What is an affirmative action plan? An Employer’s Guide To Compliance

As a federal contractor or subcontractor, you know you’re subject to some additional rules and need to take extra steps to keep your workplace compliant. One of the things you need to do is have an affirmative action plan to ensure equal employment opportunities. Just what is a plan and what do you need to do to meet the requirements? Let’s find out.

In this article, we’ll explain what an affirmative action plan is, when one is required, and tips on how to create a plan for your organization. After reading this, you’ll know if you’re subject to the affirmative action plan requirements and how to best follow them.

What is an affirmative action plan?

An affirmative action plan, or AAP, is a written program that details the steps an employer has taken and will take to ensure equal employment opportunities in terms of recruitment and selection, advancement, and other privileges, without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin. It should not only outline how an organization will consistently promote affirmative action through its policies and programs but also how it will track specific affirmative action metrics.

While required by federal contractors and subcontractors to provide more opportunities for underemployed populations and help eliminate discrimination, even some organizations that are not required to have an affirmative action plan choose to have strong diversity equity and inclusion (DEI) programs to promote greater equality in the workplace. For the purposes of this article, we’ll focus on required versus voluntary plans.

When is an affirmative action plan required?

An affirmative action plan is required by contractors that have at least 50 employees and at least 1 contract valued at the jurisdictional threshold amounts as follows:

• Executive Order 11246: A contract of $50,000 or more. This order applies to non-construction (supply and service) contractors and prohibits federal contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.
• Section 503 of the Rehabilitation Act of 1973, as amended (Section 503): A contract of $50,000 or more. This clause, which applies to both construction and non-construction contractors, prohibits discrimination against individuals with disabilities and requires contractors and subcontractors to take affirmative action to employ and advance in employment qualified individuals with disabilities.
• Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA): A contract of $150,000 or more. This regulation covers construction and non-construction contractors and is intended to prohibit discrimination against protected veterans.

It’s important to note that section 503 and VEVRAA don’t apply to federally-assisted construction contractors and subcontractors; however, they do apply to direct federal construction contractors and subcontractors.

What affirmative action employer requirements are there?

If you are a covered employer, you’ll need to take several steps to stay in compliance with affirmative action plan requirements.

1. Write and maintain an AAP. You’ll need to develop a written AAP within 120 days of entering a federal contract or subcontract. The Department of Labor (DOL) offers sample AAPs but they should be customized to reflect your organizational structure, policies, practices, programs, and data.
2. Analyze data and develop action plans for underutilization. Companies must review the number and percentages of minorities and women each year compared to the relevant labor pool, identify problem areas, and establish action-oriented goals to address any underutilization.
3. Review your plan obligations at least once a year with supervisory personnel and employees responsible for hiring, termination, and other employment-related decisions before work begins on job sites.
4. Register and certify that you are developing and maintaining annual affirmative action plans in a contractor portal. AAP reporting requirements state that you must complete this certification for each establishment or functional/business unit annually. If you certify that you don’t have a plan or don’t complete the certification at all, it may increase the likelihood of an OFCCP audit.

The Office of Federal Contract Compliance Programs (OFCCP) is responsible for ensuring compliance with affirmative action requirements, and may conduct audits or on-site inspections, where they request your affirmative action plan and supporting data. Penalties for failing to meet your federal contractor requirements can include both monetary penalties as well as being barred from future government contract work.

How do you write an affirmative action plan?

The requirements for your AAP will differ based on the governing law that covers your business, with some common elements between them.

• Executive Order 11246: You’ll want to include:
• Your organizational structure that lists the gender, race, and ethnicity of the supervisor, and breakdown of employees who are male and female, and number of minority workers.
• How you’ll categorize opportunities within job groups for the purposes of comparing the representation of women and minorities in your business with those in the relevant labor pool.
• The availability of women and minorities with the required skills for the job pool in the local area and within your organization to determine if there are barriers within certain job groups.
• Placement goals that you can reasonably attain.
• Who will be assigned to implement the affirmative action plan.
• The process of identifying underutilization of minorities or women in the organization and that you’ll develop programs to correct any problem areas.
• Your system for conducting internal audits and reviewing the results.
• Section 503: For the plans required to prevent discrimination against individuals with disabilities, your plan should include:
• A statement posted that states employees and applicants won’t be subject to harassment or discrimination if they file a claim related to equal opportunity for individuals with disabilities.
• Your processes for carefully considering the job qualifications of applicants and employees with disabilities.
• Establishing mental and physical job qualifications that don’t discriminately screen out qualified individuals with disabilities.
• Your process for requesting and making reasonable accommodations.
• The procedures to ensure individuals with disabilities are not harassed on the basis of their disability.
• Outreach and recruitment efforts you’ll take to recruit qualified individuals with disabilities.
• Your reporting system to measure the effectiveness of your AAP and the need for remedial action.
• Who is responsible for implementing the plan.
• Your training plan for personnel involved with recruiting, screening, promotion, and disciplinary processes.
• Recordkeeping procedures to ensure you document those employees who have voluntarily self-identified as individuals with disabilities.
• VEVRAA: To ensure equal opportunities for protected veterans, your plan should include:
• A posted policy statement that you will hire and promote individuals without regard to protected veteran status.
• That you’ll ensure your company processes don’t stereotype protected veterans in a way that limits their access to jobs for which they’re qualified.
• How you’ll review the mental and physical job qualification standards to ensure they don’t discriminately screen out qualified disabled veterans.
• That you’ll make reasonable accommodations for physical or mental limitations of otherwise qualified veterans.
• The procedures to ensure individuals are not harassed on the basis of their protected veteran status.
• Outreach and recruitment efforts you’ll take to recruit qualified protected veterans.
• Your process for providing your AAP policy in your employee handbook and to union officials if you are subject to a collective bargaining agreement.
• How you’ll develop an audit system to ensure the effectiveness of your affirmative action plan and determine if you need to take remedial action.
• The individual you are designating to implement the AAP.
• Your training plan for personnel involved with recruiting, screening, promotion, and disciplinary processes.
• Recordkeeping procedures to ensure you document those employees who have voluntarily self-identified as protected veterans.

It’s important to note that any of the required plans should be updated annually based on the data from the previous year and include steps the company will take the next year. For example, if you’re subject to Executive Order 11246, and your company had fewer female applicants than available in the general labor pool, you may need to outline how you will try to increase your pool of candidates. As a result, you’ll need to review the data each year when updating your plan.

Ensure AAP Compliance With The Right Partner

As you can see, requirements for AAPs can be complex, and compliance is essential to avoiding potential penalties. If you don’t have the expertise in-house to implement an AAP and actively manage it, you may want to seek the help of an outsourced HR provider. If you decide to go this route, learn about Complete Payroll Solutions’ HR outsourcing solutions to see if we may be a good fit to help your organization maintain affirmative action plan compliance.