Affirmative Action Plan Methodology 101 Part I : An Overview
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1 Affirmative Action Plan Methodology 101 Part I : An Overview February 15, 2017 Michael Pati Be Lam
2 Overview of Biddle Consulting Group, Inc. Affirmative Action Plan (AAP) Consulting and Fulfillment Thousands of AAPs developed each year Audit and compliance assistance myaap Enterprise software HR Assessments Custom Test Development & Validation EEO Litigation Consulting /Expert Witness Services Compensation Analysis Publications/Books BCG Institute for Workforce Development Speaking and Training AutoGOJA online job analysis system TVAP test validation & analysis program CritiCall pre-employment testing for 911 operators OPAC pre-employment testing for admin professionals Video Situational Assessments (General and Nursing) High stakes test development Validation studies in response/prevention to litigation Over 200+ cases in EEO/AA (both plaintiff and defense) Focus on disparate impact/validation cases Proactive and litigation/enforcement pay equity studies COMPare compensation analysis software EEO Insight : Leading EEO Compliance Journal Adverse Impact (3 rd ed.) / Compensation (1 st ed.) 7,500+ members Free webinars, EEO resources/tools Regular speakers on the national speaking circuit 2
3 Biddle Consulting Group Institute for Workforce Development (BCGi) BCGi Memberships (free): ~7500+ members / 15,000 HRCI credits to-date Online community Monthly webinars on EEO compliance topics EEO Insight Journal (e-copy) BCGi Platinum Membership (paid) Includes validation/compensation analysis books EEO Tools including those needed to conduct AI analyses EEO Insight Journal (e-copy and hardcopy) Access to the BCGi library of webinars, training materials, and much more 3
4 Managing Uncertainty: EEO In A New Administration April 6-7, 2017 San Francisco, California *Early bird registration ends Feb 28 th * 4
5 Contact Information Biddle Consulting Group, Inc. 193 Blue Ravine, Suite 270 Folsom, CA Michael Pati Be Lam 5
6 Agenda: Part I Brief History of Affirmative Action Who Must Create an Affirmative Action Plan Requirements of an Affirmative Action Plan In Conclusion: Summary, Questions and Answers
7 What is an AAP? An Affirmative Action Plan is a set of goal oriented management policies and procedures designed to identify and eliminate barriers to employment opportunities for minorities, women, protected veterans and individuals with disabilities that are not based on specific job requirements Intended to foster equal opportunity (not equal outcome) so everyone has a fair chance They are designed to evaluate diversity and fairness within the contractor s workforce as well as personnel processes/procedures They outline action-oriented programs and good-faith efforts They are updated annually so that contractors can see progress (or lack thereof) 7
8 History of Affirmative Action Affirmative Action Timeline Equal Pay Act Protects women who perform substantially equal work in the same establishment from sex-based wage discrimination Age Discrimination in Employment Act Protects individuals who are 40 years of age or older Executive Order No Established the President s Committee on Equal Employment Opportunity which later became the EEOC Civil Rights Act Title VII Prohibits employment discrimination on the basis of race, color, religion, sex or national origin Executive Order No Prohibits federal contractors from employment discrimination based on race, religion, color or national origin and requires affirmative action Executive Order No Amended EO to prohibit discrimination based on sex as well Vietnam Era Veterans Readjustment Assistance Act of 1974 To take affirmative action to employ and advance in employment veterans protected by this act and prohibits discrimination against these veterans
9 Federal Civil Rights Agency 9
10 OFCCP - Chain of Command OFCCP Acting Interim Director Thomas Dowd Regional Directors 1. New York 4. Chicago 2. Philadelphia 5. Dallas 3. Atlanta 6. San Francisco District Directors Assistant District Directors Compliance Officers 10
11 11
12 Who Must Create an AAP? Government contract Two types of contracts: 1) Supplies and Services 2) Construction Prime Contractors Holds a contract with the Federal Government Example: Motor vehicle company supplying cars to the government employees Subcontractors Holds a subcontract with a prime contractor supplying goods and services to a prime contractor Example: The company who supplies tires to the motor vehicle company Ref: 41 CFR
