Affirmative Action Plans: Does Your Company Need One?

Affirmative Action Plans: Does Your Company Need One?

affirmative action plan requirements Affirmative Action Plans: Does Your Company Need One?

So who needs an Affirmative Action Plan (AAP)? We spoke with Doug Brown, President of Alexander & Bryce, to find out what the requirements, guidelines, and timeframe is when getting involved with an AAP.

Alexander & Bryce Inc. is a human resources consulting firm that provides support to employers who are government contractors and subcontractors subject to the broad spectrum of affirmative action obligations, covering females, minorities, the disabled, and veterans.

Affirmative Action 101

Brown says affirmative action obligations come about because of the three laws and implementing regulations requiring affirmative action. All of these regulations are enforced by the Office of Federal Contract Compliance Programs (OFCCP) of the U.S. Department of Labor. 

Executive Order 11246 (EO): Requires affirmative action and non-discrimination for minorities and females.

Organizations that must comply with the (EO) are:

  • Federal contractors and subcontractors who provide $10,000 or more of goods and services to the federal government as either a prime contractor, or a subcontractor to a prime contractor whose work is “necessary” to the furtherance of the prime contract.
  • Construction contractors receiving more than $10,000 while working on federal construction projects or projects that are federally funded.
  • Financial institutions who are covered by FDIC insurance or who serve as a depository of federal funds. 
  • In addition, if an organization also has a contract for $50,000 and 50 or more employees, they must also prepare an AAP for minorities and females. 

The implementing regulations require an annual comparison between current representation of minorities/females in the contractor’s workforce and the availability of minorities/females in the “pool” from which the contractor fills jobs.   If representation is what would reasonably be expected given availability, then all is well.  If representation is less than reasonably expected, then the contractor must establish goals and undertake good-faith efforts to improve minority/female representation in the workforce.

In addition, the regulations require an audit of employment selections (hire, promotions, and terminations) to identify possible indicators of discrimination through the use of what is known as an adverse impact analysis. 

Lastly, contractors must audit their compensation practices to ensure non-discrimination in the payment of wages between males/females and minorities/non-minorities.

Section 503 of the Rehabilitation Act of 1973: Covers individuals with disabilities. The same coverage is applied to Section 503 as the EO. Section 503 requires contractors to make efforts to advance in the employment of qualified individuals with disabilities. 

Compliance with implementing regulations includes:

  • An equal employment opportunity clause that covers contracts, subcontracts and purchase orders.
  • Using a specific EEO tag line on all covered job postings.
  • Making reasonable accommodations to disabled employees and applicants.
  • Having a utilization goal of 7% for disabled individuals in all job groups.
  • Taking various other actions to comply.

Vietnam Era Veterans Readjustment and Assistance Act (VEVRAA): Covers protected veterans. The covering threshold is $100,000. VEVRAA requires contractors to make efforts to employ and advance in employment protected veterans. 

Compliance with implementing the regulations includes:

  • An EEO clause in covered contracts, subcontracts and purchase orders.
  • Using a specific EEO tag line on all covered job postings.
  • Listing most job openings with the local state job delivery system, engaging in specific outreach to identify and attract protected veterans.
  • Having a hiring benchmark of 8% for protected veterans.
  • Taking various other actions to comply.

Depending on the size of the contract, an organization may have to prepare an AAP for minorities, females and disabled individuals but not for protected veterans. 

What an Affirmative Action Plan Ensures

Having an AAP means:  

  • The contractor is in compliance with its contractual obligations and lessens the risks if they are subject to an enforcement action by the OFCCP. 
  • The contractor is monitoring its personnel practices to ensure that it is treating individuals equally and fairly, without regard to their status (e.g. race, gender, disability, and veteran status), thereby reducing the chance of being subject to a discrimination complaint or lawsuit. 
  • The current employees should perceive that they are employed by an organization that treats them fairly and equally without regard to their status, thus improving their perception of their working conditions.

Timeframe When Plans Need to be in Place

For a new federal contractor who meets the coverage thresholds, an AAP must be developed within 120 days of starting the contract. Once the AAP is developed, then the AAP must be updated annually. 

The OFCCP merely mandates the development of the AAP by covered contractors.  They then monitor compliance through the compliance review process.

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