Seeking feedback on use of FAAPs
The text below is from an OFCCP e-mail sent out to the public on September 12, 2018. OFCCP is seeking input on the requirements and use of functional plans. Functional plans are different from establishment plans in that they utilize a line of business or company "function" as opposed to the standard plan that is defined by a brick and mortar building or "establishment". Functional plans become an option for Federal contractors several years ago, and at face value they present a desirable and logical path for contractors.
There are many positive aspects to functional plans:
Likely development of fewer Affirmative Action Plans
Simpler data assignments - fewer pools of data to manage
- More meaningful plans - plans aligned with actual business practices allowing for easier assignment of responsibility to stakeholders
However, FAAPs also come with a few not insignificant cons and many organizations are hesitant to utilize a functional plan structure for annual plan development. The reason for hesitation is simple, contractors fear exposure to OFCCP regarding data issues such as disparate impact in hiring and compensation. Also, functional plans likely grants OFCCP access to a larger cut of the organization than an establishment review. Functional plans create larger data sets and larger data sets mean a greater likelihood of statistical significance. When statistical significance is discovered during an audit, it triggers further scrutiny of the data and related company processes often resulting in conciliation agreements and very public financial settlements.
OFCCP has opened the doors for input on the process. Anyone wishing to share their thoughts directly with OFCCP can do so by clicking the link at the bottom of this blog.
See the full email posting and text from their justification document below.
Justification text published by OFCCP:
Office of Federal Contract Compliance Programs (OFCCP) is requesting Office of Management and Budget (OMB) approval of 862 hours in reporting burden for the process that allows federal contractors and subcontractors to develop functional affirmative action programs (FAAPs). The requested hours constitute a decrease from the previous request of 1,297 hours.
OFCCP is proposing in this ICR to change the current requirement that contractors certify every three years that there have been no changes made to the functional units, business structure, or other circumstances that affect their existing FAAP agreements. This certification would be required every five years. Lengthening the amount of time contractors are able to maintain the same FAAP agreement reduces their burden. Other proposed significant changes in the ICR include:
• Eliminating the requirement that FAAP contractors undergo at least one compliance evaluation during the term of their agreements;
• Expanding the exemption period for FAAP units that have undergone a compliance evaluation from 24 months to 36 months from the date OFCCP closed the previous evaluation;
• Eliminating consideration of a contractor’s equal employment EEO compliance history when deciding whether to approve a FAAP request;
• Removing the three-year waiting period for reapplying for a FAAP following termination of an agreement; and
• Eliminating the annual requirement for contractors to modify their FAAP agreements.
Email from OFCCP:
WHAT is a FAAP? OFCCP knows from listening to stakeholders that an affirmative action program only covering employees in one building at a specific geographical location does not always reflect how business actually operates.
Affirmative action programs based on functional units, or FAAPs, may provide a better option. FAAPs can span geographical locations, freeing federal contractors from the traditional establishment-based model when employees who work together are not located in the same building.
WHAT's new? Yesterday, OFCCP proposed changes that reduce burden for contractors in the FAAP program. You can learn more about the program, and the proposed changes to it, by reading a notice in the Federal Register and a draft of the revised FAAP Directive.
WHO should use a FAAP? OFCCP encourages all contractors who need to develop an AAP to consider using a FAAP. As always, OFCCP will be available to assist contractors before, during, and after the standard FAAP review process.
HOW can I give OFCCP feedback on the FAAP program? We would like to hear your thoughts on how the FAAP program could be improved to work better for you. To share your thoughts, please submit comments via www.regulations.gov.
Comments on this proposal must be submitted on or before November 13, 2018.
Click Here to learn more.