking applicants for salary histories and/or requiring companies to pay employees equally regardless of gender. It’s important to review your recruiting practices and implement training to ensure recruiters understand and don’t violate these laws.
In addition to salary history bans, several states and cities have implemented salary transparency laws, requiring employers to disclose salary ranges in job postings or during the hiring process. Staying updated on local and state requirements for salary disclosures can help prevent compliance issues.
While The Equal Pay Act requires that men and women in the same workplace be given equal pay for equal work, Department of Labor statistics find a gender wage gap still exists. A number of other laws enforced by the EEOC prohibit pay discrimination based on race, color, religion, sex, national origin, disability, or genetic information.
Ban the Box
To date, 37 states and 100+ cities and counties nationwide have adopted official efforts to “ban the box” or eliminate questions regarding convictions and arrest records so that employers consider a job candidate’s qualifications first. While ban-the-box laws primarily affect the private sector, the Fair Chance Act prohibits most federal agencies and contractors from requesting information about arrest and conviction records from a job applicant prior to a job offer.
Pre-Employment Drug Screening
Now that marijuana is legal for medical and/or recreational use or decriminalized in the majority of states, U.S. territories, and D.C., laws related to pre-employment drug screening have also changed. These laws also vary by state. Be sure to know how the laws impact candidates and new hires in the states where your employees work and live prior to the recruiting process.
Make Sure Recruiters Toe the Line
Discrimination during the recruiting process is typically not intentional; it’s often due to lack of training or sloppy policies. Inadvertent industry stereotypes can be a challenge, however. For example, highly qualified women often have a difficult time getting hired in fields such as engineering or construction.
As the number of violations and lawsuits continue to rise, it’s critical that employers educate recruiters on proper interview procedures. Plus, employers should conduct an audit of all job descriptions and requirements to remove possible biases. Doing so will help you meet recruiting compliance requirements down the road.
How Paycor Helps
Paycor can help you navigate the ever-growing maze of recruiting laws and regulations. Our unique software solution was designed by recruiting experts who understand your needs. We built Paycor Recruiting to actually think and behave like a recruiter.
Our system empowers you to create online career and application pages that attract the best candidates available. You’ll be able to efficiently sort and track applications throughout the hiring process and communicate quickly with your leading candidates. You’ll also gain access to valuable analytics and compliance reporting to make sure you’re staying in line with EEOC/OFCCP regulations.
