An interview with Kevie Mikus, Vice President Client Services, The HR Group
What is an AAP?
An Affirmative Action Plan (AAP) is a written, results-oriented program in which a federal contractor details the steps it will take to ensure equal employment opportunity.
Do You Need an AAP?
An annually updated affirmative action plan or program is required of employers who are:
- Government contractors or subcontractors with 50 or more employees and at least $50,000 in annual revenue stemming from a federal government contract
- Financial institutions serving as depositories of government funds (in any amount)
- Issuing or paying agents for U.S. Savings Bonds and Savings Notes
What's Involved in an AAP?
Affirmative action programs involve analyzing the racial and gender makeup of an organization's workforce and making good faith efforts through specific action plans to employ a workforce that reflects the demographics of the recruitment area. Compliance with affirmative action regulations is enforced by the Office of Federal Contract Compliance Programs (OFCCP).
The OFCCP believes that the AAP should be an ongoing management tool and not just an exercise to be performed annually.
Kevie Mikus, vice president client services with The HR Group offers insight into what affirmative action compliance and initiatives truly encompass.
"Compliance isn’t just a policy statement and document," says Kevie Mikus, vice president client services for The HR Group of Brentwood, Tennessee. "An AAP shapes many aspects of how an employer conducts business: company policies, its record retention practices, how an employer recruits and trains it employees, etc."
An affirmative action plan is comprised of a narrative section and a statistical section. The OFCCP estimates it should take the average employer 180 hours to complete the initial plan (75 hours for annual updates).
The narrative component of an AAP is a custom document. It is important not to simply use a "boiler plate" version. It must be specific to your company’s needs and how it operates.
According to Mikus, the basic building block of the statistical section is job groups. Many companies assume they should use their EEO1 categories when establishing their job groups. The regulations however only allow companies with fewer than 150 employees to use these categories. Those with over 150 employees must establish more specific job groups. Job Group criteria depend on many factors, including salary, company size, and content of position.
Your current employees, as well as all applicants, will have to be classified according to these job groups. The hiring, the promotion, the transfer, and the termination of all employees and potential employees are all tracked on the basis of these job categories. "If your job groups are inaccurate, your affirmative action plan and everything else associated with it will be inaccurate and have to be redone," she says.
The statistical section also includes conducting an availability analysis and a utilization analysis. The availability analysis is made up of the percentages of minorities and females available for employment both externally and internally for each job group. Data for this analysis will come from the US Bureau of Census (external) as well as those employees you deem promotable, transferable and trainable within your organization (internal). You should develop an availability analysis for each job group in your workforce separately for minorities and women. The utilization analysis compares the percentage of minorities and females in each job group (from the job group analysis) with the calculated percentage availability of minorities and females (from the availability analysis) to determine if minorities and females are "underutilized" in any job group.
Based on these analyses you will need to determine your goals for addressing areas of underutilization as well as opportunities to enhance internal employment practices.
Then discuss the step of adverse impact analysis and that should be done periodically.
Take time to monitor your application process. Mikus warns against waiting until the end of the year to review this information. Instead, she says, check it each quarter. That way, if you come across what could be construed as adverse impact, you can correct it before it gets out of hand.
Finally, pay close attention to equal pay in your compensation plans. The OFCCP will want to look at your compensation planning data in an effort to uncover potential pay discrepancy problems and obtain back pay settlements from contractors. Differences in pay between males and females and minorities and non-minorities could be deemed patterns of discrimination. Therefore, contractors need to maintain detailed documentation in support of their non-discrimination pay practices.
Affirmative action plans require some history of where your company has been and where it is heading, so if you have not drawn up a plan in the past, you are not going to have anything to show the OFCCP. Now is not the time to try and fabricate such a plan.
Waiting until you are audited to drum up an AAP is not effective. The OFCCP will want to see proof of your good faith efforts you made from the previous year’s AAP and often times progress to date for an existing plan year. If you are putting a plan together at the last minute there will be no proof of your efforts. A simple desk audit could turn into a more detailed audit from the OFCCP. This could entail compliance officers coming to your establishments and reviewing your HR records.
We find that most of our clients who are required to have an AAP ultimately utilize this mechanism as an impetus to tighten up/enhance their internal practices. Therefore, by approaching your AAP process comprehensively, you not only satisfy compliance requirements, but also improve your internal HR procedures and identify areas of efficiency at the same time.
Kevie Mikus, SPHR, is a vice president client services with The HR Group, a full-service human resources and employee benefits company located in Brentwood, Tennessee. She has a Bachelor of Science degree in human resources management from Oklahoma State University and is certified as a SPHR (Senior Professional in Human Resources), which demonstrates a mastery in the body of knowledge, practical experience and strategic application of human resources management. As an instructor and workshop facilitator, Kevie provides HR compliance and management training to The HR Group’s clients as well as professional/trade associations throughout Tennessee.