OFCCP's TAG, Part 10: Additional Components of an EO 11246 AAP

By: Kate Hayek

As we continue our series on OFCCP’s Supply and Service Contractors Technical Assistance Guide (“TAG”), this post reviews the TAG’s section covering the certain requirements and components in an Executive Order 11246 affirmative action program (AAP), sometimes referred to as a minority and female AAP.

The previous article in this series covered the first four basic requirements of the EO 11246 AAP:  

  1. Organizational Profile
  2. Job Group Analysis
  3. Utilization Analysis
  4. Placement Goals 

In this entry, we will discuss the final four components of an EO 11246 AAP:  

  1. Designation of Responsibility  
  2. Identification of Problem Areas  
  3. Action-Oriented Programs  
  4. Audit and Reporting System  

It’s worth noting that while Federal Regulations 41 CFR 60-2.11 through 2.16 provide comprehensive instructions about the analyses that Federal Contractors must perform for Executive Order AAPs, the section of the TAG covered in this blog seeks to define the vague obligations outlined in 41CFR 60-2.17, and, in some instances, deviates from the regulations, as discussed below. 

Designation of Responsibility (41 CFR § 60-2.17 (a)) 

The Designation of Responsibility section of the Executive Order AAP outlines who is responsible for overseeing and implementing all aspects of the AAP. This section should: 

  • Name an Affirmative Action Officer who has overall responsibility for all matters pertaining to equal employment opportunity policy and the AAP.  The designated person must have the organizational authority to develop equal employment opportunity (EEO) Policies and implement Affirmative Action Programs.  
  • Outline the responsibilities of managers and supervisors to support EEO Policies and AAPs.  

If appropriate, the Affirmative Action Officer may also delegate an additional person or persons to carry out EEO and AAP implementation and handle day-to-day EEO commitments. 

Federal Regulation 60-2.17(a) provide scant details regarding the designation of responsibility. By contrast, the TAG clearly outlines the responsibilities of the Affirmative Action Officer (acting alone or through other personnel), as the following: 

  • Developing policy statements, affirmative action programs, and internal and external communications.  
  • Creating the organization’s EEO Policy and ensuring that it is presented during supervisory training and employee orientation programs. The Affirmative Action Officer should also ensure that the organization encourages employees to ask EEO-related questions. 
  • Implementing a system to:  
    • Evaluate the effectiveness of the Company's affirmative action programs.  
    • Indicate, if appropriate, the need for remedial action.  
    • Determine the degree to which the Company's goals and objectives have been attained.  
  • Serving as liaison between the Company and enforcement agencies.  
  • Developing and implementing action-oriented programs that address potential problem areas. 
  • Serving as liaison between the Company and minority organizations, women's organizations, and community action groups concerned with employment opportunities of minorities and women.  
  • Keeping management informed of the latest equal opportunity developments.  

The TAG states that the Affirmative Action Officer should also periodically audit the organization to ensure that all required federal, state, and local employment discrimination postings and the EEO Policy are properly displayed, assist in the preparation of EEO-1 reports and other required documentation, and act to ensure that supervisors and employees do not engage in harassment of employees or applicants. 

Additionally, the TAG states that Affirmative Action Officer must ensure that department supervisors and management understand they have specific responsibilities under the affirmative action regulations. Their duties should include, but are not limited to:  

  • Responding to employee questions about the organization’s equal employment policy under the guidance of the Affirmative Action Officer. 
  • Assisting the Affirmative Action Officer during investigations of alleged discrimination. 
  • Performing audits to ensure that posters are properly displayed.  
  • Participate in the implementation of AAPs. 

Identification of Problem Areas (41 CFR § 60-2.17 (b)) 

The Identification of Problem Areas section of the federal regulations outlines analyses that must be conducted to determine where impediments to equal opportunity exist. The section of the regulations must discuss problems areas found by the analyses covered in our previous blog as well as problem areas identified in other ways. Among the analyses and procedures to be reviewed are the following: 

  • Workforce by organizational unit and by job group to determine if there are disparities involving race/ethnicity and/or sex (41 CFR § 60-2.17 (b) (1)) 
  • Personnel activity including applicant flow, hires, terminations, and promotions to determine if there are selection disparities involving race/ethnicity and/or sex (41 CFR § 60-2.17 (b) (2)) 
  • Compensation systems to determine if there are pay disparities involving race/ethnicity and/or sex (41 CFR § 60-2.17 (b) (3)) 
  • Selection, recruitment, referral, and other personnel procedures to determine if there are any disparities involving race/ethnicity and/or sex (41 CFR § 60-2.17 (b) (4)) 
  • Any other areas that might impact the success of the affirmative action program (41 CFR § 60-2.17 (b) (5)) 

The TAG offers insights into how OFCCP identifies problem areas by organizational unit and job group in this section – details that were not provided in 2.17(b). OFCCP Compliance Officers may use Job Area Acceptance Range (JAAR) and EEO-1 Trend analyses to identify minority and female concentration or underrepresentation with an organization’s workforce, and Impact Ratio Analyses (IRAs) to measure how employment process affect employees and applicants. The TAG refers users to OFCCP’s Federal Contract Compliance Manual (FCCM) for more information on these subjects. 

