Government Contractors Need to Revamp Affirmative Action Processes
nDecember 13, 2000, sweeping changes to affirmative action became law.
TheOffice of Federal Contract Compliance Programs (OFCCP) claims they simplifycompliance, but government contractors will need to completely revamp theiraffirmative action plans and processes. Virtually every statistical report andnarrative document included in a plan are affected.
Thelast time such sweeping changes in affirmative action were proposed was duringthe Carter Administration. Before the regulations could become final, the ReaganAdministration took office and froze them. The regulations never became law andthe OFCCP appears to have learned from this experience. These new regulationspassed in November, became law before the Bush Administration took office. Thenew administration cannot freeze final, published regulations. The entire noticeand comment process would need to be repeated to rescind or otherwise change theregulations, which could take years.
The most significant new requirementmight be the Equal Opportunity Survey. It must be submitted bi-annually to theOFCCP in addition to the submission of the annual EEO-1 and Vets 100 reportsfiled by companies with 50 or moreemployees and at least $50,000 in government contracts or subcontracts. TheEO Survey requires the inclusion of employee, applicant and hire informationwhich will summarize much of the actual affirmative action plan. Annualized compensation data in the report will be used bythe OFCCP to identify pay disparity issues and trigger compliance reviews.
A highly touted change was made to the“Eight Factor” Availability Analysis. Contractors must now consider at leastthe following factors:
- The percentage of minorities and women with requisite skills in areasonable recruitment area.
- The percentage of minorities and women among those promotable,transferable, and trainable.
Onthe surface there are two factors, but the regulations require contractors todocument how they arrived at the availability figures for each factor. What thismeans is that previous factors 1, 2, & 3 were eliminated; factors 4, 5 &7 were combined into new factor 1; and factors 6 & 8 became new factor 2.
Employees must be included in the AAPwhere they work, with three exceptions:
- Employees who work at an establishment other than that of their managermust be included in the AAP of their manager.
- There are 3 options for employees who work at a location with less than50 employees:
- include the employees in a separateAAP;
- include them in another AAP where the personnel function supports thislocation;
- include them in the AAP of the location to which they report.
- If the hiring authority for a particular employee is made at a higherlevel at another location, that employee must be included in the AAP of thehiring location.
Employees whofall into one of these “exceptions” must be “annotated” in two separateplans – the plan in which they are included, and the plan where they actuallywork. This annotation requirement cuts across geographic lines and could be anadministrative nightmare for large, diversified companies.
Companiescan now request special permission from the OFCCP to complete their plans byfunctional or business units that cut across geographic locations. However, theregulations also state that these agreements “...cannot be construed to limitor restrict how the OFCCP structures its compliance evaluations.” It appearsthat the OFCCP could still conduct compliance reviews by individual facility,which would negate the very reason for entering such agreements in the firstplace.
The Organizational Profile is a newreport that consists of a graphical, tabular chart, text or spreadsheetpresentation of the company’s organizational structure. It shows eachorganizational unit and its relationship to other organizational units.Organizational units are departments, divisions, sections, branches, groups,project teams, job families or similar units.
For each organizational unit, thefollowing must be included:
- Name of the unit;
- Job title, gender, race and ethnicity of the supervisor;
- Total number of male and female incumbents;
- Total number of male and female incumbents broken down by Black,Hispanic, Asian, and American Indian.
The regulations allow the use of thefamiliar Workforce Analysis in place of the Organizational Profile, so initiallyit is anticipated that most companies will choose to continue to produce theWorkforce Analysis.
The required narrative elements havebeen narrowed, but increased emphasis has been placed upon the actual actionstaken by the contractor. It is now more important than ever to customize thenarrative for your company and not use simple “boilerplate” language. Therequired narrative elements are:
- Designation of responsibility: This individual must have theauthority, resources, support of and access to top management to ensureeffective implementation of the affirmative action plan. In the commentssection, the OFCCP recommends that an executive be assigned as director of equalopportunity programs.
- Identification of problem areas: An in-depth analysis thatincludes an evaluation of the workforce by organizational unit and job group,all personnel activity, compensation systems, and personnel procedures.
- Action-oriented programs: The contractor must ensure that theseconsist of more than just following the same procedures which have previouslyproduced inadequate results.
- Internal audit: Key elements include: monitoring personnelrecords, requiring internal reporting on a scheduled basis, reviewing theresults with all levels of management, advising top management of theeffectiveness of the plan and suggestions for improvement.
The newaffirmative action regulations represent the broadest changes in affirmativeaction over the past 20 years. If past experience holds true, it will be severalmonths or years before we know exactly how the OFCCP will actually enforce andinterpret the regulations. Welcome to the 21st Century...