A federal contractor and/or subcontractor that has at least 50 employees, and a federal contract of $50,000 or more, is required to develop, update annually, and maintain a written Affirmative Action Plan (“AAP”). While most primary contractors — those who receive money directly from the federal government — are aware of this requirement, over the years, I have encountered a surprising number of subcontractors who were simply unaware that they were doing work for a federal contractor, much less that they had an obligation to maintain their own AAP. While federal contractors are supposed to inform their subcontractors of their AAP obligations, such notices are often buried in the contract and their references to “Executive Order 11246” mean very little to the sales persons who signed them.
While failing to comply with the AAP requirements can have serious consequences, including being debarred from any future federal contracts, until now the reality has been that routine audits or discrimination complaints were the only ways for the Office of Federal Contract Compliance Programs (the “OFCCP”) to discover that a contractor and/or subcontractor was missing an AAP. In other words, the OFCCP would not know whether a contractor and/or subcontractor had developed an AAP unless it investigated that employer, since employers have never been required to file their AAPs with the OFCCP.
That is about to change. The OFCCP is establishing a “Contractor Portal,” where employers will need to certify whether they are meeting their requirement to develop and maintain annual AAPs. Existing contractors and/or subcontractors are encouraged to begin registering with the Contractor Portal on February 1, 2022, although the certification features will not be available until March 31, 2022. By June 30, 2022, existing contractors and/or subcontractors must certify whether they have developed and maintained an affirmative action program for each of their establishments. New contractors and/or subcontractors will have 120 days to develop their AAPs, and will need to register and certify compliance through the Contractor Portal within 90 days of developing their AAPs.
If you determine that your company does have a federal contract and/or subcontract of $50,000 or more and you have not developed an AAP, this is not something that you should put off until May or early June 2022. Developing an AAP, especially your first AAP, can be very time consuming. You will need to assemble and analyze your recruiting, hiring and promotion data, and compare the representation of minorities and women in your workplace with the correct statistical data for the workforce in the appropriate surrounding geographic area. Often, an AAP will identify job groups where minorities or women appear to be underrepresented. Careful thought needs to be given to why such underrepresentation could exist, since there may be a number of nondiscriminatory explanations for any disparity. Recognizing these explanations is something that someone with experience with AAPs and statistics can help identify. Hence, it is a good idea to discuss your AAP with employment counsel before it is finalized.
