Affirmative Action Planning Methodology 101 Part I A presentation of the BCG Institute for Workforce Development (BCGi) October 14, 2011
Affirmative Action Planning Methodology 101
Part I
A presentation of the
BCG Institute for Workforce Development (BCGi) October 14, 2011
The following presentation is Copyrighted by Biddle Consulting Group, Inc.
Dao Vang Esmeralda Bermudez
EEO/AA Analyst II EEO/AA Analyst I
[email protected] [email protected]
Biddle Consulting Group, Inc. Biddle Consulting Group, Inc.
193 Blue Ravine, Ste. 270 193 Blue Ravine, Ste.270
Folsom, CA 95630 Folsom, CA 95630
1-800-999-0438 ext. 153 1-800-999-0438 ext. 132
www.biddle.com www.biddle.com
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Contact Information
Agenda Part I
Words to Know
Who Must Create an Affirmative Action Plan
Requirements of an Affirmative Action Plan
OFCCP and Regulation Update
Questions and Answers
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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 11246
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) 11246 – 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
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History of Affirmative Action
1961 1963 1964 1965 1967 1974
Executive Order No. 10925
Established the President‟s Committee on Equal
Employment Opportunity which later became the EEOC
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
Executive Order No. 11375
Amended EO 11246 to prohibit discrimination based
on sex as well.
Age Discrimination in Employment Act
Protects individuals who are 40 years
of age or older
Executive Order No. 11246
Prohibits federal contractors from employment
discrimination based on race, religion, color or national
origin and to take affirmative action
Equal Pay Act Protects gender who perform
substantially equal work in the same establishment from
sex-based wage discrimination
Civil Rights Act – Title VII
Prohibits employment discrimination on the basis of
race, color, religion, sex or national origin
Affirmative Action Timeline
Ref: 41 CFR 60-2.1 (b) (2) 7
Executive Order (E.O.) 11246
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
Who Must Create an AAP?
Who Must Create an AAP?
Affirmative Action Programs
Three types of written Affirmative Action Programs:
1) AAP for Minorities & Women (E.O. 11246)
2) AAP for Disabled (Sec. 503 of the Rehabilitation Act)
3) AAP for Protected Veterans (VEVRAA)
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Ref: 41 CFR 60-2.1 (b) (1) (i-iv) 9
1) AAP for Women and Minorities - Executive Order (E.O.) 11246
Requires Federal contractors who have 50 or more employees and meet one of the following criteria to create an AAP:
• $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
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 60-250
Who Must Create an AAP?
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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 60-250, 60-300
Who Must Create an AAP?
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Apply to Government contracts of $25,000 or more entered into before December 1, 2003
Veterans covered:
• Special Disabled Veteran • Veteran of the Vietnam Era • Other Protected Veteran • Recently Separated Veteran • Required Filing: Vets-
100
§60-250 of the C.F.R.
Apply to Government contracts of $100,000 or more entered into after December 1, 2003
Veterans covered:
• Disabled Veterans • Armed Forces Service
Medal Veteran • Recently Separated Veteran • Other Protected Veteran • Required Filing: Vets-
100(A)
§60-300 of the C.F.R.
Ref: 41 CFR 60-250, 60-300
Who Must Create an AAP? Veteran Reporting
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Who Must Create an AAP?
Thresholds Disabled Women & Minorities
Veterans
Contract Amount
Section 503 of Rehabilitation Act of 1973
Executive Order 11246
Vietnam Era Veterans' Readjustment Assistance Act of 1974
$10,000
$25,000 (§60-250)
$50,000
(§60-250)
$100,000 (§60-300)
Requirements
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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 60-1.4(a) or 41 CFR 60-1.4(b), as appropriate.”
• For complete language, please see http://www.dol.gov/dol/allcfr/Title_41/Part_60-1/41CFR60-1.4.htm
Ref: 41 CFR 60-1.4
Who Must Create an AAP?
