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AAP Development in 2011


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Building an effective recruiting program to meet OFCCP Enforcement trends

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AAP Development in 2011

  1. 1. Compliance Trends in Support of EEO Legislation Affirmative Action and the DCAA
  2. 2. <ul><li>The purpose of this webinar is to inform you about the regulations and provide ideas for discussion within your recruiting, compliance, legal, and HR teams. This webinar does not contain legal advice. </li></ul><ul><li>Your corporate legal and compliance team must interpret these regulations and: </li></ul><ul><ul><li>Review and approve all policies and procedures for compliance </li></ul></ul><ul><ul><li>Identify areas of uncertainty or ambiguity </li></ul></ul><ul><ul><li>Provide clear guidelines and protocols. </li></ul></ul><ul><ul><li>Monitor changes in the regulations and their interpretations </li></ul></ul><ul><ul><li>Answer any specific questions you have about the regulations </li></ul></ul><ul><ul><li>and how they apply to YOUR company. </li></ul></ul>Inform vs. Interpret
  3. 3. Session Goals <ul><li>The legal requirements that drive Affirmative Action </li></ul><ul><li>The regulating authorities that are mandated to review and audit compliance efforts </li></ul><ul><li>Recent trends and activity out of the Department of Labor, DCAA, and OFCCP </li></ul><ul><li>The most common misunderstandings of AAP and most frequent compliance failures </li></ul><ul><li>How to equip yourself with the ability to successfully handle an audit and to fully implement a compliant program </li></ul>
  4. 4. Affirmative Action’s True Meaning <ul><li>“ Affirmative action” means positive steps taken to increase the representation of veterans, women and minorities in areas of employment, education, and business from which they have been historically excluded. </li></ul>
  5. 5. The EEO Clause in Contracts <ul><li>Requirement to take Affirmative Action </li></ul><ul><li>Clause makes EEO and AA integral elements of contractual agreement </li></ul><ul><li>EO 11246 provides the mandate to measure EEO activities </li></ul><ul><li>EEO clause in Prime, then Subcontractors bound by the requirement </li></ul>
  6. 6. Requirement for Written AAPs <ul><li>Contracts and Subcontracts for $50K or more </li></ul><ul><ul><li>Formal Written AAP </li></ul></ul><ul><ul><ul><li>Women and Minorities </li></ul></ul></ul><ul><ul><ul><li>Disabled Individuals </li></ul></ul></ul><ul><ul><ul><li>Veterans </li></ul></ul></ul><ul><li>When there are 50 or more employees </li></ul><ul><li>Must define underutilization </li></ul><ul><li>Must set goals for hiring and promoting </li></ul><ul><li>Must demonstrate internal and external equity </li></ul>
  7. 7. Expanded Veteran Requirement <ul><li>Contracts for $100k or more </li></ul><ul><ul><li>Disabled Veterans </li></ul></ul><ul><ul><li>Veterans Serving During a War or Campaign </li></ul></ul><ul><ul><li>Veterans having participated in a US Military Operation and awarded a medal </li></ul></ul><ul><ul><li>Recently Separated Vets </li></ul></ul><ul><li>Qualified Covered Veteran Defined </li></ul>
  8. 8. Office of Federal Contract Compliance Programs (OFCCP) <ul><li>OFCCP Mission Description Enforces: </li></ul><ul><ul><li>EO 11246 </li></ul></ul><ul><ul><li>Section 503 of the Rehabilitation Act of 1973 </li></ul></ul><ul><ul><li>AA provisions of the Vietnam Era Veterans’ Readjustment Assistance Act </li></ul></ul><ul><li>Jurisdiction </li></ul><ul><ul><li>26 million (22%) of the total civilian workforce </li></ul></ul><ul><li>EEO Requirement as condition of contract: </li></ul><ul><ul><li>Written plan of action with engagement in self-analysis to discover barriers to EEO </li></ul></ul>
  9. 9. OFCCP Enforcement Trends <ul><li>4000-5000 desk audits in 2008 </li></ul><ul><ul><li>10-15% of audits ended in conciliation agreements </li></ul></ul><ul><ul><li>70% of conciliation agreements included financial penalties </li></ul></ul><ul><li>2010 budget increase of more than $25.6m </li></ul><ul><ul><li>Addition of 213 full-time employees </li></ul></ul><ul><ul><li>New case management system </li></ul></ul><ul><li>Heavy concentration on the final rule for Internet Applicant </li></ul><ul><li>Significant increase in small business audits </li></ul><ul><li>OFCCP refining and analyzing data themselves </li></ul>
  10. 10. More Aggressive…More Systematic “ Compared with years past, OFCCP more quickly and accurately screens contractor establishments for indicators of potential discrimination … OFCCP is monitoring a larger portion of the federal contractor universe than it has in the past...”
