Application of the Fair Labor Standards Act to Domestic Service
[Proposed Rules] [04/08/2002]
Government Contractors, Affirmative Action Requirements; Proposed Rule
[05/04/2000]
Volume 65, Number 87, Page 26087-26109
[[Page 26087]]
-----------------------------------------------------------------------
Part IV
Department of Labor
-----------------------------------------------------------------------
Office of Federal Contract Compliance Programs
-----------------------------------------------------------------------
41 CFR Parts 60-1 and 60-2
Government Contractors, Affirmative Action Requirements; Proposed Rule
[[Page 26088]]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-1 and 60-2
RIN 1215-AA01
Government Contractors; Affirmative Action Requirements
AGENCY: Office of Federal Contract Compliance Programs (OFCCP), ESA,
Labor.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is
proposing to revise certain regulations implementing Executive Order
11246, as amended. The Executive Order prohibits Government contractors
and subcontractors, and federally assisted construction contractors and
subcontractors, from discriminating in employment, and requires these
contractors to take affirmative action to ensure that employees and
applicants are treated without regard to race, color, religion, sex, or
national origin. Today's proposal would refocus, revise, and
restructure 41 CFR Part 60-2, the regulations that establish the
requirements for affirmative action programs, and related sections in
41 CFR Part 60-1. The proposal would refocus the regulatory emphasis
from the development of a written document that complies with highly
prescriptive standards, to a performance based standard that
effectively implements an affirmative action program into the overall
management plan of the contractor. The proposal also would introduce a
new tool that would aid contractors in assessing their pay and other
personnel practices, while increasing the efficiency and effectiveness
of program monitoring. This tool, the Equal Opportunity Survey, would
be primarily submitted electronically.
The proposal would help fulfill the Administration's Equal Pay
Initiative to provide contractors with the necessary tools to assess
and improve their pay policies. The proposal also would help fulfill
the Department's goal of increasing the number of federal contractors
brought into compliance. A means to fulfill that goal is for OFCCP to
more effectively monitor the pay practices of federal contractors.
In addition, today's proposal to revise and restructure the
regulations relating to affirmative action programs is part of OFCCP's
continuing efforts to meet the objectives of the Reinventing Government
Initiative. These objectives include obtaining input from those most
directly affected by the regulations, reducing paperwork and compliance
burdens wherever possible, more effectively focusing Government
resources where most needed in order to administer the law most
efficiently, making the regulations easier to understand by
streamlining and simplifying them and writing them in plain language,
and updating the regulations to accommodate modern organizational
structures and to take advantage of new technologies.
DATES: To be assured of consideration, comments must be in writing and
must be received on or before July 3, 2000.
ADDRESSES: Comments should be sent to James I. Melvin, Director,
Division of Policy, Planning and Program Development, OFCCP, Room C-
3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
As a convenience to commenters, public comments transmitted by
facsimile (FAX) machine will be accepted. The telephone number of the
FAX receiver is (202) 693-1304. To assure access to the FAX equipment,
only public comments of six or fewer pages will be accepted via FAX
transmittal. Receipts of FAX transmittals will not be acknowledged,
except that the sender may request confirmation of receipt by calling
(202) 693-0102 (voice), (202) 693-1308 (TTY).
FOR FURTHER INFORMATION CONTACT: James I. Melvin, Director, Division of
Policy, Planning and Program Development, OFCCP, Room C-3325, 200
Constitution Avenue, N.W., Washington, D.C. 20210. Telephone (202) 693-
0102 (voice), (202) 693-1308 (TTY). Copies of this proposed rule in
alternative formats may be obtained by calling (202) 693-0102 (voice)
or (202) 693-1308 (TTY). The alternative formats available are large
print, electronic file on computer disk, and audiotape. The proposed
rule also is available on the Internet at http://www.dol.gov/dol/esa.
SUPPLEMENTARY INFORMATION:
Background
a. History of the Part 60-2 Regulations
Executive Order 11246, as amended, requires that Federal Government
contractors and subcontractors ``take affirmative action to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, or
national origin.'' Affirmative action under Executive Order 11246, as
amended, connotes more than passive nondiscrimination; it requires that
contractors take affirmative steps to identify and eliminate
impediments to equal employment opportunity.
The principles and concepts underlying the current blueprint for
affirmative action under Executive Order 11246, as amended, have their
origins in Plans for Progress (PfP), conceived and successfully
implemented in 1961 by a group of 300 leading corporations committed to
achieving equal employment opportunity through voluntary affirmative
action. Each company adopted a ``plan for progress'' for the
corporation as a whole and for each of its individual establishments.
These plans for progress, as a management tool for achieving equal
employment opportunity, were the precursors to the current written
affirmative action programs (AAPs).
In July 1969, after having successfully tested this model over an
eight-year period, PfP merged with the National Alliance of Business,
and turned its focus to youth employment. Seven months later, on
February 7, 1970, the Office of Federal Contract Compliance
incorporated PfP's Guidelines on Affirmative Action as the centerpiece
of its affirmative action program regulations applicable to larger
Federal nonconstruction contractors. These regulations--41 CFR Part 60-
2--have served as reasonable and successful tools that aid in breaking
down barriers to equal employment opportunity for women and minorities
without impinging upon the rights and reasonable expectations of other
members of the workforce.
b. Overview of the Affirmative Action Program
The current regulations require Federal Government nonconstruction
contractors and subcontractors with 50 or more employees and a contract
of $50,000 or more to prepare and implement a written AAP for each of
their establishments. The basic elements of the AAP are discussed in
more detail in the Section-by-Section Analysis which follows, but an
overview is provided here for ease of understanding.
Under the current regulations, the written AAP must contain several
elements. One element of the AAP is a ``workforce analysis,'' which
essentially is a snapshot of all employment at the establishment. The
snapshot shows all the job titles, arranged by department or other
organizational unit, and reveals the number of employees in each job by
gender, race, and ethnicity. Examination of the employment patterns
documented in the workforce analysis is intended to
[[Page 26089]]
alert the contractor to potential problems of discrimination and
inadequate affirmative action.
The current written AAP also must contain a multi-step analysis to
identify whether minorities or women are being employed at a rate that
would be expected based upon their availability for employment. This
analysis is focused on contractor-defined ``job groups,'' which consist
of one or a group of jobs that are similar in content, wage rates, and
opportunities. The contractor utilizes census and other available
demographic data to conduct a prescribed ``eight factor analysis,'' to
calculate the number of qualified women and minorities that should be
available in the labor market to work in each job group. The contractor
then compares the number of minorities and women it actually employs in
each job group against the calculated ``availability'' for that group
to determine whether minorities and women are being employed at a rate
reasonably expected given their availability to work in those jobs. If
so, the analysis is concluded. If women and minorities are being
employed at a rate lower than reasonably would be expected given their
availability to work in those jobs, the contractor determines that
``underutilization'' exists. Underutilization means that the
representation of minorities or women in a specific job group is less
than reasonably would be expected given the availability of candidates.
If these analyses show underutilization in certain job groups, the
contractor must analyze its policies, practices, and procedures to
determine possible causes, and take corrective action that is designed
to overcome the underutilization. For example, the AAP would include
outreach and other affirmative steps precisely tailored to eliminate
barriers to equal employment opportunity, and, when necessary, goals
and organizational objectives to measure success toward achieving that
result.
In addition to the quantitative analyses, the current AAP contains
an explanation of the nondiscrimination and equal opportunity policies
the contractor has established, the methods elected to implement and
disseminate those policies, and the recruitment and community outreach
programs implemented. The contractor is instructed to identify various
problem areas in the AAP together with plans for appropriate solutions.
The affirmative action measures prescribed by the regulations,
including the establishment of goals, are intended to implement
Executive Order 11246 that contractors ``take affirmative action to
ensure that applicants are employed, and that employees are treated
during employment, without regard to their race, color, religion, sex
or national origin.'' These requirements are rooted in many significant
governmental interests, including: that Federal funds may not be used
to support discrimination (e.g., Cannon v. University of Chicago, 441
U.S. 677 (1979)); that the Federal Government may rightfully fix the
terms upon which it will make needed purchases, including that it may
expect more of Government contractors than is expected of employers
generally (e.g., Perkins v. Lukens Steel Co., 310 U.S. 113 (1940)); and
that the Federal Government's suppliers should not increase the costs
of Government work and delay programs by excluding from the labor pool
available minority and female workers (Contractors Association of
Eastern Pennsylvania v. Secretary of Labor, 442 F2d 159 (3d Cir. 1971),
cert. denied, 404 U.S. 854 (1971)).
The goals component of the AAP was not designed for, nor may it
properly or lawfully be interpreted as, permitting or requiring
unlawful preferential treatment or quotas with respect to persons of
any race, color, religion, sex, or national origin. The regulations
specifically prohibit employment discrimination based on these factors,
and affirmative action goals may not be used to impose a quota or
preference based on race, color, religion, sex, or national origin.
The policy and practice of the agency is to measure the compliance
of the contractor by evaluating the steps the contractor took to
analyze its policies, practices, and procedures, and the good faith
efforts the contractor has undertaken to overcome any underutilization
found and to meet the goals established to correct underutilization.
Under that policy and practice, moreover, a contractor will not be
charged with a violation of the Executive Order solely because the
goals were not met.
c. The Proposed Revision
The basic structure of the Part 60-2 written AAP regulations has
remained essentially unchanged since the regulations first were
promulgated in 1970. Feedback over the years, from the regulated
community of contractors, from groups representing minorities and
women, and from OFCCP field staff, suggested that portions of the
regulations should be improved. For instance, contractors and some
OFCCP staff as well, long have been critical of the eight factors that
must be considered in determining the ``availability'' of minorities
and women for employment in the contractor's workplace. In addition,
the workforce analysis requirement has received its share of criticism
as being the most expensive and time consuming portion of the AAP,
while also being an analytical tool out of touch with the changing
nature of the workforce. Therefore, under the umbrella of Executive
Order 12866 and the Clinton Administration's Reinventing Government
Initiative, a regulatory team was appointed several years ago to review
the Part 60-2 regulations.
The regulatory team began work with a number of objectives. These
included eliminating outdated, duplicative and unnecessary provisions;
eliminating unnecessary compliance burdens by reducing paperwork,
providing more flexibility to contractors, and seeking greater
consistency between compliance requirements and standard business
practices; improving the quality and effectiveness of contractors'
affirmative action efforts, and the rate of voluntary compliance;
making it easier for contractors to understand and comply with the
regulations by simplifying the requirements and stating them as clearly
as possible; enhancing the ability of OFCCP personnel to monitor
compliance in a time of smaller Government and diminishing resources;
and reducing unnecessary friction between contractors and OFCCP
compliance officers.
More recently, an additional objective of the proposed revision has
been to advance the Department of Labor's goal of pay equity; that is,
ensuring that employees are compensated equally for performing equal
work. Today working women earn just 76.5 cents on the dollar compared
to men. Black women earn 64 cents on the dollar compared to White men,
and Hispanic women earn only 55 cents. The pay disparity exists even
after accounting for differences in jobs, education, and experience.
This NPRM encourages contractors to analyze their own compensation
packages to ensure that all their employees are being paid fairly.
As is prescribed by Executive Order 12866, and in accordance with
the established rulemaking practices of OFCCP, prior to drafting this
notice of proposed rulemaking (NPRM) OFCCP engaged in extensive
consultations with its stakeholders regarding the regulatory
requirements for the AAP. In the fall of 1994, officials in OFCCP
invited contractors, civil rights groups, and women's rights groups to
participate in roundtable discussions as to whether and to what extent
the required contents of the AAP should be changed. Front
[[Page 26090]]
line staff in regional and district offices of OFCCP also submitted
recommendations for changing the regulatory requirements for the AAP.
As a result of these preliminary discussions and recommendations, the
agency identified a number of issues desirable to address through
regulatory reforms.
In the Spring of 1995, OFCCP officials convened a series of public
meetings with the agency's stakeholders to elicit their recommendations
for clarifying and simplifying the regulations at 41 CFR Part 60-2.
Several hundred representatives from the contractor, civil rights, and
women's rights communities attended these ``partnership'' meetings,
which were held in Dallas, Pittsburgh, San Diego, and Chicago. In
addition, during this consultation process, interested parties
submitted written comments and suggestions for revising the regulatory
requirements for the AAP. Thus, over an 18 month period OFCCP engaged
in broad consultations that focused on changing the regulatory
requirements for the AAP. Further stakeholder meetings, at which
elements of the regulatory package were discussed, have been held over
the past year.
OFCCP analyzed the comments and recommendations that were received.
Then OFCCP thoroughly examined and pilot-tested the available options
for effecting the desired changes in the regulations. Based on this
analysis, OFCCP drafted the NPRM being published today.
This is the second step in revising the basic regulations
implementing Executive Order 11246, as amended. First, on August 19,
1997, OFCCP published (62 FR 44174) revisions to the regulations at 41
CFR Part 60-1, which eliminated a certification requirement, clarified
sanction authority, streamlined the compliance evaluation process, and
made several other changes. Those revisions are improving agency
efficiency and enforcement effectiveness, while reducing burdens on
contractors.
Today's proposal covers the regulations at 41 CFR Part 60-2, which
address the content of AAPs. We also propose a corresponding revision
of Sec. 60-1.12, which covers records that must be retained, and
Sec. 60-1.40, which covers who must develop and maintain an AAP.
This proposal represents a significant departure from OFCCP's
existing approach to implementing Government contractor
nondiscrimination and affirmative action obligations under Executive
Order 11246. After drafting and considering several alternative
revisions of Part 60-2 we opted in favor of this new direction, which
we believe will greatly benefit the interests of contractors,
minorities and women, and OFCCP itself. Our proposed new approach to
the nondiscrimination and affirmative action regulations is based upon
the following principles:
<bullet> Contractor workplaces should be free of discrimination.
<bullet> Contractors should have greater freedom to design their
AAPs around their unique business structure and needs.
