Government-contract companies must have affirmative action plans

Compliance with the myriad of em-ployment laws is a daunting undertaking for any business. Companies in the construction industry with government contracts need to consider an additional statute.

Contractors and subcontractors with more than 50 employees and a federal contract of more than $50,000 must comply with Executive Order 11246. Job discrimination based upon race, color, creed, national origin or sex is not allowed.

Affirmative action plans (AAPs) must be written and supporting documentation maintained that detail specific, results-oriented procedures to turn around any discovered deficiencies. The AAPs also must ensure selection and promotion of minorities and women.

An organization will realize average expenditures of $25,000 if subject to one of the regular, random compliance re-views conducted by the U.S. Department of Labor's Office of Federal Contract Compliance Programs.

These reviews often discover noncompliant AAPs, resulting in even further costs as companies will be mandated to provide additional reports for up to two more years. Development of a compliant plan will avoid these unnecessary expenditures.

Create the AAP within 120 days of the commencement of a federal contract. In-clude a work-force analysis, which is a simple display of the race, sex and ethnic employee populations of the business.

Conduct a utilization analysis.

First, identify major job groups consisting of positions with similar task content, wages and promotional opportunities.

Second, perform an availability analysis by estimating the percentages of minorities and women available for em-ployment in each major job group. Consider the minority and female populations in the labor area, whether those individuals might be interested and qualified, and the existence of training facilities to assist in staff skill development.

Compare the calculated percentage of availability with the actual percentage of employment of minorities and women in each job group in the company.

These numbers will determine if either protected class is underutilized defined as fewer in a particular job group than would be reasonably expected based upon the availability.

For each job group with underutilization, establish a numeric goal equal to the availability calculated for minorities and women.

Analyze hiring and promotional practices in the past year. Develop action-oriented steps to reduce or eliminate the under-utilization, including time lines and responsible parties.

Compose a narrative report. Discuss the procedures for policy dissemination, a description of internal auditing and reporting systems, details regarding current compliance with anti-sexual discrimination guidelines, and a listing of community action programs assisting minorities and women. Attach all documentation from the work-force and utilization analyses.

Retain the AAP and submit it if requested by the OFCCP. Accordingly, unless under audit by the OFCCP, a business is allowed to dispose of the AAP for the prior year.

To minimize legal exposure and sizable, unnecessary expenditures, personally review the specific regulations and ensure the AAP in the organization is compliant and effective.

(Lynne Haggerman is president/ owner of Haggerman & Associates, a retained search, outplacement, in-house management training and human resources consulting firm.)