Affirmative Action Update: New Mandates for Federal Contractors and Subcontractors Take Effect
New federal regulations governing the preparation of affirmative action plans by federal non-construction contractors and subcontractors under Executive Order 11246 went into effect on December 13, 2000. The new regulations, issued by the Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP"), modify the legal obligations of federal contractors in a number of respects. For example, the new regulations require contractors to record, where possible, the ethnicity (as well as the race and gender) of employees and job applicants; significantly streamline prior affirmative action program requirements; and contain a new mandatory equal opportunity survey.
Executive Order 11246 prohibits federal government contractors and subcontractors from discriminating in employment, and requires those contractors to take affirmative action to ensure that employees and applicants are treated without regard to race, color, religion, sex, or national origin. The OFCCP originally issued regulations implementing the Executive Order more than thirty years ago. The original regulations required non-construction contractors with at least 50 employees and at least $50,000 in government contracts to develop a written affirmative action program (which must set forth goals to overcome any underutilization of women and minorities) for each of their establishments, and contained extensive requirements regarding these plans. With respect to construction contractors, the original regulations provided that the OFCCP, rather than the contractor, would establish goals and specific affirmative action that the contractors must undertake.
Streamlined Requirements for Affirmative Action Programs
The new regulations, which apply only to non-construction contractors, change the OFCCP's past regulatory approach in several respects. Specifically, under the new regulations, the size and complexity of the required written affirmative action programs will be reduced in the following respects:
- The prior work force analysis -- a detailed job breakdown which typically ran over 20 pages in length -- has been replaced by a simplified one page organizational profile. Under the former regulations, employers were required to submit a work force analysis which included a list of job titles ranked from the lowest paid to the highest paid in each department, the lines of progression or promotion of jobs, and for each job title, the number of incumbents by race, ethnicity and sex. Under the newly revised regulations, employers may submit a one page "organizational display" (i.e., a chart, text or spreadsheet depicting the employer's organizational structure). This organizational display must identify each organizational unit (e.g., department, division, etc.), and for each such organizational unit, the organizational display must also include the job title, race, gender and ethnicity of the unit supervisor and the total number of male and female incumbents by race/ethnicity.
- The much criticized "eight factor availability analysis" (which required contractors to compare the availability of minorities and women in each job group according to the overall workforce, unemployment force, skills, and five other determinants) has been eliminated. This analysis has been replaced by two factors: the percentage of minorities or women with the requisite skills in the geographical area in which the contractor usually recruits or reasonably could recruit employees ("external availability"), and the percentage of minorities or women among those who are trainable, transferable and promotable within the contractor's organization ("internal availability").
- Small employers -- those with fewer than 150 employees -- are permitted to prepare a job group analysis (i.e., a combination of job titles with similar content, wage rates and opportunities) that utilizes EEO-1 categories (officials and managers; professionals; technicians; sales; office and clerical; craft workers; operatives; laborers; service workers) as job groups rather than being required to create narrower job groups tailored to their own organizations.
Equal Opportunity Survey and Confidentiality of Wage Data
The new regulations also provide that the OFCCP will designate a substantial number of non-construction contractors each year to prepare and file an Equal Opportunity ("EO") Survey, which will contain at least the following information: applicants, hires, promotions, terminations, compensation, and tenure by race and gender. The EO Survey will serve the dual purposes of assisting employers in self-auditing the relative success of their affirmative action efforts and employment practices, and identifying contractors to be selected by the OFCCP for compliance evaluations.
In response to employers' concerns that wage information contained in the survey may be disclosed to competitors, the new regulations indicate that the OFCCP will treat this information as confidential to the extent such information is exempt from disclosure under the Freedom of Information Act.
Although the survey requirement does not apply to construction contractors, the OFCCP has stated that it will consider expanding the survey to include them in the future. The OFCCP has also indicated that it has no current plans to extend the survey to colleges and universities.
Goals, Not Quotas
While the new regulations substantially overhaul many of the prior requirements, the regulations reaffirm the principle that a contractor's compliance with Executive Order 11246 will not be judged solely by whether or not it has met numerical goals, but, rather, by its demonstrated good faith affirmative action efforts.