Author: Richard Warren
Date of Publication: 19.04. 2006
Related Services: Affirmative Action Plans


OFCCP Issues New Regulations Regarding Affirmative Action Plans by Dick Warren The Office of Federal Contract Compliance (OFCCP) has issued final regulations regarding the contents of affirmative action plans for federal contractors and subcontractors. The regulations apply to all plans developed or updated on or after December 13, 2000. While the original intent of the revisions was to "streamline" the process, the revised regulations actually increase the burden on contractors.
Federal contractors or their subcontractors with 50 or more employees and contracts of $50,000 (and State of Minnesota contractors with 40 or more employees and contracts of $100,000) must prepare and implement an Affirmative Action Plan (AAP).
The most notable change in the regulations is the requirement that contractors complete a detailed equal opportunity survey report every two years (annually in Minnesota). Included in this extensive report is data regarding applicants, new hires, promotions, terminations, current workforce, tenure and compensation broken down by race, ethnicity and gender. Since the report covers only full time employees, it is different than other reports employers may be preparing such as the EEO-1. The data may be reported by EEO-1 category or AAP job group.
The OFCCP’s concern with compensation equity is also reflected by the new regulation that employers perform an in-depth analysis of their records to be certain there are no gender, race or ethnicity based disparities in pay. If disparities are found and not corrected, the employer could potentially be found liable for failure to correct the alleged pay inequities.
The Availability Analysis has also been revised from eight factors to two. The degree of complexity is, however, actually increased because employers must weigh the factors formerly used in their plans and convert them into the new format for plans they develop or update on or after 12/13/00. The regulations require calculation of availability for each job title and creation of a composite availability for each AAP job group.
The new regulations also permit employers to reconfigure their plans on a functional or business unit basis. Typically this will involve including more than one "establishment" in an AAP. The OFCCP still retains the right to audit individual establishments covered by these plans. While permitted by the regulations, these plans must be approved in advance by the OFCCP. In view of the fact that the approval process has not been defined and that individual establishments may still be audited, we recommend caution when considering functional or business unit AAPs.
We have all heard the discussion about the new "organizational profile" that employers may now use in place of the standard tabular workforce analysis to which we have become accustomed. These organizational profiles require preparation of a comprehensive organization chart in flow diagram format showing each work unit, its relationship to other work units, and a summary of race, gender and ethnicity in each unit. While the original intent was to simplify the workforce analysis, the actual impact is to make the process more complex for most employers. We recommend using the established tabular workforce analysis format.
The new regulations reduce the number of required elements in the narrative portion of the AAP from ten to four. On the surface, this would seem to reduce the paperwork burden on employers. This "streamlining" merely combines the elements from the old regulations into a new format. The OFCCP will expect to see most if not all of the "old" elements in "new" AAPs. The reference to compliance with the Sex Discrimination Guidelines has been eliminated but the OFCCP emphasizes that the obligation to comply remains. So…what has changed?

The sections that remain are the meat of the AAP including:

Establishment of responsibility for implementation of the AAP
Identification of problem areas by organization unit and job group
Development and execution of action oriented programs designed to eliminate problems and to obtain
established goals and objectives, and
Design and implementation of internal audit and reporting systems to measure effectiveness of the total
program.

The above changes would appear to simplify the paperwork burden, however, the OFCCP has made it clear that they will expect the deleted sections to be integrated into those that remain.
In summary, the content of Affirmative Action Plans are virtually unchanged and a new and complex reporting requirement has been added. We expect the end result to be an increase in the number of audits and compliance checks under the new regulations. We also expect a much greater emphasis on actual results than on the construction of the Plans.