New Affirmative Action Regulations

April 1, 2001 Advisory
The U.S. Department of Labor has issued regulations, effective December
13, 2000, addressing affirmative action requirements for federal
contractors and subcontractors (broadly referred to hereafter as
"contractors') under Executive Order 11246. The new regulations include
several significant changes that will directly affect a covered
employer's affirmative action plans. Employers are not required to make
any changes to their existing affirmative action plans. The regulatory
revisions, however, will need to be incorporated as soon as the plan is
Eight Factor Analysis Scaled Down to Two Factors The "eight factor
availability analysis," often criticized as complicated and largely
meaningless, has been reduced to a two factor analysis - external
availability and internal availability. External availability is the
percentage of minorities or women with requisite skills in the
reasonable recruitment area. The reasonable recruitment area is defined
as the geographical area from which the contractor usually seeks or
reasonably could seek workers to fill the positions in question.
Internal availability is the percentage of minorities or women among
those promotable, transferable, and trainable within the contractor's
Organizational Profile (Work Force Analysis vs. Organizational Display)
Contractors may choose between two formats for their organizational
profile. They may use either a work force analysis format (i.e. a
listing of job titles in each department or organizational unit ranked
in order from lowest paid to highest paid, including the number of
incumbents by race and gender, and including departmental supervision),
or they may prepare an "organizational display". The organizational
display is an organization chart showing each of the departments or
organizational units and their relationships to each other.
Definition of an Applicant Unfortunately for employers, the definition
of the term "applicant" remains unchanged. The OFCCP has indicated it
will continue to rely on the very broad and old standard that defines an
applicant as any person who has indicated an interest in being
considered for hiring, promotion or other employment opportunities. This
interest might be expressed by completing an application form, or might
be expressed orally, depending upon the employer's practice.
The new regulations contain a slight relaxation of the requirements for
tracking applicant data, with the OFCCP recognizing that in certain
instances it may not be possible to identify the gender and/or race of
each person. The burden, however, remains on the employer to demonstrate
that every reasonable effort was made to identify the race and gender of
Smaller Employers May Use EEO-1 Categories Employers with 50-150
employees will now be able to use the EEO-1 categories for their job
groups. They no longer have to create job groups specific to their
Functional Affirmative Action Plans Under the new regulations,
contractors may create functional affirmative action plans based on
business function or line of business rather than geographic location.
It is important to note, however, that the OFCCP must grant individual
approval for these plans. The OFCCP plans to release additional
information in the near future describing the procedures a contractor
will need to follow if it wishes to obtain OFCCP approval for a
functional plan.
EO Survey The regulations also provide for the implementation of a new
survey that requires contractors to submit information concerning the
personnel activity of their workforce, including compensation practices.
The survey is to be sent to half of all nonconstruction contractor
establishments each year. Contractors who have already been contacted
were instructed to file the response within 45 days of receipt. The
OFCCP, however, has recently extended the deadline for responding until
May 31st.
Contractors should note that the Department of Labor recently filed a
lawsuit against a contractor for failing to complete and return the
survey. The OFCCP is seeking to compel the contractor to provide the
solicited information and to bar it from any government contracts for
six months. The Department of Labor has indicated that it intends to
pursue similar actions against other contractors if they fail to return
the survey.