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Federal Civil Rights Agency Relationship
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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
OFCCP - Chain of Command
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Requirements
of an
Affirmative Action Plan
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Federal Contractors Reporting Requirements
Affirmative Action Plan
• OFCCP
EEO-1 Reports
• Equal Employment Opportunity Commission
• Due September 30th annually
VETS-100 and/or VETS-100A
• Veterans‟ Employment and Training Services
• Due September 30th annually
Requirements of an Affirmative Action Plan
Ref: 1. 41 CFR 60-2.17 2. 41 CFR 60-250, 60-300 3. 41 CFR 60-2.11-2.16 19
What does an AAP include?
• AAP for Women and Minorities
o Narrative 1
o Technical Reports3
• AAP for Veterans and Persons with Disabilities
o Narrative 2
Requirements of an Affirmative Action Plan
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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
Requirements of an Affirmative Action Plan
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Narrative for Women and Minorities (Cont.)
Identification of Problem Areas
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. 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 non-
discrimination 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
Requirements of an Affirmative Action Plan
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Technical Reports (AAP for Women and Minorities)
Workforce Analysis or Organizational Profile (Ref: 41 CFR 60-2.11(c))
Job group Analysis (Ref: 41 CFR 60-2.12)
Availability Analysis (Ref: 41 CFR 60-2.14)
Incumbency vs. Availability (Ref: 41 CFR 60-2.15)
Placement Goals (Ref: 41 CFR 60-2.16)
Additional Requirements:
Conducting Compensation Analysis
Conducting Adverse Impact Analysis
Data Needed: Personnel Transaction Data
Requirements of an Affirmative Action Plan
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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
Requirements of an Affirmative Action Plan
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?
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Requirements of an Affirmative Action Plan
Question 1:
What Are the Dates that I Should Remember?
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AAP’s require three important sets of dates
1) Plan Implementation Dates
• Effective for a 12 month Period
• Example: January 1, 2011 through
December 31, 2011
2) Employee Snapshot Date
• A snapshot of current employees on a specific day
• Example: December 31, 2010
3) Transaction Dates
• Includes Applicants, Hires, Promotions, and Terminations
• 12 month period prior to the Implementation Period
• Example: January 1, 2010 through December 31, 2010
Requirements of an Affirmative Action Plan
Requirements of an Affirmative Action Plan
Question 2:
How Many AAPs Should I Develop?
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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.
Requirements of an Affirmative Action Plan
Requirements of an Affirmative Action Plan
Establishment or Roll-Up AAPs
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Requirements of an Affirmative Action Plan
Establishment or Roll-Up AAPs
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Requirements of an Affirmative Action Plan
Functional AAPs
Communications
Sales
Human Resources 31
Pros Cons
Easier/Accepted Practice Increased Audit Exposure
Less Costly Increased Sample Size =
Underutilization/Adverse
Impact
Less Work Greater chance that employees
are not similarly situated –
skewed analysis results
Pros and Cons to Rolled-Up AAPs
Requirements of an Affirmative Action Plan
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Requirements of an Affirmative Action Plan
Question 3:
Who Are Included in the AAP?
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Ref: 41 CFR 60-2.1(d) 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?
How do we allocate employees to plans?
• Create a plan for that location
• Roll them into their manager‟s location
• Roll them into the location of their personnel function
Requirements of an Affirmative Action Plan
Identify Who are 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 reports to another AAP location.
• The employees who physically work there will have to show in the workforce analysis of their physical location (with annotation); but nowhere else in the AAP.
• The employees who report to another location (AAP) are included in the all the reports of that AAP.
Requirements of an Affirmative Action Plan
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How to Define Corporate Initiative Employees
Recommendations:
• Include employees to the AAP where their supervisor are located
• Define Corporate Initiative employees as
those who are in certain “levels” (e.g.,
Executives, pay grade, etc.)
Requirements of an Affirmative Action Plan
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Ref: 41 CFR 60-2.11(c) 37
Workforce Analysis
• Provides an overview of the workforce at the establishment where women and minorities are underrepresented or concentrated in each department
• 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
Requirements of an Affirmative Action Plan
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Example of Workforce Analysis
Requirements of an Affirmative Action Plan
XYZ
Ref: 41 CFR 60-2.12 39
Job Group Analysis
• All other reports from hereon will be based on job groups
• Identifying appropriate job groups is very critical
• Job groups are aggregations of jobs that are similar in content, wage and opportunity.
