Government contractors are subject to complex affirmative action obligations that go beyond universally applicable Equal Employment Opportunity (EEO) laws. As part of doing business, our government contractor clients have to produce written, up-to-date affirmative action plans (AAPs) aimed at building a workforce that reflects the demographics of their qualified labor pool, and that meet the minimum standards of the Office of Federal Contract Compliance Programs (OFCCP). An AAP includes an OFCCP-prescribed method for documenting recruiting and hiring efforts, and analyzing and demonstrating employment and compensation data.
Then there’s the enforcement: Every year, OFCCP randomly selects several thousand government contractors for compliance reviews. Desk audits come first, followed by on-site investigations if OFCCP believes there is evidence of systemic discrimination in hiring and compensation practices. The consequences of being found noncompliant can extend to loss of contracts, being shut out of future contracts, and sometimes paying damages. Our clients in government contracting trust us to help them stay in compliance and guide them through OFCCP investigations, whether random or arising from complaints.
Compliant AAPs vary based on the type of contractor and work, but they all have to give fair access to employment opportunities to specific protected classes, including minorities, women, people with disabilities, and covered veterans. There are dozens of specifications pertaining to taking such steps as seeking referrals from designated unions, disseminating EEO policies externally, encouraging women and minority employees to take appropriate training in preparation for promotion, and more. Knowing what your regulatory obligations are can seem like a lot of work.
We sit down with our clients to assess their corporate structure and business model, design and prepare a compliant AAP that works for them, and answer all their questions. Our services also cover training for management in the day-to-day ramifications of their AAP—including applicant tracking, outreach and recruiting of persons with disabilities and covered veterans, data collection, employee selection and training, and record retention. We also assist with contractors’ reporting obligations.
Review Process Response
Because of OFCCP’s randomized compliance review process, your AAP can be audited even without anyone making a complaint against your business. When that happens, we are ready to guide you through the process: addressing issues of jurisdiction, providing you with an aggressive defense, and negotiating agreements on your behalf to resolve any compliance issues that arise. When serving our clients, we rely both on our knowledge of the relevant law and on the relationships we’ve established and maintained with past and present key personnel at OFCCP.
- Created plan documents for 45 affirmative action programs covering 15 establishments and over 10,000 employees. We also provided advice and counsel on implementation of those programs. In addition, we defended the client in upwards of 10 compliance reviews being conducted by OFCCP, including a corporate management compliance evaluation of the company’s headquarters.
- Represented a public utility company serving one of the largest U.S. states, a pharmaceutical company involved in the fight against COVID-19, and a law firm offering legal services related to pension and 401(k) plans in the military before OFCCP and state and local contracting agencies.
- Provided advice and counsel to a subsidiary of a “top 10” Fortune 500 company. We addressed the subsidiary’s business relationship to the Fortune 500 company and determined whether the two companies would be viewed as a single entity, thereby requiring the subsidiary to create plan documents for 1,200 affirmative action programs covering approximately 400 establishments and over 90,000 employees.
- Represented a global professional services firm with more than 2,000 U.S. employees in multiple locations in both annual AAP preparation and defense of several OFCCP compliance reviews, all of which were resolved by agreement with no financial payouts required.
- Designed affirmative action programs, preparing plan documents annually and providing counsel on their implementation, for a global financial services company with more than 11,000 U.S. employees and multiple locations.
- Represented a global mass media company’s subsidiaries, including a film and television studio, production, and distribution company, in reviewing its submission to OFCCP in response to a compliance review.
- Created affirmative action programs, preparing plan documents and providing advice and counsel on their implementation, for a leading national provider of investor communications and technology-driven solutions for wealth management, asset management, and capital markets firms with over 3,500 U.S. employees and multiple locations.
- Prepared AAPs annually, and provided advice on their implementation, for a New York-based academic medical center with more than 21,000 employees.
Does My Business Need an AAP?
Pursuant to Executive Order 11246, government contractors with 50 or more employees must develop and maintain a written AAP for each of their establishments if they (i) have a government contract or subcontract of $50,000 or more; (ii) have government bills of lading that, in any 12-month period, total or can reasonably be expected to total $50,000 or more; (iii) serve as a depository of government funds in any amount; or (iv) are a financial institution that is an issuing and payment agent for U.S. savings bonds and savings notes in any amount. The Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 also require written AAPs.
Government contractors turn to Epstein Becker Green to prepare and update their AAPs. When creating the plan documents, we work hard to ensure that our clients fully understand the process, purpose, and results of their affirmative action programs.