Creating an Affirmative Action Plan

Purpose of Process (see below how HRSource can help):

Affirmative Action Plans are required of federal contractors and subcontractors having a contract or contracts with an executive branch agency or department exceeding $10,000 during any 12-month period. Federal contractors with 50 or more employees and at least one covered contract for $50,000 or more are also required to prepare written affirmative action plans for their establishments, which must be updated at least annually.

Affirmative action requires companies to establish female and minority hiring goals and to demonstrate that a "good faith" effort is being made to attract and retain females and minorities, especially into positions that they have not traditionally held.

Recommended Steps in the Process:

  1. Create a Title Page (see sample).

  2. Create a Table of Contents (see sample). Suggestions on what to include in each chapter appear below.

  3. Write an introductory statement providing a short overview of the company, headcount, and any significant changes in employment over the past year. Also include language that provides legal protection in the form of a Confidentiality Statement (see sample).

    Paragraphs 4 through 14 include a description of what is to be written in each chapter of the Affirmative Action Plan.

  4. Chapter 1 includes the company's policy on equal opportunity and affirmative action with regard to recruitment, hiring, training, promotions, compensation, layoffs, and other personnel transactions.

  5. Chapter 2 includes an organizational profile. An organizational profile is a depiction of the staffing pattern within the company. A detailed graphical or tabular chart, text, spreadsheet, or similar presentation of the organizational structure may be used to display the required information. For each organizational unit, the organizational display must indicate the following:
    • The name of the unit
    • The job title, gender, and minority status (if the person is a minority or not) of any unit supervisor
    • The total number of male and female incumbents
    • The total number of male and female incumbents in the minority group

    The organizational profile must include and identify 1) employees at subordinate locations who report to the establishment, and 2) employees at subordinate location whose selection was made at the location.

    Multiple locations with less than 50 employees can have a separate AAP, combine with the location with HR authority, or combine with the location to which it reports.

  6. Chapter 3 shows how similar jobs are combined into job groups. The job groups can be the EEO-1 categories for companies with less than 150 employees (see the sample EEO-1 form). Larger companies may be required to subdivide the EEO-1 categories into smaller job groups. Also see the descriptions of the EEO-1 categories.

    Jobs included in a job group must have three elements in common; i.e., similar job duties, compensation, and opportunities for advancement.

  7. Chapters 4 and 5 includes the availability analysis. Here the external availability of females and minorities for each of the job groups is determined. State and local governments provide statistical data that can be used for this analysis. Some states publish this information on the Internet (e.g. to view the statistical data for the state of California, click here). Private companies also sell this data.

    Two factors are to be considered in determining availability:
    • The percentage of minorities or women with requisite skills in the reasonable recruitment area (defined as the geographical area from which the contractor usually seeks or reasonably could seek applicants).
    • The percentage of minorities or women among those promotable, transferable, and trainable within the contractor's organization. (Trainable refers to those employees within the organization who could, with appropriate training that the company is reasonably able to provide, become promotable or transferable during the AAP year).

    Internal availability percentages can be calculated by undertaking one or both of the following steps:
    • Determine which job groups are "feeder pools" for the job group in question. (The feeder pools are job groups from which individuals are promoted)
    • Ascertain which employees could be promoted or transferred with appropriate training that the contractor is reasonably able to provide.

    Weighted average of statistics must be used when there is more than one job title in a job group and the different job titles have different availability percentages. Companies are also required to provide a documented rationale for the recruitment areas and feeder groups chosen. This is the most difficult and time consuming piece of the Affirmative Action Plan, unless you utilize a system such as HRSource.

  8. In chapter 6, the availability of women and minorities is compared with their current representation in each job group. For those job groups in which the women or minority availability is greater than their representation at the company (and is statistically significant), goals are set.

    Companies may identify under utilization using a variety of methods including:
    • The "any difference" rule
    • The "one person" rule
    • The "80 percent" rule
    • The "two standard deviations" analysis

  9. Placement goals (expressed as placement rates) are included in chapter 7. Placement (hiring, promotion, transfer, etc.) goals equals availability, as determined in the chapter 6 (see sample Goal-Setting worksheet).

  10. Chapter 8 indicates who is responsible for the equal opportunity and affirmative action programs. Specific responsibilities must be listed for the EEO administrator, Human Resources and Managers. One individual must be designated and assigned responsibility and accountability for the overall affirmative action plan. This person must have the authority and resources needed to ensure effective implementation of the AAP.
     
  11. Chapters 9 and 10 describe affirmative action oriented programs designed to eliminate problem areas and attain goals.

  12. Chapter 11 describes how the affirmative action program (employment activity) is measured and monitored and reported to managers.