13 Who Must Create an AAP? Federal Contractor s Reporting Requirements Affirmative Action Plans Overseen by OFCCP EEO-1 Reports Overseen by EEOC Must file if company has 100+ employees or is a contractor who falls under the requirements of E.O Report on number of employees by gender, ethnicity and race NEW: For contractors with 100+ employees, must also report on W-2 salary data and hours worked across 12 pay bands NEW: May use snapshot of data from any payroll period between October 1 December 31, 2017 NEW: Deadline extended to March 31, 2018 VETS-4212 Reports Overseen by VETS Dept Can file August 1 September 30 Due September 30 th annually 13
14 Who Must Create an AAP? Affirmative Action Programs Three (3) types of written Affirmative Action Programs: 1) AAP for Minorities & Women (E.O ) 2) AAP for Disabled (Sec. 503 of the Rehabilitation Act) 3) AAP for Protected Veterans (VEVRAA) 14
15 Who Must Create an AAP? 1) AAP for Women and Minorities Executive Order (E.O.) Requires Federal contractors to create an AAP if they meet one of the following criteria: 50 or more employees and $50,000 or more in contract revenue during a 12 month period Serves as a depository of Government funds in any amount A financial institution who issues and pays U.S. saving bonds or saving notes Ref: 41 CFR (b) (1) (i-iv) 15
16 Who Must Create an AAP? 2) AAP for Individuals with Disabilities Section 503 of the Rehabilitation Act of 1974, as amended 50 or more employees and a contract of $50,000 or more Ref: 41 CFR (b) 16
17 Who Must Create an AAP? 3) AAP for Protected Veterans Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended 50 or more employees and a contract of $150,000* or more Covered contractors shall take affirmative action to employ and advance in employment qualified protected veterans. Disabled veterans, recently separated veterans, active duty wartime or campaign badge veterans, and Armed Forces service medal veterans are protected veterans under VEVRAA. Ref: 41 CFR (a) * Federal Acquisition Regulations; Inflation Adjustment of Acquisition- Related Thresholds, 80 FR
18 Who Must Create an AAP? Requirements Thresholds Disabled Women & Minorities Protected Veterans Contract Amount Section 503 of Rehabilitation Act of 1973 Executive Order Vietnam Era Veterans' Readjustment Assistance Act of 1974 $50,000 $150,000 Practice Tip: Confirm the amounts of federal contracts/subcontracts. It may be the case that you meet the requirements of E.O and Sec. 503, but not VEVRAA. 18
19 Requirements of an Affirmative Action Plan 19
20 Requirements of an Affirmative Action Plan What does an AAP include? AAP for Women and Minorities Narrative 1 Technical Reports 3 AAP for Protected Veterans and Individuals with Disabilities Narrative 2 Technical Reports 4 Ref: CFR CFR CFR CFR (k) & /741.44(k) &
21 Requirements of an Affirmative Action Plan AAP for Women and Minorities - Narrative Content Explanatory chapters Chapters 1-6 (explains the technical reports) [Optional] Designation of Responsibilities Who is responsible to implement the AAP President/CEO, HR Manager, AA Officer, Managers and Supervisors Identification of Problem Areas Do impediments to EEO exist? Action Oriented Programs The implementation portion of the AAP (i.e., How does the organization plan to address the problem areas?) Internal Audit and Reporting Measures the effectiveness of the AAP 21
22 Requirements of an Affirmative Action Plan Technical Reports - AAP for Women and Minorities 1. Workforce Analysis or Organizational Profile (Ref: 41 CFR ) 2. Job group Analysis (Ref: 41 CFR ) 3. Availability Analysis (Ref: 41 CFR ) 4. Incumbency vs. Availability (Ref: 41 CFR ) 5. Placement Goals (Ref: 41 CFR ) 6. Personnel Transactions (Ref: 41 CFR (b)(2)) Additional Requirements: Compensation Analysis Adverse Impact Analysis Data Needed: Employee and Personnel Transactions Data 22
23 Requirements of an Affirmative Action Plan AAP for Protected Veterans (Vets) and Individuals with Disabilities (IWDs) - Narrative Content Required Components Vets IWDs 1. Equal Opportunity Policy Statement 2. Review of Personnel Processes 3. Review of Physical and Mental Qualifications 4. Reasonable Accommodations to Physical and Mental Limitations 5. Commitment to Anti-Harassment 6. External Dissemination of Policy, Outreach, and Positive Recruitment 7. Internal Dissemination 8. Audit and Reporting System 9. Identification of Responsibility for Implementation 10. Training 23
24 Requirements of an Affirmative Action Plan Technical Reports - AAP for Protected Veterans and Individuals with Disabilities 1. Data Collection Analysis (Veterans)(Ref: 41 CFR (k)) 2. Hiring Benchmark (Ref: 41 CFR ) 3. Data Collection Analysis (IWDs) (Ref: 41 CFR (k)) 4. Utilization Goals (IWDs) (Ref: 41 CFR ) 24