<bullet> OFCCP would like to place greater focus on contractors'
actual nondiscrimination and affirmative action activities, and less
focus on item-by-item review of whether contractor AAPs meet detailed
technical standards.
<bullet> OFCCP can do a better job of enforcing the Executive Order
if it has detailed and up-to-date data up-front about the contractor's
hiring and advancement of minorities and women and its affirmative
action performance.
<bullet> The regulatory requirements should lead to heightened
awareness by contractor officials of each establishment's equal
employment opportunity and affirmative action performance.
<bullet> Heightened awareness of performance, coupled with
increased compliance presence by OFCCP, should dramatically improve the
level of compliance.
Accordingly, as we outline in more detail in the Section-by-Section
Analysis below, the proposal contains a number of new approaches.
We propose to greatly reduce the number of elements required to be
included in contractor AAPs. Beyond the required elements, contractors
would include in their AAPs those elements and actions that they
considered necessary and appropriate to carry out the nondiscrimination
and affirmative action commitments of their Government contracts.
We propose to make it easier for contractors to prepare the
remaining required elements of an AAP in two ways. First, we have
sought to streamline requirements, for example, by proposing that
contractors consider only two availability factors instead of the
current eight. Second, we have sought to enhance contractor
understanding of the rules by stating the requirements in clear terms,
and by providing in the preamble explanations and illustrations of how
the requirements are intended to be applied.
As the proposal makes clear, an AAP consists of a diagnostic
component through which the contractor analyzes its workforce to
determine whether there are problems of underutilization that need to
be addressed, an action-oriented programs component through which the
contractor takes steps to address the identified problems, and an
evaluative component through which the contractor establishes and uses
internal auditing and reporting systems to ensure that the diagnostic
and action-oriented components of the AAP are effective.
Under the proposed regulations, an AAP is effective when the
diagnostic component is accurately identifying problem areas, and when
good faith efforts are being actively undertaken through action-
oriented programs to effectively address those areas. Together, these
components would form the cornerstone of the new AAP.
To help OFCCP better monitor compliance, and to further the
objective of contractor self-analysis, we propose a new Equal
Opportunity Survey, to be submitted by a subset of nonconstruction
establishments each year. The Survey would provide OFCCP with the data
necessary to more effectively identify contractor establishments that
may have problems with their Executive Order 11246 obligations, and to
select those contractors for further evaluation under OFCCP's new
compliance evaluation procedures.
Finally, the proposal performs several ``housekeeping'' functions
with respect to the Part 60-2 regulations. A final rule was published
on December 30, 1980 (45 FR 86215; corrected at 46 FR 7332, January 23,
1981), but was stayed in accordance with Executive Order 12291 on
January 28, 1981 (46 FR 9084). This rule later was stayed indefinitely
on August 25, 1981 (46 FR 42865), pending action on an NPRM published
on that same date (46 FR 42968; supplemented at 47 FR 17770, April 23,
1982). No further action on the August 25, 1981, proposal, or
consequently on the 1980 stayed final rule, has been taken. Both the
1980 final rule and the 1981 proposal addressed 41 CFR Part 60-2. To
avoid conflict with the NPRM published today, OFCCP proposes to
withdraw Part 60-2 of the 1980 final rule, and hereby withdraws the
1981 and 1982 NPRMs in their entirety. Additionally, consistent with
the President's 1998 ``Plain Language'' Memorandum, we have replaced
the word ``shall'' with ``must'' or ``will'' as appropriate to the
context.
Section-by-Section Analysis
Section 60-1.12 Record Retention
OFCCP published a final rule revising 41 CFR Part 60-1 on August
19, 1997. The revision proposed today would
[[Page 26091]]
further amend the record retention provisions in Sec. 60-1.12 to
harmonize them with the proposed changes to Part 60-2.
Current paragraph (b) recites that contractors subject to the
``written'' affirmative action program (AAP) requirement shall maintain
and preserve their current and immediately prior AAPs and documentation
of good faith effort. Consistent with today's proposed changes to Part
60-2, which de-emphasize the written nature of the AAPs, we propose to
remove the modifier ``written'' from this section.
Paragraphs (c) and (d) would be redesignated as paragraphs (d) and
(e) respectively, and the first sentence of the newly designated
paragraph (d) would reflect the addition of a new paragraph (c). The
new paragraph (c) would require that the contractor be able to
identify:
<bullet> the gender, race, and ethnicity of each employee; and,
<bullet> where possible, the gender, race, and ethnicity of each
applicant
in any records the contractor maintains pursuant to this section. In
addition, the contractor would be required to supply this information
to OFCCP upon request. This provision is necessary for OFCCP to verify
EEO data. Although not expressly stated in the regulations, OFCCP
traditionally has required contractors to maintain and submit upon
request information about the gender, race, and ethnicity of their
applicants and employees. See, for example, OFCCP's Federal Contract
Compliance Manual at Section 2H01 and Figure 2-2. Methods for
collecting data on gender, race, and ethnicity are discussed in
Question and Answer 88 in the ``Adoption of Questions and Answers to
Clarify and Provide a Common Interpretation of the Uniform Guidelines
on Employee Selection Procedures,'' 44 F.R. 11996, 12008 (March 2,
1979).
Section 60-1.40 Affirmative Action Programs
Current Sec. 60-1.40 describes at paragraph (a) which contractors
are required to develop ``written'' AAPs. Paragraph (a) also discusses
the importance of identification of problem areas and the evaluation of
opportunities for the utilization of minority employees. Finally,
paragraph (a) requires that AAPs contain specific steps for addressing
identified problems, and a table of job classifications detailing jobs,
duties, rates of pay, and other pertinent information. Paragraph (b) of
the current regulation describes utilization evaluations, and paragraph
(c) describes when AAPs are to be developed and how they are to be
maintained. Current paragraph (c) also indicates that the required
information pertaining to the AAP is to be made available to
representatives of the Director of OFCCP.
We propose several modifications to Sec. 60-1.40. The proposal
retains in paragraph (a) current standards for who must develop and
maintain an AAP, although the standards are slightly edited for
clarity. Additionally, as we proposed for Sec. 60-1.12(b), we would
remove from paragraph (a) references to ``written'' AAPs.
The remainder of existing paragraph (a), as well as all of current
paragraphs (b) and (c), would be removed from this section. Much of the
material is outdated, in that it references only employment problems
relating to minorities, and not those relating to women. As
appropriate, we have updated the material and incorporated it into Part
60-2 with the rest of the regulatory material relating to contents of
AAPs.
In addition, to further consolidate requirements relating to AAPs
in Part 60-2, specific information as to when the obligation to develop
and maintain an AAP arises, which is addressed in current paragraph
(c), has been significantly abbreviated and moved to proposed Sec. 60-
2.1(c). Finally, we are proposing a new paragraph (b), which directs
construction and nonconstruction contractors to the regulations that
establish the affirmative action requirements applicable to each.
Part 60-2
Subpart A--General
Section 60-2.1 Scope and Application
Existing Sec. 60-2.1 describes the purpose and scope of the
regulations contained in 41 CFR Part 60-2. Current paragraph (a)
specifies which contractors are required to develop AAPs and provides a
general overview of the regulations contained in Part 60-2. Paragraph
(b) of the current regulation states that relief, including back pay
where appropriate, must be provided for an affected class in all
conciliation agreements entered into to resolve violations uncovered
during a compliance review. Paragraph (b) also states that an
``affected class'' problem must be remedied in order for a contractor
to be considered in compliance, and indicates that a contractor may be
subject to the enforcement procedures set forth in Sec. 60-2.2 for its
failure to remedy past discrimination.
Consistent with the goals of streamlining and simplifying the
regulations, the proposal would revise and restructure Sec. 60-2.1. The
proposal would revise paragraph (a) by limiting the language to a brief
description of the scope of the regulations contained in Part 60-2.
The proposal would delete as redundant the contents of paragraph
(b) of current Sec. 60-2.1, because the requirement that conciliation
agreements include provisions for back pay and other remedies also is
set forth in Sec. 60-1.33. The removal of the back pay and affected
class language from paragraph (b), however, is not intended to affect
OFCCP's ability to recover back pay or other affirmative relief for
victims of discrimination.
The proposal also would delete the historical reference to
``Revised Order No. 4,'' the predecessor to the current Part 60-2, as
it would not be appropriate or necessary in light of the changes
proposed to be made to Part 60-2.
Paragraph (b) in proposed Sec. 60-2.1 would specify who must
develop an AAP; it would repeat the standards found in Sec. 60-1.40,
because recitation of the scope of coverage is important for
completeness in both parts of the regulation.
The proposal would add a paragraph (c) that specifies that AAPs
must be developed by the contractor within 120 days from the
commencement of the contract. This requirement was previously set out
in 41 CFR 60-1.40(c). Since Part 60-2 addresses the requirements of
AAPs, it appears more appropriate to include information specifying
when the obligation to develop AAPs begins as part of Part 60-2.
The proposal would add a paragraph (d) describing who is included
in affirmative action programs. Proposed subparagraph (2) provides
three options for contractors with fewer than 50 employees at a
particular establishment to account for those employees for AAP
purposes. Proposed subparagraph (3) is designed to clarify that the AAP
at the establishment that makes the selection decision is the
appropriate establishment for inclusion of their selectees. This is
particularly important for corporate headquarters AAPs, since selection
decisions are likely to be made at corporate headquarters for employees
who are assigned to other establishments within the corporation. This
reflects OFCCP's ``corporate initiative'' (53 FR 24830, June 28, 1988).
Paragraph (e) of the proposed regulation explains how to identify
employees who
[[Page 26092]]
are included in AAPs at establishments other than where they are
located.
Section 60-2.2 Agency Action
Paragraph (a) of existing Sec. 60-2.2 deals with agency approval of
AAPs. The entire paragraph would be revised for clarity, and a few
technical changes (such as substituting ``Deputy Assistant Secretary''
for ``Director'') would be made as well. No substantive change is
intended.
Paragraph (b) of existing Sec. 60-2.2 deals with responsibility
determinations. A few technical changes similar to those in paragraph
(a) would be made, but no substantive changes are proposed for
paragraph (b) at this time. Pursuant to the authority set forth in 5
U.S.C. 552(b)(3)(A), which allows Federal agencies to alter ``rules of
agency organization, procedure, or practice'' without notice and
comment, OFCCP is not accepting comments on paragraph (b).
Paragraphs (c) and (d) of the current Sec. 60-2.2 address show
cause notices and other enforcement procedures for a contractor's
failure to develop an AAP as prescribed in the regulations. Consistent
with the goals of streamlining and simplifying the regulations, the
proposal would delete as superfluous paragraphs (c) and (d) because the
subjects are also addressed in Secs. 60-1.26 and 60-1.28.
Subpart B--Purpose and Contents of Affirmative Action Programs
Section 60-2.10 General Purpose and Contents of Affirmative Action
Programs
The current Sec. 60-2.10 describes an AAP as a set of specific and
result-oriented procedures to which a contractor commits itself to
apply every good faith effort. It generally describes the contents of
AAPs and states that the good faith efforts must be directed to correct
the deficiencies and achieve prompt and full utilization of minorities
and women.
A complete rewrite of Sec. 60-2.10 is proposed. The rewrite is
intended to convey that an AAP should be considered a management tool--
an integral part of the way a corporation conducts its business. The
proposed revision emphasizes the philosophy OFCCP intends to convey
throughout the regulation, that affirmative action is not to be a mere
paperwork exercise but rather a dynamic part of the contractor's
management approach. Paragraph (a) of proposed Sec. 2.10 states that
the premise underlying AAPs is that absent discrimination, a
contractor's workforce would be expected to generally reflect the
available qualified labor force. The proposed revision explains that,
in addition to identifying and correcting underutilization, AAPs also
are intended to institutionalize the contractor's commitment to
equality in every aspect of employment. AAPs institutionalize the
contractor's commitment to equality by establishing procedures to
monitor and examine the contractor's employment decisions and
compensation systems. AAPs establish these procedures to ensure that
the contractor's employment decisions and compensation systems are free
of discrimination.
Paragraph (b) of proposed Sec. 60-2.10 outlines the required
elements of an AAP. Contractors, thus, at the outset, can get a general
sense of what is required for an AAP. It may also prove useful when a
contractor is checking to see if all of the required AAP elements have
been addressed in its AAP.
Finally, the proposal would add a paragraph (c) requiring that
contractors maintain and make available to OFCCP documentation of their
compliance with Secs. 60-2.11 through 2.17.
Section 60-2.11 Organizational Profile
The current Sec. 60-2.11 is entitled ``Required utilization
analysis.'' It contains an introductory paragraph which identifies
broad job areas (EEO-1 categories) in which racial and ethnic
minorities or women are likely to be underutilized, and sets forth in
lettered paragraphs the core contents of a written AAP. Proposed
Sec. 60-2.11 would address only paragraph (a) of the current
regulation, which deals with the workforce analysis. Paragraph (b) of
the current regulation, which addresses the job group analysis, would
be revised and moved to new Sec. 60-2.12 discussed below in this
preamble. The introductory paragraph of current Sec. 60-2.11 would be
deleted as outdated and unnecessary.
Paragraph (a) of current Sec. 60-2.11 provides that a workforce
analysis is a listing of job titles (not job groups) ranked from the
lowest paid to highest paid within each department or similar
organizational unit. The workforce analysis also shows the lines of
progression or promotional sequences of jobs, if applicable. If no
lines of progression or usual promotional sequences exist, job titles
are listed by departments, job families or disciplines, in order of
wage rates or salary ranges. For each job title, the workforce analysis
must reflect the wage rate or salary range, and the number of
incumbents by race, ethnicity, and sex. In short, the workforce
analysis is a map pinpointing the location of jobs and incumbent
employees and their relationship to other jobs and employees in the
contractor's workforce.
During the consultation process, several contractor representatives
criticized the current workforce analysis regulation. Some felt that
the requirement to present a hierarchical array of jobs by job title
and by pay for departments or organizational units, along with lines of
progression, is too burdensome. These contractor representatives
recommended that the workforce analysis be eliminated as a required
element of the AAP.
