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Affirmative Action Plan Requirements - Who is required to have an Affirmative Action Plan?

Scott Kushner

Is your company required to prepare an AAP?

1. 50 Employees

Once a company reaches 50 or more employees, and meets any of the below criteria, it has 120 days to create an Affirmative Action Plan. Every year the company remains larger than 50 employees and meets the federal contracts guidelines listed below, it is required to update the plan to track changes in employee population and employee transactions.

2. $50,000 Federal Contactors or subcontracts

If a government contract worth at least $50,000 is awarded to any business with more than 50 employees, then it must adhere to Affirmative Action requirements, which begin with the implementation of an Affirmative Action Plan.

3. Government bills of lading totaling $50,000 or more in 12 months

In some instances, companies are required to implement an Affirmative Action Plan without a direct government contract. If government contractors purchase at least $50,000 worth of goods to fulfill their obligations on a government contract, then the goods’ seller is also subject to the OFFCP’s laws.

A prime example is a hardware company which sells screws to a company that builds Navy submarines. Although there’s no direct contract with the government for the hardware company, accepting the order as part of a government contract makes it a bill of lading, and if it exceeds $50,000 total revenue on those deals, then both sides must comply with Affirmative Action law.

4. Depository of government funds

Any financial institution, employing at least 50 people, with federal share and deposit insurance (including FDIC) is considered to be government contractors, and therefore fall under Affirmative Action ordinances. This covers nearly every bank in the United States.


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