One of the least discussed, yet most contentious areas in Affirmative Action Planning is the determination of the date in which the Affirmative Action Plan (AAP) goes into effect and the determination of the associated employee snapshot date. For years I have spoken with clients, consultants and the OFCCP regarding their perception on choosing an appropriate plan date and it always surprises me how disparate the answers can be.
First, let’s start with the regulations. The requirements are very simple. Contractors must have an AAP in place within 120 days of commencing a Federal contract. Here is the citation:
- 60-2.1 (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.
This clearly states that contractors need to have a plan finalized within four (4) months. However, the regulations do not state exactly what the annual renewal date must be and contractors should be aware that they can choose the date within those 120 days that fits the needs of the company.
Before we go into the plan date versus employee snapshot discussion, let’s review the common themes for selecting a plan date and the pros and cons of each.
- Calendar plan date – Developing the AAP with a January first plan date is by far the most common scenario with the vast majority of Federal contractors choosing this date and it has been this way for many years. The reason why is simple because the plan looks back over a 12-month period and its simple to view and relate to the window of time that includes one entire year as opposed to being split across portions of two years. So, what is the con to a calendar plan date? In my experience, developing the AAP in January would seem to be the worst time of the year to be pulling and checking data because HR and IT staff are buried in end-of-year projects that pull them in a myriad of directions causing not only stress but delays in their ability to facilitate plan creation. I also believe that the calendar AAP creates challenges in generating an action plan and training management on results if the plan is not ready-to-go very early in the year. Not to discourage contractors from utilizing calendar year AAPs, but experience shows me that people tend to get stressed out in the first quarter of the year.
- Summer plan date – The next most common option for selecting a plan date follows the fiscal year-end for many companies which is July 1. While summertime (third quarter of the year) presents its own challenges for AAP development due to vacations, end of OFCCP fiscal year and other potential distractions, the summer has some big advantages too. Perhaps the biggest positive is the opportunity to utilize the same data snapshot for both the AAP and the EEO-1/VETS-100 reports. Since contractors need to pull and check data for the two reports due by September 30th, why not kill two birds with one stone and manage the AAP as well? Also, if Q3 happens to be a slower time for the company, it should be the optimal time to work on cleaning up recordkeeping issues, spending some time on reviewing the results and preparing an action plan for the coming year.
- Spring/Fall plan dates – Developing AAPs in the spring or fall can be very useful if it is an optimal time for the company to be pulling and analyzing data followed by the creation of an action plan to monitor the results. However, there can be functions within HR that could make certain seasons a challenge such as when HR is running open enrollment or during seasonal hiring times. Regardless, there are challenges to any season, but aligning the AAP to the time when the HR/compliance team can focus on plan development is worth consideration.
Can a company change their Affirmative Action Plan date?
Yes, they can. Contractors must develop their first AAP to meet the 120 day requirements, but they do not necessarily have to stay at that date forever. Now there is an important warning flag to raise here because contractors do not ever want to have a gap in their plan development. Meaning, if you have a plan that is due in October but you really want to have a calendar based plan that is active on January first, you cannot (or at least you should not) simply wait three months and start a new plan in January. This would mean you have a gap in time where you have no active plan. While you might get away with doing it, be aware that OFCCP considers that a form of non-compliance and they expect that contractors will always have an active plan. So this gives way to the very common question “How do I change my plan date?” The answer is simple. Write an update that begins when your current plan ends and have the update expire on the date you want to start your new plan date and then update annually from there. Now shifting a plan date can cause a little confusion during an audit if your dates move around so be prepared to explain anything outside of a typical 12-month AAP program. While I was hesitant to suggest having an extended plan, for example a 15-month AAP, I want to say thanks to a knowledgeable consultant who gave me some feedback on this article and she suggested that OFCCP will accept an extended plan so long as there is a logical explanation provided such as a new HRIS being put in place or other significant change.
What about mergers and acquisitions?
Mergers and acquisitions cause heartburn on many levels for HR folks and AAP compliance often becomes a quagmire. When a Federal contractor acquires a company, that company typically falls under the compliance radar and I have had many reliable people agree that it places those companies in the 120 day window just like a new contractor. This means that if a contractor acquires a company, the buyer should make sure that the new group has plans in place in short order if they don’t have AAPs already. Having some experience with this, I know it’s never anywhere near that simple, but that is a discussion for another article. Regardless, there does need to be a plan to get the new businesses into compliance. If there is a significant reorganization planned, then the contractor may have to wait for the dust to settle, but then the recordkeeping becomes a huge challenge. Once again, this falls under the necessity to document everything. Be able to show who moved into and out of what sites, and be prepared to explain any site closures to the OFCCP. Big changes in headcounts will throw OFCCP for a loop without a story to back it up.
What if my company has staggered plan dates for multiple establishments?
While it may be somewhat common for companies to stagger their plan dates for completion across the year, it always surprises me to see that scenario. I understand why contractors do it because of the effort it can take to create an affirmative action plan from data to final reports when so many other needs are pressing. However, if at any time I engage a client using staggered plan dates, putting an end to that practice will be my first order of business. My reasoning is simple. “How can you ever work to implement the results when there is never a true conclusion to the process?” If the completion of one set of AAPs only results in the beginning of the next set, then how can a company ever improve upon their weaknesses? While it seems likely that a lack of resources is the driving force behind staggered plans, the contractor should try to get away from the practice so they can turn their attention to Good Faith Efforts, better record keeping, training, etc. Note, there are always exceptions such as the use of functional AAPs which operate independently. Regardless, if a client asks how to change this process, the answer may necessitate a trip to the C-Suite and asking for (requiring) more resources. In today’s EEO/AA environment, the requirements for compliance are expanding so making do with previous levels of support simply aren’t going to cut it.
Should my plan date and my employee snapshot date be on back-to-back days?
We will wrap up this discussion with the toughest question of them all. For many years, Federal contractors have, for example, used a December 31st employee snapshot followed by a January first plan date that looks like January 1, 2013 to December 31st, 2013 for the annual AAP cycle. So, does this mean everyone is developing the AAP on New Year’s Eve? Ha Ha, and no. I would wager that nary an ILG conference goes by without someone making that age-old joke. The reality is that it means people are developing their AAP in the early part of the year with a retro-active date listed on the plan, and if they get audited, it just means they develop the plan faster. So why would contractors subject themselves to the pressure of trying to push through an AAP after the start date has already passed? Doesn’t this mean that there is a window of time where the contractor does not have an active plan? Yes, technically it does. However, this has been common practice for many years and it’s a known fact that OFCCP expects it and will have an issue with any gaps between the snapshot and the plan date. Trust me, I have asked OFCCP staff for their opinion on this in just about every region. Now it may seem logical that a contractor would prefer to pull the snapshot data, develop the AAP and then have it become active; however, it can be argued that the data at that point is already detached from the plan date, and it creates an awkward perception when the data has to be renewed prior to the plan date if it is to remain on a 12 month schedule for renewal. It’s worth mentioning that some organizations do utilize a separation between the snapshot and actual plan date, but I would not recommend doing it without approval from your OFCCP district office. Let the debate rage on, but for practical purposes, the concept of an employee snapshot being immediately followed by the plan date is, for all intensive purposes, the industry standard, perfectly logical or not.
Good luck out there.