  11. 11. The Dilemma <ul><li>Comply…or wait and see? </li></ul>-42.1% -4.0% 62.3% 55.8% Change from 2001 to 2005 45.6% 10.3% 3.5% 14.1% Change from 2005 to 2006 9.0% -18.3% 60.5% 31.0% Change from 2006 to 2008 -8.1% -13.6% 169.5% 133.0% Change from 2001 to 2008 4,716 $3,187 9,093 $28,975,000 2001 4,135 $2,673 8,969 $23,975,000 2002 4,698 $1,825 14,361 $26,220,356 2003 6,529 $3,586 9,615 $34,479,294 2004 2,730 $3,059 14,761 $45,156,462 2005 3,975 $3,374 15,273 $51,525,235 2006 4,923 $2,323 22,251 $51,680,950 2007 4,333 $2,755 24,508 $67,510,982 2008 Compliance Evaluations Average Benefit Per Person Workers Re-compensated by OFCCP Agreement Financial Remedies Obtained Fiscal Year
  12. 12. OFCCP ENFORCEMENT PROCEDURES <ul><li>Focuses resources on finding and resolving systemic discrimination </li></ul><ul><li>Technical Assistance when requested </li></ul><ul><li>Compliance Evaluations and Complaint Investigations </li></ul><ul><li>Obtains Conciliation Agreements </li></ul><ul><li>Monitors both Prime Contractors and Subcontractors </li></ul><ul><li>Recommends Enforcement Action to include debarment and victim relief to include back pay </li></ul><ul><li>Close working relationship with other Departmental Agencies </li></ul>
  13. 13. Compliance Evaluations <ul><li>Compliance Review </li></ul><ul><li>Compliance Check </li></ul><ul><li>Focused Review </li></ul>
  14. 14. Most Common Issues <ul><li>Poorly defined protocol and recordkeeping of applicant data </li></ul><ul><li>Disparate impact found in resume search strings </li></ul><ul><li>Search and staffing firm data failures </li></ul><ul><li>Job posting missteps </li></ul><ul><li>Poor data analysis </li></ul><ul><li>Compliant Pay System </li></ul><ul><li>The Inference Provision </li></ul><ul><li>Affirmative Action is a diversity program </li></ul><ul><li>Numerical goals are designed to achieve proportional representation </li></ul><ul><li>Goals essentially set quotas requiring preferential hiring </li></ul><ul><li>OFCCP sets penalties for not meeting goals </li></ul>Most Common Audit Traps Most common Misunderstandings
  15. 15. The “Applicant” Trap <ul><li>2005 - New definition of “Applicant” </li></ul><ul><li>Establish protocol that identifies a candidate vs. an “Applicant” </li></ul><ul><li>Requirement to track resume activity </li></ul>
  16. 16. Definition of an “Applicant” <ul><ul><li>Resume submitted with expressed interest in employment </li></ul></ul><ul><ul><li>Considered for employment </li></ul></ul><ul><ul><li>Individual possesses the basic quals for the position </li></ul></ul><ul><ul><li>Individual does not remove themselves from further consideration </li></ul></ul>41 CFR Part 60-1
  17. 17. Definition of an Applicant #1 <ul><ul><li>The individual submits an expression of interest in employment through the Internet or related electronic data technologies; </li></ul></ul><ul><li>Electronic mail/email </li></ul><ul><li>Fax transmissions </li></ul><ul><li>Web-site submissions </li></ul><ul><li>Internal or external resume data bases </li></ul><ul><li>Electronic scanning technology </li></ul><ul><li>Applicant screening technology </li></ul><ul><li>Applicant tracking systems </li></ul><ul><li>Applicant service providers </li></ul><ul><li>Job Boards </li></ul><ul><li>BOT searches </li></ul><ul><li>Any other related electronic technologies </li></ul>If a single applicant comes into your recruiting process for a position through one of these means, the ‘Internet Applicant’ definition and the associated record retention rules of 41 CFR Part 60.1 apply for that entire REQ. As a result, 41 CFR Part 60.1 is the de facto definition of ALL applicants for all corporations that use the Internet for recruiting.