Other contractor representatives contended that the current
regulation does not permit contractors to capture the structural
characteristics of today's workforces, and that in many instances
contractors develop ``artificial'' workforce analyses solely for the
purpose of complying with the regulations. Specifically, they asserted
that the current regulation does not recognize the increasing use of
the fluid team structure (e.g., a multi-disciplinary team drawn from
several components of an organization to work for a limited time on a
project), does not allow contractors to indicate that a job is part of
a chain of command outside of the establishment (e.g., sales personnel
who report directly to a sales manager in another office), and is not
meaningful when small numbers of employees work at remote locations
(e.g., small branch banks). These critics of the current workforce
analysis urged OFCCP to revise the regulations to permit contractors to
base their workforce analyses on how their businesses actually are
organized, using data that are readily available and compiled to meet
other business needs. To that end, they urged removal of the current
geographical restriction that the workforce analysis (indeed the entire
AAP) cover a single establishment, and revision of the workforce
analysis regulation so as to permit contractors to: (1) Include several
small locations in one workforce analysis (and corresponding AAP; this
sometimes is referred to as a ``consolidated'' AAP); (2) prepare a
workforce analysis (and AAP) for a group or groups within a single
establishment; or (3) prepare a single workforce analysis (and AAP)
based on a business function or a line of business, without regard to
the geographic locations of the establishments and employees (sometimes
referred to as a ``functional'' AAP).
Other contractor representatives were satisfied with the current
workforce analysis requirement. Some observed that ``wholesale
changes'' in the AAP format could be costly for those
[[Page 26093]]
contractors that have been developing the AAP for many years in
accordance with the current regulatory requirements.
A central function of the workforce analysis, and any substitute,
is to provide a picture of a contractor's organizational structure. The
picture enables an individual reviewing equal employment opportunity at
the establishment to understand how the establishment functions. Adding
gender, race, and ethnicity to the picture provides a graphic
representation of where minorities and women may be underrepresented or
concentrated, which permits preliminary review for potential
discrimination and the need for affirmative action. This graphic
representation is useful to contractors engaging in self analysis, and
it is useful to OFCCP's compliance officers. OFCCP believes that the
concept is well worth retaining.
In response to the concerns discussed above, however, OFCCP has
attempted to ``reengineer'' the workforce analysis into a shorter,
simpler format which we propose to call an ``organizational profile.''
The organizational profile is described in proposed Sec. 60-2.11(b)(1).
In basic terms, the organizational profile is an organization chart for
the establishment, showing each of the organizational units and their
relationships to one another, and the gender, race, and ethnic
composition of each organizational unit. Unlike the current workforce
analysis, the profile would focus only on organizational units; it
would not require the identification of individual job titles with the
exception of the supervisor, if any. Likewise, reporting of race, sex,
and salary information by job title would be eliminated.
In drafting the proposed rule we have attempted to avoid a minutely
itemized prescription for the organizational profile. Thus, we specify
only that the profile is ``a detailed organizational chart or similar
graphical presentation of the contractor's organizational structure,''
and that it must identify: each organizational unit; the job title,
gender, race, and ethnicity of the unit supervisor; and the gender,
race, and ethnic composition of the total employees in each unit. Our
intent is that the profile be presented in a visual, rather than
narrative, format, and that it account for all elements of the
establishment's workforce.
Beyond those basic requirements, however, the proposal leaves
contractors substantial latitude to present the organizational profile
in a manner that best fits their operational needs. In most cases,
contractors should be able to use existing organizational charts as the
core for their profiles. The only additional work required would be to
annotate the charts with information about supervisors, and with the
gender, race, and ethnic composition of each unit.
A key definitional question is what is meant by the term
``organizational unit.'' As we set forth in section (b)(2) of the
proposed rule, an organizational unit is any component that is part of
the contractor's corporate structure. In a more traditional
organization, an organizational unit might be a department, division,
section, branch, group, or similar unit. Typically, such a unit would
be headed by a supervisor. In a less traditional organization, an
organizational unit might be a project team, job family, or similar
unit. Such a unit might not have a direct supervisor.
Following is a sample organizational profile. This sample is
provided for illustrative purposes only, and should not be construed to
represent a required format or template.
[[Page 26094]]
[GRAPHIC] [TIFF OMITTED] TP04MY00.001
In OFCCP's estimation the proposed organizational profile
simplifies and improves upon the existing workforce analysis. The
proposed rule's focus on actual organizational units, and particularly
the notion that the core of
[[Page 26095]]
the organizational profile can be the contractor's actual
organizational chart, should result in the profile being more accurate,
more useful, easier for contractors to produce, and significantly
shorter, than the workforce analysis it would replace. These changes
should benefit both contractors and OFCCP.
During the consultations it was asserted that the current
regulations do not provide contractors the flexibility to report on
their organizations as they actually exist, and that this results in
contractors creating special report formats solely for AAP purposes.
Because the proposed rule permits, indeed encourages, the use of
existing organizational structures and organizational charts, the
asserted practice of creating special report formats should diminish,
thus reducing contractor burden. In turn, if the organizational profile
more closely reflects the actual organization of the establishment, it
should be a more useful and reliable analytical tool.
Finally, as noted above, under the proposal the organizational
profile would not require the itemization of individual job titles, or
the reporting of gender, race, ethnicity, and salary information by job
title. This will greatly reduce the volume of the organizational
profile, as compared to the existing workforce analysis (which often is
one of the largest sections of the AAP).
Regarding the structure of the AAP, except as provided in 60-
2.1(d), OFCCP decided not to adopt the recommendation that would allow
for the development of a ``consolidated'' or ``functional'' AAP at this
time. Although some of the concepts may have merit, they appear to also
have shortcomings that will require lengthy and substantive
consultation among stakeholders.
Finally, in subsection (c)(4), the minority group designations
would be changed to conform to the designations of minorities currently
used in the EEO-1 report. At a later date, OFCCP intends to revisit the
racial and ethnic designations used in the regulations at 41 CFR
Chapter 60 to render them consistent with the revised standards set
forth in OMB's Statistical Policy Directive No. 15, Race and Ethnic
Standards for Federal Statistics and Administrative Reporting (62 FR
58782, October 30, 1997). OFCCP will coordinate any changes in these
designations with the Equal Employment Opportunity Commission (EEOC) so
that recordkeeping and reporting requirements for both agencies are
compatible.
Section 60-2.12 Job Group Analysis.
[Current Sec. 60-2.12 entitled ``Establishment of goals and
timetables'' would be revised, renamed, and moved to Sec. 60-2.16 as
discussed below in the preamble.]
Contractors use the job group analysis for combining job titles in
their workforce. This is the first step in comparing the representation
of minorities and women in the contractor's workforce with the
estimated availability of qualified minorities and women who could be
employed. When the representation of minorities or women within a job
group is less than their availability by some identifiable measure (see
discussion of Sec. 60-2.16, below) the contractor must establish goals.
The reason for combining job titles is to organize the workforce
into manageable size groups to facilitate analysis, while still
maintaining elements of commonality among the jobs grouped together.
The jobs included in a job group must have elements in common, i.e.,
similar job duties, similar compensation, and similar opportunities for
advancement within the contractor's workforce. Contractors have
considerable discretion in determining which jobs to combine, but the
resulting job groups must contain jobs with the requisite common
elements. If the job groups are inappropriately drawn, the availability
and utilization analyses based on those job groups will be flawed.
The current regulations (Sec. 60-2.11(b)) define a job group as one
or more jobs having similar content, wage rates and opportunities. The
structure of the job group analysis in the current regulation often is
criticized by contractors and by OFCCP compliance staff. Some view the
instruction to combine jobs by similar content, wage rates and
opportunities as too general to provide clear, consistent guidance. The
result, according to this appraisal, is inconsistent interpretations
among different OFCCP offices, and needless disagreements between
contractors and compliance officers about the grouping of particular
jobs. Others say that the current regulation does not give larger
contractors enough flexibility to tailor the job group analysis to the
idiosyncrasies of different organizational structures, places too much
emphasis on tracking lines of progression, and precludes compliance
officers from making fair and accurate evaluations of contractor
achievements. Further, critics claim that for smaller contractors, the
existing job group analysis regulation often results in the formation
of job groups that are too small to conduct a meaningful utilization
analysis.
Despite the criticisms of the current job group regulation,
contractors and OFCCP staff have expressed divergent views on whether
it should be revised, and if so, how. During the consultation process,
some contractor representatives recommended that OFCCP retain the job
group regulation as it currently exists. Those who favored keeping the
current regulatory approach observed that the current approach of
contractor-developed job groups can best accommodate the diversity in
organizational structures that exists among contractor establishments.
Other contractor representatives supported the idea of basing job
grouping on the standard EEO-1 categories, a concept which OFCCP
explored during the consultation process. The term ``EEO-1 categories''
refers to nine broad occupational groupings: officials and managers,
professionals, technicians, sales workers, office and clerical, craft
workers (skilled), operatives (semi-skilled), laborers (unskilled), and
service workers. These groupings are used in the EEO-1 report (the
Employer Information Report), which most employers file annually with
the Joint Reporting Committee (an entity composed of OFCCP and the
EEOC).
Proponents of the EEO-1 job grouping approach observed that most
contractors and employers already are familiar with the EEO-1
categories and that, in practice, those categories already serve as the
baseline for most job groups. They asserted that another advantage of
EEO-1 category job grouping is that, in many cases, it would address
the problem of job groups with too few employees to conduct a
meaningful utilization analysis.
Still other contractor representatives recommended that OFCCP
revise the regulations in a manner that would allow contractors the
option of selecting either approach--the contractor-developed job group
prescribed by the current regulations or the EEO-1 category-based job
group.
After considerable thought about the wide range of views described
above, OFCCP has decided to continue the traditional approach to the
job group analysis, as reflected in current Sec. 60-2.11(b), for larger
employers (contractors with 150 or more employees). Accordingly,
proposed Sec. 60-2.12(b) states that jobs at the establishment with
similar content, wage rates, and opportunities, must be combined to
form job groups. OFCCP is proposing, at Sec. 60-2.12(e), that smaller
employers (contractors with fewer than 150
[[Page 26096]]
employees) may use EEO-1 categories as job groups.
In response to criticisms that the current regulations provide
inadequate guidance, the proposed regulation would further explain the
criteria that the contractor must consider when determining which jobs
to combine into job groups. Proposed Sec. 60-2.12(b) states
``similarity of job content refers to the duties and responsibilities
of the job titles which make up the job group.'' Further, the proposed
regulation provides that ``similarity of opportunities refers to
training, transfers, promotions, pay mobility, and other career
enhancement opportunities offered by the jobs within the job group.''
Although OFCCP's Federal Contract Compliance Manual contains detailed
guidance on job group formation, the agency believes the expanded
regulatory definition will address many of the issues that arise when
decisions are being made about job groups.
Once the appropriate job groups are determined, proposed Sec. 60-
2.12(c) would require the contractor to prepare a list of the job
titles that comprise each job group. The paragraph also would reflect
the provisions of proposed Secs. 60-2.1(d) and (e) relating to jobs
located at another establishment.
Proposed Sec. 60-2.12(d) would provide that all jobs located at an
establishment must be included in the establishment's job group
analysis, except as provided in Sec. 60-2.1(d).
Finally, as noted above, proposed Sec. 60-2.12(e) permits smaller
employers to use EEO-1 categories as job groups. OFCCP considers job
grouping by EEO-1 category to be simpler both for smaller employers and
for OFCCP than grouping by similarity of content, wage rates and
opportunities (the scheme found in Sec. 60-2.11(b) of the current
regulations and Sec. 60-2.12(b) of this proposal). Contractors that are
smaller employers tend to have so few employees that to subdivide them
into smaller job groups than required by the EEO-1 categories would
make goal setting unreliable. We are expressly soliciting comments on
this issue.
Section 60-2.13 Placement of Incumbents in Job Groups
[Current Sec. 60-2.13 entitled ``Additional required ingredients of
affirmative action programs'' would be revised, renamed, and moved to
Sec. 60-2.17 as is discussed below in the preamble.]
This proposed new section would require the contractor to record
separately the percentage of minorities and women it employs within
each job group. The current regulations (Sec. 60-2.11) do not directly
address this procedure. This step may seem obvious, but it is expressly
included here in an effort to make the process of preparing an AAP
clearer to first-time and infrequent users of the regulations and to
casual readers.
Section 60-2.14 Determining Availability
[Current Sec. 60-2.14 entitled ``Program summary'' would be moved
to Sec. 60-2.31.]
Proposed Sec. 60-2.14 contains the guidelines for determining
availability and would replace the regulations that are currently found
at Secs. 60-2.11(b)(1) and (2). The purpose of the availability
analysis is to determine the representation of minorities and women
among those qualified (or readily qualifiable) for employment for each
job group in the contractor's workforce. Availability is the yardstick
against which the actual utilization of minorities or women in the
contractor's job group is measured.
Under the current regulation, the contractor is required to compute
availability, separately for minorities and for women, for each job
group. In determining availability, the contractor must consider each
of eight factors listed in the regulations. The factors are similar,
but not identical, for minorities and women. Although the contractor
must consider all eight factors, it is not required to utilize each
factor in determining the final availability estimate. Only the factors
that are relevant to the actual availability of workers for the job
group in question must be used. Most contractors actually use only a
few of the eight factors to compute the final availability estimates.