25 Requirements of an Affirmative Action Plan Three (3) Important Questions: 1) What Are the Dates that I Should Consider? 2)How Many AAPs Should I Develop? 3)Who Should Be Included in the AAP? 25
26 Requirements of an Affirmative Action Plan Question 1: What Are the Dates that I Should Remember? 26
27 Requirements of an Affirmative Action Plan AAP s require understanding three important sets of dates: 1) Employee Snapshot Date A snapshot of current employees on a specific day Example: December 31, ) Transaction Dates 12-month period prior to the snapshot date Example: January 1, 2016 through December 31, 2016 Includes Hires, Promotions, and Termination Applicants all applicants associated with the hires during the transaction period 3) Plan Implementation Dates Current plan is effective for a 12-month period after the Snapshot Date Example: January 1, December 31,
28 Requirements of an Affirmative Action Plan Question 2: How Many AAPs Should I Develop? 28
29 Requirements of an Affirmative Action Plan Types of Affirmative Action Plans 1) Establishment-based AAP By location 2) Function-based AAP (FAAP) By department, division, or business unit Requires permission from the OFCCP 3) Roll-Up AAP Regional, state, company-wide, etc. 29
30 Requirements of an Affirmative Action Plan Establishment or Roll-Up AAPs 30
31 Requirements of an Affirmative Action Plan Establishment or Roll-Up AAPs 31
32 Requirements of an Affirmative Functional AAPs Action Plan Communications Sales Human Resources 32
33 Requirements of an Affirmative Action Plan Pros and Cons to Rolled-Up AAPs Pros Cons Easier/Accepted Practice Increased Audit Exposure Less Costly Increased Sample Size = Underutilization/Adverse Impact Less Work Greater chance that employees are not similarly situated skewed analysis results 33
34 Requirements of an Affirmative Action Plan Question 3: Who Is Included in the AAP? 34
35 Which employees are included? Each employee in the contractor s U.S. based workforce Who are employees? The term employee is broad enough to include part-time, temporary, and full-time employees Are they on your payroll as of snapshot date (one day in time)? How do we allocate employees to plans? Create a plan for each location with 50 or more employees If fewer than 50, roll-up with other locations Field employees roll into manager s location move up the chain Ref: 41 CFR (d) 35
36 Identify the Corporate Initiative Employees: Organizations are required to identify employees who work in one AAP location while being on the payroll at another AAP location and/or report to a manager at another AAP location. Employees who physically work at a given location will have to appear in the Workforce Analysis of that physical location (with annotation); but nowhere else in that AAP. The employees who report to another location are included in all AAP reports of that other location. 36
37 How to Define Corporate Initiative Employees Recommendations: Include employees in the AAP of their supervisor or Those who are in certain levels (e.g., Executives, pay grade, etc.) 37
38 Ref: 41 CFR
39 Workforce Analysis Overview of the workforce by Department Shows a Line of Progression To determine whether barriers exist to equal employment opportunity within the organization Glass Ceiling Each Workforce Analysis must display the following: Name of the Unit Job titles must be listed by in order of wage rate or salary ranges For each job title, the total number of incumbents by gender and total number of males and females within each race group (+) (-) Corporate Initiative employees identified by footnotes Ref: 41 CFR (c) 39
40 Example of Workforce Analysis 40
41 Ref: 41 CFR
42 Job Group Analysis All other reports from here forward will be based on job groups Identifying appropriate job groups is critical Job groups are aggregations of jobs that are similar in content, wage, and opportunity Workforce Analysis Jobs by department Job Group Analysis Jobs by functional alignment, regardless of department Ref: 41 CFR
43 Developing Job Groups Keep it simple Organizations of 150 employees or fewer may use EEO-1 Categories Ref: 41 CFR (e) 1.1 Executive/Senior Level Officials and Managers 1.2 First/Mid Level Officials and Managers 2 Professionals 3 Technicians 4 Sales Workers 5 Administrative Support Workers 6 Craft Workers 7 Operatives 8 Laborers and Helpers 9 Service Workers 43
44 Developing Job Groups More than 150 Employees? How many employees in each EEO category? Enough employees to break down into sub categories? Develop the sub categories: Levels? (e.g., Entry Level, Mid Level, Senior Level) Specialty? (e.g., Administrative Professionals, Technical Professionals, Finance Professionals) Ref: 41 CFR
