EMPLOYMENT LAW
A Legal Roadmap to Affirmative Action Audits
February 2006
By Dana R. Scott, HR and Benefits Consultant
Federal contractors who escaped an Office of Federal Contract Compliance audit in 2004 and 2005 should be prepared for the very real possibility that they will be audited in 2006.
In 2004, the Office conducted more than 6,500 compliance audits and collected more than $34 million from employers for victims of employment discrimination. These figures will be higher for 2005, and the compliance audit listing for 2006 is already in the hands of regional and local OFCCP offices.
The success of an OFCCP audit depends in large part on how accurate, accessible and comprehensive the employer's data is. Be prepared to provide detailed information regarding hires, separations, transfers, promotions and other employment actions for at least a two-year period. This information needs to be maintained not just for current and former employees, but for all applicants as well. To the extent that data is not being retained and/or it can not be located, the OFCCP may issue sanctions.
Make sure an applicant flow log is being maintained. This log should demonstrate how candidates for openings are screened, selected and rejected. When reviewing data, the OFCCP looks for patterns of discrimination. For example, to the extent your data consistently shows that qualified minority or female applicants are not hired for available openings, the OFCCP will look closely at your hiring practices to ensure that reasons for rejecting such candidates are legitimate and non-discriminatory. Without good applicant flow log data, this is very difficult.
In addition, federal contractors are required to post available openings with either the local Employment Security office or America's Job Bank. Copies of such postings will be requested by the OFCCP.
Affirmative action plans
If qualified female or minority employees are not being promoted, the OFCCP will want information about how decisions regarding promotions are made. Be prepared to discuss the specifics of individual promotion decisions and to provide supporting documentation.
Data regarding the reason for separation for all departing employees also should be routinely maintained in a manner that is readily accessible. The OFCCP will likely inquire further if there are patterns suggesting a greater incidence of separation among a protected group.
If a company has a high number of minority or female terminations, for example, information detailing the employees' reasons for separation from employment may be requested. This might include information on the department of the employee, his/her supervisor, etc.
Records of employees who transfer from one department to another also will be requested and should be kept as part of the back-up data to your affirmative action plan. The OFCCP will review transfers to ensure that certain departments are not seen as non-friendly to females or minorities.
Complete affirmative action plans need to be maintained by federal contractors for females, minorities, veterans and individuals with disabilities. In addition, all back-up records for such plans need to be made available.
In an OFCCP audit, a request is generally for the production of affirmative action plans for the past two or three years, with all accompanying data.
Another common mistake among federal contractors is the lack of filing of VETS-100 Reports and EEO-1 Reports. Ensure when completing these reports that copies are kept. Not being able to locate them or verify that the reports were filed over the past several years results in further OFCCP review.
Care needs to be taken when contemplating the acquisition of another entity that all of the information noted above is current and in good order. In addition, ensure copies of previous plans and records are transferred or otherwise locatable.
Scheduling letter
If a scheduling letter from the OFCCP is received, the required documentation must be provided within 30 days. Even if all of the records discussed above have been maintained, 30 days is still a very short time to gather and reproduce the required data.
Employers are encouraged to ensure that company affirmative action plans and records are up to date now, so that if an OFFCP audit letter arrives, the work necessary to respond and the risk of findings of non-compliance and penalties will be minimized.
Dana Scott, Human Resources and Benefits Consultant at the Concord law firm of Gallagher, Callahan & Gartrell, regularly assists clients with affirmative action plan development and compliance with OFCCP requirements. For more information, call 800-528-1181 ext. 236.
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