The TAG states that OFCCP does not prescribe a specific method that contractors must use to perform the required in-depth evaluation of compensation systems, only that the regulations require that the assessments seek to uncover race- or gender-based disparities in compensation. The TAG refers users to Directive 2018-05 on Analysis of Contractor Compensation Practices During a Compliance Evaluation for more information about OFCCP’s guiding principles for compensation self-audits and analyses.  

Action-Oriented Programs (41 CFR § 60-2.17 (c)) 

Federal regulations and the TAG agree that Action-Oriented Programs should be developed to eliminate issues uncovered in the Identification of Problem Areas section. These programs should address underutilization, findings of disparities, issues with selection process, and the absence of required policies or procedures.  

The federal regulations state that a contractor must not continue policies and programs that created impediments to equal employment, and must document that it has “made good faith efforts to remove identified barriers, expand equal opportunities, and produce measurable results." 

The TAG builds upon the regulations by stating that action-oriented programs must have two qualities: 

  • They must be specific to the problems identified, focusing on what actions will be taken, who is responsible for implementation of the programs, and when corrective action be accomplished. 
  • They must be result-oriented, leading to a direct increase minority and female participations in company-sponsored programs or to remedies in identified problem areas. 

The TAG provides two lengthy examples of action-oriented programs. The first example involves utilization for minorities and women in an Analyst Job Group. It outlines how the contractor determined that the underutilization was caused by a lack of recruitment. The contractor took action to increase minority and female representation in the relevant applicant pools by: 

  • Advertising in media channels directed at minorities and women. 
  • Building partnerships with professional groups, educational institutions, and employment agencies to increase the recruitment of minorities and women. 

The TAG recommended that the contractor explore existing employees who could be trained for and then promoted or transferred into the affected job group.  

The second example explores a high termination rate of women in a Technician Job Group. The TAG says that the contractor conducted exit interviews and determined that the high rate of female turnover was caused by a belief that women would not get promoted. The contractor in this example took the following actions: 

  • Reviewed promotion procedures to ensure equal access through posting promotion opportunities where all employees can see them, and then assessing job requirements for potential barriers 
  • Conducted periodic affirmative action and equal opportunity training for all employees involved in the selection procedure 
  • Instituted development programs 
  • Established a temporary system to oversee promotions in the affected job group 

After these two examples, the TAG reminds contractors that all programs should be reviewed for effectiveness and adjusted as necessary on a periodic basis.  

It should be noted that the standards for action-oriented programs found in the TAG are not part of the federal regulations, and that the regulations provide no examples on how to create or measure the effectiveness of action-oriented programs. 

Internal Auditing and Reporting Systems (41 CFR § 60-2.17 (d)) 

Federal contractors are also obligated to develop and implement an internal audit and reporting system that monitors the effectiveness of all Affirmative Action Programs. The federal regulations list 'key' elements of a successful affirmative action program, including the following: 

  • Monitoring of all personnel activity, including referrals, placements, transfers, promotions, terminations, and compensation, to ensure that there is no discrimination in these actions; 
  • Scheduling internal reporting on the degree to which objectives are being attained; 
  • Reviewing reports with all levels of management; and 
  • Advising top management of program effectiveness and submitting recommendations for improvements. 

The TAG again expands on the regulations by attaching specifics to the original vague regulatory language. It states that the Internal Auditing and Reporting Systems section of the AAP must include a narrative description of the system and should specify: 

  • Frequency of remedial actions and reports 
  • The designated person responsible for taking each corrective action 
  • How and when program results will be reviewed with all levels of organizational management 

The TAG states internal auditing and reporting systems should do the following: 

  • Assess progress toward stated goals by job groups 
  • Outline the frequency and method of reviewing selection, promotion, transfer, training and termination procedures by job title, job group, and, where appropriate, organizational unit  
  • Provide an overview of compensation programs analysis and the correction of any identified disparities. The analysis should consider all types of compensation including: 
    • Salary and/or wages 
    • Any other forms of compensation including stock options, bonuses, and car allowances 
  • Provide a schedule reporting on the attainment of equal opportunity and organizational objectives with management
  • Detail how the contractor will keep top management informed of the effectiveness of corporate EEO policies and make recommendations for improvements  

It is very important to note that while the TAG suggests that all forms of compensation should be evaluated, the regulations themselves provide no specific guidance on what forms of compensation should be analyzed or how compensation analyses should be conducted. 

This section of TAG also suggests that contractors must include a review regarding the accessibility of all online or electronic application systems as well as a review of accommodation request procedures. (Refer to OFCCP’s FAQs on Disability Issues Related to Online Application Systems for additional guidance.)  While these actions are required under OFCCP’s regulations regarding individuals with disabilities, they are not found in Executive Order regulations and thus seem out of place in this section of the TAG. 

In the next installment of DCI’s series on the Supply and Service TAG, we’ll begin to cover the affirmative action requirements regarding individuals with disabilities and protected veterans. 

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