The ``eight-factor analysis'' for determining availability is one
of the most frequently criticized elements of the Executive Order 11246
program. Common complaints among contractors are that the requirements
are unnecessarily complex and not sufficiently focused. For instance,
critics suggest that factors such as the minority population of the
labor area surrounding the facility (factor (1)(i)), the size of the
minority and female unemployment force in the labor area surrounding
the facility (factors (1)(ii) and (2)(i)), and the percentage of the
minority and female workforce as compared with the total workforce in
the immediate labor area (factors (1)(iii) and (2)(ii)), are
inappropriately broad because they do not focus on the skills needed to
perform the particular jobs in the contractor's workplace. Even for
jobs for which no special skill is needed, the factor on minority
population is criticized because it commingles those who are ready to
work with those who are under 16 or over 65 years of age, completely
unable to work due to disability, or otherwise unavailable. Similarly,
consideration of the existence of training institutions capable of
training persons in the requisite skills (factors (1)(vii) and
(2)(vii)) is said to focus on those who may be available several years
in the future and not on those who can work now. Why, contractors ask,
is it necessary to analyze or consider these factors if it is improper
to use them?
Accordingly, contractors frequently recommend that the number of
factors be limited to the few most commonly used. Contractors further
suggest that for ease of application the same availability factors be
used for minorities and for women. During our consultations, groups
representing minorities and women were not strongly opposed to
collapsing the list of factors to concentrate on those that best
identify persons available for employment. However, the civil rights
and women's groups felt strongly that the concept of affirmative action
required consideration of those who reasonably could be trained for a
job, as well as those who already have the skills.
Today's proposal would simplify the availability computations by
reducing the number of factors from eight to two. The proposed
regulation would use the same factors for minorities and for women, but
availability would be computed separately for minorities and women for
each job group, as is done under the current regulations. Under
proposed Sec. 60-2.14(c), the following factors would be considered in
determining availability:
(1) The percentage of minorities or women with requisite skills in
the reasonable recruitment area, where ``reasonable recruitment area''
refers to the geographical area from which the contractor usually seeks
or reasonably could seek workers to fill the positions in question; and
(2) The percentage of minorities or women among those promotable,
transferable, and trainable within the contractor's organization, where
``trainable'' refers to employees who could, with appropriate training,
become promotable or transferable within the AAP year.
To determine the percentages in Sec. 60-2.14(c)(2), the contractor
would undertake one or both of the following steps:
<bullet> Determine which job groups are ``feeder pools'' for the
job group in question. The feeder pools are job
[[Page 26097]]
groups from which individuals are promoted.
<bullet> Ascertain which employees could be promoted or transferred
with appropriate training.
Example #1: A contractor has a job group of Engineering
Managers. Over the past year, all individuals who have been promoted
into the Engineering Managers job group have been promoted from only
two other job groups: Chemical Engineering Project Leaders and
Petroleum Engineering Project Leaders. The Chemical Engineering
Project Leaders job group has 100 incumbents, of which 20 are
minority and 25 are female. The Petroleum Engineering Project Leader
job group also has 100 incumbents, of which 15 are minority and 20
are female. The ``feeder pool'' availability is the total number of
minority or female incumbents divided by the total number of
incumbents for the two job groups.
----------------------------------------------------------------------------------------------------------------
Minority Female
Job group Total Minority Female promotables promotables
incumbents incumbents incumbents (in percent) (in percent)
----------------------------------------------------------------------------------------------------------------
Chem.E PL....................... 100 20 25 20 25
Pet.E PL........................ 100 15 20 15 20
----------------------------------------------------------------------------------------------------------------
Minority Availability (20 + 15) / (100 + 100) = 17.5%
Female Availability (25 + 20) / (100 + 100) = 22.5%
Example #2: A contractor has a job group of Entry Level
Managers. This contractor has a management training program. A
review of the training program shows that of the 200 employees in
the program last year, 100 completed the program and are eligible
for Entry Level Manager positions this AAP year. Of those 100 who
completed the program, 45 are minority and 40 are female. The
availability in this example is the percentage of minorities or
females who completed the training program.
----------------------------------------------------------------------------------------------------------------
Minorities Females Minority Female
Total individuals eligible for promotion eligible for eligible for availability availability
promotion promotion (in percent) (in percent)
----------------------------------------------------------------------------------------------------------------
100......................................... 45 40 45 40
----------------------------------------------------------------------------------------------------------------
Our experience has shown that these factors are the ones most
contractors use to compute availability estimates. Taken together, they
reflect contractors' assertions of who is qualified and available for
employment. In addition to the percentage of minorities or women in the
reasonable recruitment area and within the contractor's workforce who
already possess the requisite skills, proposed Sec. 60-2.14(c) would
require the contractor to consider the percentage of minorities or
women among its employees who could, with appropriate training, become
promotable or transferable during the AAP year, when determining
availability. This provision is intended to address the recommendations
of civil rights and women's groups that the availability computation
include consideration of training opportunities. It is a refinement of
the requirement in the current regulations (Secs. 60-2.11(b)(1)(viii)
and (b)(2)(viii)) that the contractor consider the degree of training
which it is reasonably able to undertake as a means of making all job
classes available to minorities and to women.
Proposed Sec. 60-2.14(e) would require a contractor to define its
recruitment area reasonably so as not to exclude minorities and women,
and to develop a brief written rationale for selection of that
recruitment area. On occasion, defining the recruitment area in a
slightly different way can significantly enlarge or reduce the
proportion of minorities or women with requisite skills available for
employment. In such a case, the contractor would be required to assure
that the recruitment area chosen would not have the effect of excluding
minorities or women.
Proposed Sec. 60-2.14(f) would require contractors to define the
pool of promotable, transferable, and trainable employees in such a way
as not to exclude minorities or women, and to develop a brief
documented rationale for the selection of the pool. This provision
responds to concerns expressed by civil rights and women's groups that
a contractor may have relatively low levels of available incumbent
minorities and women due to prior discrimination in access to training
and employment opportunities in general, and, perhaps, within the
contractor's workforce. When barriers to equal employment opportunity
have prevented minorities and women from entering the pipeline to
promotional consideration, contractors must critically evaluate the
criteria they use to identify candidates. Otherwise, generations of
minority and female workers, barred from equal consideration in the
past, may continue to experience the effects of prior discrimination
and lack of affirmative action.
Further, proposed Sec. 60-2.14(d) would require contractors to use
the most current and discrete statistical data to conduct its
availability analyses. This is addressed in Section 2G05(e) and
Appendix 2B of the Federal Contract Compliance Manual. Examples of such
information include census data, data from local job service offices,
and data from colleges and other training institutions.
When a job group is composed of job titles with different
availability rates, proposed Sec. 60-2.14(g) would require the
contractor to compute a composite availability estimate. The composite
availability figure would represent a weighted average of the
availability estimates for all the job titles in the job group.
The composite weighted average availability is computed by
determining the percentage of total job group incumbents represented by
the incumbents in each job title, multiplying each incumbent percentage
by the corresponding availability for that job title, and summing the
results. The computation is illustrated by the following job group of
professionals with a total of 80 incumbents:
------------------------------------------------------------------------
Number Availability
Job title incumbents (in percent)
------------------------------------------------------------------------
Accountant.............................. 20 35
Auditor................................. 40 20
Analyst................................. 20 15
------------------------------------------------------------------------
1. Accountant = 20/80 incumbents, or .25
Auditor = 40/80 incumbents, or .5
Analyst = 20/80 incumbents, or .25
2. Accountant = .25 x .35 = .0875
Auditor = .5 x .20 = .1
Analyst = .25 x .15 = .0375
3. Composite Availability = .0875 + .1 + .0375 = .225 or 22.5%
[[Page 26098]]
The proposed regulation would retain the requirement that
contractors determine the availability of total minorities. OFCCP
requests comments on whether the regulation should be changed to
require the contractor to compute availability for individual minority
subgroups and invites commenters to address the following questions:
1. Should contractors be required to compute availability
separately for individual minority subgroups as a general rule?
2. Should contractors be required to compute availability for
individual minority subgroups only when the minority subgroup
represents a specified percentage of the population in the immediate
labor area?
3. How large must the minority subgroup population be before the
contractor is required to compute the separate availability for
minority subgroups?
Section 60-2.15 Comparing Incumbency to Availability
[Current Sec. 60-2.15 entitled ``Compliance status'' would be
revised and moved to Sec. 60-2.35, discussed below in the preamble.]
Proposed Sec. 60-2.15 addresses an aspect of the existing
regulations that is referred to as the ``utilization analysis,'' and
would replace one portion of existing Sec. 60-2.11(b). Proposed
Sec. 60-2.15(a) would require the contractor to compare the
representation of minorities and women in each job group with their
representation among those available to be employed in that group.
During compliance reviews, OFCCP typically finds that more minorities
and women are available for employment in particular occupations and
job groups than are actually employed in those positions. Indeed, OFCCP
Regional Directors report that virtually every AAP reviewed by their
offices contains one or more job groups in which availability exceeds
actual employment. If the availability for a job group is greater than
incumbency, and the difference is of a sufficient magnitude, the
contractor must establish a goal.
The current regulation refers to the difference between
availability and incumbency as ``underutilization,'' which is defined
as ``having fewer minorities or women in a particular job group than
would reasonably be expected by their availability.'' When this
condition exists, the contractor must establish a goal. Under the
current practice, contractors are permitted to identify
underutilization using a variety of methods, including: the ``any
difference'' rule, i.e., whether any difference exists between the
availability of minorities or women for employment in a job group and
the number of such persons actually employed in the job group; the
``one person'' rule, i.e., whether the difference between availability
and the actual employment of minorities or women equals one person or
more; the ``80 percent rule,'' i.e., whether actual employment of
minorities or women is less than 80 percent of their availability; and
a ``two standard deviations'' analysis, i.e., whether the difference
between availability and the actual employment of minorities or women
exceeds the two standard deviations test of statistical significance.
We propose no substantive change from the current regulation. The
proposal, which is slightly reworded for clarity, appears at Sec. 60-
2.15(b).
Finally, current Sec. 60-2.11(b) specifies that the AAP shall
contain ``[a]n analysis of all major job groups'' for which
underutilization determinations will be made (emphasis added). The
regulations do not define ``major,'' nor do they distinguish major job
groups from other job groups. Most contractors have treated all job
groups as major, and have conducted the analyses for each. This
approach correctly reflects that no job groups are so insignificant
that further analysis of them should not be performed. Any job group of
such insignificance probably should not be considered a job group at
all. Accordingly, OFCCP proposes to drop the word ``major,'' thereby
requiring that contractors determine availability, compare incumbency
to availability, and set placement goals (where comparison of
availability to incumbency indicates a need to do so) for all job
groups. OFCCP is soliciting comments concerning dropping the word
``major'' from job groups.
Section 60-2.16 Placement Goals
The procedures outlined in the preceding sections of this proposed
rule would require a Federal contractor to analyze its workforce and
evaluate its employment practices for the purpose of identifying and
correcting gender-, race-and ethnicity-based obstacles to equal
employment opportunity. Where the need for corrective action is
revealed, the AAP must include outreach and other steps precisely
tailored to eliminate the barriers disclosed, and placement goals to
target and measure the effectiveness of efforts directed towards
achieving that result.
In 1970, when the goals requirement first was incorporated into the
regulations, the then Office of Federal Contract Compliance recognized
that some might misunderstand goals to be quotas which must be
achieved, or that gender-, race-, and ethnicity-based preferences were
permitted or required in the pursuit of goals. Accordingly, the Office
of Federal Contract Compliance squarely addressed these issues in the
regulations, stating that: quotas are expressly forbidden; compliance
is judged by a contractor's efforts rather than whether goals have been
met; and goals should not be used to discriminate against any employee
or applicant because of race, color, religion, sex, or national origin.
(See, for example, Secs. 60-2.12(e), 2.15 and 2.30 of the current
regulations, respectively.)
To further clarify and maintain the proper focus of affirmative
action in the contract compliance program, OFCCP periodically issued
supplemental guidance and instructions explaining the difference
between permissible goals, on the one hand, and unlawful preferences,
on the other. The latest such guidance is contained in an OFCCP
Administrative Notice entitled ``Numerical Goals under Executive Order
11246,'' which was issued in December 1995. The Administrative Notice
reiterates a number of critical points about goals, including the
following:
<bullet> The goals component of the AAP is not designed to be, nor
may it properly or lawfully be interpreted as, permitting unlawful
preferential treatment and quotas with respect to persons of any race,
color, religion, sex, or national origin.
<bullet> Goals are neither quotas, set-asides, nor a device to
achieve proportional representation or equal results; rather, the goal-
setting process is used to target and measure the effectiveness of
affirmative action efforts to eradicate and prevent barriers to equal
employment opportunity.
<bullet> Goals under Executive Order 11246, as amended, do not
require that any specific position be filled by a person of a
particular gender, race, or ethnicity; instead, the requirement is that
contractors engage in outreach and other efforts to broaden the pool of
qualified candidates to include minorities and women.
<bullet> The use of goals is consistent with principles of merit,
because goals do not require an employer to hire a person who does not
have the qualifications needed to perform the job successfully, hire an
unqualified person in preference to another applicant who is qualified,
or hire a less qualified person in preference to a more qualified
person.
<bullet> Goals may not be treated as a ceiling or a floor for the
employment of members of particular groups.
[[Page 26099]]
<bullet> A contractor's compliance is measured by whether it has
made good faith efforts to meet its goals, and failure to meet goals,
by itself, is not a violation of the Executive Order.
Against this backdrop, OFCCP today proposes to revise its
regulation on the establishment of goals by contractors. Goal setting
currently is addressed in Sec. 60-2.12; today's proposal would move the
goals provision to Sec. 60-2.16, and would revise the section to
provide additional clarity on how to set goals and guidance regarding
the use of goals. The substance of current Sec. 60-2.30 also is
included in this section.
Under the existing regulations, after determining that there is
underutilization of minorities or women in a specific job group, the
contractor must establish goals. Existing Secs. 60-2.10 and 60-2.12
refer to ``goals and timetables'' to which a contractor's ``good faith
efforts'' must be directed to correct deficiencies in the utilization
of minorities or women.
The current regulation provides general guidance regarding the
establishment of goals. For instance, contractors are required to
consider the availability of minorities or women for the job group as
revealed by the requisite utilization analysis. Additionally, the
current regulation provides that ``goals may not be rigid and
inflexible quotas which must be met, but must be goals reasonably
attainable by means of applying every good faith effort * * *.''
