Since the onset of the pandemic, employers have been overwhelmed by new rules, regulations, and procedural updates. Perhaps this explains why the announcement of a significant change in the Affirmative Action compliance requirement has been issued seemingly unnoticed, and under the radar of many businesses.
Affirmative Action is a set of procedures for employers to follow for both applicants and current employees. It is designed to eliminate unlawful discrimination in the workplace based on, at the very least, race, creed, color, and national origin.
Federal contractors have long been required to complete annual Affirmative Action Plans (AAPs) that address women, minorities, individuals with disabilities, and veterans in contractor workforces. However, these plans have largely been on the “honor system” with contractors only needing to produce them during audits or certify their existence during the contracting process.
Until now, the Office of Federal Contract Compliance Programs (OFCCP) has never required annual reporting regarding the maintenance of Affirmative Action Plans. This new rule will assuredly send a jolt through many employers who will need to quickly ramp up their compliance efforts by 2022, when the new rule goes into effect.
The New Affirmative Action Rule
The new rule states that supply and service federal contractors and subcontractors with Affirmative Action Plans will soon need to register and certify they are meeting their compliance obligations to develop and maintain annual AAPs via the online Contractor Portal, a new OFCCP Affirmative Action Program Verification Interface.
The interface was created by the Department of Labor with the intent of reducing the pressure on department audit resources by developing an online completion and certification for the difficult-to-track metrics on employment practices.
In 2016, a Government Accountability Office (GAO) Report recognized that OFCCP did not have a method to regularly collect Affirmative Action Plans and only audited approximately 2% of the contractor community annually. The GAO report recommended a mechanism to monitor Affirmative Action Plans on a regular basis. In September 2020, the OFCCP published a notice seeking comment on the possibility of an annual AAPs certification and verification process.
What Should Contractors Do to Prepare?
Although OFCCP will only require annual certification by supply and service federal contractors, this may well change to cover the entire federal contractor and sub-contractor community and any business receiving federal funds.
Now is a good time to review your compliance practices. Businesses should be prepared to complete the registration and certification process on schedule. For registration, you will need your EIN number and Headquarters/Company Number and Establishment/Unit Number from the EEO-1 Reports.
What Will Contractors Be Required to Do?
Starting in 2022, federal contractors will need to provide certification of their AAPs to OFCCP via the AAP-VI portal. The schedule for contractor registration and certification is as follows:
- February 1, 2022: contractors may begin registering for access to the portal. OFCCP will send an email to each covered federal contractor in its jurisdiction whose email information is available in its system, inviting them to register.
- March 31, 2022: contractors will be able to utilize the certification feature in the portal to certify their AAP compliance.
- By June 30, 2022: existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit, as applicable.
- New contractors that have 120 days to develop their AAPs must register and certify compliance in the portal within 90 days of developing their AAPs.
- Registration and annual certification will not exempt covered federal contractors and subcontractors from compliance evaluations.
Impact on Other Businesses?
Employers who contract with the government or who otherwise receive federal funds are required to document their affirmative action practices and metrics.
A Brief History on Affirmative Action
In 1961, President John F. Kennedy issued Executive Order 11246, mandating government contractors “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin.” (Executive Order 10925) Since 1965, government contractors have been required to document their affirmative action programs through compliance reports, to contain “such information as to the practices, policies, programs, and employment policies, programs, and employment statistics of the contractor and each subcontractor…” Enforcement is conducted by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs.
Affirmative action is also a remedy, under the Civil Rights Act of 1964, where a court finds that an employer has intentionally engaged in discriminatory practices. (The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit demographic workforce data, including data by race/ethnicity, sex, and job categories.)
The Equal Employment Opportunity Commission (EEOC), which was created by Title VII of the Civil Rights Act of 1964, enforces the following employment anti-discrimination laws:
- Equal Pay Act of 1963
- Title VII of the Civil Rights Act of 1964 (race, color, religion, national origin)
- Age Discrimination in Employment Act of 1967 (people of a certain age)
- Rehabilitation Act of 1973, Sections 501 and 505 (people with disabilities)
- Titles I and V of the Americans with Disabilities Act of 1990
- Civil Rights Act of 1991
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