Affirmative Action Plan Methodology 101 Part I. A presentation of the BCG Institute for Workforce Development (BCGi) March 27, 2013

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1 Affirmative Action Plan Methodology 101 Part I A presentation of the BCG Institute for Workforce Development (BCGi) March 27, 2013

2 Contact Information Criselda Cooper Cassie Verdon EEO/AA Consultant I EEO/AA Analyst II ext ext. 182 Biddle Consulting Group, Inc. 193 Blue Ravine, Ste. 270 Folsom, CA The following presentation is Copyrighted by Biddle Consulting Group, Inc. 2

3 Agenda: Part I Words to Know A A P Who Must Create an Affirmative Action Plan Requirements of an Affirmative Action Plan Updates OFCCP and Regulation Update In conclusion: Summary, Questions and Answers 3

4 Words to Know AAP Affirmative Action Plan EEO Equal Employment Opportunity Federal Contractor Has a contract with the federal government and is subject to EO Department of Labor (DOL) Federal governing agency over EEO/Affirmative Action OFCCP Office of Federal Contract Compliance Program EEOC Equal Employment Opportunity Commission Establishment Allocation of employees into an AAP by address Executive Order (E.O) Regulations that require contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment. Section 503 of the Rehabilitation Act - prohibits discrimination and requires employers with federal contracts or subcontracts that exceed $10,000 to take affirmative action to hire, retain, and promote qualified individuals with disabilities. VEVRAA Vietnam Era Veterans Readjustment Assistant Act Audit - OFCCP formal review of a contractor s AAP Incumbents Employees Conciliation Agreement (CA) A contract with the OFCCP that details specific contractor commitments to resolve violations found in the AAP audit Notice of Violation (NOV) A letter from OFCCP identifying potential violations in the AAP as identified in an audit SSEG Similarly Situated Employee Group 4

5 Copyright Biddle Consulting Group, Inc. 5 Affirmative Who Must Create an Action Plan?

6 History of Affirmative Action Affirmative Action Timeline Equal Pay Act Protects gender who perform substantially equal work in the same establishment from sex-based wage discrimination Age Discrimination in Employment Act Protects individuals who are 40 years of age or older Executive Order No Established the President s Committee on Equal Employment Opportunity which later became the EEOC Civil Rights Act Title VII Prohibits employment discrimination on the basis of race, color, religion, sex or national origin Executive Order No Prohibits federal contractors from employment discrimination based on race, religion, color or national origin and to take affirmative action Executive Order No Amended EO to prohibit discrimination based on sex as well. Vietnam Era Veterans Readjustment Assistance Act of 1974 To take affirmative action to employ and advance in employment veterans protected by this act and prohibits discrimination against these veterans

7 Who Must Create an AAP? Executive Order (E.O.) Two types of contracts: 1) Supplies and Services 2) Construction Prime Contractors Holds a contract with the Federal Government Example: Motor vehicle company supplying cars to the government employees Subcontractors Holds a subcontract with a prime contractor supplying goods and services to a prime contractor Example: The company who supplies tires to the motor vehicle company Ref: 41 CFR (b) (2) 7

8 Who Must Create an AAP? Affirmative Action Programs Three types of written Affirmative Action Programs: 1) AAP for Minorities & Women (E.O ) 2) AAP for Disabled (Sec. 503 of the Rehabilitation Act) 3) AAP for Protected Veterans (VEVRAA) 8

9 Who Must Create an AAP? 1) AAP for Women and Minorities - Executive Order (E.O.) Requires Federal contractors to create an AAP if they meet one of the following criteria: 50 or more employees and $50,000 or more in contract revenue during a 12 month period Serves as a depository of Government funds in any amount A financial institution who issues and pays U.S. saving bonds or saving notes Ref: 41 CFR (b) (1) (i-iv) 9

10 Who Must Create an AAP? 2) AAP for Disabled Persons - Section 503 of the Rehabilitation Act of 1974, as amended Any contract in excess of $10,000 for personal property and non-personal services (including construction) shall contain a provision requiring that the party contracting with the government shall take affirmative action to employ and advance in employment qualified individuals with disabilities. Ref: 41 CFR

