AAP presentation 2010 trends


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Enforcement trends of the OFCCP and how to build a recruiting program to stand up to the more common audit traps.

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AAP presentation 2010 trends

  1. 1. Affirmative Action and the DCAA Compliance Trends in Support of EEO Legislation
  2. 2. Inform vs. Interpret• 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.• Your corporate legal and compliance team must interpret these regulations and: – Review and approve all policies and procedures for compliance – Identify areas of uncertainty or ambiguity – Provide clear guidelines and protocols. – Monitor changes in the regulations and their interpretations – Answer any specific questions you have about the regulations and how they apply to YOUR company.© Hampton Resources 0510 Proprietary Slide 2
  3. 3. Session Goals• The legal requirements that drive Affirmative Action• The regulating authorities that are mandated to review and audit compliance efforts• Recent trends and activity out of the Department of Labor, DCAA, and OFCCP• The most common misunderstandings of AAP and most frequent compliance failures• How to equip yourself with the ability to successfully handle an audit and to fully implement a compliant program© Hampton Resources 0510 Proprietary Slide 3
  4. 4. Affirmative Action’s True Meaning “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.© Hampton Resources 0510 Proprietary Slide 4
  5. 5. The EEO Clause in Contracts • Requirement to take Affirmative Action • Clause makes EEO and AA integral elements of contractual agreement • EO 11246 provides the mandate to measure EEO activities • EEO clause in Prime, then Subcontractors bound by the requirement© Hampton Resources 0510 Proprietary Slide 5
  6. 6. Requirement for Written AAPs• Contracts and Subcontracts for $50K or more – Formal Written AAP • Women and Minorities • Disabled Individuals • Veterans• When there are 50 or more employees• Must define underutilization• Must set goals for hiring and promoting• Must demonstrate internal and external equity© Hampton Resources 0510 Proprietary Slide 6
  7. 7. Expanded Veteran Requirement• Contracts for $100k or more – Disabled Veterans – Veterans Serving During a War or Campaign – Veterans having participated in a US Military Operation and awarded a medal – Recently Separated Vets• Qualified Covered Veteran Defined© Hampton Resources 0510 Proprietary Slide 7
  8. 8. Office of Federal Contract Compliance Programs (OFCCP)• OFCCP Mission Description Enforces: – EO 11246 – Section 503 of the Rehabilitation Act of 1973 – AA provisions of the Vietnam Era Veterans‟ Readjustment Assistance Act• Jurisdiction – 26 million (22%) of the total civilian workforce• EEO Requirement as condition of contract: – Written plan of action with engagement in self- analysis to discover barriers to EEO© Hampton Resources 0510 Proprietary Slide 8
  9. 9. OFCCP Enforcement Trends• 4000-5000 desk audits in 2008 – 10-15% of audits ended in conciliation agreements – 70% of conciliation agreements included financial penalties• 2010 budget increase of more than $25.6m – Addition of 213 full-time employees – New case management system• Heavy concentration on the final rule for Internet Applicant• Significant increase in small business audits• OFCCP refining and analyzing data themselves© Hampton Resources 0510 Proprietary Slide 9
  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...”© Hampton Resources 0510 Proprietary Slide 10
  11. 11. The Dilemma Comply…or wait and see? Workers Financial Re-compensated Remedies by OFCCP Average Benefit Compliance Fiscal Year Obtained Agreement Per Person Evaluations 2008 $67,510,982 24,508 $2,755 4,333 2007 $51,680,950 22,251 $2,323 4,923 2006 $51,525,235 15,273 $3,374 3,975 2005 $45,156,462 14,761 $3,059 2,730 2004 $34,479,294 9,615 $3,586 6,529 2003 $26,220,356 14,361 $1,825 4,698 2002 $23,975,000 8,969 $2,673 4,135 2001 $28,975,000 9,093 $3,187 4,716 Change from 2001 to 2008 133.0% 169.5% -13.6% -8.1% Change from 2006 to 2008 31.0% 60.5% -18.3% 9.0% Change from 2005 to 2006 14.1% 3.5% 10.3% 45.6% Change from 2001 to 2005 55.8% 62.3% -4.0% -42.1%© Hampton Resources 0510 Proprietary Slide 11
