2013 has been a very busy year for the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). With the release of revised regulations regarding veterans and persons with disabilities in September and the agency’s changing procedures for investigating potential compensation disparities, federal contractors and subcontractors are spending much of their time focusing on these areas. Even with these significant changes, though, companies need to realize the importance of having good affirmative action plans.
Most federal contractors and subcontractors will produce two affirmative action plans (AAPs) for each establishment or functional unit. One affirmative action plan will deal with OFCCP’s regulations regarding minorities and females; the other affirmative action plan will deal with OFCCP’s regulations regarding veterans and persons with disabilities. Some companies will combine all affirmative action plans into one document, and others may separate the affirmative action plan for veterans from the AAP for persons with disabilities. Regardless, companies should spend the time and resources necessary to produce good affirmative action plans.
What Constitutes a Good Affirmative Action Plan?
There are some basic concepts that characterize a good affirmative action plan. Among these are the following:
- A good affirmative action plan should be complete. It should include all the elements found in the relevant portions of the federal affirmative action regulations. The AAP for minorities and females should include all of the statistical and narrative reports required by these regulations, while the AAP for veterans and persons with disabilities should include the specific narratives required by the regulations. (Currently, the AAP for veterans and persons with disabilities does not require the production of any statistical reports, although this will change in coming years with the implementation of OFCCP’s revised regulations.)
- A good affirmative action plan should be correct. All of the statistical reports in the AAP for minorities and females should accurately reflect the workforce that is part of the AAP and should accurately reflect the personnel activity that has occurred in that workforce. All of the narrative reports in any AAP should accurately reflect the company’s policies, procedures, and practices.
- A good affirmative action plan should reflect the organization. OFCCP has become increasingly suspicious of AAPs that appear to be “boiler-plate” documents. A good AAP should include specific narrative references to the company’s particular circumstances and background. A good AAP should also include statistical reports that give OFCCP an effective understanding of the company, how it is organized, and what is occurring in the workforce.
Why Should a Company Have Good Affirmative Action Plans?
There is an interesting discussion that has been occurring in the federal contractor community about the value of having good affirmative action plans. One school of thought suggests that companies should simply produce AAPs as quickly as possible, wait to be contacted by OFCCP about the start of a compliance review, and then make revisions to the AAPs at that point. People who subscribe to this school of thought give little attention to the initial preparation of the statistical and narrative components of an AAP, preferring to produce boiler-plate documents with statistical reports of questionable accuracy that are then heavily revised before submission to OFCCP.
Another school of thought suggests that there is little to be gained by having good AAPs. Subscribers to this school of thought believe that OFCCP compliance officers do not read any of the narrative sections in an AAP, and pay little attention to the traditional statistical components of an AAP. This group is much influenced by the fact that most OFCCP compliance officers tend to place great emphasis on whatever the current focus areas are for the agency. Currently, that would mean that a company’s attention should be focused on areas such as outreach efforts regarding veterans and persons with disabilities and the documentation of these outreach efforts, not on the production of documents that will receive little scrutiny.
While the desire to prepare AAPs as quickly and painlessly as possible may be very attractive, and the need to understand OFCCP’s current focus areas is important, the value of having good AAPs cannot be understated. Here are some of the reasons to have good AAPs.
- A company’s affirmative action plans are the first thing that OFCCP sees during a compliance review. The AAPs set the tone for the remainder of the compliance review. An AAP that is disorganized or that is missing information will suggest that the company doesn’t particularly care about its obligations as a federal contractor. An AAP that consists of extensive boiler-plate language or that includes statistical reports that do not reflect the company’s particular workforce or circumstances will also suggest a lack of interest by the company. OFCCP compliance officers tend to take this lack of interest into account as the company attempts to explain issues that arise during a review.
- Good AAPs demonstrate that a company has a mastery of the affirmative action regulations. Complete, correct, effective AAPs send a message to an OFCCP compliance officer that the company understands its responsibilities under the affirmative action regulations and has acted accordingly. A compliance officer who has received good AAPs from a company is more likely to show deference to explanations offered by the company about its decisions, and is more likely to accept the validity of any documentation that is offered by the company as part of a compliance review.
- OFCCP compliance officers are required to examine certain sections of an AAP closely at the start of a review. OFCCP’s revised Federal Contract Compliance Manual that was released earlier this year provides specific guidance to compliance officers on how to examine an AAP to determine if it is complete and correct. If an AAP has all the required statistical and narrative reports and explains the company’s efforts to employ minorities, females, veterans, and persons with disabilities, a compliance officer will be able to complete his or her work much more quickly and easily.
- Good AAPs provide a company with an effective tool to conduct a self-audit. An AAP that includes complete and accurate statistical reports will provide a company with information on the specific areas that an OFCCP compliance officer might focus on during a review. This gives the company an opportunity to develop documentation demonstrating that issues associated with some statistical report have an appropriate explanation, and gives the company an opportunity to correct any real problems before concerns are raised during a compliance review.
- Good AAPs prevent a company from doing extensive rework prior to submitting the AAPs to OFCCP. Companies that give little attention to the initial preparation of their AAPs are often required to make significant revisions to these AAPs before they are submitted to OFCCP. These revisions can be time-consuming and can potentially result in the late submission of an AAP to OFCCP. At a time when OFCCP is not allowing extensions for the initial submission of AAPs, the requirement to do rework can have various adverse results for a company. The need to do rework can also be problematic if a company’s data systems cannot properly produce data that reflects the workforce or personnel activity that should have been included in the AAP.
- Good AAPs have the potential to reduce the costs to a company that are associated with an OFCCP compliance review. Making changes to an AAP during the course of an OFCCP compliance review has direct financial and other costs to a company. The failure to do an effective self-analysis of data before the start of a compliance review may have significant costs to a company, especially if a compliance officer finds what appears to be evidence of discrimination. Good AAPs can help to establish a positive relationship with a compliance officer and increase the chances that there will be no problematic findings of the kind that can result in costly additional actions for the company.
In summary, a good AAP can be a critical part of having a successful compliance review. Companies will certainly need to be able to demonstrate that they are making substantive efforts to meet OFCCP’s requirements in areas such as outreach to find veterans and persons with disabilities and the avoidance of pay disparities. However, producing good AAPs prior to the time that an affirmative action review begins can give a company an opportunity to effectively prepare for a review, and these AAPs can demonstrate to OFCCP that a company has a firm understanding of its affirmative action responsibilities and is doing its best to meet OFCCP’s various requirements.
Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc. 2013