11 Who Must Create an AAP? 3) AAP for Veterans - Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended Covered contractors shall take affirmative action to employ and advance in employment qualified special disabled veterans, veterans of the Vietnam era and any other veterans who served on active duty during a war or in a campaign or expedition for which a campaign badge has been authorized. Ref: 41 CFR ,

12 Who Must Create an AAP? Veteran Reporting Ref: 41 CFR ,

13 Who Must Create an AAP? Requirements Thresholds Disabled Women & Minorities Veterans Contract Amount Section 503 of Rehabilitation Act of 1973 Executive Order Vietnam Era Veterans' Readjustment Assistance Act of 1974 $10,000 $25,000 ( ) $50,000 ( ) $100,000 ( ) 13

14 Who Must Create an AAP? Requirements Equal Opportunity Clause Every federal contractor that does business with non government organizations for goods or services must include the Equal Opportunity Clause in contracts and purchase orders. Can be summarized with the following language, all parties agree that they will abide by the provisions of 41 CFR (a) or 41 CFR (b), as appropriate. For complete language, please see: Ref: 41 CFR

15 Federal Civil Rights Agency 15

16 OFCCP - Chain of Command OFCCP Director Patricia Shiu Regional Directors 1. New York 4. Chicago 2. Philadelphia 5. Dallas 3. Atlanta 6. San Francisco 54 District Directors Assistant District Directors Compliance Officers 16

17 Requirements of an Affirmative Action Plan Copyright Biddle Consulting Group, Inc. 17

18 Requirements of an Affirmative Federal Contractors Reporting Requirements Affirmative Action Plan OFCCP EEO-1 Reports Action Plan Equal Employment Opportunity Commission (EEOC) Due September 30 th annually VETS-100 and/or VETS-100A Veterans Employment and Training Services Due September 30 th annually 18

19 Requirements of an Affirmative Action Plan What does an AAP include? AAP for Women and Minorities o Narrative 1 o Technical Reports 3 AAP for Veterans and Persons with Disabilities o Narrative 2 Ref: CFR CFR , CFR

20 Requirements of an Affirmative Action Plan AAP for Women and Minorities: Narrative for Women and Minorities Chapters 1-6 (explains the technical reports) [Optional] Designation of Responsibilities Who is responsible to implement the AAP President CEO HR Manager AA Officer Managers and Supervisors Identification of Problem Areas 20

21 Requirements of an Affirmative Narrative for Women and Minorities (Cont.) Action-Oriented Programs Programs or steps that the contractor had taken in the past, currently takes, and/or are willing to take in the future to remedy potential problem areas. Action Plan Document ALL good-faith-efforts Example: XXXX will continue to place an ad in the XXX for campus recruiting Internal Audit and Reporting Monitor all transactions to ensure the nondiscrimination policy is carried-out Require internal reporting on a regular basis as to the degree to which EEO objectives are attained Review reports with all levels of management Advise top management of program effectiveness 21

22 Requirements of an Affirmative Action Plan Technical Reports (AAP for Women and Minorities) Workforce Analysis or Organizational Profile (Ref: 41 CFR (c)) Job group Analysis (Ref: 41 CFR ) Availability Analysis (Ref: 41 CFR ) Incumbency vs. Availability (Ref: 41 CFR ) Placement Goals (Ref: 41 CFR ) Additional Requirements: Conducting Compensation Analysis Conducting Adverse Impact Analysis Data Needed: Employee and Personnel Transaction Data 22

23 Requirements of an Affirmative Action Plan AAP for Veterans and Persons with Disabilities: Narrative for Veterans and Persons with Disabilities Contractor s policies and procedures toward veterans and persons with disabilities Required Contents: Reaffirmation of EEO/AA Policy Internal and External Dissemination of the Policy Responsibility for Implementation Review of Personnel Processes Physical and Mental Qualifications Reasonable Accommodations to Physical and Mental Limitations Harassment Training 23

24 Requirements of an Affirmative Action Plan Three (3) Important Questions: 1) What Are the Dates that I Should Consider? 2)How Many AAPs Should I Develop? 3)Who Should Be Included in the AAP? 24

