Frequently Asked Questions
Affirmative Action Plans
Putting together an affirmative action plan and understanding key terms and components can feel daunting. DCI has put together a list of frequently asked questions to help navigate new concepts for federal contractors and subcontractors. If you have questions or need additional help, our team is always available to assist.
General Information
How does OFCCP define the term “establishment”?
Certain organizations that are covered by the federal affirmative action regulations must prepare affirmative action plans on an annual basis. The Office of Federal Contract Compliance Programs’ (OFCCP) regulations state that federal contractors and subcontractors (contractors) must “develop and maintain a written affirmative action program for each of its establishments…” The question then arises, “How does OFCCP define the term “establishment”?
OFCCP’s formal regulations do not include the term “establishment” in the definitions sections of the regulations. However, in OFCCP’s Federal Contract Compliance Manual, OFCCP defines an establishment as:
“A facility or unit that produces goods or services, such as a factory, office store, or mine. In most instances, the unit is a physically separate facility at a single location. In appropriate circumstances, OFCCP may consider as an establishment several facilities located at two or more sites when the facilities are in the same labor market or recruiting area. The determination as to whether it is appropriate to group facilities as a single establishment will be made by OFCCP on a case-by-case basis.”
In essence, the term “establishment” means “building” or “facility.”
What should organizations consider when choosing HR systems?
The decision on which applicant tracking system (ATS) and which human resource information system (HRIS) to use can have a significant impact on your organization’s ability to evaluate personnel decisions. There are various factors that organizations should consider in choosing HR systems.
In the affirmative action realm, it is critical to be able to collect, retain, and report on data needed for affirmative action plans and other analyses required by OFCCP. Here are four key affirmative action-related questions to consider when choosing HR systems:
Can the system track and store crucial data?
- Data for an HRIS: unique identifier, race, sex, disability status, protected veteran status, pay, job title, location, history of job movements such as promotions and transfers
- Data for an ATS: unique identifier, race, sex, disability status, protected veteran status, disposition information, job title, location, requisition number, relevant dates such as date of application
Can the required data be extracted from the system?
- There should be quick and efficient access to data
- The system should ensure integrity, completeness, and consistency of the data
Can the system integrate required forms?
- For example, the system should be able to show applicants or employees OFCCP’s required self-identification form for disability status
Can the system protect data and keep it confidential?
- A system should keep protected data such as disability status sealed away from users who should not have access to this data
What is the best approach to placing employees into appropriate job groups for analyses in an AAP?
The federal affirmative action regulations require that employers covered by Executive Order 11246 group employees into appropriate job groups. A job group combines positions with “similar content, wage rates, and opportunities.”
In regard to the three factors above:
- Similarity of content refers to the duties and responsibilities of positions.
- Similarity of wage rates refers to how employees are paid in relation to others in the same and similar positions.
- Similarity of opportunities refers to “training, transfers, promotions, pay, mobility, and other career enhancement opportunities offered” by an organization.
Creating a job group structure is as much art as it is science. There is no specific way that OFCCP requires organizations to place positions into job groups other than to consider the three factors above. It is often the case that one of these factors may not be in alignment with the others, leaving employers to use their best judgment.
OFCCP’s Technical Assistance Guide (TAG) for Supply and Service Contractors provides useful guidance on the three factors noted above and how to create job groups that comply with OFCCP regulations. For example, the TAG suggests employers should use EEO-1 categories as a starting point for the creation of job groups. The TAG also suggests that employers should consider concepts such as supervisory responsibilities, function of jobs, levels within job families, and pay ranges associated with jobs. While the TAG states that employers should consider whether job groups are a sufficient size to conduct meaningful statistical analyses, there is no minimum or maximum number required for a job group.
What recordkeeping requirements are there when federal contractors use temporary agencies and executive search firms?
Federal contractors and subcontractors frequently use temporary agencies and executive search firms (third parties) to assist in finding or evaluating candidates. There are important recordkeeping requirements associated with the use of a third party.
OFCCP requires that federal contractors and subcontractors collect and retain records on candidates for open positions. Employers are allowed to use third parties such as temporary agencies and executive search firms to find and evaluate candidates. However, OFCCP’s FAQs concerning Internet Applicants make it clear that “the use of a recruiting firm…does not relieve a contractor of its recordkeeping obligations…[R]ecordkeeping obligations belong to [the] federal contractor or subcontractor.”
When using a temporary agency or executive search firm to find candidates, the federal contractor or subcontractor must have access to records concerning outreach efforts made by a third party and records concerning how candidates are evaluated. More importantly, the contractor must be able to access records on all candidates who were viable candidates for an open position, regardless of whether they were directly submitted to the federal contractor or subcontractor.