However, the regulation does not further define the term ``goals,'' nor
explain how they should be set.
In order to clarify that AAPs (including goals) involve annual
planning, which accounts for changes in the contractor's business,
proposed Sec. 60-2.16(c) would require the contractor to establish a
``percentage annual placement goal'' for a particular job group. Thus,
under proposed Sec. 60-2.16, the concept of ``timetables'' would not be
retained because it implies a requirement of multi-year or ultimate
goals.
Further, proposed paragraph (c) would require the contractor to set
goals at a level ``at least equal to the availability figure'' derived
for minorities or women for the job group at issue. Proposed paragraph
(c) is not a new requirement; it is consistent with OFCCP's current
practice. To illustrate: If pursuant to Sec. 60-2.14 the contractor
determined that the availability of women for employment in a
particular job group was 17.3 percent, the contractor would set a goal
to place women, during the current AAP year, in (at least) 17.3 percent
of the openings in that job group.
The focus on annual planning and the concomitant deletion of
timetables in the proposal should not be misunderstood to mean that a
contractor must fully resolve all differences between availability and
actual utilization within the current AAP year. In many cases (for
instance, few hiring opportunities during the year), it would be
mathematically impossible to bridge that gap in such a short time. More
important, however, is that compliance, as in the past, always is
measured by good faith effort, and not by the achievement of a
particular numerical result.
The proposal would considerably strengthen existing language so as
to reaffirm that goals prescribed by the regulations implementing
Executive Order 11246, as amended, are not to be used as quotas which
must be achieved through gender-, race-, or ethnicity-based
preferences. Although OFCCP does not consider it necessary to repeat
verbatim in the regulations the principles set forth in its December
1995 policy statement, the proposed rule is intended to reflect those
concepts. The proposed regulation would set forth the principles that
govern the establishment and use of placement goals. Specifically,
proposed paragraph (e) states that: (1) Quotas are expressly forbidden
and that goals are neither a floor nor ceiling for the employment of
particular groups; (2) employment selection decisions must be made in a
nondiscriminatory manner, and that placement goals do not provide a
contractor justification to extend a preference to any individual,
select an individual, or to adversely affect an individual's employment
status, on the basis of that person's race, color, religion, sex, or
national origin; (3) placement goals do not create set-asides for
specific groups, nor are they intended to achieve proportional
representation or equal results; and (4) placement goals may not be
used to supersede merit principles.
Proposed paragraph (f) states that contractors extending an
authorized preference for American Indians living on or near a
reservation, may reflect such a preference in their placement goals.
This provision appears at Sec. 60-2.12(j) of the current regulations.
We have added the adjective ``American'' when referring to Indians.
Section 60-2.17 Additional Required Elements of Affirmative Action
Programs
The preceding sections of the regulations have focused primarily on
the diagnostic component of AAPs--the statistical analyses of the
contractor's workforce to identify equal employment opportunity
problems. However, meaningful affirmative action also requires that the
contractor develop and carry out action-oriented programs to eliminate
the identified problems, and establish procedures for monitoring its
employment activities to determine whether the AAP is effective.
The current regulations address the action-oriented and evaluative
components of AAPs in a section designated ``Additional required
ingredients of affirmative action programs.'' The current regulation
appears at Sec. 60-2.13. OFCCP proposes to eliminate a number of
elements that no longer need to be specifically and separately set
forth in regulatory form. The remaining provisions would be moved to
Sec. 60-2.17 and would be renamed ``Additional required elements of
affirmative action programs.'' Although OFCCP is eliminating these
provisions from the mandatory requirements of the AAP, the contractor
may voluntarily choose to retain these elements in its program.
First, OFCCP proposes to delete as specific required elements the
following items:
Sec. 60-2.13(a)--reaffirmation of the contractor's EEO policy in all
personnel matters;
Sec. 60-2.13(b)--formal internal and external dissemination of the
contractor's EEO policy;
Sec. 60-2.13(e)--establishment of goals and objectives by
organizational units and job groups, including timetables for
completion;
Sec. 60-2.13(i)--active support of local and national community action
programs and community service programs; and
Sec. 60-2.13(j)--consideration of minorities and women not currently in
the workforce having requisite skills.
Effective affirmative action is not a rote, or follow-the-numbers,
exercise. As was suggested during the consultation process, overly
prescriptive requirements sometimes lead to contractors simply going
through the motions, and not really working to achieve affirmative
action. Instead, effective affirmative action is intensely situation
specific. The contractor must assess its individual circumstances--for
example, the types of equal employment opportunity problems in
evidence, how the problems developed, previous efforts to address the
problems, and the types of resources available to the contractor--and
devise mechanisms and programs to address those particular
circumstances.
[[Page 26100]]
In addition, OFCCP is proposing the deletion of Sec. 60-2.13(h)--
compliance of personnel policies and practices with the Sex
Discrimination Guidelines (41 CFR Part 60-20). The Sex Discrimination
Guidelines are an independent regulatory requirement to which
contractors are subject, regardless of whether the Guidelines are
mentioned as ``additional required elements.'' Eliminating redundancy
by not referencing the Guidelines in proposed Sec. 60-2.17, therefore,
would in no way affect the contractor's obligation to comply with the
Guidelines nor OFCCP's commitment to enforcing the Guidelines.
The proposed rule would retain four of the original 10 ``additional
required ingredients.'' OFCCP intends that these remaining items
capture the essence of effective affirmative action, including
subsuming many aspects of the specific ``ingredients'' proposed to be
deleted. They should energize and encourage contractors to improve upon
and eliminate any weaknesses in their equal employment opportunity
performance. The following elements in the current Sec. 60-2.13 would
be retained:
Sec. 60-2.13(c)--establishment of responsibilities for implementation
of the contractor's AAP (to be codified as Sec. 60-2.17(a));
Sec. 60-2.13(d)--identification of problems areas by organizational
units and job groups (to be codified as Sec. 60-2.17(b));
Sec. 60-2.13(f)--development and execution of action-oriented programs
designed to eliminate problems and further designed to attain
established goals and objectives (to be codified as Sec. 60-2.17(c));
and
Sec. 60-2.13(g)--design and implementation of internal audit and
reporting systems to measure effectiveness of the total program (to be
codified as Sec. 60-2.17(d)).
The ``required ingredients'' that would be retained in the proposed
rule have been rewritten to enhance clarity. OFCCP is soliciting
comments concerning the proposed deletion and retention of the
additional required elements of the AAP. In addition, OFCCP proposes to
modify the provision in Sec. 60-2.13(c) of the current regulations
(proposed Sec. 60-2.17(a)) concerning the ``establishment of
responsibilities for implementation of the contractor's affirmative
action program.'' This proposed modification is derived from Sec. 60-
2.22(a) of the current regulations, which recommends, but does not
require, that the contractor assign an executive as director or manager
of company equal opportunity programs and give that person the
management support and staffing to carry out the assignment. The
revised provision would expressly require that the contractor provide
for the implementation of the affirmative action program by assigning
responsibility and accountability to a company official. However, the
official is not required to be an executive of the company.
OFCCP believes that responsibility and accountability are essential
to an effective affirmative action program. Affirmative action programs
are not self-executing; an official in the contractor's organization
must be responsible for the development of the affirmative action
program. Moreover, the official must be held responsible for the
program's implementation and accountable for results. Accordingly,
OFCCP proposes to make this provision mandatory.
Section 60-2.18 Equal Opportunity Survey
Proposed Sec. 60-2.18 would require that nonconstruction contractor
establishments designated by OFCCP prepare and file an Equal
Opportunity Survey. The Equal Opportunity Survey contains information
about personnel activities and compensation concerning minorities and
women, and the contractor's affirmative action programs. Contractors
are already required to maintain information necessary for completing
the Survey, although not in the precise format called for by the Survey
instrument.
This proposal codifies the Equal Opportunity Survey which has been
under development since March 1999, with the assistance of other DOL
agencies. During the initial development stage there were also
discussions with OMB, and meetings with contractors and contractor
representatives, civil rights groups, and women's groups. The Survey
was also field tested beginning in August 1999.
The data reported in the Survey will enable OFCCP to more
effectively and efficiently select contractor establishments that may
have possible problems for compliance evaluations, thus enhancing the
agency's ability to focus its enforcement resources on those
establishments most likely to be out of compliance. In addition, the
Survey will streamline the compliance evaluation process by enabling
OFCCP to obtain compliance information earlier in the process. This
should also alleviate any potential undue burden on contractors under
review by allowing more focused compliance evaluations. Finally, the
Survey requirement is expected to heighten contractor awareness of each
establishment's equal employment opportunity performance, which should
encourage contractors to conduct self-audits of their performance and
to make any necessary corrections and improvements in their equal
employment opportunity programs. OFCCP expects that the heightened
awareness of performance, along with increased monitoring presence,
will improve the level of compliance.
The proposal establishes as a base standard that OFCCP will require
a substantial portion of all nonconstruction contractor establishments
to submit the Survey each year. At this time, OFCCP contemplates
sending the Survey to no less than 50% of all nonconstruction
contractor establishments each year, which is the minimum number we
consider necessary in order for the Survey to be a credible evaluation
method. Although other models may be used, the most likely initial
scenario is that OFCCP will require most contractor establishments to
submit the Survey biennially, with approximately one half of all
establishments submitting the Survey each year. This approach would
enable OFCCP to obtain at least minimal information about the entire
contractor universe every two years. Although the large majority of
establishments will be required to submit the Survey only once every
two years, OFCCP might also require additional Survey responses in
special situations, including, but are not limited to: (1) annual
follow-up on establishments that are not selected for compliance
evaluation but whose survey responses indicate potential equal
employment problems; and (2) one-time monitoring of all establishments
in a particular industry that is suspected of having industry-wide
equal employment problems. We do not contemplate requiring any
establishment to submit the Survey more than once in a year. OFCCP is
considering whether to include in the final rule codification of the
``50% of nonconstruction establishments'' floor mentioned in this
Preamble.
Proposed paragraph (b) provides that the Survey must be prepared in
accordance with the format specified by the Deputy Assistant Secretary.
The paragraph further stipulates that the Survey will include
information that will allow for an accurate assessment of contractor
personnel activities, pay practices, and affirmative action
performance. This may include data elements such as applicants, hires,
promotions, terminations, and compensation by race and gender.
Proposed paragraph (c) describes how, when, and where contractors
must file the Equal Opportunity Survey. Contractors are encouraged to
file the
[[Page 26101]]
Survey in electronic format. Submission in electronic format should
result in savings for many contractors. It also will greatly expedite
OFCCP's receipt and analysis of submitted data. Contractors also may
mail or fax the Survey to OFCCP.
A recurring concern of contractors is that information submitted to
OFCCP may be disclosed to competitors or the public under the Freedom
of Information Act (FOIA). Proposed paragraph (d) states that OFCCP
will treat information contained in the Equal Opportunity Survey as
confidential to the maximum extent the information is exempt from
public disclosure under FOIA. OFCCP explains in proposed paragraph (d)
that its practice is not to release data where the contractor still is
in business and where the contractor asserts, and through the
Department of Labor review process it is determined, that the data are
confidential and that disclosure would subject the contractor to
commercial harm.
The Equal Opportunity Survey will require no additional
recordkeeping on the part of a contractor. Current regulations already
require a contractor to keep the information needed to complete the EO
Survey.
Subpart C--Miscellaneous
Subpart C of the current regulations contains suggested methods for
implementing the required ingredients of AAPs. For instance, current
Sec. 60-2.21 suggests steps that a contractor may take to disseminate
its equal employment opportunity policy, both within the organization
and externally. Section 60-2.22 suggests appropriate responsibilities
for a corporate manager of equal opportunity programs. Although the
provisions of Subpart C are intended to be advisory only, they
frequently are confused as being mandatory. OFCCP is aware also that
conflicts develop between compliance officers and contractors as to
whether certain portions of Subpart C should be implemented. Some of
the guidance also has been criticized as being outdated.
The proposal would remove the contents of current Subpart C from
the regulations. As is discussed above with respect to proposed
Sec. 60-2.17, one goal of the proposal is to state the essence of an
AAP, without binding contractors into prescriptive, one-size-fits-all
solutions that may, at times, prove counterproductive to the objective
of enhancing opportunity. OFCCP recognizes, however, that much of the
information contained in current Subpart C is of value to many
contractors. Accordingly, while the proposal would remove the
provisions from the regulations, the agency intends to incorporate
suggestions for implementing affirmative action programs in a technical
assistance manual for contractors.
The proposal would substitute for current Subpart C, a new Subpart
C containing miscellaneous items. In current Subpart D (Miscellaneous),
sections 2.31 (Preemption) and 2.32 (Supersedure) would move to
proposed Subpart C in a modified form. The remainder of current Subpart
D would be eliminated.
Section 60-2.30 Corporate Management Compliance Evaluations
OFCCP pioneered the concept of corporate management--or ``glass
ceiling''--compliance reviews almost ten years ago. This proposed new
section draws upon OFCCP's experience in conducting glass ceiling
reviews, addressing several issues that are unique to the corporate
management environment.
Proposed paragraph (a) briefly explains the purpose of corporate
management compliance evaluations--to ascertain whether individuals are
encountering artificial barriers to advancement into mid-level and
senior corporate management positions. The term ``compliance
evaluation'' is used in the proposed regulation to clarify that the
agency may use any of the methods authorized under Sec. 60-1.20, i.e.,
compliance review, off-site review of records, compliance check and
focused review, to investigate the employment practices at a corporate
headquarters facility.
