Government Contractors Beware

Audits Regarding Equal Employment Opportunity Are on the Rise

As an employer, the last thing you want is to face an audit for compliance with equal-employment-opportunity laws unprepared. Although an audit may be unavoidable, there are steps you can take to safeguard yourself in the event an audit does occur.
This is especially important because the Office of Federal Contract Compliance Programs (OFCCP) has been conducting random audits to determine if federal contractors and subcontractors are in compliance with equal-employment opportunity laws.
One of the three equal-employment-opportunity laws that the OFCCP enforces is Executive Order 11246, which prohibits discrimination and requires affirmative action to ensure that women and minorities have an equal opportunity for employment. Under the regulations implementing Executive Order 11246, some federal contractors and subcontractors are required to develop and maintain a written affirmative-action plan. If you are a government contractor, you need to know whether you are subject to this requirement.
To determine if you need a written affirmative-action plan under Executive Order 11246, ask yourself: are you a non-construction (supply and service) contractor? Do you have 50 or more employees? Do you have government contracts of $50,000 or more? If you answered yes to these three questions, you must develop and maintain a written affirmative-action plan.
The objective of an affirmative action plan is to promote diversity in the workplace and ensure equal employment opportunity in the workforce. By analyzing current employment practices and the makeup of the workforce, employers can identify deficiencies in the utilization of women and minorities in their workforce. Once these deficiencies are identified, employers can create corrective policies and practices to achieve full utilization of women and minorities in their workforce.
Affirmative-action plans are complex to create and require specific elements.  The following is a general overview of some of the required elements as detailed by the OFCCP regulations.
• Contractors must construct an organizational profile of their workforce, which is a detailed depiction of the staffing patterns within the company. This profile helps identify areas where women and minorities are underrepresented or concentrated.
• Contractors must perform a job-group analysis, which involves combining job titles into groups based on similar duties, responsibilities, compensation, and promotional opportunities. This analysis is the first step in comparing the representation of women and minorities in the company’s workforce with the estimated availability of women and minorities qualified for employment.
• Contractors must perform a utilization analysis, which involves determining the percentage of women and minorities employed in each job group, determining the availability of women and minorities who have the skills required to perform the jobs within the job groups internally (promotable, transferable, and trainable employees within the company) and externally (in the relevant labor market), and comparing the percentage of women and minorities employed in each job group with those available internally and externally. There is underutilization if there are significantly fewer women and minorities employed in each job group than are available.
• If underutilization is identified in job groups, contractors must establish placement goals for correcting such underutilization, and such goals are used to measure progress toward achieving equal-employment opportunity.
• Contractors must designate a specific person responsible for implementation of their affirmative-action plan.
• Contractors must identify problem areas where impediments to equal-employment opportunity exist.
• Contractors must develop and execute action-oriented programs designed to eliminate identified problem areas.
• Contractors must periodically conduct internal audits to measure the effectiveness of their affirmative-action plan.
• Contractors must maintain documentation to demonstrate their compliance and make such documentation available to the OFCCP upon request.
An affirmative-action plan is only one component of OFCCP compliance. For example, there are compliance requirements related to equal-employment-opportunity notice posting and record-keeping responsibilities. Also, as noted earlier, the OFCCP enforces three equal-employment-opportunity laws. Besides Executive Order 11246, the OFCCP also enforces Section 503 of the Rehabilitation Act of 1973, which prohibits discrimination and requires affirmative action in the employment of qualified individuals with disabilities; and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, which prohibits discrimination against specified categories of veterans and requires affirmative action in the employment of such veterans.
Similarly, these laws require a written affirmative-action plan, but with some variation from the elements required under Executive Order 11246. Thus, based on the complexity and extensiveness of equal-employment-opportunity laws, government contractors should consult with their employment counsel to ensure OFCCP compliance.
Being proactive will prepare you to face an OFCCP audit. The way to do that is by developing, maintaining, and annually updating your written affirmative-action plan.

Karina L. Schrengohst, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned, boutique, management-side labor- and employment-law firm; (413) 586-2288; [email protected]