  18. 18. <ul><ul><li>The contractor considers the individual for employment in a particular position; </li></ul></ul><ul><ul><ul><li>Considers means ‘the contractor assesses the substantive information provided in the expression of interest with respect to any qualifications involved with a particular position’ </li></ul></ul></ul><ul><ul><ul><li>The word considers is the root cause of much of the confusion regarding these new regulations. </li></ul></ul></ul>Definition Of An Applicant #2
  19. 19. <ul><ul><li>The individual’s expression of interest indicates the individual possesses the basic qualifications for the position. </li></ul></ul><ul><ul><ul><li>Basic qualifications need to be 1) established before recruiting begins; 2) non-comparative; 3) objective; 4) and relevant to the position. </li></ul></ul></ul><ul><ul><ul><li>Understanding who meets the basic qualifications of a REQ is critically important to your record keeping obligations. </li></ul></ul></ul>Definition Of An Applicant #3
  20. 20. <ul><ul><li>The individual at no point in the contractor’s selection process’ prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position. </li></ul></ul><ul><ul><ul><li>An individual can remove themselves from consideration by 1) verbally or in writing declaring they are not interested in the position, 2) not following a uniformly applied and communicated application process or 3) indicating on their resume or ‘expression of interest’ a salary preference, work preference, or location of work preference that is inconsistent with uniformly applied policies or procedures for the REQ. </li></ul></ul></ul><ul><ul><ul><li>This is a very valuable tool in reducing your data collection </li></ul></ul></ul><ul><ul><ul><li>obligations. </li></ul></ul></ul>Definition Of An Applicant #4
  21. 21. Search & Staffing Firm Traps <ul><ul><li>The Contractor’s recordkeeping obligations under 41 CFR 60-1.12 </li></ul></ul><ul><ul><ul><li>Obligations for recordkeeping belong to the Contractor . </li></ul></ul></ul><ul><ul><ul><li>Prudent to contractually define recordkeeping requirements and expectations. </li></ul></ul></ul><ul><ul><ul><li>Ensure that the Agency is held accountable to those requirements and expectations and is provided in a timely manner that is equally defined. </li></ul></ul></ul>
  22. 22. Search String Trap Prevention <ul><li>If you limit your search to Basic Qualifications </li></ul><ul><ul><li>Data Management Technique (DMT) will limit who you consider. </li></ul></ul><ul><ul><li>You must consider all hits if you don’t use DMT. </li></ul></ul><ul><li>Search Beyond Basic Qualifications </li></ul><ul><ul><li>Considers every resume you review in your database </li></ul></ul><ul><ul><li>Considers only those resumes that represent a positive hit from your Basic Qualifications search from an external database when using DMT. </li></ul></ul>
  23. 23. Job Posting Trap <ul><li>OFCCP Endorsed Internal Job Posting Programs </li></ul><ul><ul><li>Records regarding the program must be retained </li></ul></ul><ul><ul><li>Contractors with $100k or more in contracts </li></ul></ul><ul><ul><ul><li>List all Employment Openings with Appropriate Employment Service Delivery Systems </li></ul></ul></ul>
  24. 24. Statistical Report Traps <ul><li>AAP Statistical Reports for Minorities and Women </li></ul><ul><ul><li>Workforce Analysis </li></ul></ul><ul><ul><li>Job Group Analysis </li></ul></ul><ul><ul><li>Availability Analysis </li></ul></ul><ul><ul><li>Incumbents vs. Availability Analysis </li></ul></ul><ul><ul><li>Goals Analysis </li></ul></ul><ul><ul><li>Goals Progress Report </li></ul></ul><ul><li>Disparate Impact Analysis Reports - Minorities vs. Non-Minorities and Females vs. Males </li></ul><ul><ul><li>New Hires vs. Job Applicants </li></ul></ul><ul><ul><li>Promotions vs. Available Pool </li></ul></ul><ul><ul><li>Terminations vs. Available Pool </li></ul></ul><ul><li>Compensation Analysis that follows OFCCP Protocol for Statistical Analysis called &quot;First Pass Testing&quot; </li></ul><ul><ul><li>Females vs. Males </li></ul></ul><ul><ul><li>Minorities vs. Non-Minorities </li></ul></ul>