When using a temporary agency or executive search firm to evaluate candidates, the third party “stands in” for the federal contractor or subcontractor. Any recordkeeping requirements that would apply to the federal contractor or subcontractor would apply to the third party, temporary agency or executive search firm.
Recordkeeping rules are different when a federal contractor or subcontractor uses a third party to provide temporary workers who remain on the payroll of the third party. In this situation, recordkeeping obligations typically begin to apply when a federal contractor or subcontractor considers temporary workers for conversion to its regular workforce.
A best practice is to have a contract with temporary agencies and executive search firms that makes the recordkeeping requirements of the federal contractor or subcontractor clear. OFCCP expects that contractors can always produce required records. Thus, third parties should be required by contract to collect and retain records on behalf of the federal contractor or subcontractor.
Employee Information
Are federal contractors and subcontractors required to include interns and temporary employees in affirmative action plans?
Federal contractors and subcontractors routinely ask whether they are required to include interns and temporary employees in their affirmative action plans (AAPs). OFCCP has produced no specific guidance regarding interns. The closest OFCCP has come to providing guidance is on student workers at universities. OFCCP has stated that it “will not cite contractors for excluding student workers from AAPs or personnel activity data submitted to OFCCP during a compliance review.”
Many organizations choose to exclude interns from affirmative action plans because of their tenuous connection to the organization. If interns are included in EEO-1 reports, are paid through the employer’s traditional payroll system, or are a large recruiting pool for permanent/entry-level positions, federal contractors and subcontractors should consider including interns in statistical reporting. When interns are included in affirmative action plans, one option would be to place interns in their own job groups so that they do not affect analyses for regular, ongoing employees.
OFCCP has provided some limited guidance on temporary employees. In its regulations for protected veterans, the agency defines the positions that must be listed with the state employment service. These positions include positions that will be “full-time employment, temporary employment of more than three days’ duration, and part-time employment.” While there is no additional firm guidance about temporary employees, this provision suggests that temporary employees should be included in affirmative plans and all statistical reporting.
Regarding temporary employees, employers should distinguish between temporary employees who are on an employer’s direct payroll and temporary employees who are paid through an agency. Temporary employees who are paid through an agency should typically NOT be included in the employer’s affirmative action plan. These workers are employees of another organization. Note that federal contractors and subcontractors may have some co-employment responsibilities for temporary workers who are not on their payrolls. There may also be some reporting requirements if temporary workers are converted from agency status to an employer’s payroll.
How can we increase the self-identification rates for individuals with disabilities and protected veterans?
OFCCP's regulations require federal contractors and subcontractors to provide applicants and employees with opportunities to self-identify their status as an individual with a disability or a protected veteran. However, low self-identification rates by applicants and employees are a common problem for employers. Below are ideas on how to increase the self-identification rates for individuals with disabilities and protected veterans.
- Solicit information as early as possible in the application process
- Ensure that new employees are provided with an opportunity to self-identify during or before employee orientation
- Communicate the importance of self-identification to employees
- Hold a self-identification campaign and promote the value of self-identification during the campaign
- Be transparent on how and why self-identification forms are being used
- Ensure that all information on disability and veteran status is kept confidential and communicate this fact to applicants and employees
- Provide employee-friendly methods of updating self-identification information in your HR information system
- Create a culture that promotes the value of individuals with disabilities and protected veterans
- Implement employee resource groups for individuals with disabilities and protected veterans
- Highlight programs related to disability and veteran inclusion and your organization’s affirmative action plans
Recognize that it may take time to increase rates of self-identification for individuals with disabilities and protected veterans. Give the ideas above time to work and consider new programs if the ideas above do not fit your organization.
What if employees do not want to provide race or sex information?
Federal contractors and subcontractors are required to gather race, ethnicity, and sex information from all employees. This information is used in multiple reports in affirmative action plans and in other required reporting such as EEO-1 Reports. However, contractors often encounter situations where employees do not want to provide race or sex information.
Information on race and sex is typically collected through a voluntary self-identification process. Some HR information systems allow employees to change their race and gender information at any time. Employers with such a system may want to encourage employees to update their race and gender information.
When employees fail to provide race or sex information through self-identification, employers are allowed to use other methods to gather this information. Employers may use visual observation or review post-employment records for these purposes. However, federal contractors should NOT use other methods to override information provided through self-identification when race or sex information is provided.
How should remote workers be placed in affirmative action plans?
Between the expansion of technology and the COVID-19 pandemic, many organizations have a significant number of employees who work from home or another remote location. Federal contractors and subcontractors that must prepare affirmative action plans (AAPs) are required to include all employees in AAPs. This means that federal contractors and subcontractors must consider how remote workers should be placed in affirmative action plans.