45 Developing Job Groups: EEO Category No. of Emps Executives 5 Professionals 120 Sales 15 Professionals No. of Emps Nurses 90 Accountants 5 Systems Engineers 20 Analysts 5 Ref: 41 CFR Job Groups No. of Emps 1A - Executives 5 2A Prof- Nurses 90 2B Prof IT Prof 20 2C Prof - Other 10 4A - Sales 15 45
46 Example of Job Group Analysis Ref: 41 CFR
47 Ref: 41 CFR
48 Availability Analysis - What is it? Helps us understand what your organization should look like: An estimate of the number of qualified minorities or women available for employment in a given job group. A combination of both internal and external comparison data (i.e. factors) used to identify what the composition of a job group is supposed to look like. To establish a benchmark against which the demographic composition of the contractors incumbent workforce can be compared. Ref: 41 CFR
49 Availability Analysis - What is it? Two Factors External Factor: Data compiled by an outside source (e.g., census data) Local and National Labor Areas Census Codes U.S. Census Bureau Internal Factor: Promotable and/or transferable into the target job group from within your own organization Ref: 41 CFR
50 Determining Availability: 1. Identify the necessary/relevant factors for each job group (e.g., internal vs. external) 2. Identify the external recruitment areas (e.g., local and other than local ) collect external census data 3. Identify the internal recruitment source(s) or feeder job groups/job titles collect internal feeder data 4. Determine the factor weights 50
51 1) Availability Analysis Identify the Necessary/Relevant Factors for Each Job Group Ask this question: If we are to fill vacancies within this job group, would it typically be filled externally (i.e., hires) or internally (i.e., promos/transfers)? JOB GROUP TITLE INTERNAL FACTOR EXTERNAL FACTOR XYZ COMPANY 1A - Executives 1B Directors and Senior Managers 1C - Supervisors 2A - Administrative Professionals 2B - Technical Professionals 8A - Laborers Ref: CFR (c) (1) 51
52 2) Availability Analysis Identify the External Recruitment Area(s) A recruitment area is defined as the geographical area from which the contractor usually seeks, or reasonably could seek, workers to fill the positions in question Local Labor Area (Recruitment Area 1) Counties Close to the location Zip Code Analysis Asking Knowledgeable Staff Reasonable Area (Recruitment Area 2) Wider area(s) CBSA (Core Based Statistical Area) State/Region National Ref: CFR (c) (1) Requirements of an AAP 52
53 Reasonable Labor Area Wider Area/National Local Labor Area BCG 53
54 2) Availability Analysis Identify the External Recruitment Area(s) cont. JOB GROUP TITLE EXTERNAL FACTOR XYZ COMPANY 1A - Executives Recruitment Area 1 (Local) Recruitment Area 2 (Reasonable) 1B - Directors and Senior Managers 1C - Managers 2A - Administrative Professionals 2B - Technical Professionals 8A - Laborers 54
55 3) Availability Analysis Identify the Internal Recruitment Source(s) (i.e., Feeders) A feeder job group is composed of employees who are promotable/transferable/trainable within the organization. Ref: CFR (c) (2) 55
56 4) Availability Analysis Determine Factor Weights The weights given to the internal and external availability data for each job group. Assigning the factor weights requires the user to ask the following question: Out of 100 hypothetical movements into this job group, what number do I expect to come from a recruitment area (i.e. area 1 and area 2), or an internal pool? Ref: CFR (c) (1) 56
57 Example of Factor Weights 57
58 Example of Availability Analysis 58
59 Ref: 41 CFR
60 Comparison of Incumbency to Availability A comparison of gender and race/ethnic percentages within each job group in the employer s workforce (i.e., what you do look like) to the corresponding availability percentages for those job groups (i.e., what your availability analysis indicates you should look like) Ref: 41 CFR
61 OFCCP allows for different tests: Any Difference Rule Whole Person Rule 80% Rule 80% + Whole Person Rule Statistical Significance 61
62 Example of Comparison of Incumbency to Availability and Placement Goals Report Utilization Test: Whole Person Shortfall calculation for Female: Total Employees (16) x Availability (51.8%) = 8.29 #of female as of the snapshot (7)= 1.29 Shortfall within Whole Person = 1 62
63 Ref: 41 CFR Requirements of an AAP Placement Goals Placement Goals defined Serve as objectives or targets reasonably attainable by means of applying every good faith effort to make all aspects of the entire AAP work. Refers back to the Comparison of Incumbency to Availability Report If underutilization was flagged, (based on utilization test) this report will identify the magnitude or severity of the underutilization the Placement Goal. Placement goals refer to RECRUITMENT. They are NOT Hiring Quotas. 63
