EEO Affirmative Action

Q and A; Equal Employment Opportunity and Affirmative Action Programs

As a condition of doing business with the federal government, federal contractors meeting certain contract and employee population levels agree to prepare, in accordance with federal regulations at 41 CFR 60-1, 60-2, etc., an Affirmative Action Program (AAP). A contractor's AAP is a combination of numerical reports, commitments of action and description of policies. A quick overview of an AAP based on the federal regulations (41 CFR 60-2.10) are as follows:

An affirmative action program is a management tool designed to ensure equal employment opportunity

Affirmative action programs contain a diagnostic component, which includes a number of quantitative analyses designed to evaluate the composition of the workforce of the contractor and compare it to the composition of the relevant labor pools.

Affirmative action programs also include action-oriented programs. If women and minorities are not being employed at a rate to be expected given their availability in the relevant labor pool, the contractor's affirmative action program includes specific practical steps designed to address this underutilization.

Effective affirmative action programs also include internal auditing and reporting systems as a means of measuring the contractor's progress toward achieving the workforce that would be expected in the absence of discrimination.

An affirmative action program includes those policies, practices, and procedures that the contractor implements to ensure that all qualified applicants and employees are receiving an equal opportunity for recruitment, selection, advancement, and every other term and privilege associated with employment.

AAPs must be developed for:

Minorities and women (41 CFR 60-1 and 60-2)

Special disabled veterans, Vietnam era veterans, and other covered veterans (41 CFR 60-250)

Individuals with disabilities (41 CFR 60-741)

Who is required to prepare a written AAP?
Government, non-construction, contractors must develop and maintain AAPs for all establishments if it has 50 or more employees (total work force) and

Has a contract of at least $50,000 or more; or,

Has Government bills of lading which in any 12-month period, total or can reasonably be expected to total $50,000 or more; or,

Serves as a depository of Government funds in any amount; or,

Is a financial institution, which is an issuing and paying agent for U.S. Savings bonds and savings notes in any amount.

(Per 41 CFR 60-1.40)

This definition of a contractor, for example, would include defense contractors, companies leasing buildings to the government, banks, hospitals/medical centers, and colleges and universities.

Subcontractors are also responsible for complying if they meet similar requirements as described above.

Mandatory - For federal government contractors, this is a condition of doing business with the federal government.

Voluntary - Organizations for internal, political or other reasons decide to write an AAP.

What are the regulations governing an AAP?
Executive Order 11246 was signed by President Lyndon B. Johnson in 1964 and forms the basis, as amended, for the regulations governing the preparation of the AAP. The AAP regulations appear in 41 CFR 60-1, 60-2, 60-3, etc. Most recently 60-1 and 60-2 were revised in 2000. These regulations provide very broad guidance and leave much to be interpreted by the enforcement agency and contractors.

The enforcement agency, the Office of Federal Contract Compliance Programs (OFCCP), has issued a Compliance Manual for use by their staff. It interprets the regulations but is not considered, especially by those outside the agency, as authoritative.

Who is charged with enforcement and how do they accomplish this?
The Office of Federal Contract Compliance Programs (OFCCP), an agency under the Employment Standards Administration at the U.S. Department of Labor, is primarily responsible for conducting compliance evaluations of contractors' AAPs.

The OFCCP has approximately 50 local offices, known as District or Area offices, under the direction of six regional offices throughout the country. Personnel in these offices, usually compliance officers, are responsible for conducting compliance evaluations. Although each government contractor is obligated to prepare and update their AAP annually, they do not submit the AAP to the government. Instead, the OFCCP selects contractors for a compliance evaluation (much like the Internal Revenue Service auditing taxpayer's income tax returns) and sends them a letter informing the contractor they have been selected.

The thirty-day letter requests a copy of the written AAP and other data. This is reviewed at the OFCCP office as part of a desk audit and is then followed by an on-site review at the contractor's facility. There are also other types of evaluations which can be used by the OFFCP to review contractor compliance with the AAP regulations.