OFCCP’s regulations under Executive Order 11246 do not explicitly discuss remote workers. However, these regulations provide three options for situations where an employee is not included in an AAP for his or her physical location:
- The employee can be included in the AAP for the manager to whom the employee reports.
- The employee can be included in the AAP that covers the location of the HR team that supports the employee.
- The employee can be included in the AAP where selection decisions regarding that employee are made.
OFCCP has a series of frequently asked questions that provide additional insight into how remote workers can be placed in AAPs. For example, one of these FAQs makes it clear that organizations should avoid placing all remote workers in an AAP that includes only remote workers.
After Submitting
If my organization is not in compliance with OFCCP’s regulations, will we be fined?
A common concern in the affirmative action realm is that an organization that is not in compliance with OFCCP’s regulations may be fined. OFCCP has no authority under its regulations to issue a fine like other agencies within the Department of Labor such as the Occupational Safety and Health Administration or the Wage and Hour Division that can assess fines during enforcement proceedings.
However, OFCCP compliance reviews may result in monetary and non-monetary consequences for an organization. Where there is alleged discrimination, enforcement proceedings may result in significant monetary settlements to rectify alleged discrimination. In this instance, the agency is not issuing a fine. It is acting to place alleged victims of discrimination in the position they would have been absent the discriminatory actions.
Additionally, OFCCP has the right to take non-monetary action against federal contractors and subcontractors for non-compliance. The agency’s Federal Contract Compliance Manual has an entire chapter devoted to “Resolution of Noncompliance.” The kind of action OFCCP will take depends on the nature and severity of the non-compliance, including:
- When OFCCP finds minor technical issues that can be easily resolved, the agency may allow the employer to correct the issue during the course of a compliance review.
- When OFCCP finds major technical issues, where an organization is not complying with the agency’s regulations in some significant way, the agency will issue a Conciliation Agreement (CA) requiring the organization to fix the relevant problem.
- When OFCCP finds potential discrimination, the agency will issue a Notice of Violation (NOV) that describes the alleged discrimination and provides corrective actions. This may include back pay and other forms of monetary and non-monetary relief.
- When an organization refuses to comply with OFCCP’s regulations, the agency may recommend the suspension or cancellation of current or future federal contracts and subcontracts.
In recent years, OFCCP has published CAs on its website, resulting in potential public relations issues, as well.
What obligations do federal contractors and subcontractors have once the affirmative action plans are done?
After the affirmative action programs (or plans) are done, it is important to implement the AAPs. Federal contractors and subcontractors should know that they have responsibilities beyond preparing AAPs.
Identify Priorities
Using the AAP results as a diagnostic tool, contractors should look for trends and identify priorities and consider the following items:
- Are there recurring placement goals year-over-year?
- Compare the total number of placement goals for this year with placement goals from prior years
- Are there significant problems identified in the data?
- Find job groups and/or locations with consistent goals or goals showing high levels of statistical significance
- Find job groups that have 0% representation for any protected class
- Find personnel activity for job groups, job titles, and/or locations that have statistically significant disparities
- Are there explanations for why goals or statistical disparities exist?
- Determine your organization’s biggest risk areas and which areas have the greatest possibility for change
- Determine whether statistical data actually provides a true picture of what is occurring
- Have actions been taken for all classes covered by OFCCP regulations?
- Make outreach efforts to recruit and retain individuals with disabilities and protected veterans
- Evaluate outreach efforts for all protected classes, especially individuals with disabilities and protected veterans
Take Action
Once issues are identified, take action to correct potential problems and fully implement your affirmative action plans:
- Actions to take to increase employment of minorities, females, individuals with disabilities, and protected veterans
- Make targeted outreach and recruitment efforts
- Place job postings on sites and in ads that may attract diverse populations
- Attend career fairs
- Develop advocacy groups
- Develop relationships with secondary schools and higher education programs that can provide candidates from diverse populations
- Make calls and visit agencies that work with diverse populations
- Conduct mock interviews for persons who are unemployed or at schools with a significant enrollment of diverse populations
- Actions to take when statistical disparities exist
- Review data for accuracy
- Determine whether the selection processes for the group(s) in question are appropriate for the relevant job(s)
- When tests are used, ensure they are validated for your company and location
- Conduct an analysis to identify specific steps in the selection process that may be causing a disparity
- If disparities exist involving promotions, review policies for career progression and competitive promotions
- If disparities exist regarding turnover, know why this turnover is occurring and whether employees are leaving voluntarily or involuntarily
- Actions to take to increase internal awareness of affirmative action obligations
- Engage in holistic review practices to identify relationships between attraction, selection, and retention
- Identify potential trends in the workforce
- Understand where opportunities exist now and where they may exist in the future
- Tie metrics to current initiatives and programs
- Engage with diversity and inclusion teams