  25. 25. Pay System Trap <ul><li>A compliant plan must meet two external audits - DCAA and DOL/EEOC </li></ul><ul><ul><li>DCAA is concerned that the plan pays fair wages compared to the external market </li></ul></ul><ul><ul><ul><li>Are you paying in line with peer companies? </li></ul></ul></ul><ul><ul><li>DOL is concerned that the plan pays fair wages compared to internal equity </li></ul></ul><ul><ul><ul><li>Are your minorities paid in line with majorities? </li></ul></ul></ul><ul><ul><ul><li>Are “equal” jobs rewarded equally? (after adjustment for experience, etc.) </li></ul></ul></ul>
  26. 26. Job Group Placement Trap <ul><li>All jobs located in an establishment must be reported in the analysis for that establishment except for: </li></ul><ul><ul><li>Employees reported in the establishment of their manager </li></ul></ul><ul><ul><li>In establishments of less than 50 EEs may be captured under any of the following three manners: </li></ul></ul><ul><ul><ul><li>AAP for the establishment they work within </li></ul></ul></ul><ul><ul><ul><li>Location of the personnel function that supports that establishment </li></ul></ul></ul><ul><ul><ul><li>Location of the program that covers the individual to whom they report </li></ul></ul></ul><ul><ul><li>Employee selections made at a higher level establishment must be included in the program where the decision is made. </li></ul></ul>
  27. 27. Recordkeeping Trap <ul><li>Any and All Recruiting and Personnel records </li></ul><ul><li>Complaints and Evaluations </li></ul><ul><li>Past AAPs </li></ul><ul><li>Records retention is included in the requirement for good faith efforts at compliance </li></ul><ul><li>Missing records presumed unfavourable to the employer and infers a practice of discrimination </li></ul>
  28. 28. Inference Provision Trap <ul><li>Where the user has not maintained data on adverse impact as required by the documentation section of applicable guidelines, the Federal enforcement agencies may draw an inference of adverse impact of the selection process from the failure of the user to maintain such data… (emphasis added). </li></ul><ul><li>41 CFR 60-3.4(D) </li></ul>
  29. 29. Audit Focus <ul><li>Established Lines of Authority </li></ul><ul><li>Internal Controls </li></ul><ul><li>Established Policies & Procedures </li></ul><ul><li>Applicant Tracking & Structured Data Analysis </li></ul><ul><li>Formal Pay Structures, Merit Budgets & Analysis </li></ul><ul><li>External Consistency - Survey Data </li></ul><ul><li>Internal Equity – Job Group Analysis </li></ul><ul><li>ADA complaint job descriptions </li></ul><ul><li>Defined Training and Communications </li></ul>
  30. 30. Preparing for the Audit <ul><li>Current year AAP and two previous years if asked for </li></ul><ul><li>Adverse impact analysis </li></ul><ul><li>Veterans and Disabled Workers plan </li></ul><ul><li>EEO-1s </li></ul>
  31. 31. Preparing for the Audit, Cont. <ul><li>Total Compensation Plan with Methodology </li></ul><ul><li>I-9s </li></ul><ul><li>Job Postings </li></ul><ul><li>Employment law posters </li></ul><ul><li>General facility appearance </li></ul><ul><li>Regular Review of Diversity Progress </li></ul>
  32. 32. Penalties for Noncompliance <ul><li>Conciliation Agreement </li></ul><ul><ul><li>Back pay </li></ul></ul><ul><ul><li>Job offers </li></ul></ul><ul><ul><li>Seniority credit </li></ul></ul><ul><ul><li>Additional training programs </li></ul></ul><ul><ul><li>Special recruitment efforts </li></ul></ul><ul><li>Enforcement proceedings </li></ul><ul><ul><li>Debarment </li></ul></ul><ul><ul><li>Monetary sanctions </li></ul></ul>
  33. 33. Summary <ul><li>Don’t breathe a sigh of relief. </li></ul><ul><li>Have a policy and enforce it on both internal and external recruiting resources. </li></ul><ul><li>Design an Affirmative Action Program with policies for the long-run. </li></ul><ul><li>Use data management and basic qualification to manage your record keeping burden. </li></ul><ul><li>Look at how you can use technology to reduce manual labor AND turn the record keeping requirements into a mechanism for talent pool development. </li></ul><ul><li>Seek expert services for guidance, guessing is not worth the consequence of getting it wrong. </li></ul>
  34. 34. Questions <ul><li>Cathleen M. Hampton </li></ul><ul><li>Hampton Resources </li></ul><ul><li>[email_address] </li></ul><ul><li> </li></ul><ul><li>(703) 794-9442 </li></ul>