OFCCP's TAG, Part 9: Components of an EO 11246 AAP

By: Fred Satterwhite

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

The TAG lists the basic requirements of the EO 11246 AAP as: 

1. Organizational Profile 
2. Job Group Analysis
3. Utilization Analysis
4. Placement Goals 
5. Designation of Responsibility 
6. Identification of Problem Areas 
7. Action-Oriented Programs 
8. Audit and Reporting System

Organizational Profile 

The organizational profile is a depiction of the company’s workforce that reflects employment patterns within the AAP establishment. The organizational profile requirement can be met by using one of the following two options described in the TAG: 

1. Organizational Display: This is similar to an organizational chart, but showing organizational units (e.g., departments), rather than individual employees, to demonstrate the structure of the company. Each unit on the chart must be annotated to show the following: 

1. 1. Unit name
   2. If the unit has a supervisor, the unit supervisor’s job title, race/ethnicity, and gender; and,
   3. The total number of employees in the unit, grouped by race/ethnicity and gender. 

 The TAG includes an example of what the organizational display could look like:

2. Workforce Analysis: A workforce analysis is a listing of job titles, from lowest- to highest-paid, within each organizational unit (e.g., department). For each job title, the following information must be shown: 

1. 1. The total number of employees;
   2. The total number of male and female employees by race/ethnicity category; and, 
   3. The wage rate or salary range. 
      

The workforce analysis must include all positions at the establishment; if any employees at the establishment are included in a different establishment’s AAP based on reporting relationships, the workforce analysis should identify in which AAP those employees are included. In addition, if the company has formal lines of progression, a separate list showing the order of jobs through which an employee moves from entry level to the top level within the unit must be included. 

The TAG instructs employers to review the organizational profile to identify areas where women and/or minorities are either concentrated in lower-level positions, or underrepresented in higher-level positions, relative to their overall representation in the workforce. 

This section of the TAG also includes a sidebar stating that when contractors create an organizational profile, they may choose to use the race/ethnicity categories listed in either the current EEO-1 report, or in OFCCP’s regulations, which have not yet been updated to reflect the current EEO-1 report. This guidance will need to be updated in the next few years, based on the Office of Management and Budget’s (OMB) recent publication of revisions to Statistical Policy Directive 15: Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity.  

Job Group Analysis 

The job group analysis organizes jobs into groups based on similarities in content, wage rates, and opportunities for advancement. These job groups serve as the primary level of analysis in the AAP, allowing comparison of representation in the company’s workforce with estimated availability of qualified minorities and women for employment. Similar to the workforce analysis, the job group analysis must include employees located in a different AAP establishment from the one to which they report with the establishment to which they report. 

The TAG describes the following steps to form job groups: 

1. Organize job titles into EEO-1 job categories. Contractors with fewer than 150 employees can stop here and simply use the EEO-1 job categories as the job groups in their AAPs. 
2. Group job titles within the same EEO-1 job category based on similarities in content, wages, and opportunities. 
3. Consider the size (i.e., number of employees) of the groups formed in step 2, making sure that each group is large enough to conduct meaningful analyses. 
4. Finalize the most appropriate groupings based on the first three steps. 

The utilization analysis (or, “Comparison of incumbency to availability” as described in OFCCP’s current regulations) includes the determination of estimated availability of minorities and women for employment and comparison with their representation in the job groups. The TAG describes the process of determining job group availability by considering two factors: external availability and internal availability. 

External availability is the percentage estimate of women and minorities possessing the requisite skills in a geographic area where the contractor recruits applicants. The TAG states that contractors must use the Census Bureau’s EEO Tabulation for external availability data but can supplement with other data sources. The TAG includes a step-by-step example demonstrating how to calculate external availability estimates for women and minorities in a job group. 

Internal availability is the percentage estimate of female and minority employees who are promotable, trainable, and/or transferable into the job group from within the contractor’s organization. The TAG also includes a step-by-step example demonstrating how to calculate internal availability estimates for women and minorities in a job group. 

The TAG continues by demonstrating a step-by-step example of combining external and internal availability by weighting each of the two factors to calculate the final availability of women and minorities for a job group. 

In this section of the TAG, OFCCP includes a callout mentioning that contractors should also look at individual race/ethnicity groups in their availability analyses as a “best practice.” A brief example of such a “disaggregate” analysis is also included. 

The TAG walks through an example of an incumbency to availability comparison to identify underutilization, which is defined as female or minority representation in a job group which is lower than would be reasonable expected given their availability. The most common methodologies for identifying underutilization, described in the TAG, are: 

• Any Difference: Declaring underutilization when there is any difference between the incumbency and availability percentages. 
• Whole Person Rule: Declaring underutilization when the number of incumbents is at least one person lower than the number expected based on the availability percentage. 
• 80% or 4/5 Rule: Declaring underutilization when the actual employment is less than 80 percent of the expected employment based on the availability percentage. 
• Statistically Significant: Declaring underutilization when the difference between actual and expected employment is statistically significant, based on a common test such as a z-test or Fisher’s exact test. 

Placement Goals 

Based on the results of the utilization analysis, placement goals are reasonably attainable objectives created by the company to measure progress toward equal employment opportunity in job groups where women and/or minorities are considered underutilized. Contractors must set placement goals for each underutilized job group. Placement goals must be at least equal to the availability percentage for the underutilized group (women or minorities). 

The TAG states that placement goals are not to be considered as quotas, should not supersede principles of merit in hiring practices, and may not be treated as either a ceiling or a floor for the employment of particular group members. The TAG also states that the failure to meet a placement goal, by itself, is not a violation of EO 11246. 

This section of the TAG also includes a callout recommending that contractors, as a “best practice,” should set placement goals for individual race/ethnicity groups when they are underutilized, but states that such placement goals are in addition to—rather than in place of—placement goals for minorities in the aggregate when they are underutilized. 

Next in this Series… 

In the next post in this series, we look at the rest of the requirements and components in an Executive Order 11246 AAP.

Previous Installments

Click here to read the previous eight blogs in this series.