IN FOCUS: Affirmative Action Plans

June 1, 1999 Advisory
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  1. Who needs an affirmative action plan?
    A written affirmative action plan is required if an employer is a federal contractor or subcontractor with 50 or more employees and:

      a. has a government contract of $50,000 or more; or
      b. has government bills of lading that in any 12-month period total or can reasonably be expected to total $50,000 or more; or
      c. serves as a depository of government funds in any amount; or
      d. is a financial institution that is an issuing and paying agent for U.S. savings bonds and savings notes in any amount.

  2. What does a written plan entail?
    The first, and most detailed part of a written plan addresses women and minorities. It includes written explanations of the company's actions and good faith affirmative action efforts on their behalf, several statistical analyses, and a report on the statistical data maintained for the prior 12 months. The plan also includes less detailed discussions of the contractor's affirmative action efforts regarding the employment and advancement in employment of veterans and individuals with disabilities.

  3. What happens if a company is required to have a written plan and it does not prepare one?
    Contractors without a plan are in violation of federal law and are taking unnecessary risks. The Office of Federal Contract Compliance Programs (OFCCP) has recently begun conducting "compliance checks." Contractors are generally asked to have information ready for an on-site visit within three days of notification of the check. Unless a plan already exists, it is nearly impossible to collect the required information prior to the on-site visit. Contractors who don't have the information available for the meeting, or won't agree to meet with the OFCCP, are scheduled for a more detailed audit. A contractor generally has 30 days to submit its full plan to the OFCCP once it has been notified of an audit. The plan must analyze statistical data for a 12-month period and include an analysis of the progress the contractor has made in meeting its prior year's goals. It is difficult to both compile data and complete these analyses in a 30 day period. Missing or incomplete analyses make it obvious that the contractor has not had a plan and the result can be a very protracted and costly audit.

  4. What's the worst that can happen if a company does not have a plan?
    The government, after a lengthy, costly process, may debar the contractor (i.e. prohibit the contractor from working on federal contracts) for up to five years. Also, if the audit reveals evidence of discrimination, the government may seek injunctive relief and monetary damages on behalf of the aggrieved individuals. Minor violations, however, generally result in an employer having to provide ongoing reports to the government, usually for the next year or two.