What Does It Really Mean to be an Affirmative Action Employer?

It never fails in our office. The frantic phone call because a Department of Labor Office of Federal Contract Compliance Programs (OFCCP) audit letter shows up on a desk, two weeks after sitting on the President’s desk, with the yellow sticky note “please handle.” Before fear and panic set in, here are some pointers for keeping ahead of the scary audit letter.

Explore if your organization IS covered by the Affirmative Action (AA) regulations. ASK QUESTIONS! If your business purchases or sells to the US Government directly, you must have 50+ US based employees and a contract of $50,000 or more to be covered by the regulations. Subcontractors providing services to a prime government contractor may also be covered under the regulations. Often times, signing Certification Letters or contracts that you are an EEO/AA employer indicates that a subcontract is in place. If your organization is a depositor of funds (such as savings bonds) or insured by the federal government (such as FDIC), you may be covered under these regulations.

HR professionals should check with legal, contracts, sales or other areas of the company to explore if they are doing business with the government, pursuing government work or providing secondary services to a prime contractor. Check to see if anyone is signing Certification Letters; review contracts from major customers; and also look at EEO-1 reports – is the box checked that you are a government contractor/subcontractor?

If you are a construction contractor, providing construction services to federal projects, the threshold is $10,000 and the AA plan requirements are different.

PLEASE NOTE: Some cities, states and other governmental organizations also have AA requirements with some variation of the federal regulations. If your company has contracts with these types of agencies, check your local/state regulations. If your sales organization is bidding on federal, state or local work, have them coordinate with you to make sure you are meeting the affirmative action obligations of the bid or contract award.

Most business leaders believe that having a policy statement that you are an Equal Employment Opportunity (EEO) employer is enough. It’s not! The Equal Employment Opportunity Commission and the OFCCP are two separate agencies that enforce two separate regulations.

An AAP requires you to have analyses for Minorities and Females (Executive Order 11246); Individuals with Disabilities (Section 503); and Veterans (VEVRAA).

If you are covered under the affirmative action regulations, here are some things you should know:

• An Affirmative Action Plan (AAP) is an annual process. You can pick the date of your plan but you MUST update it every year.
• The AAP includes text that promises not to discriminate and provides a plan for affirmative action in the coming year. It also provides demographic analyses of your organization on plan date and the setting of goals for the current year (look forward). The AAP also looks back – how did you do the previous years on goals you set? Did you have any adverse impact in your hiring, promoting or terminating? If so, have you addressed them?
• You are on “scout’s honor” – someone has certified or promised as part of the contract to have one but you are not typically asked to send your federal plan into anyone unless audited. Some cities and states require certification and pre-certification, which may include a copy of the plan.
• Sometimes the large award of a federal contract will trigger an automatic audit to assure that you have your AAP.
• Data management is key to preparing an affirmative action plan. Having basic, accurate demographic data about your employees – name, race, gender, job title, etc. and the ability to report your employment transactions – hires, promotions and terminations – is critical to preparing an AAP.
• The careful defining of an applicant and capturing of applicant flow is CRITICAL and can be the most burdensome part of the AA reporting process. An applicant is defined as a person who expresses interest in an open position AND the expression is reviewed AND meets the basic qualifications of the position AND remains interested. Setting up systems to capture this is imperative.
• Once goals are established, you must develop a plan for how to meet those goals. How will you reach females? Minorities? Disabled? Veterans?
• The regulations require GOOD FAITH EFFORTS to meet goals and do not require quotas. You don’t get in trouble with the OFCCP if you don’t meet your goals, but you might if you don’t TRY.
• The regulations also require compensation equity between males/females and minorities/non minorities for those in same jobs where all else is the same (skill, effort, experience, working environment, performance).

Having your plan completed each year on time is the best way to be prepared for an OFCCP audit.

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