Proposed paragraph (b) provides that OFCCP may expand the scope of
a corporate management compliance evaluation beyond a company's
headquarters establishment, if, during the course of a compliance
evaluation, it comes to OFCCP's attention that compliance problems
exist at other locations. This provision codifies longstanding OFCCP
policy and practice concerning the appropriate scope of corporate
management evaluations. The basic policy is stated in OFCCP's
compliance manual, which provides that corporate management reviews may
include analysis of positions at lower-level establishments, i.e.,
``feeder pools'' from which selections for management positions at the
headquarters establishment may be made. See Federal Contract Compliance
Manual, Section 5A04.
The regulation currently at Sec. 60-2.30 (Use of goals) would be
eliminated with its substance included in proposed Sec. 60-2.16
Placement goals.
In addition, OFCCP is considering including in the regulatory text
a number of approaches we have found to be particularly effective in
addressing glass ceiling problems. These approaches are drawn from
OFCCP's report, ``The Glass Ceiling Initiative: Are There Cracks in the
Ceiling?'' (June 1997). The approaches are the following:
(1) commitment of top management to equal employment opportunity
and affirmative action principles;
(2) development of a system to identify high potential minority and
female employees and track their progress;
(3) management development programs, including early identification
of senior management potential, developmental assignments, and special
training opportunities;
(4) succession planning, designed to identify and develop employees
with management or executive potential so that individuals are trained
and prepared to assume greater responsibility as opportunities arise;
(5) mentoring programs;
(6) active recruitment at colleges and universities with
predominantly minority or female enrollment;
(7) monitoring equal employment opportunity performance and
reporting it to the Chief Executive Officer on a regular basis to
ensure maximum accountability; and
(8) making equal employment opportunity performance an evaluation
factor for top level managers.
OFCCP is soliciting comments concerning whether this list of
approaches should be included in the regulations or in subregulatory
guidance only.
Section 60-2.31 Program Summary
The regulation currently at Sec. 60-2.14 (Program summary) would be
redesignated at Sec. 60-2.31. In addition, the regulation would be
revised to make one technical change--to substitute the title ``Deputy
Assistant Secretary'' for ``Director.'' Pursuant to the authority set
forth in 5 U.S.C. 552(b)(3)(a), which allows Federal agencies to alter
``rules of agency organization, procedure, or practice'' without notice
and comment, OFCCP is not accepting comments on this regulation. OFCCP
intends to replace the program summary requirements at some point in
the future should it be found to be duplicative of the Equal
Opportunity Survey.
Section 60-2.32 Affirmative Action Records
The proposed regulation would add a provision specifying that the
contractor
[[Page 26102]]
must make relevant records, including records maintained pursuant to
Secs. 60-1.12 and 2.10, available to OFCCP on request. This provision
is derived from the last sentence of Sec. 60-1.40(c) of the current
regulations. It is designed to ensure that OFCCP will have access to
the records it needs to ascertain a contractor's compliance with its
obligations under part 60-2.
Section 60-2.33 Preemption
OFCCP intends to move this provision from Sec. 60-2.31 in the
current regulations to Sec. 60-2.33 without alteration, except for
several technical wording changes. Pursuant to the authority set forth
in 5 U.S.C. 552(b)(3)(A), which allows Federal agencies to alter
``rules of agency organization, procedure, or practice'' without notice
and comment, OFCCP is not accepting comments on this regulation.
Section 60-2.34 Supersedure
This provision would be moved from Sec. 60-2.32 in the current
regulations to Sec. 60-2.34. OFCCP proposes to retain the first
sentence of this section essentially as it appears in the current
regulations. The second sentence, which references an old version of
``Order No. 4'' (a precursor to the part 60-2 regulations), and the
third sentence, which states that nothing in part 60-2 is intended to
amend parts 60-3 and 60-20, are omitted as outdated and unnecessary at
this time.
Section 60-2.35 Compliance Status
This section would expand upon and restructure a provision that
appears at Sec. 60-2.15 of the current regulations. The new section
would begin, as does the current rule, with the assurance that no
contractor's compliance status will be judged alone by whether the
contractor reaches its goals.
Consistent with the proposal contained in Sec. 60-2.16 above, we
would remove from this section the existing reference to
``timetables.'' We propose to further reinforce this point by adding a
new sentence that restates OFCCP's longstanding position that the
composition of the contractor's workforce does not, by itself, serve as
the basis for imposing sanctions.
The remainder of the section would address, in turn, compliance
with affirmative action and nondiscrimination obligations. A sentence
on affirmative action obligations would be similar to the second
sentence of the current regulation, stating that a contractor's
compliance status will be determined by the entirety of its affirmative
action activities and good faith efforts. A sentence on compliance with
nondiscrimination obligations would recite that a contractor's
compliance status will be determined by analysis of statistical data
and other non-statistical information that would indicate whether
employees and applicants are being treated without regard to their
race, color, religion, sex, or national origin. Examples of
nonstatistical information are collective bargaining agreements,
company policy statements, and training notices.
Regulatory Procedures
Executive Order 12866
The Department is issuing this proposed rule in conformance with
Executive Order 12866. This proposal has been determined to be
significant for purposes of Executive Order 12866 and therefore has
been reviewed by the Office of Management and Budget. This proposal
meets the criteria of Section 3(f)(1) of Executive Order 12866 and
therefore the information enumerated in Section 6(a)(3)(C) of that
Order is contained in the Paperwork Reduction Act Section below. The
proposed changes to the regulations in this NPRM will decrease the
total estimated annualized cost to contractors of developing, updating,
and maintaining an AAP by $147,950,698. The estimated average cost
savings per establishment of developing, updating, and maintaining an
AAP is $1378. See Paperwork Reduction Act section below.
Executive Order 13132
OFCCP has reviewed this rule in accordance with Executive Order
13132 regarding federalism, and has determined that it does not have
``federalism implications.'' The rule does not ``have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
Regulatory Flexibility Act
The proposed rule, if promulgated, would not have a significant
economic impact on a substantial number of small business entities.
The proposals to eliminate the workforce analysis requirement and
instead require an organizational profile, to allow smaller contractors
to use EEO-1 categories for their job groups, to reduce the number of
factors that must be considered to determine the availability of women
and minorities from eight to two, and to eliminate more than half of
the additional required ingredients of the documentation of the AAP
will reduce costs associated with these provisions for all covered
contractors. The proposal to require an Equal Opportunity Survey will
increase costs, but the overall result of the proposed rule should be a
reduction in the recordkeeping and reporting burden.
Thus, the Department concludes that the proposed rule will not have
a significant economic impact on a substantial number of small
entities. The Secretary has certified to the Chief Counsel for Advocacy
of the Small Business Administration to this effect. Therefore, a
regulatory flexibility analysis under the Regulatory Flexibility Act is
not required.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995, as well
as Executive Order 12875, the proposed rule, if promulgated, will not
include any Federal mandate that may result in increased expenditures
by state, local, and tribal governments, or increased expenditures by
the private sector, of $100,000,000 or more in any one year.
Paperwork Reduction Act
This proposed rule contains information collections which are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995. The proposed rule would revise
regulations which contain information collection requirements which are
currently approved under OMB No. 1215-0072. The proposal includes a new
requirement, the Equal Opportunity Survey, which was reviewed and
approved by OMB under OMB No. 1215-0196. The title and description of
the information collections are shown below with an estimate of the
effect the revised requirements would have on the recordkeeping hours
contained in the approved 1215-0072 on file at OMB.
The six information collections discussed below relate to Federal
nonconstruction contractor and subcontractor responsibilities under
Executive Order 11246, as amended, and its implementing regulations at
41 CFR parts 60-1 and 60-2. Five of these collections are revisions of
current methods and procedures used in developing and implementing an
AAP. The sixth collection relates to the proposed annual Equal
Opportunity Survey. The AAP is updated annually by the contractor.
OFCCP invites the public to comment on whether each of the proposed
[[Page 26103]]
collections of information: (1) Ensures that the collection of
information is necessary to the proper performance of the agency,
including whether the information will have practical utility; (2)
estimates the projected burden, including the validity of the
methodology and assumptions used, accurately; (3) enhances the quality,
utility, and clarity of the information to be collected; and (4)
minimizes the burden of the collection of information on those who are
to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology (e.g., permitting electronic
submission of responses).
Title: 41 CFR 60-1.12 Record Retention
Description: The proposed rule would amend the record retention
provisions in Sec. 60-1.12(c) to add a requirement that contractors be
able to identify the gender, race, and ethnicity of employees and
applicants in any record the contractors maintain pursuant to this
section, and submit this information to OFCCP on request. This
proposal, it is estimated, would increase the burden of developing,
maintaining, and updating an AAP by 5 percent.
Title: 41 CFR 60-2.11 Organizational Profile
Description: This proposed rule would replace the current portion
of 41 CFR 60-2.11(a) which describes the method to be used in
developing a workforce analysis. The current rule requires a listing of
job titles (not job groups) ranked from the lowest paid to highest paid
within each department or similar organizational unit and the race and
sex of incumbents. The proposal would not require listings of job
titles, with the exception of supervisors; instead, the contractor
would include in its AAP an organizational profile which shows each of
the work units and their relationships to one another, and the gender,
race, and ethnic composition of each work unit. In most cases, a
contractor should be able to use its existing organizational chart as
the core for its organizational profile. This proposal, it is
estimated, would reduce the burden of developing, maintaining, and
updating an AAP by 20 percent.
Title: 41 CFR 60-2.12 Job Group Analysis
Description: For larger contractors, the proposed rule would
continue the current practice of grouping jobs by similarity of
content, wage rates, and opportunities. Thus, for contractors with 150
or more employees there would be no change from the current regulation.
For contractors with fewer than 150 employees, the proposal permits the
use of the nine occupational groups used in the EEO-1 report rather
than requiring such contractors to develop specific job groups. Many of
these contractors are already grouping their employees this way for the
annual EEO-1 report and the proposal would relieve them of any
additional grouping analysis. This proposal, it is estimated, would
decrease the burden of developing, maintaining, and updating an AAP by
10 percent for smaller contractors.
Title: 41 CFR 60-2.14 Determining Availability
Description: This proposed rule would replace the current portion
of 41 CFR 60-2.11(b) which describes the method of determining the
availability of minorities or women for each job group. The present
method requires the contractor to assess each of eight factors,
separately for minorities and women, to determine the availability for
each job group. The proposal would reduce the number of factors to two.
This proposal, it is estimated, would reduce the burden of developing,
maintaining, and updating an AAP by 10 percent.
Title: 41 CFR 60-2.17 Additional Required Elements of Affirmative
Action Programs
Description: The proposed rule would replace the current 41 CFR 60-
2.13 which lists 10 required additional ingredients of affirmative
action programs. The proposed rule would retain four of the items, some
rewritten to enhance clarity, and one of which is modified slightly.
OFCCP believes that these changes would reduce the burden of
developing, maintaining, and updating an AAP by an estimated 20
percent.
Title: 41 CFR 60-2.18 Equal Opportunity Survey
Description: This proposal would require contractors to submit
Affirmative Action Program, Personnel Activity, and Compensation Data
information to OFCCP. The information required for the Equal
Opportunity Survey would be drawn from the records required to be
retained by 41 CFR part 60. The Equal Opportunity Survey would not
impose any new recordkeeping requirements. The Equal Opportunity Survey
was reviewed and approved by OMB under OMB No. 1215-0196. The format
would be available from OFCCP in electronic form. The Equal Opportunity
Survey would provide contractors with an economical means of assessing
their affirmative action efforts and provide OFCCP with an improved
basis for compliance evaluations. This proposal, it is estimated, would
increase burden by 12 hours per respondent or 720,000 hours for the
current estimate of 60,000 respondents (see Federal Register Notices 64
FR 54056 (October 5, 1999) and 65 FR 5689 (February 4, 2000)).
Description of respondents: Nonconstruction Contractors and
Subcontractors Subject to the Requirements of 41 CFR 60-1.40
These estimates are an approximation of the average time expected
to be necessary to accomplish the desired results. The personnel
information being recorded and included in the AAP is currently
available during the normal course of business. Estimated operating and
maintenance costs are included below.
OFCCP seeks comments on these estimates.
The contractors subject to these proposed regulations are currently
covered by the approved information collection request on file with OMB
under No. 1215-0072. That document represents information collection
requirements for 89,807 establishments which, on average, expend
approximately 150 hours each on developing, maintaining, and updating
the AAP.
At this time, OFCCP records indicate that the number of
establishments has increased from approximately 89,807 to 107,414.
Application of the estimated changes in burden hours discussed above
for Secs. 60-1.12, 60-2.11, 60-2.12, 60-2.14, and 60-2.17 results in
the following burden estimates as compared with the current inventory
under 1215-0072.
[[Page 26104]]
Burden Change Summary
----------------------------------------------------------------------------------------------------------------
Current
Current inventory Revised
inventory adjusted for # estimate Changes
of firms
----------------------------------------------------------------------------------------------------------------
AAP Development................................. 161,155 192,750 99,624 -93,126
AAP Updating.................................... 6,658,288 7,963,670 4,391,335 -3,572,335
AAP Maintenance................................. 6,725,543 8,044,110 4,435,692 -3,608,418
Total Recordkeeping Burden.................. 13,544,986 16,200,530 8,926,651 -7,273,879
Average hours per respondent.................... @150 @150 @83
----------------------------------------------------------------------------------------------------------------
Section 60-2.18 requires contractors to submit an Equal Opportunity
Survey to OFCCP. The information required for the Survey would come
from the records contractors are required to retain by 41 CFR Part 60.
The Survey would not impose any new recordkeeping requirements.
Although we estimate that this proposal would increase burden by 12
hours per respondent, these burden hours are not included in this NPRM.
OFCCP has already included the Survey burden hours in a previous
submission to OMB. See Federal Register Notices 64 FR 54056 (October 5,
1999) and 65 FR 5689 (February 4, 2000).
