Affirmative Action Compliance Resources

Affirmative Action Compliance Resources

When you become a federal contractor or subcontractor, or a qualifying bank or higher educational institution, you may be subject to the nondiscrimination and affirmative provisions of Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), among other laws. Your first step should be to review the regulations and determine whether the federal contract(s) or subcontract(s) you hold are subject to these affirmative action compliance provisions. The regulations can be found on the Department of Labor’s Office of Federal Contract Compliance Programs’ (OFCCP) website. OFCCP is the government agency responsible for the enforcement of these laws. You may also visit the OFCCP’s eLaws advisor for a step-by-step guide to determining your status as a federal contractor.

Executive Order 11246 prohibits federal contractors, subcontractors, and federally-assisted construction contractors and subcontractors with contracts that exceed $10,000, from discriminating in employment decisions on the basis of sex, sexual orientation, gender identity, race, color, religion, or national origin. It also requires covered contractors to take affirmative action to ensure equal opportunity is provided in all aspects of their employment. Covered supply & service contractors holding a contract of $50,000 or more must prepare a written annual affirmative action plan under EO 11246. 

The Rehabilitation Act of 1973, Section 503, requires employers with federal contracts or subcontracts that exceed $15,000, including construction contractors, to ensure nondiscrimination in employment on the basis of disability and take affirmative action to hire, retain, and promote Individuals with Disabilities (IWDs). Covered contractors holding a contract of $50,000 or more must prepare a written annual affirmative action plan for individuals with disabilities.

VEVRAA requires federal contractors and subcontractors with contracts or subcontracts of $150,000 or more, including construction contractors, to ensure nondiscrimination in employment on the basis of Protected Veteran (PV) status and take affirmative action to employ and advance in employment Disabled Veterans, Active Duty or Wartime Campaign Badge Veterans, Armed Forces Service Medal Veterans, and Recently Separated Veterans (those discharged from the Service in the past three years). Covered contractors holding a contract of $150,000 or more must prepare a written annual affirmative action plan for protected veterans.

Once you determine you are a federal contractor or subcontractor, your next step is to ensure your organization’s compliance with the requirements for each law. This information is designed to give you an overview of federal affirmative action compliance requirements. More detailed information regarding each of the requirements can be found at the links below, or on OFCCP’s website.

What Is Affirmative Action?

Like Equal Employment Opportunity (EEO), Affirmative Action is having, and abiding by, an equal opportunity policy. This means ensuring equal employment opportunity for all applicants and employees by making employment decisions without regard to race, gender, national origin, religion, disability status, Veteran status, gender identity, sexual orientation, and other legally protected bases. However, Affirmative Action is broader than EEO because it requires covered federal contractors and subcontractors to:

  1. Develop and implement action plans to ensure that qualified men, women, minorities, Protected Veterans, and Individuals with Disabilities are included in candidate pools; and
  2. Analyze their current workforce representation and selection decisions to identify and remove any barriers to employment and employee development. 

What are the Requirements of a Written Affirmative Action Plan?

If you have at least 50 employees and a contract or subcontract of $50,000 or more, a written minority and women AAP must be created annually for each establishment that has 50 or more employees. Key elements of the written AAP include but are not limited to:

  • Designated persons responsible for the program
  • An EEO/AA policy statement
  • An organizational profile 
  • Job group analysis
  • Availability analysis of minorities and women
  • Incumbency versus estimated availability analysis
  • Placement goals
  • Identified problem areas 
  • Review of progress towards prior year placement goals
  • Action oriented programs
  • Explanation of internal audit and reporting systems

If you have at least 50 employees and a covered contract ($50,000 under Section 503 and $150,000 under VEVRAA), you are required to develop and implement a written AAP for IWDs and PV on an annual basis. Many of the required elements apply to both IWD and PV, while some are specific to one plan or the other. Some key affirmative action compliance elements of these written AAPs include, but are not limited to:

  • Designated persons responsible for the program
  • An EEO/AA policy statement
  • Training statement
  • Schedule to review personnel practices 
  • Schedule to review all job qualifications for job-related physical and mental job qualification standards 
  • Reasonable accommodations policy
  • Harassment policy
  • Utilization analysis of IWD or hiring benchmark analysis of PV
  • Data collection analysis of IWD and PV applicants and hires
  • Outreach and positive recruitment efforts for IWDs and PVs and evaluation of effectiveness of efforts
  • Explanation of internal audit and reporting systems

How Do You Develop the Written Affirmative Action Plan (AAP)?

As you can see from the requirements outlined above, covered federal contractors have detailed recordkeeping obligations and must perform annual analyses of their personnel activity, including hiring, promotions, terminations, and compensation systems. Companies have the option of conducting the necessary analyses and reports internally, or with outside assistance.