25 Requirements of an Affirmative Action Plan Question 1: What Are the Dates that I Should Remember? 25

26 Requirements of an Affirmative Action Plan AAP s require three important sets of dates 1) Plan Implementation Dates Effective for a 12 month Period Example: January 1, 2013 through December 31, ) Employee Snapshot Date A snapshot of current employees on a specific day Example: December 31, ) Transaction Dates 12 month period prior to the snapshot date Example: January 1, 2012 through December 31, 2012 Includes Hires, Promotions, and Termination Applicants all applicants associated with the hires during the transaction period 26

27 Requirements of an Affirmative Action Plan Question 2: How Many AAPs Should I Develop? 27

28 Requirements of an Affirmative Action Plan Types of Affirmative Action Plans 1) Establishment-based AAP By location 2) Functional-based AAP By department, division, or business unit Requires permission from the OFCCP 3) Roll-Up AAP Regional, state, company-wide, etc. 28

29 Requirements of an Affirmative Action Plan Establishment or Roll-Up AAPs 29

30 Requirements of an Affirmative Action Plan Establishment or Roll-Up AAPs 30

31 Requirements of an Affirmative Functional AAPs Action Plan Communications Sales Human Resources 31

32 Requirements of an Affirmative Action Plan Pros and Cons to Rolled-Up AAPs Pros Easier/Accepted Practice Cons Increased Audit Exposure Less Costly Increased Sample Size = Underutilization/Adverse Impact Less Work Greater chance that employees are not similarly situated skewed analysis results 32

33 Requirements of an Affirmative Action Plan Question 3: Who Is Included in the AAP? 33

34 Which employees are included? Each employee in the contractor s U.S. based workforce Who are employees? The term employee is broad enough to include part-time, temporary, and full-time employees Are they on your payroll as of snapshot date (one day in time)? How do we allocate employees to plans? Create a plan for each location with 50 or more employees If fewer than 50, roll-up with other locations Field employees roll into manager s location move up the chain Ref: 41 CFR (d) 34

35 Identify the Corporate Initiative Employees: Organizations are required to identify employees who work in one AAP location while being on the payroll at another AAP location and/or report to a manager at another AAP location. Employees who physically work at a given location will have to appear in the Workforce Analysis of that physical location (with annotation); but nowhere else in that AAP. The employees who report to another location are included in all AAP reports of that other location. 35

36 How to Define Corporate Initiative Employees Recommendations: Include employees in the AAP of their supervisor or Those who are in certain levels (e.g., Executives, pay grade, etc.) 36

37 Ref: 41 CFR (c) 37

38 Workforce Analysis Overview of the workforce by Department Shows a Line of Progression To determine whether barriers exist to equal employment opportunity within the organization Glass Ceiling Each Workforce Analysis must display the following: Name of the Unit Job titles must be listed by in order of wage rate or salary ranges For each job title, the total number of incumbents by gender and total number of males and females within each race group (+) (-) Corporate Initiative employees identified by footnotes Ref: 41 CFR (c) 38

39 Example of Workforce Analysis 39

40 Ref: 41 CFR (c) 40

41 Job Group Analysis All other reports from hereon will be based on job groups Identifying appropriate job groups is critical Job groups are aggregations of jobs that are similar in content, wage and opportunity SSEGs Similarly Situated Employee Groups Ref: 41 CFR

42 Developing Job Groups Keep it simple Organizations of 150 employees or fewer can use EEO-1 Categories Ref: 41 CFR

43 Developing Job Groups More than 150 Employees? How many employees in each EEO category? Enough employees to break down into sub categories? Develop the sub categories: Levels? (e.g., Entry Level, Mid Level, Senior Level) Specialty? (e.g., Administrative Professionals, Technical Professionals, Finance Professionals) Ref: 41 CFR

44 Developing Job Groups: EEO Category No. of Emps Executives 5 Professionals 120 Sales 15 Professionals No. of Emps Nurses 90 Accountants 5 Systems Engineers 20 Analysts 5 Job Groups No. of Emps 1A - Executives 5 2A Prof- Nurses 90 2B Prof IT Prof 20 2C Prof - Other 10 4A - Sales 15 Ref: 41 CFR