The estimated annualized cost to respondents is based on Bureau of
Labor Statistics data in the publication ``Employer Costs for Employee
Compensation'' (USDL: 99-173), which lists total compensation for
executive, administrative, and managerial as $35.18 per hour and
administrative support as $16.63 per hour. OFCCP estimates that 20
percent of the burden hours will be executive, administrative, and
managerial and 80 percent will be administrative support. We have
calculated the total estimated annualized cost as follows:
Executive 7,273,879 x .20 x $35.18 = $51,179,012
Admin. Supp. 7,273,879 x .80 x $16.63 = $96,771,686
Total annualized cost savings estimate = $147,950,698
Estimated average cost savings per establishment is: $147,950,698/
107,414 = $1,378
OFCCP estimates that contractors will have some operations and
maintenance cost associated with this collection. For Supply & Service
compliance evaluations, contractors copy their AAPs and mail the AAPs
to OFCCP. We estimate an average copying cost of 8 cents per page.
Under the proposed regulations, the size of an AAP will decrease, on
average, by 85.5%, from 150 pages to 22 pages. This decrease is
associated with a reduction in burden hours. The estimated total
copying cost to contractors will be: 22 pages x $.08 x 2762 =
$4861. In addition, we estimate an average mailing cost of $5.00 per
contractor. The total mailing cost for contractors will be $5 x 2762
= $13,810.
A copy of this proposed rule has been submitted to OMB for its
review and approval of these information collections. Interested
persons are requested to send comments regarding this information
collection, including suggestions for reducing this burden, to the
Office of Information and Regulatory Affairs, OMB, New Executive Office
Building, 725 17th Street NW, Room 10235, Washington, DC 20503,
Attention: Desk Officer for DOL/ESA.
List of Subjects in 41 CFR Parts 60-1 and 60-2
Civil rights, Discrimination in employment, Employment, Equal
employment opportunity, Government contracts, and Labor.
Signed at Washington, DC, this 28th day of April 2000.
Alexis M. Herman,
Secretary of Labor.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.
Accordingly, part 60-2 of the rule amending 41 CFR Chapter 60
published on December 30, 1980 (45 FR 86216), which was delayed
indefinitely on August 25, 1981 (46 FR 42865), is proposed to be
withdrawn; the proposed rule published on August 25, 1981 (46 FR 42968;
supplemented at 47 FR 17770, April 23, 1982) is withdrawn in its
entirety; and parts 60-1 and 60-2 of Title 41 of the Code of Federal
Regulations are proposed to be amended as follows.
PART 60-1--OBLIGATIONS OF CONTRACTORS AND SUBCONTRACTORS
1. The authority citation for part 60-1 continues to read as
follows:
Authority: Sec. 201, E.O. 11246 (30 FR 12319), as amended by
E.O. 11375 (32 FR 14303) and E.O. 12086 (43 FR 46501).
1a. In Sec. 60-1.12, paragraph (b) is revised to read as follows:
Sec. 60-1.12 Record retention.
* * * * *
(b) Affirmative action programs. A contractor establishment
required under Sec. 60-1.40 to develop and maintain an affirmative
action program (AAP) must maintain its current AAP and documentation of
good faith effort, and must preserve its AAP and documentation of good
faith effort for the immediately preceding AAP year, unless it was not
then covered by the AAP requirement.
* * * * *
2. In Sec. 60-1.12, paragraphs (c) and (d) are redesignated as
paragraphs (d) and (e), respectively, and the first sentence of newly
redesignated paragraph (d) is revised to read as follows:
Sec. 60-1.12 Record retention.
* * * * *
(d) Failure to preserve records. Failure to preserve complete and
accurate records as required by paragraphs (a) through (c) of this
section constitutes noncompliance with the contractor's obligations
under the Executive Order and this part.* * *
* * * * *
3. In Sec. 60-1.12, a new paragraph (c) is added to read as
follows:
Sec. 60-1.12 Record retention.
* * * * *
(c)(1) In any record the contractor maintains pursuant to this
section, the contractor must be able to identify:
(i) The gender, race, and ethnicity of each employee; and
(ii) Where possible, the gender, race, and ethnicity of each
applicant.
(2) The contractor must supply this information to the Office of
Federal Contract Compliance Programs upon request.
* * * * *
4. Section 60-1.40 is revised to read as follows:
[[Page 26105]]
Sec. 60-1.40 Affirmative action programs.
(a) Each nonconstruction contractor that has 50 or more employees
and has a contract of $50,000 or more; or has Government bills of
lading which in any 12-month period, total or can reasonably be
expected to total $50,000 or more; or serves as a depository of
Government funds in any amount; or is a financial institution which is
an issuing and paying agent for U.S. savings bonds and savings notes in
any amount, must develop and maintain an affirmative action program for
each of its establishments.
Each contractor and subcontractor must require each nonconstruction
subcontractor that has 50 or more employees and has a subcontract of
$50,000 or more; or has Government bills of lading which in any 12-
month period, total or can reasonably be expected to total $50,000 or
more; or serves as a depository of Government funds in any amount; or
is a financial institution which is an issuing and paying agent for
U.S. savings bonds and savings notes in any amount, to develop and
maintain an affirmative action program for each of its establishments.
(b) Nonconstruction contractors should refer to part 60-2 of this
chapter for specific affirmative action requirements. Construction
contractors should refer to part 60-4 of this chapter for specific
affirmative action requirements.
5. Part 60-2 is revised to read as follows:
PART 60-2--AFFIRMATIVE ACTION PROGRAMS
Subpart A--General
Sec.
60-2.1 Scope and application.
60-2.2 Agency action.
Subpart B--Purpose and Contents of Affirmative Action Programs
60-2.10 General purpose and contents of affirmative action
programs.
60-2.11 Organizational profile.
60-2.12 Job group analysis.
60-2.13 Placement of incumbents in job groups.
60-2.14 Determining availability.
60-2.15 Comparing incumbency to availability.
60-2.16 Placement goals.
60-2.17 Additional required elements of affirmative action
programs.
60-2.18 Equal Opportunity Survey.
Subpart C--Miscellaneous
60-2.30 Corporate management compliance evaluations.
60-2.31 Program summary.
60-2.32 Affirmative action records.
60-2.33 Preemption.
60-2.34 Supersedure.
60-2.35 Compliance status.
Authority: E.O. 11246, 30 FR 12319, and E.O. 11375, 32 FR 14303,
as amended by E.O. 12086, 43 FR 46501.
Subpart A--General
Sec. 60-2.1 Scope and application.
(a) General. The requirements of this part apply to nonconstruction
contractors. The regulations prescribe the contents of affirmative
action programs, standards and procedures for evaluating the compliance
of affirmative action programs implemented pursuant to this part, and
related matters.
(b) Who must develop affirmative action programs. Each
nonconstruction contractor that has 50 or more employees and has a
contract of $50,000 or more; or has Government bills of lading which in
any 12-month period, total or can reasonably be expected to total
$50,000 or more; or serves as a depository of Government funds in any
amount; or is a financial institution which is an issuing and paying
agent for U.S. savings bonds and savings notes in any amount, must
develop and maintain an affirmative action program for each of its
establishments.
Each contractor and subcontractor must require each nonconstruction
subcontractor that has 50 or more employees and has a subcontract of
$50,000 or more; or has Government bills of lading which in any 12-
month period, total or can reasonably be expected to total $50,000 or
more; or serves as a depository of Government funds in any amount; or
is a financial institution which is an issuing and paying agent for
U.S. savings bonds and savings notes in any amount, to develop and
maintain an affirmative action program for each of its establishments.
(c) When affirmative action programs must be developed. The
affirmative action programs required under paragraph (b) of this
section must be developed within 120 days from the commencement of a
contract and must be updated annually.
(d) Who is included in affirmative action programs. Contractors
subject to the affirmative action program requirements must develop and
maintain an affirmative action program for each of their
establishments. Each employee in the contractor's workforce must be
included in an affirmative action program. Each employee must be
included in the affirmative action program of the establishment at
which he or she works, except that:
(1) Employees who perform their normal and customary duties at
locations other than that of the manager to whom they report, must be
included in the affirmative action program of their manager.
(2) Employees who work at an establishment where the contractor
employs fewer than 50 employees, may be included under any of the
following three options: in an affirmative action program which covers
just that establishment; in the affirmative action program which covers
the location of the personnel function which supports the
establishment; or, in the affirmative action program which covers the
location of the official to whom they report.
(3) Employees for whom selection decisions are made at a higher
level establishment within the organization must be included in the
affirmative action program of the establishment where the selection
decision is made.
(e) How to identify employees included in affirmative action
programs other than where they are located. If pursuant to paragraph
(d) of this section employees are included in an affirmative action
program for a location other than the one in which the employees are
located, the organizational profile and job group analysis of the
affirmative action program in which the employees are included must be
annotated to identify the actual location of such employees. If the
establishment at which the employees actually are located maintains an
affirmative action program, the organizational profile and job group
analysis of that program must be annotated to identify the program in
which the employees are included.
Sec. 60-2.2 Agency action.
(a) Any contractor required by Sec. 60-2.1 of this chapter to
develop and maintain an affirmative action program for each of its
establishments that has not complied with that section is not in full
compliance with Executive Order 11246, as amended. When a contractor is
required to submit its affirmative action program to OFCCP (e.g., for a
compliance evaluation), the affirmative action program will be deemed
to have been accepted by the Government at the time OFCCP notifies the
contractor of completion of the compliance evaluation or other action,
unless within 45 days thereafter the Deputy Assistant Secretary has
disapproved such program.
(b) If, in determining such contractor's responsibility for an
award of a contract it comes to the contracting officer's attention,
through sources within his/her agency or through the OFCCP or other
Government agencies, that the contractor does not have an affirmative
action program at each of its establishments, or has substantially
deviated from such an approved
[[Page 26106]]
affirmative action program, or has failed to develop or implement an
affirmative action program which complies with the regulations in this
chapter, the contracting officer must declare the contractor/bidder
nonresponsible and so notify the contractor and the Deputy Assistant
Secretary, unless the contracting officer otherwise affirmatively
determines that the contractor is able to comply with the equal
employment obligations.
Any contractor/bidder which has been declared nonresponsible in
accordance with the provisions of this section may request the Deputy
Assistant Secretary to determine that the responsibility of the
contractor/bidder raises substantial issues of law or fact to the
extent that a hearing is required. Such request must set forth the
basis upon which the contractor/bidder seeks such a determination.
If the Deputy Assistant Secretary, in his/her sole discretion,
determines that substantial issues of law or fact exist, an
administrative or judicial proceeding may be commenced in accordance
with the regulations contained in Sec. 60-1.26; or the Deputy Assistant
Secretary may require the investigation or compliance evaluation be
developed further or additional conciliation be conducted: Provided,
That during any pre-award conferences, every effort will be made
through the processes of conciliation, mediation, and persuasion to
develop an acceptable affirmative action program meeting the standards
and guidelines set forth in this part so that, in the performance of
the contract, the contractor is able to meet its equal employment
obligations in accordance with the equal opportunity clause and
applicable rules, regulations, and orders: Provided further, That a
contractor/bidder may not be declared nonresponsible more than twice
due to past noncompliance with the equal opportunity clause at a
particular establishment or facility without receiving prior notice and
an opportunity for a hearing.
Subpart B--Purpose and Contents of Affirmative Action Programs
Sec. 60-2.10 General purpose and contents of affirmative action
programs.
(a) Purpose. (1) An affirmative action program is a management tool
designed to ensure equal employment opportunity. A central premise
underlying affirmative action is that, absent discrimination, over time
a contractor's workforce, generally, will reflect the gender, racial
and ethnic profile of the labor pools from which the contractor
recruits and selects. Affirmative action programs contain a diagnostic
component which includes a number of quantitative analyses designed to
evaluate the composition of the workforce of the contractor and compare
it to the composition of the relevant labor pools.
Affirmative action programs also include action-oriented programs.
If women and minorities are not being employed at a rate to be expected
given their availability in the relevant labor pool, the contractor's
affirmative action program includes specific practical steps designed
to address this underutilization. Effective affirmative action programs
also include internal auditing and reporting systems as a means of
measuring the contractor's progress toward achieving the workforce that
would be expected in the absence of discrimination.
(2) An affirmative action program also ensures equal employment
opportunity by institutionalizing the contractor's commitment to
equality in every aspect of the employment process. Therefore, as part
of its affirmative action program, a contractor monitors and examines
its employment decisions and compensation systems to evaluate the
impact of those systems on women and minorities.
(3) An affirmative action program is, thus, more than a paperwork
exercise. An affirmative action program includes those policies,
practices, and procedures that the contractor implements to ensure that
all qualified applicants and employees are receiving an equal
opportunity for recruitment, selection, advancement, and every other
term and privilege associated with employment. Affirmative action,
ideally, is a part of the way the contractor regularly conducts its
business. OFCCP has found that when an affirmative action program is
approached from this perspective, as a powerful management tool, there
is a positive correlation between the presence of affirmative action
and the absence of discrimination.
(b) Contents of affirmative action programs. (1) An affirmative
action program must include the following quantitative analyses:
(i) Organizational profile Sec. 60-2.11;
(ii) Job group analysis Sec. 60-2.12;
(iii) Placement of incumbents in job groups Sec. 60-2.13;
(iv) Determining availability Sec. 60-2.14;
(v) Comparing incumbency to availability Sec. 60-2.15; and
(vi) Placement goals Sec. 60-2.16.
(2) In addition, an affirmative action program must include the
following components specified in the Sec. 60-2.17 of this part:
(i) Designation of responsibility for implementation;
(ii) Identification of problem areas;
(iii) Action-oriented programs; and
(iv) Periodic internal audits.
(c) Documentation. Contractors must maintain and make available to
OFCCP documentation of their compliance with Secs. 60-2.11 through 60-
2.17.
Sec. 60-2.11 Organizational profile.
(a) Purpose. An organizational profile is a snapshot of the
staffing pattern within an establishment. It is one method contractors
use to determine whether barriers to equal employment opportunity exist
in their organizations. The profile provides an overview of the
workforce at the establishment that may assist in identifying
organizational units where women or minorities are underrepresented or
concentrated.
