On December 1, 2021, the Office of Federal Contract Compliance Programs (OFCCP) announced the launch of a new online portal called the Affirmative Action Plan Verification Interface (AAP-VI or Contractor Portal). AAP-VI will require covered employers to report compliance with creating and maintaining federally required Affirmative Action Plan (AAP) documents. OFCCP also announced that this portal will double as a mechanism through which covered employers will submit their AAP documents in the event of a “compliance evaluation,” or desk audit.

What Does This Mean?

In short, businesses should take a close look at their AAP timelines right away.  Historical lack of direct government monitoring has resulted in many businesses treating AAP creation and renewal as a lower priority item.  This all changes with the Contractor Portal.  Failure to timely verify compliance might be a surefire way to invite closer scrutiny from the OFCCP.

Q&A

This is a new requirement for companies who are required to maintain AAP documents. Following are some helpful Q&As based on guidance from the OFCCP:

Q: Why is OFCCP requiring contractors to use the Contractor Portal?

In a report regarding federal contractor nondiscrimination compliance, the U.S. Government Accountability Office determined that "OFCCP has no process for ensuring that the tens of thousands of establishments that have signed a qualifying federal contract have developed an AAP within 120 days of the commencement of the contract, or updated it annually." OFCCP implemented the AAP-VI with the objective of ensuring that all covered contractors are meeting their obligation to develop and maintain written AAPs.

Contractors will use the Contractor Portal to annually verify compliance with the AAP regulations; contractors will only be required to upload their actual AAP documents in the event of a desk audit.

Q: Who is required to use the Contractor Portal?

All supply and service contractors and subcontractors who meet the jurisdictional thresholds below are required to use the Contractor Portal to register and certify their AAP compliance.

Specially, federal contractors with 50 or more employees must create and maintain an annually updated AAP, as described below:

• Under Executive Order 11246, businesses with a contract of $50,000 or more (AAP must include required data on women and minorities);
• Under Section 503 of the Rehabilitation Act of 1973, businesses with a contract of $50,000 or more (AAP much include required data on disabled individuals); and/or
• Under Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) if the company has 50 or more employees and at least one contract of $150,000 or more (AAP must include required data on protected veterans).

Q: Are construction contractors required to use the Contractor Portal?

OFCCP is currently only requiring annual certification for supply and service contractors. Contractors that are only construction contractors and not also supply and service contractors are not required to certify compliance, and should not register for the portal.

Q: Will certifying compliance through the Contractor Portal exempt a contractor from compliance evaluations?

No. Certification that a contractor has developed and annually updated their AAP(s) will not exempt them from compliance evaluations (OFCCP desk audits). However, a company’s failure to certify compliance using the Contractor Portal will make it a more likely target for a compliance review.

Q: When should a contractor register for the Contractor Portal?

Existing contractors may register starting February 1, 2022; covered contractors should start registering as soon as possible. As a reminder, new contractors have 120 days to develop their AAP(s), and must register and certify compliance through the Contractor Portal within 90 days of developing their AAP(s).

Q: When can contractors begin to certify their compliance?

The certification features in the portal will be available March 31, 2022. By June 30, 2022, existing contractors must certify whether they have developed and maintained an affirmative action program for each establishment and/or functional unit[1], as applicable.

Nuts and Bolts of Registration

Sign in can be completed by using your company’s login.gov credentials. If you do not have these credentials, you will use the “create account” option.

After signing in, users will be required to enter their user authorization. This requires at least the company EIN. Companies have the option to enter a headquarters or company number or the establishment unit number. This will cause the company’s profile to be prepopulated with establishment information as it appeared in the company’s 2018 EEO-1 report. In the likely event that information is outdated, or if the company did not file a 2018 EEO-1 report, the company can choose to enter its EIN only.

It is important, upon registration, to add or enter up to date information, including names and number of establishments, and headcount of employees at each establishment.

Note that every establishment with 50 or more employees needs its own affirmative action plan.

Affirmative Action 101

Under the regulatory requirements discussed above, AAPs are mandatory in order to do business with the government.

The ultimate goal for companies required to implement an AAP is for the workforce to reflect the demographic profile of the general employment pool from which companies are selecting applicants. The federal government recognizes that this won’t always be the case, so the requirement is to analyze recruiting, hiring, and retention practices and to otherwise make good faith efforts to work toward achieving that level of representation in the workforce. 

Contrary to popular belief, an AAP does not establish a hiring quota system. Contractors do not have to hire certain members of identified demographic groups. However, contractors that are required to implement and maintain AAPs must commit to using good faith efforts to meet AAP goals.

With the new reporting portal, the government will be more attuned than ever to companies’ good-faith efforts to comply with AAP reporting. For further guidance about affirmative action plan reporting or document creation, please reach out to Koley Jessen’s Employment, Labor and Benefits Team.

[1] As an alternative to developing establishment-based AAPs, federal contractors can enter into an agreement with the OFCCP to develop a functional affirmative action plan (FAAP). For some multi‐establishment contractors that have large business or functional units such as a Sales Division or a Research and Development function that spans across establishments located in different states or regions, an AAP developed by functional or business unit may better align with the contractor's operations.

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