Affirmative Action Plan Methodology: An Overview. Overview of Biddle Consulting Group, Inc. 3
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1 Affirmative Methodology: An Overview April 16, 2014 Diana Sicari Cassie Verdon Overview of Biddle Consulting Group, Inc. Affirmative (AAP) Consulting and Fulfillment HR Assessments Thousands of AAPs developed each year Audit and compliance assistance AutoAAP Enterprise software 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) Custom Test Development & Validation EEO Litigation Consulting /Expert Witness Services Compensation Analysis Publications/Books BCG Institute for Workforce Development Speaking and Training 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.) 4,000+ members Free webinars, EEO resources/tools Regular speakers on the national speaking circuit 2 Biddle Consulting Group Institute for Workforce Development (BCGi) BCGi Memberships (free): ~5500+ members / 13,000 HRCI credits todate 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 1
2 Contact Information Biddle Consulting Group, Inc. 193 Blue Ravine, Suite 270 Folsom, CA Diana Sicari Cassie Verdon Copyright (c) 2013 Biddle Consulting Group, Inc 4 Agenda: Part I Brief History of Affirmative Action Who Must Create an Affirmative Requirements of an Affirmative OFCCP and Regulatory Updates In Conclusion: Summary, Questions and Answers 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 Civil Rights Act Title VII Prohibits employment discrimination on the basis of race, color, religion, sex or national origin Executive Order No Amended EO to prohibit discrimination based on sex as well. Executive Order No Established the President s Committee on Equal Employment Opportunity which later became the EEOC Executive Order No Prohibits federal contractors from employment discrimination based on race, religion, color or national origin and requires affirmative action 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
3 7 Who Must Create an AAP? Executive Order (E.O.) 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 (b) (2) 8 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) 9 3
4 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) 10 Who Must Create an AAP? 2) AAP for Individuals with Disabilities Section 503 of the Rehabilitation Act of 1974, as amended Any contract in excess of $10,000 for personal property and non-personal services (including construction) shall contain a provision requiring that the party contracting with the government shall take affirmative action to employ and advance in employment qualified individuals with disabilities. Ref: 41 CFR Who Must Create an AAP? 3) AAP for Veterans Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended Covered contractors shall take affirmative action to employ and advance in employment qualified special disabled veterans, veterans of the Vietnam era and any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized. Ref: 41 CFR ,
5 Who Must Create an AAP? Veteran Reporting of the C.F.R. Applies to Government contracts of $25,000 or more entered into before December 1, of the C.F.R. Applies to Government contracts of $100,000 or more entered into after December 1, 2003 Ref: 41 CFR , Veterans covered: Special Disabled Veteran Veteran of the Vietnam Era Other Protected Veteran Recently Separated Veteran Required Filing: Vets- 100 Veterans covered: Disabled Veterans Armed Forces Service Medal Veteran Recently Separated Veteran Active-duty Wartime or Campaign Badge Medal Required Filing: Vets- 100(A) 13 Who Must Create an AAP? Requirements Thresholds Contract Amount Disabled Section 503 of Rehabilitation Act of 1973 Women & Minorities Executive Order Veterans Vietnam Era Veterans' Readjustment Assistance Act of 1974 $10,000 $50,000 $100, Federal Civil Rights Agency 15 5
6 OFCCP - Chain of Command OFCCP Director Patricia Shiu Regional Directors 1. New York 4. Chicago 2. Philadelphia 5. Dallas 3. Atlanta 6. San Francisco 54 District Directors Assistant District Directors Compliance Officers 16 Requirements of an Affirmative 17 Requirements of an Affirmative Federal Contractor s Reporting Requirements Affirmative Overseen by Office of Federal Contract Compliance Programs (OFCCP) EEO-1 Reports Equal Employment Opportunity Commission (EEOC) Must file if company has 100+ employees or fall under the requirement of E.O Can file July 1 September 30 Due September 30 th annually VETS-100(A) Veterans Employment and Training Services (VETS Dept) Can file August 1 September 30 Due September 30 th annually 18 6
7 Requirements of an Affirmative What does an AAP include? AAP for Women and Minorities Narrative 1 Technical Reports 3 AAP for Veterans and Persons with Disabilities Narrative 2 Technical Reports (Coming March 24, 2014) Ref: CFR CFR Requirements of an Affirmative 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 Internal Audit and Reporting Measures the effectiveness of the AAP 20 Requirements of an Affirmative Technical Reports - AAP for Women and Minorities 1. Workforce Analysis or Organizational Profile (Ref: 41 CFR (c)) 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 ) Additional Requirements: Compensation Analysis Adverse Impact Analysis Data Needed: Employee and Personnel Transaction Data 21 7