The OFCCP conducted 4,162 compliance evaluations during Fiscal Year 2000, with over half cited for violations, and an additional 2,150 compliance checks were conducted in the same period.

Contractors are also required on an annual basis to file EEO-1 and VETS-100 reports. In addition at least once every two years contractors will receive and must complete the Equal Opportunity (EO) Survey. These mandatory filings are used in the OFCCP's review and enforcement process.

What is included in an AAP?
Per the AAP regulations at 41 CFR 60-2.10 (b), "an affirmative action program must include...quantitative analyses...and...components described in 60-2.17."

This translates to:

Quantitative reports such as Organizational Profile, Job Group Analysis, Availability Analysis, Incumbency v. Estimated Availability Analysis, and Goals, which are based on the employer's workforce as of a particular date (the snapshot date)

Written narrative detailing designation of responsibility for implementation of AAP, identification of problem areas, action-oriented programs, and periodic internal audits as required under the latest regulations.

While not part of the AAP, other data such as applicant flow must be collected and submitted to the OFCCP as part of a compliance evaluation.

What are the minimal data required to prepare an AAP?

Internal to the contractor's organization:

Employees in the contractor's workforce (as of the AAP date):

Name

Job title

Department

Compensation, such as wage rate or grade

Race

Gender

EEO-1 category

External to the contractor's organization:

1990 Census data that provides data on availability of minorities and women from specific geographic areas such as a county, metropolitan area, state, or the United States. These data are presented by race/ethnicity, gender and occupation for a given geographic area.

Data on recent graduates such as Integrated Post-secondary Education Data System (IPEDS) or the National Research Council's survey on recent Ph. D. graduates.

Deciding how to set up your AAPs
The current regulations require a separate AAP for establishments with at least 50 employees (similar to EEO-1 reports) with certain exceptions.

All employees must be covered in an AAP:

Even those in locations with less than 50 employees

Even those in divisions or subsidiaries without government contracts

Functional AAPs are allowed but require OFCCP approval. OFCCP still reserves the right to conduct their compliance evaluation at the sub-unit level for functional AAPs.

Who is included in each AAP?
Per the regulations at 41 CFR 60-2.1(d), employees are to be included in the AAP at which they physically work except:

Employees who work at an establishment other than that of the manager to whom they report, must be included in the AAP of their manager

Employees who work at an establishment where the contractor employs fewer than 50 employees, may be included under any of the following three options:

AAP that covers just that establishment

AAP that covers the location of the personnel function which supports the establishment

AAP that covers the location of the official to whom the employee reports

Employees for whom selection decisions are made at a higher level establishment must be included in the AAP where the selection decision is made (old corporate initiative)

Annotation Requirement
If employees are not included in their work location AAP because of the company's requirements and/or choices made in 60-2.1 (d) (1) to (3), the contractor is required per 60-2.1 (e) to annotate both the Organizational Profile and Job Group Analysis.

For an AAP at which the employee works but is to be excluded, make annotations to indicate in which AAP the employee is included.

For an AAP in which the employee is included which is different than where the employee works, make annotations to indicate the employee's original work location AAP.

Annotation requirements can be confusing and time consuming for contractors.

What are the statistical reports in an AAP?

Organizational Display

Work Force Analysis

Job Group Analysis

Availability Analysis

Incumbency v. Estimated Availability Analysis (including Goals)

The Organizational Display (41 CFR 60-2.11 (b))

Detailed graphical or tabular chart, text, spreadsheet, or similar presentation of contractor's organizational structure

Must include name of organizational units; job title, gender, race, and ethnicity of each organizational unit supervisor; the total number of male and female incumbents; the total number of male and female incumbents in each minority group

Required part of an AAP as alternative to the Work Force Analysis.

The Work Force Analysis (41 CFR 60-2.11 (c))

Aggregates employees by department and job title (no individual employees are listed on this report).

Calculates race and gender counts by job title within each department (how many white males, white females, black males, etc.).

