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What Is an Affirmative Action Plan and Why Would My Firm Have to Develop One?

One of the most common questions that we get asked by clients is whether or not they need to create an affirmative action plan in order to achieve OFCCP compliance on their government contract bids. And if so, what does that look like? Unfortunately, the answer is a fairly complicated one that we couldn't just tuck into our FAQs. Fortunately, we are going to address affirmative action plan requirements in detail, and if you ever have any questions, your Govgistics representative is only a phone call away.




Affirmative Action Plan Requirements – Do We Need a Plan for OFCCP Compliance?

First and foremost, affirmative action plan requirements only apply to federal government contractors with 50 or more employees. If your firm has 49 or fewer employees, you do not need to worry about OFCCP compliance. For ease of definition, an employee is anyone on whose behalf your firm takes out Social Security taxes. Some small businesses have avoided having to deal with affirmative action plan requirements by utilizing independent contractors to fulfill their government contracts rather than hit the "magic number" of 50, though this is rare. Though firms with fewer than 50 employees do not need to develop a written plan, other affirmative action obligations and non-discrimination rules still apply. If your firm exceeds 50 employees, the following affirmative action plan requirements apply to you:

  • Is your firm a federal government contractor with $50,000 or more in direct federal government contracts or subcontracts? If so, you need to maintain a written action plan for women and minorities in compliance with Executive Order 11246, and for persons with disabilities in compliance with Section 503 of the Rehabilitation Act of 1973. Please note that there are some exceptions for construction companies under federal contracts. Please call your Govgistics representative to learn more about those exceptions to the affirmative action plan requirements.

The highlighted section pertains specifically to financial institutions:

  • Is your firm a federal government contractor with $100,000 or more in a single federal government contract or subcontract? If so, you need to maintain a written action plan for veterans in compliance with the Vietnam Era Veterans' Readjustment Assistance Act of 1974.
  • Does your firm serve as a depository of federal funds in any amount, or issue and redeem US savings bonds for any amount? If so, you need to maintain a written plan for women and minorities in compliance with Executive Order 11246.
  • Does your firm serve as a depository of $50,000 or more in federal funds, or have a contract in excess of $50,000 for issuing and redeeming US savings bonds? If so, you need to maintain a written action plan for persons with disabilities in compliance with Section 503 of the Rehabilitation Act of 1973.
  • Does your firm serve as a depository of $100,000 or more in federal funds, or have a contract in excess of $100,000 for issuing and redeeming US savings bonds? If so, you need to maintain a written action plan for veterans in compliance with the Vietnam Era Veterans' Readjustment Assistance Act of 1974.
  • Is your firm covered by FDIC or NCUA deposit insurance? If so, you need to maintain a written action plan for women and minorities in compliance with Executive Order 11246, and for persons with disabilities in compliance with Section 503 of the Rehabilitation Act of 1973, and for veterans in compliance with the Vietnam Era Veterans' Readjustment Assistance Act of 1974.

Do you still have questions about your status as an affirmative action employer or need guidance on next steps? If so, please contact your Govgistics representative today.

What Has Changed with the OFCCP?

(read more and discover affirmative action plan templates...)

What is the OFCCP?

The OFCCP is the U.S. Department of Labor’s Office of Federal Contract Compliance Programs. This federal agency is in charge of enforcing compliance with affirmative action legislation relevant to government contractors, most commonly, Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. The OFCCP conducts reviews of federal government contractors' affirmative action plans. The OFCCP employs focused reviews, on-site reviews, and off-site reviews to ensure OFCCP compliance. We advise all clients to expect and prepare for OFCCP reviews when doing federal government contracting.

What has changed with the OFCCP?

While the legislation the OFCCP enforces is decades old, regulations have recently changed. The most substantive change for government contractors came in 2014, though many did not realize the significance, for several months. As a result, there is a heightened awareness of OFCCP compliance. The 2014 changes centered around two things.

First, the regulatory changes require federal government contractors to establish veteran "hiring benchmarks." Though the Vietnam Era Veterans' Readjustment Assistance Act of 1974, and the recent regulatory changes that have sprung up around it, do not set specific quotas, the new regulations encourage federal government contractors to develop affirmative action plans to strive for a certain percentage of veteran employees. The general rule is that federal government contractors need to develop action plans designed to have an 8% veteran work-force, though that can vary by state. According to the regulations, the "benchmark is not a rigid and inflexible quota that must be met" and failure to achieve the goal does not constitute a violation.

The second change has to do with persons with disabilities. Under the new regulations, qualifying government contractors must establish action plans to establish a 7% "workforce utilization goal" for persons with disabilities. According to the regulations, the "benchmark is not a rigid and inflexible quota that must be met" and failure to achieve the goal does not constitute a violation.

These changes have also resulted in changes to reporting and OFCCP compliance.

What are the important "take-aways" from these regulatory changes so we can achieve OFCCP compliance?

