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Affirmative Action Compliance Essential in Stimulus Era

Guest post by: Jennifer Loftus

Article Overview: Given that many companies will become federal contractors for the first time after receiving stimulus funding, it’s more important than ever to understand and comply with the current laws governing affirmative action plans.

Affirmative Action Compliance Essential in Stimulus Era

Affirmative Action Compliance Essential in Stimulus Era

(Previously submitted to the Rochester Business Journal by Candace Walters 10/22/10)

When I typed the words “job creation” in Google’s news search engine recently, more than 12,000 hits appeared. No surprise. The phrase has become all the rage, especially in context of economic stimulus efforts such as the American Recovery and Reinvestment Act of 2009. In the middle of all the rhetoric lies a very important message for recipients of stimulus money, as well as for all organizations that fall under the laws of affirmative action. It goes something like this: As folks in Washington try to fulfill its promise of “accountability,” the government is more motivated than ever to aggressively enforce affirmative action rules. This approach was made crystal clear when the Office of Federal Contract Compliance Programs, which oversees affirmative action and equal opportunity enforcement, received a 25 percent budget increase and approval to hire more than 200 additional compliance officers in fiscal 2010. Given that many companies will become federal contractors for the first time after receiving stimulus funding, it’s more important than ever to understand and comply with the current laws governing affirmative action plans.



The basics

Here are a few frequently asked questions about affirmative action plans and compliance:

Question: What is an affirmative action plan?



Answer: It is a written plan that employers doing business with the federal government, including contractors and subcontractors, must prepare each year to remain in favorable standing. The regulations governing affirmative action were established in Executive Order 11246 and are administered by the Office of Federal Contract Compliance Programs. These regulations mandate that employers take constructive steps to avoid illegal discrimination. The creation of an affirmative action plan involves analyzing a contractor’s current work force and the previous year’s employment activity (applications, hiring, promotions and terminations) to discover potential problems. If problem areas are identified, the contractor must develop programs to correct or eliminate them.

An affirmative action plan is not simply a policy on equal employment opportunity, such as is found in many employee handbooks. Rather, it is a detailed analysis of work force utilization and includes both narrative and statistical analysis. Additionally, a plan provides a commitment to eliminating discrimination against women, minorities, individuals with disabilities and covered veterans.



Question: Who needs an affirmative action plan?

Answer: A company is required to have a current plan if it has 50 or more employees and:

• It has a federal contract or subcontract worth $50,000 or more, or
• It is a financial institution that is an issuing agent for U.S. savings bonds and notes, or
• It serves as a depository of government funds in any amount.

Question: What will happen to my company if we don’t prepare an affirmative action plan?

Answer: A contractor that fails to comply with affirmative action provisions is in violation of its contract with the federal government. The Office of Federal Contract Compliance Programs conducts compliance reviews to investigate the employment practices of government contractors. If a compliance review reveals problem, and conciliation is not reached, the OFCCP may impose sanctions. This could result in fines or even in the company’s contracts being terminated or suspended, in part or in whole. The contractor may also be debarred or declared ineligible for future government contracts. Additionally, bad publicity and employee relations problems may occur.

Question: As a federal contractor, is my company required to establish quotas?

Answer: No. Quotas are not part of an affirmative action plan; in fact, they are expressly forbidden. Based on the availability of qualified individuals, contractors are required to establish goals to reduce or overcome underuse of women and minorities. These goals do not create set-asides for specific groups. In all selection decisions, equal opportunity must be granted and the most qualified candidate chosen.



Conclusion

Achieving compliance with current affirmative action regulations is a complex process that can be particularly puzzling to companies developing plans for the first time. Contractors and subcontractors must be sure they fully understand what the current law requires of them to avoid penalties. Although this takes some effort, a properly implemented affirmative action program not only fulfills an administrative requirement but can enhance a company’s workforce by promoting diversity.

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Article Tags: Affirmative Action, Stimulus



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