Affirmative action program compliance



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AFFIRMATIVE ACTION PROGRAM COMPLIANCE

Cornelia Gamlem, SPHR



President, GEMS Group ltd.
Background. Companies that receive contracts or subcontracts from the federal government are subject to an equal opportunity clause that makes equal employment opportunity and affirmative action integral elements of the contractor’s agreement with the government. Contractors are required to develop affirmative action programs to comply with the regulations that support three separate federal laws. All three of these laws prohibit employment discrimination and require contractors to exercise good faith efforts so that certain protected classes have the opportunity to be hired and advance in employment. Together these laws are known as the Federal Contract Compliance Program (Program). Executive Order 11246 prohibits discrimination on the basis of race, color, religion, sex, or national origin. The Rehabilitation Act of 1973 prohibits discrimination on the basis of disability and the Vietnam Era Veterans Readjustment Assistance Act of 1974 (VEVRAA) prohibits discrimination against certain classes of veterans.
Requirements. The Program has three requirements. First, it prohibits discrimination against anyone on the basis of race, color, religion, sex, national origin, disability or veteran status. Second, it requires contractors to engage in specific activities to ensure that employees and applicants are treated without regard to their race, color, religion, sex, national origin, disability or veteran status. Both requirements are applicable during the hiring process as well as during the employment relationship. Third, it requires a formal documented plan (affirmative action plan) be developed and updated annually for each of the contractor’s establishments. Accompanying each of these laws is a specific set of regulations that describe the required components of affirmative action programs. These regulations are codified in the federal regulations and are legally binding.
An affirmative action plan document (AAP) describes a company’s programs, policies and practices designed to assure that all individuals have equal opportunities in all employment decisions and practices. It also contains the results of several statistical analyses of the company’s workforce and employment practices for the prior year. The purpose of these analyses is to identify areas of a workforce where qualified members of protected groups are not fully represented, as well as possible discriminatory practices. An AAP also describes corrective action to be taken when deficiencies are found. It is a temporary document that must be updated each year.
Enforcement Authority. Failure to comply with the non-discrimination or affirmative action provisions in a contract is essentially a violation of the contract. The Department of Labor’s Office of Federal Contract Compliance Program (OFCCP) is the agency with authority to enforce these laws by auditing or evaluating a company’s AAP and employment practices. OFCCP requires a contractor, as a condition of having a federal contract, to engage in a self-analysis for the purpose of discovering any barriers to equal employment opportunity. No other Government agency conducts comparable systemic reviews of employers’ employment practices to ferret out discrimination.
Enforcement Process and Outcomes. The OFCCP has the authority to conduct compliance evaluations, which may consist of one or a combination of the following investigative procedures: a compliance review; an off-site review of records; a compliance check and a focused review. These evaluations are scheduled on a routine basis. Any company that does business with the government can expect to be audited – eventually, all contractors will be audited.
If as the result of a compliance evaluation, the OFCCP finds that a company is not in compliance it will issue a Notice of Violation and attempt voluntary settlement through a Conciliation Agreement. If a voluntary settlement cannot be reached, the agency can move to impose sanctions and penalties and the contractor runs the risk of having its contracts canceled, terminated, or suspended in whole or in part, and the may be debarred, i.e., declared ineligible for future government contracts, after an evidentiary hearing is held.
Conciliation agreements require companies to adhere to specific actions as determined by the OFCCP any violations and to submit additional reports directly to the Department of Labor, usually on a quarterly basis. These reports are generally required to be submitted for two years.

THE BUSINESS CASE FOR AFFIRMATIVE ACTION



Making the Investment. In determining whether you should commit the resources to develop an affirmative action program and write an affirmative action plan, executives need to first determine what percentage of their business comes from federal government contracts. Then, they need to assess whether it’s worth the risk of losing that business by failing to adequately comply with their contractual obligations with the government.
When a company is selected for a compliance evaluation, it has 30 days notice to submit it written plan and supporting documents to the government. This does not provide sufficient time to attempt to come into compliance. While it may be possible to develop some of the elements of an affirmative action plan, if appropriate records of employment actions have not been kept, it will be extremely difficult to conduct an appropriate adverse impact analysis. Further, absent good faith efforts and positive outreach and recruiting programs, the programmatic elements will be missing.
Thus, the decision to invest resources into developing an affirmative action program and plan should be considered as an investment in ensuring continued business with the government.
Beyond the Regulations. In 1987, the Hudson Institute published a study for the Department of Labor. Workforce 2000 reported on workforce changes projected from 1985 to 2000, and documented a shift in labor force demographics with growth in ethnic, racial, and gender groupings. These changes would effect not only the workplace, but also external issues such as the changing face of consumers. Demographics were not the only changes affecting companies. Increased competition and entry into global markets were adding demands and pressures on corporations. Companies began using a variety of approaches to tap the talent and effectiveness of their work forces, realizing that to be effective and competitive, they had to manage the diversity of their workforces without impeding productivity. Driven by these changes, rather than the legal and regulatory requirements of affirmative action, companies began to implement initiatives that addressed the many dimensions of diversity within their organizations.
As we move into the twenty-first century, a number of external pressures such as competition, skilled labor shortages, globalization, and immigration are driving the need for companies to attract, manage and retain a continually changing work force. This will continue the trend of new employment opportunities for a broader, more diverse, group of job seekers, including women, older individuals, and those with limited skills and experience. With demand outpacing supply, employers are looking to recruit from untapped labor pools increasing employment opportunities for protected groups.
Affirmative action is rooted in U.S. Civil Rights laws and was originally designed to remove barriers in employment for certain protected groups under these laws. Recognizing that diversity efforts go well beyond just addressing demographic issues and barriers to employment for certain defined groups, affirmative action and equal employment opportunity programs are still viable tools for overcoming certain barriers and can be part of, but not the defining factors in, workplace diversity initiatives.
A tight labor market has made recruiting high-skilled workers a business priority. Creative sourcing of candidates results in innovative outreach programs, the very heart of affirmative action. When the demand for workers outpaces the supply, moving beyond outreach becomes necessary. Affirmative action requires programs that allow employees to advance in employment. Emphasizing programs for training individuals lacking skills is one example. Education as an enhancement to employment advancement could result in the growth of partnerships between educational institutions and corporations.
Moving beyond affirmative action to workplace diversity initiatives, organizations can build inclusive workplaces and change cultures to reflect the current social trends. Inclusive workplaces promote respect by encouraging effective communication, setting a climate for learning, and removing barriers to employment and to external factors such as customer and investor interests. Fostering respect increases productivity and builds a competitive advantage for the organization. Diversity initiatives must also be integrated into the organization’s overall business strategy and not be limited to human resources and people management strategies. A well-integrated, skillfully crafted workplace diversity initiative will position organizations to respond to social changes, create richer corporate environments, and meet organizational goals and objectives.

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