Analysis: OFCCP Releases New Guidance on AI

As previously reported, the OFCCP has launched a new Artificial Intelligence (AI) landing page with new guidance and information for federal contractors. The landing page features a Federal Contractor Guide and the Joint Statement that the OFCCP signed along with 9 other federal agencies that expresses their commitment to protecting the public from unlawful bias in automated systems. To learn more about the Joint Statement, visit our separate blog here. Below we will be summarizing the OFCCP’s Federal Contractor Guide titled “Artificial Intelligence and Equal Employment Opportunity for Federal Contractors”.

Introduction: The OFCCP introduces this guidance page by providing background information regarding the signing of Executive Order 14110 in which President Biden called for a coordinated U.S government approach to ensuring the responsible and safe development and use of AI. Under the Executive Order, OFCCP was required to issue a guidance document to address federal contractor and subcontractor obligations when using AI.

Common Questions About the Use of AI and EEO: This section includes 10 common questions and answers around AI and EEO compliance. Questions 1-3 involve definitions of AI, algorithm, and automated systems. They also provide context into what is considered AI or automated systems in the employement context- defining automated systems expansively as “software and algorithmic processes, including AI, that are used to automate workflows and help people complete tasks or make decisions.” The guidance provides an example that highlights how common recruitment practices could be viewed as automated systems by the OFCCP, such as use of an automated system to filter resumes and identify applicants who meet the basis requirements for a job.

For Question 4 the OFCCP provides examples of federal contractors’ obligations related to the use of AI in employment decisions. Covered federal contractors are legally obligated to not discriminate in employment and to take affirmative action to ensure that. These obligations extend to the use of automated systems/AI when making employment decisions. The guide specifies that federal contractors must:

1. Maintain records and ensure confidentiality of records consistent with all OFCCP- enforced regulatory requirements. For example, keeping records of resume searches, both from searches of external website and internal databases that include the substantive search criteria used.
2. Cooperate with the OFCCP by providing the necessary requested information on their AI systems
3. Make reasonable accommodation to the known physical or mental limitations of an otherwise qualified applicant or employee with a disability, unless the federal contractor can demonstrate that the accommodation would impose an undue hardship on the operation of the business. This extends to the contractor’s use of automated systems.

The answer to Question 5 explains the risk associated with using automated systems/AI in employment decisions. OFCCP notes that AI has the potential to create bias and discrimination, and if not designed and implemented properly, can replicate, or worsen inequalities. To expand on the previous example, a resume scanner that is programmed to reject applicants with resume gaps, could auto-reject an applicant who took time off for the birth of a child or for needing medical treatment for a disability. This could potentially result in having an adverse impact on women or individuals with a disability thus violating the law.

Question 6 revolves around AI and compliance evaluations/complaint investigations. The OFCCP’s new supply and service scheduling letter requests all contractors provide information about their use of AI as part of their initial submission to the OFCCP. During a compliance review and complaint investigations, the OFCCP may examine any measure or procedure that a federal contractor uses to make employment decisions, including tools that use AI systems.

The response for Question 7 explains adverse impact and specifies that when a selection procedure, including a procedure that uses or relies on AI, has an adverse impact on employment decisions, federal contractors are required to validate the system using a strategy that meets the OFCCP’s nondiscrimination laws and the Uniform Guidelines on Employee Selection Procedures (UGESP). Specifically, federal contracts must:

• Understand and clearly articulate the business needs that motivate the use of the AI system
• Analyze the job-relatedness of the selection procedure
• Obtain results of any assessment of system bias, debiasing efforts and/or any study of system fairness
• Conduct routine independent assessments for bias and/or inequitable results
• Explore potentially less discriminatory alternative selection procedure

For Question 8, the OFCCP states that they do not endorse or certify AI software vendors.

Question 9 pertains to who is responsible for compliance with OFCCP-enforced laws and whether federal contractors can delegate their compliance obligations to another entity. The guide specifies that a federal contractor is responsible for meeting their nondiscrimination and affirmative action obligations and is also responsible for the use of third-party products and services.

The answer to Question 10 contains a link to the resources at the end of the guide for federal contractors that want to learn more about AI.

Promising Practices for the Development and Use of Artificial Intelligence in the EEO Context: The guide also contains an initial framework of actions that contractors may consider, helping them avoid potential harm to workers and promote more trustworthy use of AI.

First, the guide reviews how federal contractors should provide notice and appropriate disclosures to applicants, employees, and their representatives if the contractor is intending to use AI in the hiring process or when making employment decisions. OFCCP recommends that contractors also explain how to request and obtain reasonable accommodation, notify on what data will be captured and used by the AI, explain how privacy will be safeguarded, and ensure transparency regarding the basis of an employment decision and how AI contributed to the decision.

The guide then goes over some promising practices for federal contractors that use or are considering using AI systems. Some of the practices mentioned include: standardizing the system to ensure everyone goes though the same process and establishing procedures to receive/respond to reasonable accommodation requests, routinely monitoring and analyzing whether the use of an AI system is causing disparate or adverse impact before, during and after use, and providing training on the AI system and its appropriate use. OFCCP also recommends that contractors not rely solely on AI or automated systems when making employment decisions. Finally, contractors should retain documentation of the data that was used to develop or deploy the AI system.

Many federal contractors use a third-party or vendor-created AI system, so the guide also provides some promising practices federal contractors should consider. For example, contractors should be able to verify the vendor’s protections and privacy policy on data provided by the contractor, critical information regarding the vendor’s algorithmic tool such as the data captured, the scoring system, and the basis for selection or elimination of applicants/candidates, and results of any assessment of system bias, debiasing efforts and/or any study of system fairness.

The guide also provides promising practices related to accessibility and disability inclusion. For example, federal contractors should use a system that is generally accessible to individuals with disabilities and incorporates inclusive design of the user experience, take steps to test and monitor the accessibility of all system interfaces and results, and ensure that when using a vendor that there was consideration of individuals with disabilities when developing and testing the AI system for disparate or adverse impact.

At the end of the guide there is an extensive list of resources for federal contractors. All federal contractors who use or are considering the use of AI for employment-related decisions, should review the guide and make efforts to ensure that they are complying with nondiscrimination law.