“Being a federal contractor is a privilege.”
–OFCCP Director Patricia Shiu, March 22, 2012
“We’re going to skip this year. We didn’t really hire anyone and we didn’t fire anyone, so we don’t need an AAP this year.”
From time to time we hear this reasonable-sounding excuse for not performing the annual update to the Affirmative Action Program. “Sounding” is the key word here.
The requirement to have an updated AAP is not dependent on the extent of personnel activity.
Per the OFCCP, “each non-construction contractor or subcontractor with 50 or more employees is required to develop a written Affirmative Action Program (AAP) for each of its establishments within 120 days from the start of a Federal contract and must be updated .” (41CFR 60-2 (c))
Additionally, the DOL requires contractors to have, at minimum, the prior year’s AAP on hand in case there is an audit. This way, the OFCCP is able to compare progress to previous years. Assuming contracts for several consecutive years, they may ask for more. If the dice are rolled that there will be no desk review this year, but there is one next year, the lack of a 2012 AAP could be problematic. Remember, the requirements are triggered by the acceptance of contracts, not the extent of personnel changes.
Title 41 of Public Contracts and Property Management, which is referenced above, applies to any employer if it:
- Has a Federal contract or subcontract of $50,000 or more;
- Has government bills of lading which in any 12-month period total, or can reasonably be expected to total, $50,000 or more;
- Serves as a depository of Federal funds in any amount; or
- Is a financial institution that is an issuing and paying agent for U.S. savings bonds and savings notes in any amount.
Also, per the OFCCP site:
[The same] regulations only require “periodic” reviews, which OFCCP has historically considered to mean .
Nowhere do the regulations say that this minimum yearly “review” is only necessary if there is a certain amount of hiring, firing, or promotions within a company. Also, nowhere do they state “we consider periods of greater than a year acceptable as “periodic” reviews.”
Instead, we see that if you have 50+ employees, the mere acceptance of a $50,000+ federal contract to create (or update) your Affirmative Action Program at least once per year. Since the OFCCP investigates current progress made towards the good faith efforts laid out in your program, this means you really should be preparing your plan right at the beginning of your plan year.
In fact, the OFCCP will ask for additional material showing year-to-date progress based on the current year’s plan if they choose to audit you after 6 months into your plan year. This is, of course, difficult to provide if you have no current plan in place with goals determined from your workforce profile at the beginning of the year. If you do this, they may wonder if you are trying to hide something.
Don’t give them that impression. They’re not really asking for that much. I don’t know of any businesses falling under the requirements to have an AAP that can’t afford creating and updating one on a yearly basis.
Not only is there no excuse from that standpoint, but it is the right thing to do. When accepting that government contract, you agreed to the obligation of keeping an updated AAP on hand and to audit yourself to ensure taxpayer dollars are not supporting companies that discriminate against any group of US citizens.
As Director Shiu states, “Being a federal contractor is a privilege.” It is not a right, and the OFCCP, the DOL, and the American public expect you to fulfill your obligations to continue enjoying that privilege.