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Ross Runkel |
OFCCP
Issues Final Rules On AAP Format
by
Karen Davis
Bio email
TOC
Management Services
The
Office of Federal Contract Compliance Programs (OFCCP) has issued final
rules approving the Equal Opportunity (EO) Survey, and revising the format
of affirmative action plans for companies with federal contracts
(11/13/2000 Federal Register). The changes, which apply to affirmative
action plans under Executive Order 11246, are effective Dec. 13, 2000.
The
agency plans to send the mandatory EO Surveys to at least half of all
non-construction federal contractors each year (so employers can expect to
complete the survey at least every other year). The survey asks for data
on personnel activities and compensation, sorted by race and gender. In
limited circumstances, the agency will allow contractors to submit data by
job groups instead of by EEO Categories. The agency is still considering
how best to schedule the surveys, and how much time to allow employers to
complete them (30 days was the time limit on the 7,000 surveys sent in
April).
The
final rules streamline the required contents of affirmative action plans,
while emphasizing the importance of internal analysis and action-oriented
programs. For example, the agency reduced the eight-factor utilization
analysis down to the two most important factors. When calculating the
availability of minorities and women in each job group, employers now only
need to consider:
-
"The
percentage of minorities or women with requisite skills in the
reasonable recruitment area" and
-
"The
percentage of minorities or women among those promotable,
transferable, and trainable within the contractor's
organization."
For
each job group, a company must identify the reasonable recruitment area
and the pool of promotable, transferable, and trainable employees, and
provide a brief explanation of the company's rationale. When computing the
availability of minorities and women in a job group, the agency will
require a composite (weighted) calculation if the job group contains
different job titles with different rates of availability. The agency will
continue to allow a variety of methods for declaring "underutilization"
in a job group, including:
1.
The "any difference" rule (underutilization exists if there is
any difference between the availability of women or minorities, compared
to their percentages in the employer's actual workforce).
2.
The "one person" rule (underutilization exists if the
difference between availability and actual employment equals one person
or more).
3.
The "four-fifths" rule (underutilization exists if the actual
employment of women or minorities is less than four-fifths of their
availability).
4.
A "two standard deviations" analysis (underutilization exists
if the difference between availability and actual employment exceeds two
standard deviations, a common measure of statistical significance).
To
show the distribution of minority and female employees, a company now has
two options for its "organizational profile." One option is the
traditional workforce analysis, which lists job titles within
organizational units (e.g., departments), ranked from lowest paid to
highest paid, showing the total number of employees by race and gender in
each job title. The second option is an "organizational
display," a graphical or tabular chart that describes the company's
structure. For each organizational unit, the display must show the name of
the unit, the job title, gender, and race of the unit supervisor (if
applicable), the total number of men and women, and the total number of
male and female employees in each of the five racial categories. The
agency originally proposed to require everyone to switch to the
organizational display, but many companies responded that it would be too
much work.
The
new rules formalize the OFCCP's process of conducting corporate management
(glass ceiling) reviews. The rules now allow the agency to expand the
scope of the review beyond a company's headquarters if it believes the
company has affirmative action problems at other facilities.
For
multi-location employers, the rules also clarify which employees to
include in which affirmative action plans (AAPs). In general, the company
must include employees in the AAP for the facility where the employees
work. If an employee's manager works at a different location from the
employee, or if selection decisions are made at a higher-level
establishment, then the employee must be included in the AAP where the
manager works or the selection decision is made. If fewer than 50
employees work at a particular location, the contractor has three options:
-
Create
an AAP for that location.
-
Include
the employees in the AAP that covers the human resources department.
-
Include
the employees in the AAP that covers the person to whom the location
reports.
Multi-location
companies, therefore, sometimes include an employee in an AAP covering a
location that is different from the place where the person actually works.
When this happens, the employer must annotate the organizational profile
and the job group analysis both in the employee's AAP, and (if applicable)
in the AAP for the location where the person works. As an alternative to
organizing AAPs by physical facility, companies may seek approval from the
OFCCP to establish AAPs along functional or business units.
Other
highlights of the new rules include the following:
-
For
any given employment record, the company must be able to identify the
gender, race and ethnicity of each employee and (if possible) each
applicant. (Note: this
provision does NOT require the company to actually mark the records
with gender and racial data, which could cause serious discrimination
problems.)
-
Companies
with fewer than 150 employees may use the nine EEO Categories as job
groups.
-
In
general, it is acceptable for employers to calculate the availability
of all minorities together in a job group.
If a substantial disparity occurs, however, the agency may
require an employer to set goals for specific racial groups, or even a
particular gender within a racial group.
-
The
OFCCP plans to coordinate with the Equal Employment Opportunity
Commission before issuing guidance on tracking multi-racial
categories, or tracking race separately from ethnicity.
-
Affirmative
Action Plans with plan dates that start on Dec. 13, 2000 or later must
utilize the new format.