  12. 12. OFCCP ENFORCEMENT PROCEDURES• Focuses resources on finding and resolving systemic discrimination• Technical Assistance when requested• Compliance Evaluations and Complaint Investigations• Obtains Conciliation Agreements• Monitors both Prime Contractors and Subcontractors• Recommends Enforcement Action to include debarment and victim relief to include back pay• Close working relationship with other Departmental Agencies© Hampton Resources 0510 Proprietary Slide 12
  13. 13. Compliance Evaluations • Compliance Review • Compliance Check • Focused Review© Hampton Resources 0510 Proprietary Slide 13
  14. 14. Most Common Issues Most common Most Common Audit Misunderstandings Traps1. Affirmative Action is a 1. Poorly defined protocol and diversity program recordkeeping of applicant2. Numerical goals are data designed to achieve 2. Disparate impact found in proportional representation resume search strings3. Goals essentially set quotas 3. Search and staffing firm requiring preferential hiring data failures4. OFCCP sets penalties for 4. Job posting missteps not meeting goals 5. Poor data analysis 6. Compliant Pay System 7. The Inference Provision© Hampton Resources 0510 Proprietary Slide 14
  15. 15. The “Applicant” Trap • 2005 - New definition of “Applicant” • Establish protocol that identifies a candidate vs. an “Applicant” • Requirement to track resume activity© Hampton Resources 0510 Proprietary Slide 15
  16. 16. Definition of an “Applicant” 1. Resume submitted with expressed interest in employment 2. Considered for employment 3. Individual possesses the basic quals for the position 4. Individual does not 41 CFR Part 60-1 remove themselves from further consideration© Hampton Resources 0510 Proprietary Slide 16
  17. 17. Definition of an Applicant #1 The individual submits an expression of interest in employment through the Internet or related electronic data technologies; • Electronic mail/email If a single applicant comes • Fax transmissions into your recruiting process for a position through one of • Web-site submissions these means, the ‘Internet • Internal or external resume data bases Applicant’ definition and the • Electronic scanning technology associated record retention • Applicant screening technology rules of 41 CFR Part 60.1 • Applicant tracking systems apply for that entire REQ. As a result, 41 CFR Part 60.1 • Applicant service providers is the de facto definition of • Job Boards ALL applicants for all corporations that use the • BOT searches Internet for recruiting. • Any other related electronic technologies© Hampton Resources 0510 Proprietary Slide 17
  18. 18. Definition Of An Applicant #2 The contractor considers the individual for employment in a particular position; • Considers means „the contractor assesses the substantive information provided in the expression of interest with respect to any qualifications involved with a particular position‟ • The word considers is the root cause of much of the confusion regarding these new regulations.© Hampton Resources 0510 Proprietary Slide 18
  19. 19. Definition Of An Applicant #3 The individual‟s expression of interest indicates the individual possesses the basic qualifications for the position. • Basic qualifications need to be 1) established before recruiting begins; 2) non-comparative; 3) objective; 4) and relevant to the position. • Understanding who meets the basic qualifications of a REQ is critically important to your record keeping obligations.© Hampton Resources 0510 Proprietary Slide 19
  20. 20. Definition Of An Applicant #4The 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 otherwiseindicates that he or she is no longer interested in the position. • 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. • This is a very valuable tool in reducing your data collection obligations.© Hampton Resources 0510 Proprietary Slide 20
  21. 21. Search & Staffing Firm Traps The Contractor‟s recordkeeping obligations under 41 CFR 60-1.12 • Obligations for recordkeeping belong to the Contractor. • Prudent to contractually define recordkeeping requirements and expectations. • Ensure that the Agency is held accountable to those requirements and expectations and is provided in a timely manner that is equally defined.© Hampton Resources 0510 Proprietary Slide 21
  22. 22. Search String Trap Prevention If you limit your search to Basic Qualifications – Data Management Technique (DMT) will limit who you consider. – You must consider all hits if you don‟t use DMT. Search Beyond Basic Qualifications – Considers every resume you review in your database – Considers only those resumes that represent a positive hit from your Basic Qualifications search from an external database when using DMT.© Hampton Resources 0510 Proprietary Slide 22
