OFCCP publishes AI guidance for contractors

Traditional rules apply to AI, too!  

In response to President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, the Office of Federal Contract Compliance Programs rolled out guidance for federal contractors regarding the use of AI. According to the OFCCP, “While some federal contractors may use AI systems to increase productivity and efficiency in their employment decision-making, the use of AI systems also has the potential to perpetuate unlawful bias and automate unlawful discrimination, among other harmful outcomes.”

The OFCCP’s guidance is in the form of Frequently Asked Questions, and answers both basic and strategic issues for contractors, including how AI may affect contractors’ compliance obligations.

Here are some examples:

  • The obligation to provide reasonable accommodation to individuals with a disability extends to the use of AI and automated systems, such as electronic or online application systems.
  • Resume scanners programmed to reject applicants with gaps in employment may disproportionately reject individuals who took time off for childbirth or medical treatment, which could create adverse impact against women and individuals with a disability.

The OFCCP also explains steps contractors should take when AI results in adverse impact in employment decisions: 

An adverse impact results when the procedure(s) an employer uses to make employment decisions such as hiring, promotion, and termination have a disproportionately large negative effect on a basis that is prohibited by law. When a selection procedure, including a procedure that uses or relies on AI, has an adverse impact on employment decisions of members of any race, sex, or ethnic group, federal contractors must validate the system using a strategy that meets applicable OFCCP-enforced nondiscrimination laws and the Uniform Guidelines on Employee Selection Procedures (UGESP). More specifically, federal contractors must:

Understand and clearly articulate the business needs that motivate the use of the AI system.

Analyze 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 procedures.

See FAQ 7.

In addition, the OFCCP provides various “promising practices” on providing notice when AI is used, using AI, obtaining AI systems from a vendor, and ensuring access and disability inclusion. Here are some highlights: 

  • Provide advance notice and appropriate disclosure to applicants, employees, and their representatives if the contractor intends to use AI in the hiring process or employment decisions that allows individuals to understand how they are being evaluated.
  • Routinely monitor and analyze where the use of the AI system is causing a disparate or adverse impact before implementation, during use at regular intervals, and after use. If such an impact exists, take steps to reduce it or use a different tool. This should include assessing whether the use of historical data in the creation of an AI system may reproduce patterns of systemic discrimination.
  • The specific provisions in the contract with the vendor regarding records related to the AI system, [should] require the vendor to maintain records consistent with all OFCCP-enforced regulatory requirements and provide OFCCP with access to such records during a compliance evaluation.
  • If using a vendor, ensure that they considered the needs of individuals with disabilities using the AI system when they developed the system.

Now that the OFCCP requests information regarding contractors’ use of AI during the desk audit phase of every compliance evaluation, contractors should prepare for thorough investigation of all AI and automated systems. This includes developing a list of all such tools and monitoring their effects on applicants and employees.

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