(b)(1) An organizational profile is a detailed organizational chart
or similar graphical presentation of the contractor's organizational
structure. The profile must identify each organizational unit in the
establishment, and show the relationship of each organizational unit to
the other organizational units in the establishment.
(2) An organizational unit is any component that is part of the
contractor's corporate structure. In a more traditional organization,
an organizational unit might be a department, division, section,
branch, group or similar component. In a less traditional organization,
an organizational unit might be a project team, job family, or similar
component. The term includes an umbrella unit (such as a department)
that contains a number of subordinate units, and it separately includes
each of the subordinate units (such as sections or branches).
(c) For each organizational unit, the organizational profile must
indicate the following:
(1) The name of the unit;
(2) The job title, gender, race, and ethnicity of the unit
supervisor (if the unit has a supervisor);
(3) The total number of male and female incumbents; and
(4) The total number of male and female incumbents in each of the
following groups: Blacks, Hispanics, Asians/Pacific Islanders, and
American Indians/Alaskan Natives.
Sec. 60-2.12 Job group analysis.
(a) Purpose. A job group analysis is a method of combining job
titles within the contractor's establishment. This is the first step in
the contractor's comparison of the representation of
[[Page 26107]]
minorities and women in its workforce with the estimated availability
of minorities and women qualified to be employed.
(b) In the job group analysis, jobs at the establishment with
similar content, wage rates, and opportunities, must be combined to
form job groups. Similarity of content refers to the duties and
responsibilities of the job titles which make up the job group.
Similarity of opportunities refers to training, transfers, promotions,
pay mobility, and other career enhancement opportunities offered by the
jobs within the job group.
(c) The job group analysis must include a list of the job titles
that comprise each job group. If, pursuant to Secs. 60-2.1(d) and (e)
the job group analysis contains jobs that are located at another
establishment, the job group analysis must be annotated to identify the
actual location of those jobs. If the establishment at which the jobs
actually are located maintains an affirmative action program, the job
group analysis of that program must be annotated to identify the
program in which the jobs are included.
(d) Except as provided in Sec. 60-2.1(d), all jobs located at an
establishment must be reported in the job group analysis of that
establishment.
(e) Smaller employers. If a contractor has a total workforce of
fewer than 150 employees, the contractor may prepare a job group
analysis that utilizes EEO-1 categories as job groups. EEO-1 categories
refers to the nine occupational groups used in the Standard Form 100,
the Employer Information EEO-1 Survey: officials and managers,
professionals, technicians, sales, office and clerical, craft workers
(skilled), operatives (semiskilled), laborers (unskilled), and service
workers.
Sec. 60-2.13 Placement of incumbents in job groups.
The contractor must separately state the percentage of minorities
and the percentage of women it employs in each job group established
pursuant to Sec. 60-2.12.
Sec. 60-2.14 Determining availability.
(a) Purpose. Availability is an estimate of the number of qualified
minorities or women available for employment in a given job group,
expressed as a percentage of all qualified persons available for
employment in the job group. The purpose of the availability
determination is to establish a benchmark against which the demographic
composition of the contractor's incumbent workforce can be compared in
order to determine whether barriers to equal employment opportunity may
exist within particular job groups.
(b) The contractor must separately determine the availability of
minorities and women for each job group.
(c) In determining availability, the contractor must consider at
least the following factors:
(1) The percentage of minorities or women with requisite skills in
the reasonable recruitment area. The reasonable 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.
(2) The percentage of minorities or women among those promotable,
transferable, and trainable within the contractor's organization.
Trainable refers to those employees within the contractor's
organization who could, with appropriate training provided by the
contractor, become promotable or transferable during the AAP year.
(d) The contractor must use the most current and discrete
statistical information available to derive availability figures.
Examples of such information include census data, data from local job
service offices, and data from colleges or other training institutions.
(e) The contractor may not draw its reasonable recruitment area in
such a way as to have the effect of excluding minorities or women. For
each job group, the reasonable recruitment area must be identified,
with a brief explanation of the rationale for selection of that
recruitment area.
(f) The contractor may not define the pool of promotable,
transferable, and trainable employees in such a way as to have the
effect of excluding minorities or women. For each job group, the pool
of promotable, transferable, and trainable employees must be identified
with a brief explanation of the rationale for the selection of that
pool.
(g) Where a job group is composed of job titles with different
availability rates, a composite availability figure for the job group
must be calculated. The contractor must separately determine the
availability for each job title within the job group and must determine
the proportion of job group incumbents employed in each job title. The
contractor must weight the availability for each job title by the
proportion of job group incumbents employed in that job group. The sum
of the weighted availability estimates for all job titles in the job
group must be the composite availability for the job group.
Sec. 60-2.15 Comparing incumbency to availability.
(a) The contractor must compare the percentage of minorities and
women in each job group determined pursuant to Sec. 60-2.13 with the
availability for those job groups determined pursuant to Sec. 60-2.14.
(b) When the percentage of minorities or women employed in a
particular job group is less than would reasonably be expected given
their availability percentage in that particular job group, the
contractor must establish a placement goal in accordance with Sec. 60-
2.16.
Sec. 60-2.16 Placement goals.
(a) Purpose. Placement goals serve as objectives or targets
reasonably attainable by means of applying every good faith effort to
make all aspects of the entire affirmative action program work.
Placement goals also are used to measure progress toward achieving
equal employment opportunity.
(b) Placement goals must be designed to correct any identifiable
deficiencies. A contractor's determination under Sec. 60-2.15 that a
placement goal is required constitutes neither a finding nor an
admission of discrimination.
(c) Where, pursuant to Sec. 60-2.15, a contractor is required to
establish a placement goal for a particular job group, the contractor
must establish a percentage annual placement goal at least equal to the
availability figure derived for women or minorities, as appropriate,
for that job group.
(d) The placement goal-setting process described above contemplates
that contractors will, where required, establish a single goal for all
minorities. In the event of a substantial disparity in the utilization
of a particular minority group or in the utilization of men or women of
a particular minority group, a contractor may be required to establish
separate goals for those groups.
(e) In establishing placement goals, the following principles also
apply:
(1) Placement goals may not be rigid and inflexible quotas, which
must be met, nor are they to be considered as either a ceiling or a
floor for the employment of particular groups. Quotas are expressly
forbidden.
(2) In all employment decisions, the contractor must make
selections in a nondiscriminatory manner. Placement goals do not
provide the contractor with a justification to extend a preference to
any individual, select an individual, or adversely affect an
individual's employment status, on the basis of that person's race,
color, religion, sex, or national origin.
[[Page 26108]]
(3) Placement goals do not create set-asides for specific groups,
nor are they intended to achieve proportional representation or equal
results.
(4) Placement goals may not be used to supersede merit selection
principles. Affirmative action programs prescribed by the regulations
in this part do not require a contractor to hire a person who lacks
qualifications to perform the job successfully, or hire a less
qualified person in preference to a more qualified one.
(f) A contractor extending a publicly announced preference for
American Indians as is authorized in 41 CFR 60-1.5(a)(6) may reflect in
its placement goals the permissive employment preference for American
Indians living on or near an Indian reservation.
Sec. 60-2.17 Additional required elements of affirmative action
programs.
In addition to the elements required by Sec. 60-2.10 through
Sec. 60-2.16, an acceptable affirmative action program must include the
following:
(a) Designation of responsibility. The contractor must provide for
the implementation of equal employment opportunity and the affirmative
action program by assigning responsibility and accountability to an
official of the organization. Depending upon the size of the
contractor, this may be the official's sole responsibility. He or she
must have the authority, resources, support of and access to top
management to ensure the effective implementation of the affirmative
action program.
(b) Identification of problem areas. The contractor must perform
in-depth analyses of its total employment process to determine whether
and where impediments to equal employment opportunity exist. At a
minimum the contractor must evaluate:
(1) The workforce by organizational unit and job group to determine
whether there are problems of minority or female utilization (i.e.,
employment in the unit or group), or of minority or female distribution
(i.e., placement in the different jobs within the unit or group);
(2) Personnel activity (applicant flow, hires, terminations,
promotions, and other personnel actions) to determine whether there are
selection disparities;
(3) Compensation system(s) to determine whether there are gender-,
race-, or ethnicity-based disparities;
(4) Selection, recruitment, referral, and other personnel
procedures to determine whether they result in disparities in the
employment or advancement of minorities or women; and
(5) Any other areas that might impact the success of the
affirmative action program.
(c) Action-oriented programs. The contractor must develop and
execute action-oriented programs designed to correct any problem areas
identified pursuant to Sec. 60-2.17(b) and to attain established goals
and objectives. In order for these action-oriented programs to be
effective, the contractor must ensure that they consist of more than
following the same procedures which have previously produced inadequate
results. Furthermore, a contractor must demonstrate that it has made
good faith efforts to remove identified barriers, expand employment
opportunities, and produce measurable results.
(d) Internal audit and reporting system. The contractor must
develop and implement an auditing system that periodically measures the
effectiveness of its total affirmative action program. The actions
listed below are key to a successful affirmative action program:
(1) Monitor records of all personnel activity, including referrals,
placements, transfers, promotions, terminations, and compensation, at
all levels to ensure the nondiscriminatory policy is carried out;
(2) Require internal reporting on a scheduled basis as to the
degree to which equal employment opportunity and organizational
objectives are attained;
(3) Review report results with all levels of management; and
(4) Advise top management of program effectiveness and submit
recommendations to improve unsatisfactory performance.
Sec. 60-2.18 Equal Opportunity Survey.
(a) Survey requirement. Each year, OFCCP will designate a
substantial portion of all nonconstruction contractor establishments to
prepare and file an Equal Opportunity Survey. OFCCP will notify those
establishments required to prepare and file the Equal Opportunity
Survey. The Survey will provide OFCCP compliance data early in the
compliance evaluation process, thus allowing the agency to more
effectively identify contractor establishments for further evaluation.
The Survey will also provide contractors with a useful tool for self-
evaluation.
(b) Survey format. The Equal Opportunity Survey must be prepared in
accordance with the format specified by the Deputy Assistant Secretary.
The Equal Opportunity Survey will include information that will allow
for an accurate assessment of contractor personnel activities, pay
practices, and affirmative action performance. This may include data
elements such as applicants, hires, promotions, terminations, and
compensation by race and gender.
(c) How, when, and where to file. Contractors are encouraged to
submit the Equal Opportunity Survey in electronic format, i.e., a
computerized version prepared in accordance with the requirements of
this section. The Equal Opportunity Survey may be submitted in
electronic format or via facsimile to the address indicated in the
Survey instructions. Paper versions of the Equal Opportunity Survey
must be mailed to the address indicated in the Survey instructions. The
filing deadline will be specified by the Deputy Assistant Secretary.
(d) Confidentiality. OFCCP will treat information contained in the
Equal Opportunity Survey as confidential to the maximum extent the
information is exempt from public disclosure under the Freedom of
Information Act, 5 U.S.C. 552. It is the practice of OFCCP not to
release data where the contractor is still in business, and the
contractor indicates, and through the Department of Labor review
process it is determined, that the data are confidential and sensitive
and that the release of data would subject the contractor to commercial
harm.
Subpart C--Miscellaneous
Sec. 60-2.30 Corporate management compliance evaluations.
(a) Purpose. Corporate Management Compliance Evaluations are
designed to ascertain whether individuals are encountering artificial
barriers to advancement into midlevel and senior corporate management,
i.e., glass ceiling. During Corporate Management Compliance
Evaluations, special attention is given to those components of the
employment process that affect advancement into mid- and senior-level
positions.
(b) If, during the course of a Corporate Management Compliance
Evaluation, it comes to the attention of OFCCP that problems exist at
locations outside the corporate headquarters, OFCCP may expand the
compliance evaluation beyond the headquarters establishment. At its
discretion, OFCCP may direct its attention to and request relevant data
for any and all areas within the corporation to ensure compliance with
Executive Order 11246.
Sec. 60-2.31 Program summary.
The affirmative action program must be summarized and updated
annually. The program summary must be prepared in a format which will
be
[[Page 26109]]
prescribed by the Deputy Assistant Secretary and published in the
Federal Register as a notice before becoming effective. Contractors and
subcontractors must submit the program summary to OFCCP each year on
the anniversary date of the affirmative action program.
Sec. 60-2.32 Affirmative action records.
The contractor must make available to the Office of Federal
Contract Compliance Programs, upon request, records maintained pursuant
to Sec. 60-1.12 and written or otherwise documented portions of AAPs
maintained pursuant to Sec. 60-2.10 for such purposes as may be
appropriate to the fulfillment of the agency's responsibilities under
Executive Order 11246.
Sec. 60-2.33 Preemption.
To the extent that any state or local laws, regulations or
ordinances, including those that grant special benefits to persons on
account of sex, are in conflict with Executive Order 11246, as amended,
or with the requirements of this part, they will be regarded as
preempted under the Executive Order.
Sec. 60-2.34 Supersedure.
All orders, instructions, regulations, and memorandums of the
Secretary of Labor, other officials of the Department of Labor and
contracting agencies are hereby superseded to the extent that they are
inconsistent with this part 60-2.
Sec. 60-2.35 Compliance status.
No contractor's compliance status will be judged alone by whether
it reaches its goals. The composition of the contractor's workforce
(i.e., the employment of minorities or women at a percentage rate
below, or above, the goal level) does not, by itself, serve as a basis
to impose any of the sanctions authorized by Executive Order 11246 and
the regulations in this chapter. Each contractor's compliance with its
affirmative action obligations will be determined by reviewing the
nature and extent of the contractor's good faith affirmative action
activities as required under Sec. 60-2.17, and the appropriateness of
those activities to identified equal employment opportunity problems.
Each contractor's compliance with its nondiscrimination obligations
will be determined by analysis of statistical data and other non-
statistical information which would indicate whether employees and
applicants are being treated without regard to their race, color,
religion, sex, or national origin.
[FR Doc. 00-10991 Filed 5-3-00; 8:45 am]
BILLING CODE 4510-45-P
|