Requirements of an Affirmative Action Plan
Workforce Analysis
• Jobs by department
Job Group Analysis
• Jobs by functional alignment regardless of department
Requirements of an Affirmative Action Plan
Developing Job Groups
• Start with the EEO categories (e.g., Executive, Managers, Professionals, etc.)
• How many employees in each EEO category?
• Enough number of 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)
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Company XYZ
1.1
1A
CEO
EVP
CFO
1.2
1B
Manager
1C
Supervisor A
2
2A
Accountant I
Accountant II
Sr. Accountant
2B
Engineer II
IT Support
2C
Nurse I
Nurse II
Nurse Lead
3
Tech I
4
Sales Rep
Job Groups: Organizational Structure
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Job Groups: Organizational Structure
(EEO Cat – Organizations with 150 or less employees)
Company XYZ
1.1
CEO
EVP
CFO
1.2
Manager
2
Accountant I
Engineer II
IT Support
Nurse I
3
Tech I
4
Sales Rep
5
Admin I
Admin II
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Example of Job Group Analysis
Requirements of an Affirmative Action Plan
XYZ
Ref: 41 CFR 60-2.14 44
Availability Analysis
What is Availability?
• 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.
Two Factors
External Factor:
Census Codes – U.S. Census Bureau
Internal Factor:
Promotional Activity
Requirements of an Affirmative Action Plan
Requirements of an Affirmative Action Plan
Determining “Availability:”
Four (4) Steps:
1) Define the “Factors”
2) Define the External Recruitment Areas
3) Define the Internal Recruitment Source(s) or “feeders” job groups
4) Determine the Factor Weights.
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Ref: 1. 41 CFR 60-2.14 (c) (1) 46
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 get filled externally (i.e., via hires) or internally (i.e., via promotions)?
Requirements of an Affirmative Action Plan
JOB GROUP TITLE
EXTERNAL FACTOR
INTERNAL FACTOR
XYZ COMPANY
1A - Executives √
1B - Supervisors √ √
1C - Managers √ √
2A - Administrative Professionals √ √
2B - Technical Professionals √ √
8A - Laborers √
Ref: 1. 41 CFR 60-2.14 (c) (1) 47
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
Requirements of an Affirmative Action Plan
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XYZ
Local Labor Area
Reasonable Labor Area
Requirements of an Affirmative Action Plan
2a) Define the external recruitment area(s)
Requirements of an Affirmative Action Plan
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JOB GROUP TITLE
EXTERNAL FACTOR
XYZ COMPANY Recruitment
Area 1 (Local) Recruitment Area 2
(Reasonable)
1A - Executives
1B - Supervisors √ √
1C - Managers √ √
2A - Administrative Professionals √ √
2B - Technical Professionals √ √
8A - Laborers √
Ref: 1. 41 CFR 60-2.14 (c) (1) 50
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?”
Requirements of an Affirmative Action Plan
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Requirements of an Affirmative Action Plan
Example of Factor Weights
FACTOR WEIGHTS Enter percentage of recruiting done in each area for each
Job Group. Local = Counties close to job location.
Reasonable = Regional, statewide and nationwide recruitment.
Internal = Jobs filled through promotion/transfer. Note: percentages
Recruitment Area 1: Sacramento: 62.88%; El Dorado Hills: 25%; Placer Hills: 12.12%
JOB GROUP TITLE
EXTERNAL FACTOR INTERNAL FACTOR Recruitment Area 2: National: 100%
XYZ COMPANY
Recruitment Area 1 (Local)
Recruitment Area 2
(Reasonable)
Internal Total
1A - Executives 100.00% 100.00%
1B - Supervisors 11.88% 17.81% 70.31% 100.00%
1C - Managers 30.00% 30.00% 40.00% 100.00%
2A - Administrative Professionals 75.00% 5.00% 20.00% 100.00%
2B - Technical Professionals 50.00% 40.00% 10.00% 100.00%
8A - Laborers 100.00% 100.00%
Ref: 1. 41 CFR 60-2.14 (c) (1) 52
Availability Analysis --- Identifying Factors issuing the (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.
