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Affirmative Action Plan Guide for HR Compliance

Progressive harassment laws and regulations are being put into place quicker than ever before in history. You need to make sure that your company has an Affirmative Action Plan (AAP) in place to stay HR compliant and educate employees on diversity.

In this guide you will discover:

  • What an Affirmative Action Plan is
  • Which companies need an Affirmative Action Plan
  • How to create an Affirmative Action Plan
  • The importance of keeping Affirmative Action Plans in line with Federal Contract Compliance Programs
  • How diversity and inclusion training can prevent lawsuits

What is an Affirmative Action Plan?

Affirmative Action helps prevent social injustices of the past from affecting future employment opportunities for minorities, women, the LGBT community, people with disabilities, and veterans.

Affirmative Action Plans are set in place yearly and outline the steps a company is taking to ensure that Equal Opportunity Employment is provided for everyone.

Affirmative Action Plans include:

• Training programs
• Outreach efforts
• Positive steps towards reaping the benefits of inclusion and diversity in the workplace

Proof of these policies and how the employer is taking action on them must be kept on file in case of an audit. 

Companies must be able to prove that they putting effort into hiring a diverse workforce. That is why it is absolutely necessary to put it in your businesses' annual HR compliance checklist. Also, they need to show how their employees are compensated fairly and equally based on their job description as well as seniority.

Which Companies Need an Affirmative Action Program?

Your business has to comply with federal Affirmative Action requirements if:

• The employer performs work on federal government contracts valued over $50,000 or more and
• The business has 50+ total employees

It’s important to note that if your company is a federally insured financial institution that holds federal loans, they must also have an Affirmative Action Plan.

What Does an Affirmative Action Plan Consist of?

Affirmative Action Plans are based on the company’s employment history from the last year. The employer has to prove in writing the exact steps they are going to take to include more underrepresented groups of people. For example, the company may have to work on getting more diverse candidates by posting open positions or taking part in job fairs.

Making an Affirmative Action Plan requires the employer to gather their past employment data and summarize their findings before creating their action steps.

Organizational Profile

This is a basic snapshot of the employment structure within the company. A common method is to use a mind map to show all the roles within the organization, along with each individual’s race and gender. They usually start with the head of each department and go down to all the other roles from there. This piece of the Affirmative Action Plan needs to be clear how many total employees there are compared to the manager and what all their genders/races are. 

Job Group Analysis

Next, your company needs to have an analysis of all the jobs within the business and the characteristics of each individual within these roles. Make sure to also include all of their wages and their Equal Employment Opportunity (EEO-1) job classification. In addition to wages, you must have their compensation schedule and the level of their pay.

Utilization Analysis

This section is designed to help ensure that there is a diversity between each job group internally as well as company-wide compared to the availability of qualified minorities in the local area. 

Placement of Individuals in Job Groups

Usually, this is a table where you compare the total number of workers to the minority or female employees in relation to each job group. This gives a general overview of the business’ internal diversity between each job group. 

Comparing the Internal Workforce to Availability

This is arguably the most important piece of utilization analysis. This is when a company checks their internal average of women/minorities and compares it to the percentage of minorities/women who have the same skills in the local area. Basically, the company is ensuring that the diversity of their workforce matches other businesses in their industry that are compliant with Affirmative Action. If the employer has a smaller percentage of minorities and women than the average of their competitors, then the company has to set up placement goals.

Placement goals

These are hiring goals for a company to match or exceed their percentage of minorities/women to the availability in the local job market. There has to be a timeline set in place that the business has to achieve the compliant percentage of diversity.

Additional Required Elements

This is the last section of the Affirmative Action Plan but needs to be given the same attention as the first.

This section includes:

  • Designation of Responsibility: An outline of the responsibility of the Equal Employment Opportunity manager as well as other leadership roles in the company. 
  • Identification of problem areas: This section is a list of the business's current problems around inclusion and diversity, as well as how the employer is going to correct these issues.
  • Action-oriented programs: For example, conducting an annual review of job descriptions, reviewing the selection process to prevent unconscious bias, and techniques to increase women/minority applicants.
  • Hiring an HR consultant: When an employer brings in an external statistical consultant to audit the company for equal compensation plans and practices.
  • Ensuring equal opportunity for promotion: Be able to prove how you choose promotions in a non-biased way.
I know we just went over a lot here, but it’s important that you nail all these steps or your company could face severe consequences.

Keeping Affirmative Action Plans in Line With Federal Contract Compliance Programs

To stay within the regulations of the Office of Federal Contract Compliance Programs (OFCCP) you must make sure your Affirmative Action Plan complies with Executive Order 11246 from Title 41 of the Code of Federal Regulations 60-4. To get the whole workforce in compliance with these specific laws, try EasyLlama's Diversity and Inclusion Training.

What Happens When Affirmative Action Programs are Found Non-Compliant?

If during a random OFCCP audit your company is found non-compliant, you are given a set amount of time to fix the problem. If a company fails to do so within the time frame, then your business can lose government contracts and even be banned from getting future ones. 

On top of that, the business may have to pay compensation to the victims of discrimination. This does not include all the court fees that come from resolving a lawsuit. Not to mention your company's reputation could get damaged if the word gets out. 

In the best-case scenario, the employer's bottom line will be severely impacted. Worst case, the company will go out of business.

Prevent Lawsuits with Diversity and Inclusion Training

The price of non-compliance is too high of a risk.

Use EasyLlama’s Diversity and Inclusion Training to get the whole workforce trained and compliant with the OFCCP before it’s too late.

Despite ever-changing laws, our courses are always up to date with the current laws. We have no setup fees or long-term commitment requirements and have competitive pricing. With the push of a button, you can send out the training to the entire workforce and they can take it on their phone. After that, you can track everyone’s completion and send out reminders until everyone is HR compliant.

Setting up an Affirmative Action Plan is only half of the process. As an HR director or business owner, you must make sure that all employees are trained and up to date or else you could face a lawsuit even with a compliant Affirmative Action Program.