Here are some of the key steps to developing written AAPs. If you have limited resources or knowledge of affirmative action and related regulations, our recommendation is to obtain guidance. Since these regulations are complex requirements do change, expert interpretation is often needed and strongly recommended. 

1. Establish Your Plan Structure

The first step towards a compliant AAP is how to best organize your employees into plans. You’ll need to determine how many plans you'll need and which physical establishments require their own plans. If you have a single location with 50 or more employees, for example, then you only need one AAP. If you have five locations with 50 or more employees, you need five AAPs. If you have a sixth location with only 25 employees, you have some options. You can prepare a separate AAP for that location, or you can roll it into another location, based on where managers are located or human resources functions are handled. 

Remote workers add another layer of complexity when determining plan structure. There are some options for classifying remote employees while maintaining affirmative action compliance.

2. Compile Your Data

Developing your AAP requires data for active employees, all personnel activity and applicant logs. Before you pull employee data, you need to choose your plan date, the effective date of the AAP. The AAP establishes placement goals for the 12-month period going forward using a roster of active employees as of the plan date. For example, if your plan year starts on January 1, the plan is in effect through December 31 of that year. The employee roster is a snapshot of your workforce on January 1. The AAP also analyzes progress towards placement goals from the prior plan year using personnel activity data from the 12-month period prior to the current plan year. This includes hiring, terminations, transfers, and promotions.

For a compliant AAP, you're also required to maintain and compile applicant data to demonstrate who applied for each open position during that period, and who was ultimately selected for the position, either as a new hire or a competitive promotion. Federal contractors and subcontractors should compile applicant logs based on the OFCCP Internet Applicant Definition that outlines four criteria for determining who qualifies as an applicant.

3. Define Your Organizational Profile

In accordance with 41 C.F.R. 60-2.11

The organizational profile depicts the staffing pattern within a department or organizational unit. Each department represents a defined work function and should contain at least one supervisor or manager in EEO category Officials & Managers, and any of their direct reports who do not manage their own department.

OFCCP will review the workforce to identify areas where individuals of certain genders or races might be concentrated or segregated.

4. Create Your Job Group Structure

In accordance with 41 C.F.R. 60-2.12

Job groups are the foundation of your AAP, the unit of analysis for almost all of the required statistical reports. It is essential for affirmative action compliance that they are accurate. When creating your job group structure, group together jobs that are similar with respect to:

  • Wages;
  • Job duties and responsibilities; and/or
  • Opportunities for training, promotion, transfer, and other employment benefits.

Minority and women representation within your organization must be reported in a Job Group Analysis and compared to an availability analysis of minorities and women. For the most meaningful statistical analyses of this data, job groups should include between 30-100 employees whenever possible.

5. Set Your Placement Goals

In accordance with 41 C.F.R. 60-2.14, 41 C.F.R. 60-2.15, 41 C.F.R. 60-2.16 and C.F.R. 60-2.17 (d)

For job groups with less than reasonably expected representation of minorities or women, goals are set based on estimated availability percentages. Estimated availability analysis is a statistical method for establishing the unique percentage of minorities and women available by job group to work within your organization. At least two factors should be considered in the availability analysis:

  1. External—the percentage of minorities or women with the requisite skills in the reasonable recruitment area based on EEO Census Tabulation Data.
  2. Internal—the percentage of minorities or women among those promotable, transferable, and trainable within the organization.

Placement goals are determined by making a comparison between employment statistics from the job group analysis and availability statistics. These goals serve as objectives or targets reasonably attainable by good faith efforts and action oriented programs. 

6. Analyze Your Personnel Activity

In accordance with 41 C.F.R. 60-2.17(b)

Covered federal contractors have detailed recordkeeping obligations and must perform annual analyses of their personnel activity, including hiring, promotions, and terminations. Personnel activity data for applicants, new hires, promotions, and terminations should be summarized by job group, race, and gender, and included as a part of the AAP. To maintain affirmative action compliance, contractors are also required to analyze this data to assess adverse impact for employment decision

7. Analyze Your Individuals With Disabilities and Protected Veteran Data

In accordance with 41 C.F.R. 60-741.45 and 41 C.F.R. 60-300.45

OFCCP provides external benchmarks for employing individuals with disabilities (IWD) and protected veterans. Contractors must collect data by asking applicants and employees to self-identify if they fall into either category. The utilization goal for IWDs is currently 7%, while the VEVRAA hiring benchmark is published annually by OFCCP. 

Contractors are also required to perform Data Collection Analysis for both IWD and protected veterans.

8. Identify Your Action Oriented Programs

In accordance with 41 C.F.R. 60-2.17(d)

Action oriented programs are the programs the contractor has or will put into place to achieve progress towards placement goals during the plan year. Programs should be developed based on skills requirements and focus on the needs of the targeted population. For example, recruitment programs or sources that target female managers will generally be different than those that target minority managers. If one of your goals is to attract more female engineers, your strategy for targeting qualified female applicants might include advertising open positions at professional engineering organizations for women or at local universities with engineering programs.