  23. 23. Job Posting Trap• OFCCP Endorsed Internal Job Posting Programs – Records regarding the program must be retained – Contractors with $100k or more in contracts • List all Employment Openings with Appropriate Employment Service Delivery Systems© Hampton Resources 0510 Proprietary Slide 23
  24. 24. Statistical Report Traps• AAP Statistical Reports for Minorities and Women – Workforce Analysis – Job Group Analysis – Availability Analysis – Incumbents vs. Availability Analysis – Goals Analysis – Goals Progress Report• Disparate Impact Analysis Reports - Minorities vs. Non-Minorities and Females vs. Males – New Hires vs. Job Applicants – Promotions vs. Available Pool – Terminations vs. Available Pool• Compensation Analysis that follows OFCCP Protocol for Statistical Analysis called "First Pass Testing" – Females vs. Males – Minorities vs. Non-Minorities© Hampton Resources 0510 Proprietary Slide 24
  25. 25. Pay System Trap• A compliant plan must meet two external audits - DCAA and DOL/EEOC – DCAA is concerned that the plan pays fair wages compared to the external market • Are you paying in line with peer companies? – DOL is concerned that the plan pays fair wages compared to internal equity • Are your minorities paid in line with majorities? • Are “equal” jobs rewarded equally? (after adjustment for experience, etc.)© Hampton Resources 0510 Proprietary Slide 25
  26. 26. Job Group Placement Trap• All jobs located in an establishment must be reported in the analysis for that establishment except for: – Employees reported in the establishment of their manager – In establishments of less than 50 EEs may be captured under any of the following three manners: • AAP for the establishment they work within • Location of the personnel function that supports that establishment • Location of the program that covers the individual to whom they report – Employee selections made at a higher level establishment must be included in the program where the decision is made.© Hampton Resources 0510 Proprietary Slide 26
  27. 27. Recordkeeping Trap• Any and All Recruiting and Personnel records• Complaints and Evaluations• Past AAPs• Records retention is included in the requirement for good faith efforts at compliance• Missing records presumed unfavourable to the employer and infers a practice of discrimination© Hampton Resources 0510 Proprietary Slide 27
  28. 28. Inference Provision Trap Where the user has not maintained data on adverse impact as required by thedocumentation 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). 41 CFR 60-3.4(D)© Hampton Resources 0510 Proprietary Slide 28
  29. 29. Audit Focus• Established Lines of Authority• Internal Controls• Established Policies & Procedures• Applicant Tracking & Structured Data Analysis• Formal Pay Structures, Merit Budgets & Analysis• External Consistency - Survey Data• Internal Equity – Job Group Analysis• ADA complaint job descriptions• Defined Training and Communications© Hampton Resources 0510 Proprietary Slide 29
  30. 30. Preparing for the Audit• Current year AAP and two previous years if asked for• Adverse impact analysis• Veterans and Disabled Workers plan• EEO-1s© Hampton Resources 0510 Proprietary Slide 30
  31. 31. Preparing for the Audit, Cont.• Total Compensation Plan with Methodology• I-9s• Job Postings• Employment law posters• General facility appearance• Regular Review of Diversity Progress© Hampton Resources 0510 Proprietary Slide 31
  32. 32. Penalties for Noncompliance• Conciliation Agreement – Back pay – Job offers – Seniority credit – Additional training programs – Special recruitment efforts• Enforcement proceedings – Debarment – Monetary sanctions© Hampton Resources 0510 Proprietary Slide 32
  33. 33. Summary Don‟t breathe a sigh of relief. Have a policy and enforce it on both internal and external recruiting resources. Design an Affirmative Action Program with policies for the long-run. Use data management and basic qualification to manage your record keeping burden. Look at how you can use technology to reduce manual labor AND turn the record keeping requirements into a mechanism for talent pool development. Seek expert services for guidance, guessing is not worth the consequence of getting it wrong.© Hampton Resources 0510 Proprietary Slide 33
  34. 34. Questions Cathleen M. Hampton Hampton Resources Cathleen.hampton@hamptonresources.com www.hamptonresources.com (703) 794-9442© Hampton Resources 0510 Proprietary Slide 34