OFCCP Seeks Comments on Functional Affirmative Action Plans

OFCCP seeks comments on Functional Affirmative Action Plans. Written comments must be submitted to the office on or before July 23, 2012.

SUMMARY:

The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a pre-clearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA). 44 U.S.C. 3506(c)(2)(A). This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Federal Contract Compliance Programs is soliciting comments on its proposal to implement standard procedures for supply and service contractors seeking approval to develop affirmative action programs based on functional or business units. A copy of this information collection request (ICR), with applicable supporting documentation; including among other things a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained from the RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAMain.

 Background:

The Office of Federal Contract Compliance Programs (OFCCP) administers three nondiscrimination and equal employment opportunity laws. These authorities prohibit employment discrimination and require affirmative action to ensure that equal employment opportunities are available regardless of race, sex, color, national origin, religion, or status as a qualified individual with a disability or protected veteran by Federal contractors.

For purpose of this clearance, the regulations implementing Executive Order 11246 permit Federal supply and service contractors to develop affirmative action programs (AAPs) that are based on business function or business unit rather than AAPs based on establishments.

  1. Functional affirmative action programs (FAAPs) are designed to provide contractors with the option of creating AAPs that better fit their business needs.
  2. To develop and implement a FAAP, Federal contractors must receive written approval from the Director of OFCCP. On March 21, 2002, OFCCP issued guidance outlining procedures for approving contractors’ requests to use functional AAPs.
  3. Subsequently, on June 14, 2011, OFCCP issued new guidance and established standard procedures for FAAP approvals.
  4. This Information Collection Request (ICR) addresses the collection of information associated with the process for obtaining, modifying, updating, and renewing an agreement that allows contractors to develop and use functional AAPs.

Let the buyer beware. Federal Contractors must do the following as part of the FAAP agreement:
(http://www.dol.gov/ofccp/Presentation/FAAP_Presentation_Aug09.pdf)

  • Must notify OFCCP of significant changes in its corporate structure within 30 days
  • Modification request must be approved by OFCCP Director
  • Failure to notify OFCCP Director of changes to its corporate structure may result in termination of the FAAP Agreement
  • Notify OFCCP annually of minor FAAP changes, e.g., HR representative, address change, etc.
  • Failure to update annually may result in a compliance evaluation
  • No automatic renewal; must be approved by the OFCCP Director
  • Failure to submit a renewal request within 120 days, will result in expiration of FAAP Agreement. Establishment based AAPs are required once the FAAP agreement expires.
  • Must have two units undergo compliance evaluation to be eligible for renewal
For more information, please read this recent post on Functional Affirmative Action Plans.

If you need additional assistance or have any questions regarding FAAPs,
please contact John Piatt or Nancy Tipton

Functional Affirmative Action Plans (FAAP)

Many employers ask about creating FAAPs (Functional Affirmative Action Plans). For some, this seems like a reasonable approach to creating an AAP because the FAAP might align the personnel selections better with the decision makers who make them. However, it is wise to read the fine print before you or your employer considers going down the FAAP path. As found on the OFCCP’s FAQs regarding FAAPs, FAAP contractors are “guaranteed” to receive at least two (2) audits within the three (3) year FAAP agreement window.

Consider the below excerpt from the OFCCP FAAP FAQs:

“What is a Functional Affirmative Action Program?

Each covered non-construction (supply and service) contractor must develop and maintain an affirmative action program (AAP) in accordance with 41 CFR Part 60-2. For a majority of contractors, establishment-based AAPs are developed and maintained. However, for some multi-establishment contractors that have large business or functional units such as a Sales Division or Research and Development function that span across establishments located in different states or regions, an AAP may be developed by functional or business units. These functional AAPs or FAAPs will allow the contractor to examine whether its personnel practices and affirmative action efforts are sufficient to ensure equal employment opportunity for applicants and employees of a functional or business unit, rather than a particular establishment.”

“Will other functional or business units of my company get evaluated during the current year?

That is possible. As stated earlier, OFCCP uses administratively neutral selection criteria to select functional or business units for compliance evaluation, and more than one unit may be selected in a given year. In addition, FAAP contractors must have at least two functional or business units undergo a compliance evaluation during the three-year term of the FAAP agreement before an existing agreement is renewed. To meet this requirement, OFCCP will use administratively neutral selection criteria to select the contractor’s functional or business units, and will conduct compliance evaluations of at least two of the contractor’s functional or business units during the three-year term of its functional AAP agreement. Contractors with only one functional or business unit covered under a functional AAP must have this unit undergo a compliance evaluation before they are eligible to renew their FAAP Agreements, and OFCCP will conduct a compliance evaluation of the contractor’s functional or business unit during the three-year term.”

If the audit guarantee isn’t scary enough, click the link below to read more about the approval and change notification process to determine whether or not FAAPs are worth considering.