64 Overview of Comparison of Incumbency v Availability: External Census Data Internal Availability Data Assign Factor Weights Final Availability Data Compare Representation (Incumbency) to Availability Actual Representation (Incumbency/Headcount) Data If Potential Problem Area Exists Create Goal/Action-Oriented Program 64
65 Ref: 41 CFR (b)(2) 65
66 (+) Hires (-) Promotions From (+) Promotions Into (+) Transfers Into Current Representation (-) Transfers From (-) Involuntary Terms (-) Voluntary Terms 66
67 Personnel Transactions Four types of activity are analyzed: Applicant Flow Hires Terminations Promotions Analyzed to determine if there are selection disparities Ref: 41 CFR (b) (2) 67
68 Example of Personnel Transaction Report 68
69 69
70 Adverse Impact Adverse Impact is when a facially neutral selection device or process yields a substantially different rate of selection in hiring, promotion or other employment decision which works to the disadvantage of members of a race, sex or ethnic group 70
71 Adverse Impact - Guidelines Method A Selection Rate Comparison Asks the question: Is the selection rate of one group statistically significantly less than another group?* Group Total Pass (Rate) Failed Male (50.0%) 10 (50.0%) Female 15 5 (33.3%) 10 (66.7%) A comparison of passing rates Starting Pool: Applicants, Promotable or Available For Termination * Every Group is Protected 71
72 Example of Adverse Impact Analysis (Guidelines Method) 72
73 Ref: 41 CFR (k) 73
74 Data Collection Analysis (Veterans) Must document on an annual basis of the following computations: 1. The number of applicants who self-identified as protected veterans; 2. The total number of job openings and total number of job filled; 3. The total number of applicants for all jobs; 4. The number of applicants with protected veterans hired; and 5. The total number of applicants hired Ref: 41 CFR (k) 74
75 Example of Data Collection Analysis (Veterans) 75
76 Ref: 41 CFR
77 Hiring Benchmark Must create an annual hiring benchmark for protected veterans Hiring benchmark currently at 6.9%; may change annually based on national percentage of veterans in the CLF Hiring Benchmark is not QUOTA! Ref: 41 CFR
78 Example of Hiring Benchmark 78
79 Ref: 41 CFR (k) 79
80 Data Collection Analysis (Disability) Must document on an annual basis of the following computations: 1. The number of applicants who self-identified as individuals with disabilities; 2. The total number of job openings and total number of job filled; 3. The total number of applicants for all jobs; 4. The number of applicants with individuals with disabilities hired; and 5. The total number of applicants hired Ref: 41 CFR (k) 80
81 Example of Data Collection Analysis (Disability) 81
82 Ref: 41 CFR
83 Utilization Goals Must measure the representation of IWDs of contractor s workforce with the OFCCP s established 7% utilization goal for employment of qualified IWDs. Contractor with 100 or fewer employees has the option to measure the representation of IWDs of its entire workforce with the utilization goal of 7% instead of by job groups. Utilization goals are not QUOTA! Ref: 41 CFR
84 Example of Disability Utilization Goal 84
85 The Big Picture Each required report builds a chapter in the story of your organization s AAP. There are no stand-alone reports; each report feeds from the previous report. You are left with a view of what you should look like, what you do look like, and the transactions that got you there. 85
86 86
87 Summary/Conclusion OFCCP is very active from an enforcement perspective primary areas include: Evaluating applicant data Adverse impact (hiring) Compensation Outreach/Recruitment High-volume positions Make sure to read/understand your Affirmative Action Plans (especially the analyses/results) ask questions 87
88 Attachment A: Veterans Outreach Programs
89 Attachment B: Disability Outreach Programs
90 Attachment C: Job Posting Tips The OFCCP is expecting contractors create active relationships with outreach/recruitment sources Ensure all postings make it to state and local agencies including advocacy groups (enlist 3 rd -party if necessary) Include specific agencies aimed towards women, minorities, veterans, and individuals with disabilities Document postings and ensure they were actionable Best practice: Track referral source to evaluate effectiveness of outreach/recruitment 90
91 Q & A 91
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