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Affirmative Action Concerns for Growing Institutions

Help! We just crossed the magic threshold of having 50 employees. I am told this makes us subject to the affirmative action laws and requirements. Are there some common mistakes that companies typically make in the affirmative action area? We don't want to get nailed.

Answer:Actually, you have just avoided the most common mistake companies make with regard to their affirmative action obligations: that is, you have recognized that you are now a "federal contractor" under the affirmative action laws. Many banks and financial institutions do not realize they are a federal contractor with affirmative action obligations until the Office of Federal Contract Compliance Programs ("OFCCP") sends them an EO-Survey or notice of a compliance check.

Having crossed the first, and most important threshold, what are the things you should consider? First, there are three laws that place affirmative action obligations on your bank: Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans Readjustment Assistance Act of 1974. Taken together with the regulations promulgated under these laws, your bank is required to engage in proactive and innovative measures to commit your organization to equal employment opportunity and affirmative action with respect to women, minorities, Vietnam Era Veterans and qualified individuals with disabilities. This means that, as a matter of basic requirement, a bank or other federal contractor must assure that it has put into place those policies and procedures commonly associated with "good faith" compliance with Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, and the Family Medical Leave Act of 1993 (the "FMLA") (you realize, of course, that the "magic 50" threshold also causes your bank to be a "covered employer" under the FMLA).

Second, affirmative action is a "program," not just a "plan." The affirmative action laws do require that your bank adopt an affirmative action plan. The affirmative action plan is a written document that demonstrates that you have conducted a statistical analysis of your institution's level of utilization of women, minorities, Vietnam Era Veterans, and qualified individuals with disabilities as compared to the population of these individuals in your community who are both available and qualified to perform the jobs your bank requires. The affirmative action plan also contains language committing your bank to "goals and timetables" for increasing utilization of these classes of people in the workforce.

However, the affirmative action laws also require that your bank develop and implement a "program" of "good faith" efforts to expand employment opportunities for women, minorities, Vietnam Era Veterans and qualified individuals with disabilities. "Good faith efforts" include engaging in outreach and recruitment activities, instituting employee development programs, training management and executives on affirmative action, and documenting all of these efforts on a day-to-day basis.

Finally, the affirmative action laws require that your bank track applicants for employment positions at the bank with regard to their status as women, minorities, Vietnam Era Veterans and individuals with disabilities. Each year, the bank must analyze whether it is doing a good job in recruiting applicants from these classes of individuals. If not, the bank must set goals for making additional recruitment efforts.

If you would like to know more about affirmative action, you can look up information on the OFCCP's website: . In addition, our company provides affirmative action program support for banks. You may reach us at:


Answer by Linda Westfall, BOL Guru

Some common mistakes made in the affirmative action area are: having inaccurate job descriptions, employing inconsisent hiring practices that could have an adverse impact on minorities and women, and a lack of consistent, documented hiring criteria.


Answer by Gerard Panaro, BOL Guru

This isn't quite accurate. In the case of federal contractors -- companies doing business with the federal government -- if you have a contract for more than $10,000, you have to comply with Executive Order 11246, issued by Lyndon Johnson in 1964 or 1965, which requires affirmative action to prevent discrimination. However, only contractors with 50 or more employees and contracts of at least $50,000 are required to have written affirmative action plans.

Yes, there are mistakes companies make. I just went through this with a client. Affirmative action programs are very tricky, complicated and difficult to develop. You have to do job analyses, see how many employees in each category (e.g., sex, race, age, etc.) you have; what the percentages are in the labor pool, etc. The plan has to be "narrowly tailored" so that it doesn't "unnecessarily trammel the rights of innocent parties" (these are standard phrases from court cases). The best advice I can give is get an expert to do your plan. The one I keep hearing over and over is Berkshire Associates. My client hired Berkshire, paid it a couple thousand dollars, and was well pleased.


Answer by Lucy Griffin, BOL Guru

You have hit the magic number and now have to manage equal employment within the bank. This means several things. First, you are now required to file annual reports with the EEOC. These reports provide information on the number of employees you have by job type and categories of ethnicity. You must also have an affirmative action policy and program for the bank. The key feature to have in your program is steps the bank will take to be an equal opportunity employer. Include steps to reach potential employees who are members of a minority group that is a part of your market but not proportionately represented in your workforce. For ideas and examples of affirmative outreach, look to several of the fair lending cases - Decatur, Blackpipe, and Chevy Chase - for ideas.

First published on 2/5/01

First published on 02/05/2001

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