Requirements of an Affirmative Action Plan
2A 2B 50.00% 50.00%
2B 100.00%
8A 100.00%
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Example of Availability Analysis
Requirements of an Affirmative Action Plan
33.00 30.6
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Additional Availability
Sources of data on the available labor pool other than the Census occupation data or Feeders
Example: National Opinion Research Center (NORC)
• Doctorate Degree
Requirements of an Affirmative Action Plan
Ref: 41 CFR 60-2.15 55
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.
Requirements of an Affirmative Action Plan
Any Difference Rule
Whole Person Rule
80% Rule
80% + Whole Person Rule
Statistical Significance (Generalized or Exact Binomial)
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Utilization Tests
Requirements of an Affirmative Action Plan
Ref: 41 CFR 60-2.16 57
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 refers to RECRUITMENT; they are not Hiring Goals
Requirements of an Affirmative Action Plan
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Example of Placement Goals Report
Requirements of an Affirmative Action Plan
An Overview of the Reports
Step 1: Group Employees
Employees are grouped based on content, wage, and opportunity
Step 2: Availability Analysis
Identifies the gender and race/ethnic composition of both the external and internal available workforce
Step 3: Comparison of Incumbency to Availability
Identifies differences between current incumbency and available workforce
Step 4: Goals/Objectives
Where differences exist, identifies a placement goal for the underutilized group
Step 5: Action-Oriented Programs
Affirmative steps that will be taken to help achieve goals
Requirements of an Affirmative Action Plan
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Ref: 41 CFR 60-2.17 (b) (2) 60
Personnel Activity
Four types of activity
• Applicant Flow
• Hires
• Terminations
• Promotions
Analyzed to determine if there are selection disparities
• Via adverse impact analyses
Requirements of an Affirmative Action Plan
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Example of Personnel Transaction Report
Requirements of an Affirmative Action Plan
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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
Requirements of an Affirmative Action Plan
Group Pass (Rate) Failed Total
Men 10 (50.0%) 10 (50.0%) 20
Women 5 (33.3%) 10 (66.7%) 15
Adverse Impact • Guidelines Method
Selection Rate Comparison Is the selection rate of females/minorities statistically
significant than the selection rate of males/non-minorities?*
Requirements of an Affirmative Action Plan
Hires, Promotions, or Retentions (for terminations)
Applicants, Available for Promotions, Available for Terminations
* Every Group is Protected 63
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Guidelines Method
You have 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 and appropriate for smaller sample sizes
Industry standard adverse impact test
Requirements of an Affirmative Action Plan
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Example of Adverse Impact Analysis (Guidelines Method)
Requirements of an Affirmative Action Plan
2A - Professionals
Females
Representation 50.0%
Availability 82.5%
Adverse Impact • Hazelwood Method
Availability Comparison Is the representation of women/minorities statistically
significantly different their availabilities?
Requirements of an Affirmative Action Plan
Utilization Analysis
Example:
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Adverse Impact (cont.)
Hazelwood Method
• Used when you have a number (e.g., counts of employees, counts of hires, etc.) to compare to its own availability
Example: Hires vs. Final Availability
Hazelwood School District v. United States
Requirements of an Affirmative Action Plan
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Example of Adverse Impact Analysis (Hazelwood Method)
Requirements of an Affirmative Action Plan
2A - Professionals
Ref: 41 CFR 60-2.17 (b) (3) 69
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
Requirements of an Affirmative Action Plan
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Example of Compensation Data (Item 11) Report
Requirements of an Affirmative Action Plan
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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.
Requirements of an Affirmative Action Plan
Copyright © Biddle Consulting Group, Inc.
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• Regulatory Revisions: In FY 2012, OFCCP is scheduled to
• finalize its revision on 41 CFR Part 60-4 which impacts contractors and subcontractors in the construction industry
• finalize its revision on 41 CFR Part 60-741 which protects workers with disabilities and finalize and publish its revision on VEVRAA (summer 2011).
• Construction Contractor Affirmative Action Requirements: OFCCP is proposing change to the regulations to reflect the current state of the labor market and construction industry. The goals is to remove outdated requirements and propose a new method for goal setting for construction contractors
OFCCP Update
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• Evaluation of Recruitment and Placement Results under Section 503: OFCCP is proposing change to the regulations to require increased linkages, a more substantive analysis of recruitment/placement efforts, and revise the recordkeeping requirements for individuals with disabilities
OFCCP Update
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Q & A