eQuest reported today that it has learned that under federal law, certain federal contractors are required to prepare affirmative action plans to ensure equal opportunity in the workplace. While an affirmative action plan is generally based on an employer’s location, a functional affirmative action plan (FAAP) is prepared based on functional business unit or other operational lines. Federal contractors should be aware that the Office of Federal Contract Compliance Programs (OFCCP) recently released Directive 305, revising the FAAP approval process. The Directive is being praised for eliminating some requirements which have been burdensome for federal contractors but is also being criticized for adding new burdens. The new FAAP Directive is now currently in place and effective through December 31, 2015.
While the revised Directive does not change the basic principles governing FAAP agreements, it does change the required information that contractors must submit for FAAP approval by the OFCCP.
For instance, contractors are no longer required to submit information on race, gender, and workforce and job group analysis within each proposed functional or business unit. Similarly, contractors do not need to identify for each proposed functional unit the major job groups, representative job titles, current number of employees by race and gender in each group, and relevant recruitment area for each job group. However, the documents that are required to be submitted prior to the FAAP conference include the following:
- A statement of how the employer is a covered federal contractor or subcontractor;
- A copy of the qualifying federal contract or subcontract of $50,000 or more;
- A copy of the contractor’s most recent Consolidated EEO-1 Report;
- An organizational chart identifying all of the proposed functional or business units and how they are related to each other within the corporation’s overall structure;
- A narrative description of the business or function of each proposed FAAP unit and how it meets the definition of a functional or business unit;
- The total number of employees by location (city and state) within each proposed functional or business unit, identifying the managing official of each functional or business unit;
- A statement addressing the location (city and state) where each proposed FAAP unit will maintain its employee personnel records and applicant processing activities;
- If the contractor proposes to maintain some establishment-based AAPs: a list of the locations including the physical address, the number of employees, the phone number of the establishment’s managing official, the AAP contact and the EEO-1 unit number for each establishment;
- The dates of the proposed AAP year for the functional programs; and
- Copies of personnel policies relevant to evaluating the proposed functional or business units, including organizational- and unit-specific policies related to recruitment, hiring, promotion, compensation and termination.
Additionally, the new Directive addresses items to be discussed and furnished within the FAAP, including:
- The reporting hierarchy and personnel procedures for the functional or business unit;
- How human resources and equal opportunity are managed; and
- Any ongoing or past equal employment opportunity violations over the last three years.
Contractors are also allotted additional time (now 60 days instead of 30) to provide notice to the OFCCP of significant changes in the corporate structure that would change the function upon which the original FAAP agreement was based.
As a result of this new Directive, it will be significantly easier for contractors seeking to have FAAPs approved. However, employers should be on guard. For the first time ever, the OFCCP details in the new FAAP directive that all federal contract employers must agree to a compliance evaluation at least once within a 3 year period. Further, during those compliance evaluations, two functional business units of the contractor can be eligible for evaluations.
eQuest Compliance Division is seeking further Federal guidance on what the impact will be. In the meantime please call the eQuest Compliance Division with any questions.