8 Requirements of an Affirmative AAP for Veterans New Regulations 1. Equal Opportunity (EO) policy statement 2. Review of personnel processes 3. Review of physical and mental qualifications 4. Statement regarding reasonable accommodations to physical and mental limitations 5. Statement regarding commitment to anti-harassment 6. Documentation of external dissemination of policy, outreach, and positive recruitment 7. Documentation of internal dissemination 8. Development of an audit and reporting system 9. Identification of responsibility for implementation 10. Documented training for employees 11. Data collection analysis 12. Benchmarks for hiring 22 Requirements of an Affirmative AAP for Persons with Disabilities New Regulations 1. Equal Opportunity (EO) policy statement 2. Review of personnel processes 3. Review of physical and mental job qualifications 4. Statement regarding reasonable accommodations 5. Statement regarding commitment to anti-harassment 6. Documentation of external dissemination (outreach/recruitment/record retention) 7. Documentation of internal dissemination 8. Development of an audit and reporting system 9. Identification of responsibility for implementation 10. Documented training for employees 11. Data Collection Analysis (to incl. quantitative analyses, and percentage utilization goals) 23 Requirements of an Affirmative Equal Opportunity Clause Females and Minorities Every federal contractor that does business with non government organizations for goods or services must include the Equal Opportunity Clause in contracts and purchase orders. Can be summarized with the following language, all parties agree that they will abide by the provisions of 41 CFR (a) or 41 CFR (b), as appropriate. For complete language, please see: Ref: 41 CFR
9 Requirements of an Affirmative Equal Opportunity Clause Individuals with Disabilities Contractors must include the following sentences (verbatim), in bold text within all contracts, subcontracts, amendments to contracts, renewals, and /or extensions in excess of $10,000: This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities. Ref: 41 CFR (a) and 41 CFR (a) 25 Requirements of an Affirmative Equal Opportunity Clause Protected Veterans Contractors must include the following sentences (verbatim), in bold text within all contracts, subcontracts, amendments to contracts, renewals, and /or extensions in excess of $100,000: This contractor and subcontractor shall abide by the requirements of 41 CFR (a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans. Ref: 41 CFR (a) and 41 CFR (a) 26 Requirements of an Affirmative Equal Opportunity Clause Combined Clauses Contractors may combine all of the Equal Opportunity (EO) clauses into one consolidated clause. This clause must be included in all modifications, renewals, and/or extensions and include the following bolded text: This contractor and subcontractor shall abide by the requirements of 41 CFR (a), (a) and (a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, or national origin. Moreover, these regulations require that covered prime contractors andsubcontractors take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, national origin, protected veteran status or disability. Ref: 41 CFR (a) and 41 CFR (a) 27 9
10 Requirements of an Affirmative 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? 28 Requirements of an Affirmative Question 1: What Are the Dates that I Should Remember? 29 Requirements of an Affirmative AAP s require understanding three important sets of dates: 1) Plan Implementation Dates Effective for a 12 month Period Example: January 1, December 31, ) 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, 2013 through December 31, 2013 Includes Hires, Promotions, and Termination Applicants all applicants associated with the hires during the transaction period 30 10
11 Requirements of an Affirmative Question 2: How Many AAPs Should I Develop? 31 Requirements of an Affirmative Types of Affirmative s 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. 32 Requirements of an Affirmative Establishment or Roll-Up AAPs 33 11
12 Requirements of an Affirmative Establishment or Roll-Up AAPs 34 Requirements of an Affirmative Functional AAPs Communications Sales Human Resources 35 Requirements of an Affirmative Pros and Cons to Rolled-Up AAPs Pros Easier/Accepted Practice Cons Increased Audit Exposure Less Costly Increased Sample Size = Underutilization/Adverse Impact Less Work Greater chance that employees are not similarly situated skewed analysis results 36 12
