DATE: May 4, 2000

FROM: Barry McVay, CPCM

SUBJECT: Office of Federal Contract Compliance Programs; Government Contractor Affirmative Action Requirements

SOURCE: Federal Register, May 4, 2000, Vol. 65, No. 87, page 26087

AGENCIES: Department of Labor (DOL), Employment Standards Administration (ESA), Office of Federal Contract Compliance Programs (OFCCP)

ACTION: Notice of Proposed Rulemaking

SYNOPSIS: This proposed rule would rewrite and simplify OFCCP's regulations that implement Executive Order 11246, as amended, which requires government contractors and subcontractors to "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." The proposed rule would change the emphasis of the regulations from the development of a written "affirmative action program" (AAP) that complies with highly prescriptive standards, to a performance-based standard that incorporates an AAP into the contractor's overall management plan. Also, the proposed rule would introduce a new tool to aid contractors in assessing their pay and other personnel practices -- the Equal Opportunity Survey, which contractors would be "encouraged" to submit electronically.

EDITOR'S NOTE: OFCCP's regulations are in Title 41 of the Code of Federal Regulations, Public Contracts and Property Administration; Chapter 60, Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor. Most of this proposed rule addresses Part 60-2, Affirmative Action Programs.

Compliance with OFCCP's affirmative action regulations by federal contractors is addressed in Federal Acquisition Regulation (FAR) Subpart 22.8, Equal Employment Opportunity.

DATES: Comments on the proposed rule must be received on or before July 3, 2000.

ADDRESSES: Send comments to James I. Melvin, Director, Division of Policy, Planning and Program Development, OFCCP, Room C-3325, 200 Constitution Avenue, NW, Washington, DC 20210, or by fax to 202-693-1304 (six or fewer pages only).

FOR FURTHER INFORMATION CONTACT: James I. Melvin, Director, Division of Policy, Planning and Program Development, OFCCP, Room C-3325, 200 Constitution Avenue, NW, Washington, DC 20210, 202-693-0102, TTY: 202-693-1308.

SUPPLEMENTAL INFORMATION: Executive Order 11246, which was issued September 24, 1965, requires federal contractors and subcontractors to take "affirmative action," which means that contractors must do more than "not discriminate" -- they must identify and eliminate impediments to equal employment opportunity. OFCCP's regulations implementing Executive Order 11246 (and the implementation of OFCCP's regulations in FAR Subpart 22.8) require 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 written AAP must contain several elements. One element is a "workforce analysis," which is a snapshot of all employment at the establishment -- it includes all the job titles, arranged by department or other organizational unit, and the number of employees in each job by gender, race, and ethnicity. Another element is a "multi-step analysis," which identifies whether minorities or women are being employed at a rate that would be expected based on their availability for employment. Using census and other demographic data, the contractor conducts an "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.

If these analyses show "underutilization" in certain job groups, the contractor must analyze its policies, practices, and procedures to determine possible causes, then take corrective actions designed to overcome the underutilization, such as establishing an outreach program or developing goals and organizational objectives. (EDITOR'S NOTE: The introductory material to this proposed rule states "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." Also see paragraph (e) of proposed Section 60-2.16, Placement Goals.)

OFCCP's regulations in Part 60-2, Affirmative Action Programs, were first published in 1970 and have remained essentially the same since then. Several years ago, a regulatory team was appointed to review Part 60-2 and propose the elimination of outdated requirements, burdensome paperwork requirements, and inconsistent requirements, and to propose ways to improve the quality of AAPs, the rate of voluntary compliance, the ability of OFCCP personnel to monitor compliance, and relations between contractors and OFCCP compliance officers. To that list has recently been added the goal of ensuring employees are compensated equally for performing equal work, regardless of race, color, religion, sex, or national origin. The recommendations of the regulatory team are the basis for this proposed rule.

Besides rewriting Part 60-2 to simplify, streamline, and clarify the regulations, the following would be the most significant changes:

In addition, the following sections in Part 60-1, Obligations of Contractors and Subcontractors, would be revised:

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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