Affirmative Action started decades ago as a means of ensuring that businesses providing products or services to the federal government are providing employment opportunities to all individuals, regardless of race or ethnicity, gender, protected veteran, or disability status. An affirmative action plan, or AAP, is a document that certain employers must prepare annually to help them identify and remove barriers limiting the employment of people in these demographic groups.
The Office of Federal Contract Compliance Programs (OFCCP) manages the enforcement of AAPs under the umbrella of the U.S. Department of Labor. According to the DOL, 22 percent of the nation’s civilian workforce is covered by affirmative action plans.
Does Your Company Need an AAP?
If your company employs 50 or more people in the U.S. and has a contract or subcontract with the federal government valued at $50,000 or more, the answer is yes. Businesses meeting the 50-employee threshold and serving as a depository of government funds, in any amount, are also required to develop AAPs. Most banks and credit unions are covered, either as a depository or as a holder of FDIC or NCUA insurance.
There’s More than One Type of AAP?
It’s important to understand the difference between types of AAPs:
- Establishment-based AAPs are the most common. An AAP is developed for each company establishment with 50 or more employees. U.S.-based employees working at establishments with fewer than 50 employees are included in the AAP establishment where their supervisor is located or where their human resources functions are handled.
- Functional AAPs instead group employees by line of business or company function. Functional plans work well for employers with a geographically diffused workforce and for large employers who manage lines of business separately within a single establishment. The primary drawback to having functional AAPs is that they require a formal agreement with OFCCP’s national office and they require the employer to be audited by OFCCP at least once every three years.
- Construction AAPs adhere to a different set of regulations and requirements. OFCCP does not require construction contractors to develop written AAPs for women or minorities. However, they must meet established utilization goals and specified good faith steps for compliance. Written AAPs, data collection, utilization goals and hiring benchmarks are required for veterans and individuals with disabilities.
Sounds Confusing, Right?
AAP development and compliance – and integrating related best practices into your company culture – can be a challenge. It helps to work with an expert partner that specializes in affirmative action and stays constantly updated on changing developments and regulations.
HR Works has decades of experience developing AAPs, and has maintained 100 percent technical compliance in OFCCP audits. You don’t need to go it alone when it comes to affirmative action compliance. Instead, contact HR Works today. We’ll handle the AAP development requirements, so you can focus on building your business and workforce for the future.