Why Does a Company Have an Affirmative Action Plan?

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Affirmative action is an effort to increase opportunities for women and minorities in certain areas, such as housing, transportation, education and employment. In the workplace, an affirmative action plan (AAP) is a written document used to insure that all employees are treated equally regardless of their race, age, gender, religion, country of origin or disability. This includes all areas of employee relations, such as recruiting and hiring, training and development, work assignments, promotions, and layoffs.

Equal Employment Opportunity and Affirmative Action

Title VII of the 1964 Civil Rights Act prohibits federal, state and local governments, labor unions, employment agencies and businesses with more than 15 employees from discriminating against workers in any area of employment. Some businesses believe that they must have a written affirmative action plan in order to comply with Title VII, as administered by the Equal Employment Opportunity Commission (EEOC) of the U.S. Department of Labor. However, separate laws regulate what types of businesses must have formal affirmative action plans.

Federal Contractor AAPs

Businesses with more than 50 employees and at least one federal contract valued at $50,000 or more in a year must have an affirmative action plan. In addition, any federal contractor that serves as a depository for any amount of federal funds or is a financial institution that handles U.S. Savings bonds must also have an AAP. This includes banks and health care firms that handle Medicare and Medicaid funds. The AAP must be developed within 120 days of the federal contract start date. The AAP must be updated each year, but it is only filed with the U.S. Department of Labor’s Office of Federal Contract Compliance Program (OFCCP) if the business is randomly selected for an audit or a discrimination complaint has been filed with the EEOC or OFCCP.

Court-ordered AAPs

A federal court may require an employer to implement an AAP if the organization has been found guilty of discrimination. In a court-ordered AAP, the focus is limited to the area of discrimination. It cannot impose a burden on third parties, such as worker layoffs. In addition, it cannot require a business to hire or promote unqualified workers and the order remains in place only until the plan’s goals are reached. Court-ordered AAPs are only used in cases of serious non-compliance with anti-discrimination laws. For example, in Shuford v. Alabama State Board of Education, the State Board was ordered to desegregate its faculty in 1974. By 1994, the Board still had not done this. So, the federal court ordered an affirmative action plan, which it then supervised to ensure compliance.

Voluntary AAPs

Some employers voluntarily implement an AAP to remedy past discrimination. For example, businesses with few women in upper management may develop executive development and coaching programs to prepare and promote women to senior leadership positions. Like court-ordered plans, these voluntary plans must be temporary and narrowly focused to address a specific pattern of discrimination. In addition, the AAP cannot negatively affect other employees in the organization. For example, a plan cannot prevent the promotion of qualified employees not covered by the plan.

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