Action oriented programs for IWD should include enlisting the assistance of the state’s vocational rehabilitation service agency and local disability groups, for example. Local organizations and/or community agencies known to specialize in placing and/or developing training programs for PV should also be identified.

10. Prepare Your Written Narratives

In accordance with 41 C.F.R. 60-2.17, 41 C.F.R. 60-741.44, and 41 C.F.R. 60-300.44

A technically compliant AAP is a combination of statistical analyses and written narratives specific to each of the three affirmative action plans, minorities and women, individuals with disabilities, and protected veterans. The respective regulations for each of these groups require the contractor to address specific policies, personnel selection processes, and programs for targeted outreach in each narrative. While sample OFCCP narratives are available for reference, to maintain affirmative action compliance it is important that the contractor’s narratives are customized to reflect the policies and processes actually in practice and communicated to employees and applicants.

How Do You Implement Your Affirmative Action Plan?

Getting your broader affirmative action program in place is the important first step in implementing your AAP. Understanding what your AAP says about your organization is the next step, especially if the analyses of the employment data in your AAP show significant differences in selection rates or underutilization of available and qualified members of protected groups. Contractors also have other compliance responsibilities, outside of developing a written AAP, and must undertake targeted recruiting efforts in areas with placement goals. Creating an affirmative action program, rather than just a written AAP, is the key to successful compliance with all affirmative action and nondiscrimination requirements for contractors and subcontractors. 

The written AAP is only one component of a compliant Affirmative Action Program. Program implementation will occur throughout the plan year, starting with communication of the AAP results, targeted outreach and recruitment, ongoing evaluation of personnel policies and practices, and periodic monitoring of personnel activity data. 

Communicate AAP Results

Communicate your placement goals and their importance to executives and hiring managers. Potential topics for meeting agendas include: 

  • The contractor’s EEO/AA Policy and its commitment to EEO/AA
  • Overview of affirmative action laws and regulations, new developments in affirmative action compliance
  • Contractor’s Affirmative Action Performance including:
    • Placement Goals
    • Hiring Rate of PV
    • Utilization of IWD
    • Analysis of Problem Areas
    • Action Oriented Programs

These meetings also may communicate areas of success and progress made during the plan year as well as any areas of concern or areas in need of improvement. 

Establish and Evaluate Targeted Outreach Sources

Outreach and recruitment efforts will yield a diverse pool of qualified candidates. Examine what sources will give you the best results for your time and money, then zero in on them. This is even more important if you have specialty or hard-to-fill jobs since you might have trouble finding a diverse pool of candidates for those roles. If your goal is to hire more veterans, for instance, reach out to your local VA office or veteran support organization and post open positions on job boards for veterans. 

Evaluate Employment Practices

Outdated job requirements could be preventing applicants from submitting their applications. IWDs may not apply for a position with a lifting requirement, for example. Reassess your needs. How much does the role really require heavy lifting? Are there forklifts or tools to make that component more accessible? Periodically review job requirements at your organization to ensure that they’re up-to-date and accurate.

Train Managers and Talent Acquisition Staff

Equip your hiring managers with the tools and resources they need to follow the program and accurately record the data. Educate anyone responsible for hiring on the importance of applicant disposition codes and how to record them, and ensure that employees know your policies and where to find them.

Conduct Periodic Monitoring

Affirmative action planning is a continual process throughout the plan year. The key to a successful program is to continually measure the effectiveness of your AAP. Contractors also have a regulatory requirement to implement an internal auditing system to periodically measure the effectiveness of its affirmative action program. At least semi-annually, the contractor should review progress towards placement goals for minorities and women, as well as the national utilization goal for IWD, and the annual hiring benchmark for protected veterans. 

Contractors are also required to periodically monitor personnel policies and activities related to the three affirmative action plans.

Have more questions about implementing your AAP? Our experts have answers.


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How We Can Help With Affirmative Action Compliance

Developing an affirmative action plan AAP is not an easy task and managing the broader regulatory requirements is an ongoing effort, not a once-a-year project. Contractors must adequately plan for the resources needed to prepare an affirmative action plan and monitor their efforts. 

If you are reading this and one of your many job responsibilities is to manage the AAP, you know how much work it takes to ensure everything is in order to meet OFCCP regulations. State your business case to your boss early and often to get the attention and resources you need.

Whether it’s training in affirmative action, a software solution to prepare your plan, or a consultant to design your plan—build a business case to show what’s involved in such a project and include the costs, time, and personnel resources you’ll need. 

Berkshire can help you learn about your options, which will help you communicate and build a business case for what you need to complete your AAP in the most efficient way possible.

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