Does your company need an Affirmative Action Plan?

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Compliance is a tricky beast, especially when you don’t know what laws your organization is supposed to be complying with.

Thus, every now and again it’s worthwhile to take a topic and break it down to it’s most basic level. Today is one of those days, and the topic is Affirmative Action Plans. 

As in, do you even know if your organization needs one?

It’s as simple as answering these four questions.

1. How many employees do you have?

• Less than 50?
• No AAP required
• 50 or more?
• Go to #2

2. Do you have a federal supply/service contract or subcontract worth $50,000 or more OR have government bills of lading totaling or expected to total $50,000 or more in a 12-month period?

• Yes
• You need an AAP for females, minorities, and individuals with disabilities
• Go to #3
• EXCEPTION: Federal construction contractors/subcontractors do not need to prepare a written AAP. However, if the company holds a federal construction contract for $10,000 or more, it must adhere in good faith to sixteen (16) recordkeeping and recruiting guidelines (41 CFR 60- 4.3(a)(7)(a-p)). If an OFCCP audit occurred, these would be scrutinized.
• NOTE: Organizations with multiple facilities require an AAP for each physical location with 50 or more employees, even if only one site holds a contract.
• No
• Go to #4

3. Do you have a federal supply/service contract or subcontract worth $150,000 or more?

• Yes
• You also need an AAP for veterans
• No
• You only need an AAP for females, minorities, and individuals with disabilities

4. Is your organization a depository for federal funds or an issuing/paying agent of U.S. savings bonds or notes in any amount (most U.S. banks)?

• Yes
• You need an AAP for females, minorities, individuals with disabilities, and veterans
• No
• No AAP required

As simple as these questions seem, the consequences for not answering them correctly, or not at all, is severe.

Most significantly, a failure to submit an affirmative action plan to the federal Office of Federal Contract Compliance Programs can lead to debarment (the cancellation of all federal contracts from all locations). Moreover, if you are found to have discriminated in your hiring or other employment practices as the result of a missing or deficient affirmative action plan, the OFCCP can (and does) sue employers for discrimination.

For the risk of sounding too sales-pitchy, if you have questions about whether you are a federal contractor covered by the OFCCP, or, if so, what you legal obligations are, you should be talking to an employment lawyer who specializes in this niche area of employment law.