Orders job titles within department by compensation from lowest to highest.

Required part of an AAP if you are not preparing the Organizational Display.

The Job Group Analysis (41 CFR 60-2.12 and 60-2.13)

Aggregates employees by job group and job title (no individual employees are listed on this report).

Job groups are sets of job titles that share similar content, wage rates and opportunities.
An example of job groups in an organization is:

Executives

Managers

Computer Professionals

Financial Professionals

Secretaries and Typists

Clerical ad Administrative Support

Maintenance Workers

Calculates race and gender counts by job title within each job group (how many females, minorities, blacks, etc.).

Orders job titles within job group by compensation from lowest to highest.

Must state the percentage of women and minorities in each job group.

When forming job groups you should consider separating job titles by:

Exempt/non-exempt status

Technical/non-technical skills

Bargaining/non-bargaining unit

The Availability Analysis (41 CFR 60-2.14)
The AAP regulations require contractors to estimate the availability of women and minorities. In an Availability Analysis, you identify the various labor pools from which the contractor selects employees that move into each of its job groups. The contractor also estimates the proportion of females and minorities in each pool. The AAP regulations identify two standard pools from which employees are selected:

Factor                        Description                        Internal/External     Data Source
     1         Percentage of minorities and women       External            1990 Census 
                among those having requisite skills in                                  EEO File
                the reasonable recruiting area

     2         Percentage of minorities and females       Internal             Contractor's
                among those promotable, transferable,                           work force data
                or trainable in the contractor's
                organization

Value Weights
After calculating the availability for each factor, the next step is to assign value weights indicating the extent to which the job group draws employees from each factor, or, alternatively, the extent to which each factor contributes employees to the job group.

A value weight is a percentage representing the relative number of people your facility draws from each factor in staffing its job groups. The weights ensure that the Availability Analysis accurately reflects your facility's selection patterns.

Value weights applied in the Availability Analysis:

Indicate how important each factor is and to what degree

Must total to 100% for each job group

Can be different for each job group

Typically are 100% in the external factor (Factor 1) for entry level job groups

Should not be confused with component weights used within the factors

The Incumbency v. Estimated Availability Analysis (41 CFR 60-2.15)
For each job group:

Compare representation of minorities and females in contractor's work force to the availability estimate calculated in the Availability Analysis.

If the work force representation is less than availability, the contractor needs to determine whether the percentage of minorities or women is less than would reasonably be expected.

To determine whether the percentage of minorities or women is less than would reasonably be expected, the contractor can select from among several different rules. Over the years, a number of mathematical rules (calculations) have been developed by the OFCCP and the contractor community to measure the differences between incumbency and availability. These are:

Any Difference Rule

80% Rule

Standard Deviation Rule (either Two or Three)

Exact Binomial Rule

Placement Goals (41 CFR 60-2.16)
If the percentage of minorities or women is less than would reasonably be expected, the contractor must establish a goal. The goal, which is equal to the availability percentage calculated in the Availability Analysis, would be to fill, for example, 12.1 % of openings in a job group with minorities or women (wherever the percentage of minorities or women is less than would be reasonably expected). In the regulations, contractors are reminded that:

Goals are for the AAP year and set for each applicable job group

Placement goals may not be rigid and inflexible quotas

Placement goals are set using percentage availability of females/minorities as calculated in the Availability Analysis

A single goal is established for total minorities (with minor exceptions)

Placement goals do not constitute a finding nor admission of discrimination

Placement goals may not be used to supersede merit selection principles (persons who lack qualifications are not required to be selected…)

Progress toward goals
For job groups where goals have been established, the contractor should monitor progress, during the current AAP year, made towards goals.

Count the number of hires and promotions/transfers into the job group, and calculate the percent female/minority (for example, 15 hires and promotions, of whom 5 were females = 33.3%)

Compare the actual percentage (33.3%) to the goal (23%)

If the actual percentage is greater than the goal, then the goal was met.