In the realm of federal contracting, adherence to affirmative action regulations is not just about implementing policies but also about meticulous record-keeping. The Office of Federal Contract Compliance Programs (OFCCP) mandates that federal contractors and subcontractors maintain comprehensive employment and personnel records. This requirement is a cornerstone of compliance reviews and is crucial in demonstrating adherence to affirmative action laws.
Key Record-Keeping Requirements
- Types of Records to Maintain: Contractors must keep records related to hiring, promotion, demotion, transfer, layoff, termination, compensation, training, and apprenticeship. This includes job postings, applications, resumes, tests, test results, and interview notes. Special attention must be given to records concerning physical examinations or requests for reasonable accommodation, which should be kept separate from an individual’s personnel file.
- Identifying Race, Ethnicity, and Gender: It's essential for contractors to identify the race, ethnicity, and gender of each employee in all personnel records. OFCCP has not mandated a particular method for a contractor to obtain information about a person’s identity. If an applicant or employee chooses to self-identify as non-binary, or a gender other than male or female, the individual must still be included in its affirmative action plan. While the OFCCP has not fully aligned its categories with those of the EEO-1 Report, it does not penalize contractors for using the EEO-1 categories.
- Format and Duration of Record Retention: Records can be maintained in paper or electronic formats, with the stipulation that electronic systems accurately reproduce paper records. The duration for which these records must be kept depends on the employer's size and contract value. Generally, contractors with more than 150 employees and contracts of $150,000 or more must retain records for two years. Those not meeting these criteria must keep records for at least one year
The Consequences of Non-Compliance
Failure to preserve records can lead to significant issues during an OFCCP compliance review. If records are missing or incomplete, especially in cases of statistically significant disparities, contractors may struggle to defend against claims of discrimination. This could result in conciliation agreements, including financial settlements, or mandates to overhaul record-keeping systems and procedures. In the event of a conciliation agreement, OFCCP also monitors contractors’ progress through periodic compliance reports which aids the agency track the contractor’s efforts in meeting their affirmative action goals and recordkeeping obligations.
Other consequences include:
- Contract cancellation: termination of existing federal contracts.
- Prohibition from further government businesses: restrictions on future contracts with the government.
- Back pay and reinstatement: financial compensation and restoration of employment for affected individuals.
- Sanctions: additional penalties that may be imposed for non-compliance.
In a 2023 conciliation agreement with the Office of Federal Contract Compliance Program’s (OFCCP), evaluation revealed that the contractor's hiring practices for certain job positions discriminated against Caucasian and Asian applicants. This resulted in a settlement of $44,000 in back pay and interest. The contractor also agreed to offer job opportunities to eligible class members and revise its hiring processes to ensure compliance with OFCCP regulations. This case highlights the consequences of failing to maintain proper recordkeeping, as inadequate documentation can lead to significant financial penalties and the need for extensive revisions to hiring and selection processes to rectify non-compliance issues.
For government contractors, understanding and implementing robust record-keeping practices is not just a regulatory requirement but a strategic necessity. It safeguards against compliance issues and reinforces the commitment to fair and equitable employment practices. By staying informed and proactive, contractors can navigate these requirements effectively, ensuring both compliance and contribution to a diverse and inclusive workforce.
Action Steps for Contractors
To ensure compliance, contractors should:
- Conduct a thorough review of current record-keeping systems and procedures.
- Ensure the capture and storage of data on personnel activity and employment decisions align with affirmative action requirements.
- Implement necessary changes promptly to avoid non-compliance issues.
- Keep abreast of changes in OFCCP regulations for ongoing compliance
If your organization is looking to implement a strong strategy to manage these requirements, contact us today for support.