  • Update references to Equal Employment Opportunity clauses in your subcontracts
  • Establish hiring benchmarks for veterans and utilization goals for persons with disabilities
  • Update self-identification forms and data-collection to be able to track self-identified persons with disabilities, and veterans
  • Make sure your practices regarding job postings and job hiring achieve OFCCP compliance, and develop outreach strategies to these specific populations
  • Consider developing new forms to encourage self-identification for new hires or even prospective employees
  • Update IT systems and record keeping systems to be able to track OFCCP compliance
  • Document all steps to your affirmative action plans and dates these changes were enacted

Affirmative Action Plan Template and Legislation

Unfortunately, because not every firm is required to meet the same requirements, and because affirmative action plans are intended to ensure compliance with three different laws - Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 - no single template serves all purposes.

What is Executive Order 11246?

This is commonly called the Equal Employment Opportunity Order. This Executive Order, issued in the 1960s, is the basis for most affirmative action, and is very significant to parties attempting to secure federal government contracts. It explicitly calls for non-discrimination by the government, federal contractors, and subcontractors. With a few noteworthy exceptions, those wishing to land government contracts must actively demonstrate that they are practicing non-discriminatory hiring and firing practices. A helpful way to think about it is this: In a court of law, those wishing to allege discrimination must bear the burden of proof that discrimination is taking place. For the opportunity to secure lucrative federal government contracts the opposite is true, and firms must bear the burden of proof that they are not discriminating. As such, this law is far reaching and significant. It has been reinterpreted several times over the ensuing decades, and regulations centered around Executive Order 11246 are continually evolving.

What Should a Written Action Plan Template Include in Order to Comply With This Order?

To be compliant with Executive Order 11246, affirmative action plans should have the following components:

  • An Organizational Profile
  • A Job Group Analysis
  • A Utilization Analysis
  • Placement Goals
  • Designation of Responsibility for Implementation
  • Identification of Problem Areas
  • Action-Oriented Programs
  • An Internal Audit and Reporting System
  • Support Data
For an affirmative action plan template, click here.

What is Section 503 of the Rehabilitation Act of 1973?

This law is designed to help persons with disabilities and to prevent any discrimination against them. Though it is often understood in conjunction with the Americans with Disabilities Act of 1990, it was not replaced by that Act. Section 503 is the often amended portion of the Act which specifically addresses those entities wishing to secure federal government contracts. It specifically bans any form of discrimination against persons with disabilities with a few notable exceptions. For instance, the President can override the Act if he or she deems it necessary for national security. Section 503 also empowers the Department of Labor to take "appropriate steps" against federal contractors that are shown to discriminate. It is less strict than Executive Order 11246, in requiring those firms wishing to secure federal government contracts to prove they are non-discriminatory. Section 503 has also been interpreted by the Department of Labor to allow for "workforce utilization goals" to be set (if not met) in order to secure a federal government contract.

What Should a Written Action Plan Include in Order to Comply With This Legislation?

To be compliant with Section 503, affirmative action plans should have the following components:

  • A Policy Statement on Equal Employment Opportunity for Persons with Disabilities
  • A Review of Personnel Processes
  • A Review of Physical and Mental Job Qualification Standards
  • An Analysis of Reasonable Accommodations
  • Anti-Harassment Procedures
  • External Dissemination of Policy
  • Outreach and Positive Recruitment
  • Internal Dissemination of Policy
  • Audit and Reporting
  • Support Data
  • Responsibility for Implementation
  • Affirmative Action and EEO Training
  • Hiring Data
  • Utilization Analysis
For an affirmative action plan template, click here.

What is the Vietnam Era Veterans' Readjustment Assistance Act of 1974?

The poorly named Vietnam Era Veterans' Readjustment Assistance Act of 1974 (or VEVRAA) applies to veterans, regardless of the era or theater in which they served, if they meet the following criteria – disabled veterans, recently separated veterans, active duty wartime or campaign veterans, campaign badge veterans, and armed forces service medal veterans. This law is often understood in conjunction with the Uniform Services Employment and Reemployment Rights Act, and the two work in conjunction with one another. Specifically, these laws are intended to provide protection for veterans against discrimination. VEVRAA is the act which particularly targets employment discrimination by those seeking federal government contracts. The regulation of 2014 have interpreted VEVRAA and USERRA to allow for the creation of action plans to hit "hiring benchmark" goals

What Should a Written Action Plan Include in Order to Comply With This Law?

At first glance, the format for this affirmative action template appears to be very similar to (though not quite identical to) the template for Section 503. The content, however, is vastly different. To be compliant with VEVRAA, affirmative action plans should have the following components:

  • A Policy Statement on Equal Employment Opportunity for Persons with Disabilities
  • A Review of Personnel Processes
  • A Review of Physical and Mental Job Qualification Standards
  • An Analysis of Reasonable Accommodations
  • Anti-Harassment Procedures
  • External Dissemination of Policy
  • Outreach and Positive Recruitment
  • Internal Dissemination of Policy
  • Audit and Reporting
  • Support Data
  • Responsibility for Implementation
  • Affirmative Action and EEO Training
  • Hiring Data
  • Hiring Benchmarks
For an affirmative action plan template, click here

Conclusion – Federal Government Contracts and Affirmative Action Plans

Hopefully, the OFCCP compliance rules we have spelled out for you will help you to determine which action plans you need to develop. Ideally the affirmative action plan templates will be extremely helpful to you. The reality, however, is that Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 are complicated, and the ever-evolving regulations surrounding them can be daunting. If you need help understanding affirmative action plan requirements in order to land a government contract, please let our knowledgeable team walk you through it.