Does my company need an affirmative action plan?One of the many requirements that federal contractors have is the obligation to prepare an annual affirmative action plan (AAP). There are certain criteria that must be met in order to determine whether your company must comply with this requirement as follows:Your company has 50 or more employees; and meets at least one of the following criteria:

  • Your company has a federal contract or subcontract in the amount of $50,000 or more; or
  • Your company has government bills of lading which in a 12 month period will total $50,000 or more; or
  • Your company serves as a depository of federal funds in any amount; or
  • Your company is a financial institution that is an issuing and paying agent for the U.S. savings bonds and savings notes in any amount

Once you have determined whether you are required to prepare an AAP, the first step is to establish your AAP date. The date can be determined based on what makes the most sense to your business – there are no restrictions as to the date your AAP year begins and ends. Your AAP will reflect the employees who were active on the AAP date you choose and will analyze your personnel actions (applicants, hires, promotions, and terminations) for the preceding year.An AAP must contain the following statistical analyses:

  • Workforce Analysis: The workforce analysis divides the employee population into departments.
  • Job Group Analysis: The job group analysis groups your positions in terms of similarity of job content and level of responsibility.
  • Availability Analysis: The availability analysis consists of an estimate of the number of qualified females and minorities available for employment in each job group.
  • Incumbency vs Availability Analysis: The incumbency vs availability analysis compares the representation of females and minorities in each job group with their representation among those available to be employed in the job group. This analysis reveals whether any job group is “underutilized” with females or minorities.
  • Placement Rate Goals: Placement rate goals are established where the representation of females or minorities in a particular job group is less than would be reasonably expected based upon the calculated availability.
  • Prior Year Goal Attainment: The attainment of any goals established in the prior year AAP must be measured by any movement into the job groups where underutilized was identified.
  • Analysis of Personnel Activity Data: All personnel actions (applicants, hires, promotions, and terminations) are summarized by job group including race and gender.

Companies who meet the criteria as stated above and have determined themselves to be a federal contractor or subcontractor should familiarize themselves with the OFCCP’s requirements addressing their affirmative obligations.If you need an AAP, hire an affirmative action plan consultant you can trust. Contact CRI at