  13. Chapter 12 demonstrates that the affirmative action program is being monitored, problems are being identified, and corrective actions are being implemented, as necessary. This chapter includes an analysis of applicant flow, hiring, promotions (see sample), transfers, terminations, and other employment activities

  14. Chapter 13 reinforces the company's policy against discrimination based on religion and national origin.

  15. A summary of the prior year's affirmative action plan results can be placed in the beginning of the affirmative action plan document.

  16. Separate affirmative action plans are required for 1) Individuals with Disabilities, and 2) qualified, covered Veterans ("covered veterans" include disabled veterans, veterans who served on active duty in the Armed Forces during a war or in a campaign or expedition for which a campaign badge has been authorized, veterans who, while serving on active duty in the Armed Forces, participated in a United States military operation for which an Armed Forces service medal was awarded pursuant to Executive Order No. 12985 (61 Fed. Reg. 1209), and recently separated veterans). Neither of these plans require goals or statistical analysis. Rather, they include statements of company policy and boilerplate language.

  17. Upon completion of the Affirmative Action plan, have it reviewed and approved by the President.

  18. Make the Affirmative Action plan available to employees upon request. The version the employees see should exclude all statistical analysis.

  19. Periodically review the company commitments expressed in the affirmative action plan to ensure that they are being met. This involves a detailed analysis of all employment activity (selecting applicants, hiring, promoting, and terminating), comparing the actual results with the goals. In case of an audit, document and be prepared to defend why a candidate was selected for a hire, promotion, etc., over other qualified candidates.

  20. Periodically provide a summary report to managers on the progress of the affirmative action program. Quarterly reports are more than sufficient; semi-annual is acceptable (see sample Affirmative Action Plan Briefing for Managers).

  21. Ensure that the proper notices are posted on the company bulletin boards (refer to the Posting Requirements process).

Process Tips:

The Affirmative Action Plan requires a significant amount of data tracking and analysis, making the use of a software system essential (see how HRSource can help). Consulting firms are available to write Affirmative Action Plans. 

As part of the outreach program, job openings should be posted with the local unemployment office. Certain openings, such as high level management or executive positions, can be excluded from posting. Some states host web sites onto which employers can directly post openings (e.g. in California the site is http://www.caljobs.ca.gov).

A problem may arise when an OFCCP auditor tries to perform pay analysis by salary grade in situations where the same salary grade may contain a wide array of job titles (e.g. clerical, technical, administrative, supervisory, etc.). On top of this, if the company has broad-banded its ranges (decreased the number of grades and increased the distance between the range maximum and range minimum), then almost certainly a disparity in pay will arise (due to the apples to oranges comparison).

The employer should seek to confine the OFCCP auditor to performing a job group and job title analysis and not a job grade analysis. Legal or consulting help can be useful in this situation. The OFCCP is generally not successful in bringing lawsuits based on salary grade. Tests of statistical significance can also be an effective defense.

The OFCCP uses an equal opportunity (E.O.) survey to select employers for compliance reviews. The survey asks employers for detailed information, categorized by minority status and gender, regarding:

  • The compensation and tenure of full-time employees
  • All personnel activity (applicants, hires, promotions, and terminations)
  • General facts and data about the establishment's current AAP

Employers have the option of submitting data either by job group or by EEO-1 category. However, contractors may submit E.O. Survey data by job group only under these circumstances:

  • Employers must submit both personnel activity and compensation data by job groups
  • Employers may submit E.O. Survey data by job groups only via the Internet
  • Employers must identify the EEO-1 category to which each job group belongs
  • Employers may not submit a job group that crosses EEO-1 category lines.

Locations employing fewer than 50 employees must include those employees in:

  • The AAP that covers just that establishment
  • The AAP for the location of the personnel function that supports the establishment
  • The AAP for the location of the official to whom they report

David Copus, a partner in the law firm Jones, Day, Reavis & Pogue (Washington DC) recommends the following:

  • Treat the Affirmative Action Plan as a liability document that can be used against you. Do not reveal more information than the regulations require.
  • Submitting a paper copy of the new Equal Opportunity Survey will get less government scrutiny than submitting an electronic copy
  • When comparing utilization to availability, use the "two standard deviations" method to determine under utilization. This method will produce the fewest goals.

The OFCCP defines an "Internet Applicant," as an individual who meets the following four criteria (Note that if you advertise for the open position on the Internet, then all applicants for that position fall under the "Internet Applicant" rule):

(1) The individual submits an expression of interest in employment through the Internet or related electronic data technologies;
(2) The contractor considers the individual for employment in a particular position;
(3) The individual's expression of interest indicates the individual possesses the basic objective qualifications for the position; and
(4) The individual at no point in the contractor's selection process prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position.

How HRSource Can Help:

HRSource includes the needed data tracking tools and 30 standard reports modeled after the sample Affirmative Action Plan that the government has published on it's web site. So HRSource, along the government's sample Affirmative Action Plan, are the two primary elements needed to complete the Affirmative Action Plan.

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