45 Example of Job Group Analysis Ref: 41 CFR

46 Ref: 41 CFR (c) 46

47 Availability Analysis - What is it? Helps us understand what your organization should look like: An estimate of the number of qualified minorities or women available for employment in a given job group. A combination of both internal and external comparison data (i.e. factors) used to identify what the composition of a job group is supposed to look like. To establish a benchmark against which the demographic composition of the contractors incumbent workforce can be compared. Ref: 41 CFR

48 Availability Analysis - What is it? Two Factors External Factor: Local and National Labor Areas Census Codes U.S. Census Bureau Internal Factor: Promotable and/or transferable into the target job group Ref: 41 CFR

49 Determining Availability: 1. Define the Factors for each Job Group. (Int. V Ext.) 2. Define the External Recruitment Areas 3. Determine the Factor Weights. 4. Define the Internal Recruitment Source(s) or feeders job groups 49

50 Availability Analysis - Identifying Factors 1) Define the Factor(s) for each Job Group Ask this question: If we are to fill vacancies into this job group, would it typically be filled externally (i.e. hires) or internally (i.e. promos/trans)? JOB GROUP TITLE INTERNAL FACTOR EXTERNAL FACTOR XYZ COMPANY 1A - Executives 1B Directors and Senior Managers 1C - Supervisors 2A - Administrative Professionals 2B - Technical Professionals 8A - Laborers Ref: CFR (c) (1) 50

51 Availability Analysis - Identifying Factors 2) Define the external recruitment area(s) A recruitment area is defined as the geographical area from which the contractor usually seeks or reasonably could seek workers to fill the positions in question. 1 Local Labor Area (Recruitment Area 1) Counties Close to the location Zip Code Analysis Asking Knowledgeable Staff Reasonable Area (Recruitment Area 2) Wider area(s) MSA/PMSA State/Region National Ref: CFR (c) (1) 51

52 BCG Local Labor Area Reasonable Labor Area Wider Area/National 52

53 2) Define the external recruitment area(s) JOB GROUP TITLE EXTERNAL FACTOR XYZ COMPANY 1A - Executives Recruitment Area 1 (Local) Recruitment Area 2 (Reasonable) 1B - Directors and Senior Managers 1C - Managers 2A - Administrative Professionals 2B - Technical Professionals 8A - Laborers 53

54 Availability Analysis - Identifying Factors issuing the Weights 3) Determine the Factor Weights. The weights given to the internal and external availability data for each job group. Assigning the factor weights requires the user to ask the following question: Out of 100 hypothetical movements into this job group, what number do I expect to come from a recruitment area (i.e. area 1 and area 2), or an internal pool? Ref: CFR (c) (1) 54

55 Example of Factor Weights 55

56 Availability Analysis - Internal Weights 4) Define the internal recruitment source(s) or feeders job groups A feeder job group is composed of employees who are promotable/transferable/trainable within the organization. Ref: CFR (c) (1) 56

57 Example of Availability Analysis 57

58 Additional Availability Sources of available labor pool data, other than the Census occupation data or Feeders Example: National Opinion Research Center (NORC) Doctorate Degree 58

59 Ref: 41 CFR (c) 59

60 Comparison of Incumbency to Availability Compares the percentage of minorities and women in each job group with the availability for those job groups Refers back to the Job Group Analysis and the Availability Analysis. Ref: 41 CFR

61 Utilization Tests 61

62 Example of Comparison of Incumbency to Availability and Placement Goals Report Utilization Test: Whole Person Shortfall calculation for Female: Total Employees (16) x Availability (51.8%) = 8.29 #of female as of the snapshot (7)= 1.29 Shortfall within Whole Person = 1.29 or 1 62

63 Placement Goals Placement Goals defined Serve as objectives or targets reasonably attainable by means of applying every good faith effort to make all aspects of the entire AAP work. Refers back to the Comparison of Incumbency to Availability Report If underutilization was flagged, (based on utilization test) this report will identify the strength or severity of the underutilization the Placement Goal. Placement goals refer to RECRUITMENT. They are NOT Hiring Quotas. Ref: 41 CFR

64 Availability Recap 64

65 Ref: 41 CFR (c) 65

66 Personnel Transactions Four types of activity Applicant Flow Hires Terminations Promotions Analyzed to determine if there are selection disparities Via adverse impact analyses Ref: 41 CFR (b) (2) 66