13 Requirements of an Affirmative Question 3: Who Is Included in the AAP? 37 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) 38 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
14 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.) Minute Break: Do Not Sign Off From GoTo Webinar 41 Ref: 41 CFR (c) 42 14
15 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) 43 Example of Workforce Analysis 44 Ref: 41 CFR (c) 45 15
16 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 Developing Job Groups Keep it simple Organizations of 150 employees or fewer can use EEO-1 Categories Ref: 41 CFR 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 47 More than 150 Employees? Developing Job Groups 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
17 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 Example of Job Group Analysis Ref: 41 CFR Ref: 41 CFR (c) 51 17
18 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 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 Determining Availability: 1. Identify the necessary/relevant factors for each job group (e.g., internal v 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 collect internal feeder data 4. Determine the factor weights 54 18
19 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/trans)? 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) 55 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) MSA/PMSA State/Region National Ref: CFR (c) (1) 56 Reasonable Labor Area Wider Area/National Local Labor Area BCG 57 19
20 2) Availability Analysis Identify the External Recruitment Area(s) cont. JOB GROUP TITLE EXTERNAL FACTOR XYZ COMPANY 1A - Executives Recruitment Recruitment Area 2 Area 1 (Local) (Reasonable) 1B - Directors and Senior Managers 1C - Managers 2A - Administrative Professionals 2B - Technical Professionals 8A - Laborers 58 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) (1) 59 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) 60 20
21 Example of Factor Weights 61 Example of Availability Analysis 62 Ref: 41 CFR (c) 63 21
22 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 OFCCP allows for different tests: Any Difference Rule Whole Person Rule 80% Rule 80% + Whole Person Rule Statistical Significance 65 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 = 1.29 or
23 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. Ref: 41 CFR Placement goals refer to RECRUITMENT. They are NOT Hiring Quotas. 67 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 68 Ref: 41 CFR (c) 69 23
24 (+) Hires (-) Promotions From (+) Promotions Into (+) Transfers Into Current Representation (-) Transfers From (-) Involuntary Terms (-) Voluntary Terms 70 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) 71 Example of Personnel Transaction Report Job Group: 1B Directors and Senior Managers 72 24
25 Ref: 41 CFR (c) 73 Ref: 41 CFR (b) (3) Investigation of Compensation System(s) AAP must include compensation data to determine whether pay disparities exist amongst gender, race, or ethnic groups Compensation is rapidly becoming a major focus of OFCCP enforcement (Directive 307) Item 11 Data (Audit Letter) A listing of the sum of annual salaries for men and women as well as non-minorities and minorities grouped in the manner of your compensation system Submit the data in groupings that best explain your compensation system 74 Example of Compensation Data (Item 11) Report 75 25
26 Ref: 41 CFR (c) 76 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 77 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 Avail. For Termination * Every Group is Protected 78 26
27 Example of Adverse Impact Analysis (Guidelines Method) 79 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
28 OFFCP Update OFCCP: Recent Major Strategic Changes Rescinded Active Case Management (too restrictive) - Initiated Active Case Enforcement (much broader, more aggressive/intrusive) Broadened investigations to include any gender/race (incl. men/whites) Released Directive 307 dramatically increasing enforcement capabilities with respect to compensation (incl. creation of web-based data collection tool) 82 OFFCP Update OFCCP: Recent Major Strategic Changes Released revisions to Section 503 of the Rehabilitation Act dramatically expanding requirements with respect to individuals with disabilities (including utilization goals) Released revisions to Section 4212 of the Vietnam Era Veterans Rehabilitation Act dramatically expanding requirements with respect to protected veterans (including hiring benchmarks) Released a major overhaul to the Federal Contractor Compliance Manual (FCCM) updating their enforcement techniques/strategies
29 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 85 Attachment A: Veterans Outreach Programs *FREE 86 Attachment B: Disability Outreach Programs * *FREE 87 29
30 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 88 Q & A 89 30
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