It’s Not Just Good Business. It May Be Legal Business

Promoting diversity in the workplace helps businesses recruit and retain qualified employees and respond to the needs of customers in the global marketplace. And in some circumstances, affirmative action to promote the hiring of minority and women candidates is required to receive federal funding, or to contract to provide goods or services to the federal government.

Affirmative action does not require the contractor to hire someone who is not qualified for the job, nor does it require the establishment of quotas.

It does require that the contractor’s managers consider its affirmative action obligations when making hiring, promotion and termination decisions.

Here are five key considerations:

1.  Is your company a federal contractor?
All contractors and subcontractors with 50 or more employees and government contracts or subcontracts of $50,000 or more must comply with Executive Order 11246 and develop a written affirmative action plan.

For example, a motion picture studio that sells DVDs valued at more than $50,000 to the military must comply with the executive order. A  subcontracting garment company that makes clothes for $50,000 or more for the military also must comply.

It is important, therefore, that an analysis be made of the company’s revenue stream to determine whether it is a “contractor” or “subcontractor” for purposes of Executive Order 11246.

2.  Prepare an affirmative action plan.
If the company is subject to the executive order, it must prepare a written affirmative action plan.

The plan must include, among other things: (1) an analysis of the contractor’s workforce by race/ethnicity and sex; (2) a determination of whether the contractor is underutilizing minorities or women in any job groups; and (3) the establishment of goals and timetables for correcting any underutilization.

These obligations are enforced by the Office of Federal Contract Compliance Programs (OFCCP). If the OFCCP finds that a contractor has violated its affirmative action obligations, it can order that the contractor be barred from any future federal contracts until it is determined to be in compliance.

3.  The utilization analysis requires careful attention.
To determine if it’s complying with its affirmative action obligations, a contractor must identify those workforce areas in which minorities and women are being underutilized.