67 Example of Personnel Transaction Report Job Group: 1B Directors and Senior Managers 67

68 Ref: 41 CFR (c) 68

69 Adverse Impact Adverse Impact is when a facially neutral selection device or process yields a substantially different rate of selection in hiring, promotion or other employment decision which works to the disadvantage of members of a race, sex or ethnic group 69

70 Adverse Impact - Guidelines Method A Selection Rate Comparison Asking the question: Is the selection rate of females/minorities statistically significant when compared to the selection rate of males/non-minorities?* Group Total Pass (Rate) Failed Male (50.0%) 10 (50.0%) Female 15 5 (33.3%) 10 (66.7%) A.I Compares passing rate Starting Pool: Applicants, Promotable or Avail. For Termination * Every Group is Protected 70

71 Guidelines Method Need a starting number and a completing number to compare statistically Example: Applicants to Hires comparison Statistical Tests: Chi-Square (estimated) Requires strong sample sizes (>30) This is the preference for the OFCCP Fisher s Exact More sensitive - appropriate for smaller sample sizes Industry standard adverse impact test 71

72 Example of Adverse Impact Analysis (Guidelines Method) 72 72

73 Adverse Impact - Hazelwood Method Also known as a Barriers Analysis Rarely used but a useful tool to have Used by the OFCCP when suspicion of a tainted applicant pool Used by the OFCCP when there is no available applicant pool A One Tailed statistical analysis Used when you have a number to compare to availability (e.g., counts of employees, counts of hires, etc.) Example: Hires vs. Final Availability Hazelwood School District v. United States 73

74 Adverse Impact - Hazelwood Method Availability Comparison Has an end pool but no starting pool Is the representation of women/minorities statistically significantly different than their availabilities? Females Representation 50.0% Availability 82.5% Is the representation statistically significant when compared to Availability? 74

75 Example of Adverse Impact Analysis (Hazelwood Method) 2A - Professionals 75

76 Ref: 41 CFR (c) 76

77 Compensation System(s) AAP must include compensation data to determine whether there are gender, race, or ethnicity pay disparities Item 11 Data (Audit Letter) A listing of the sum of annual salaries for men and women as well as non-minorities and minorities grouped in the manner of your compensation system Submit the data in groupings that best explain your compensation system Ref: 41 CFR (b) (3) 77

78 Example of Compensation Data (Item 11) Report 78

79 The Big Picture Each required report builds a chapter in the story of your organization s AAP. There are no stand-alone reports; each report feeds from the previous report. You are left with a view of what you should look like, what you do look like, and how you got there. 79

80 Copyright Biddle Consulting Group, Inc. 80 OFCCP and Regulation Updates

81 OFFCP Update Whitehouse/Department of Labor/OFCCP/Congress A Background OFCCP Audit Strategy/Philosophy: Rescinded Active Case Management (too restrictive) Initiated Active Case Enforcement much broader, more aggressive/intrusive Broadened investigations to include any gender/race (incl. men/whites) ACS Tabulation Census Bureau released five years worth of census information. 81

82 OFFCP Update Changes coming down the pipeline within OFCCP Compensation: Compensation Data Collection Tool/Revised Itemized Listing Directive February 28, 2013 o Anything goes o Analyses of employment opportunity AAP for Veterans and/or Persons with Disabilities Contractor may be required to create Technical reports for Veterans and/or Person with Disabilities o o Hiring goals Census Bureau released census information for Persons with Disabilities 82

83 OFFCP Update Changes coming down the pipeline within OFCCP Criminal Background Check Directive 308 Is job-related and consistent with business necessity Tailored, formal, consistently applied individualized assessment Periodically conduct adverse impact analyses Train staff, interpret the criminal history information 83

84 Summary Copyright Biddle Consulting Group, Inc. 84

85 Job Posting Tips At minimum, be sure to post all jobs at your state or local agencies All job openings must be posted. The only exceptions are: Executive and top management positions Positions that will strictly be filled from within the contractor's organization Positions lasting three days or less To be proactive, post at specific agencies aimed towards women, minorities, veterans, and people with disabilities 85

86 Q & A 86

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