AAP presentation 2010 trends

Affirmative Action and the DCAA

Compliance Trends
in Support of EEO Legislation

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

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


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.


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


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


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


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


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


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...”


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%


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


Compliance Evaluations

• Compliance Review
• Compliance Check
• Focused Review


Most Common Issues
Most common Most Common Audit
Misunderstandings Traps
1. Affirmative Action is a 1. Poorly defined protocol and
diversity program recordkeeping of applicant
2. Numerical goals are data
designed to achieve 2. Disparate impact found in
proportional representation resume search strings
3. Goals essentially set quotas 3. Search and staffing firm
requiring preferential hiring data failures
4. OFCCP sets penalties for 4. Job posting missteps
not meeting goals 5. Poor data analysis
6. Compliant Pay System
7. The Inference Provision


The “Applicant” Trap

• 2005 - New definition
of “Applicant”
• Establish protocol that
identifies a candidate
vs. an “Applicant”
• Requirement to track
resume activity


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


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


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.



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.



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.
• 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.


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.


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.


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


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


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.)


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.


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


Inference Provision Trap

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).

41 CFR 60-3.4(D)


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


Preparing for the Audit

• Current year AAP and
two previous years if
asked for
• Adverse impact
analysis
• Veterans and
Disabled Workers
plan
• EEO-1s


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


Penalties for Noncompliance
• Conciliation Agreement
– Back pay
– Job offers
– Seniority credit
– Additional training programs
– Special recruitment efforts
• Enforcement proceedings
– Debarment
– Monetary sanctions


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.


Questions

Cathleen M. Hampton
Hampton Resources
Cathleen.hampton@hamptonresources.com
www.hamptonresources.com
(703) 794-9442


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