Functional affirmative action plans (FAAPs) are not new.  While the regulations require AAPs be prepared on an establishment-basis, OFCCP has permitted contractors to structure their AAPs by “function” or “business unit” – with Agency approval.

Implicitly, the Agency’s 2013 Directive on the subject recognized that business structures had evolved since the 1960s.  Establishment-centered chains of command were fading, and geographically diverse teams were rising.  Since then, this workforce evolution has only gained steam, including a substantive revision in 2016.

Dating back to town hall sessions in early 2018, the current OFCCP administration under Craig Leen has been doing some deep thinking on how to “best” incentivize contractors to adopt AAP structures, that may better reflect how recruiting is done in certain organizations, and empower them to better meet the goals of Executive Order 11246.  If contractors are not organized by establishment, why should their AAPs be so rigid?

In answer to that question, OFCCP has issued an updated FAAP Directive.  OFCCP summarized the highlights of the update as follows:

  • OFCCP will no longer consider compliance history when reviewing a request for a new FAAP agreement or termination.
  • The agreement term is extended to five years, up from three years.
  • There will be a minimum of 36 months between compliance evaluations for a single functional unit. This is 12 months longer than an establishment review.
  • Complete FAAP applications will be determined within 60 days. Historically, there was no deadline.
  • OFCCP no longer requires that FAAP contractors undergo at least one compliance evaluation during the term of their FAAP agreement.

Procedurally, these changes reduce the burden of a FAAP Agreement by extending its term and committing to act on all applications within 60 days.  And, substantively, these changes may seem advantageous —audits are no longer required, and should they occur each plan would be immune from a second audit for a year longer than an employer who prepares establishment plans.

There are a multitude of issues to considering before changing to a FAAP program.  If you are assessing whether a FAAP is right for your organization, please reach out—we’re happy discuss.

Tags: FAAP, FAAPs, Functional Affirmative Action Plan, OFCCP, OFCCP audit, OFCCP compliance review, OFCCP Director Craig Leen, Office of Federal Contract Compliance Programs
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Photo of Laura A. Mitchell Laura A. Mitchell

Laura Mitchell is a principal in the Denver office of Jackson Lewis P.C. and leads the firm’s Workplace Analytics and Preventive Strategies Pay Equity subgroup. She partners with employers to evaluate, develop and implement policies and practices that ensure workplace fairness while mitigating…

Laura Mitchell is a principal in the Denver office of Jackson Lewis P.C. and leads the firm’s Workplace Analytics and Preventive Strategies Pay Equity subgroup. She partners with employers to evaluate, develop and implement policies and practices that ensure workplace fairness while mitigating legal risk. Laura is a guiding force in the firm’s most specialized and technical practice areas where she leverages an analytics-focused approach to partner with her clients in building legally compliant programs around which they can anchor their workplaces achieving productivity and stability.

Laura understands that creating a competitive advantage for employers in today’s workplace involves using a data-driven approach to counsel companies on the development of proactive and equitable non-discriminatory practices in hiring, promotions, separations and pay—and where advancements in technology can create both opportunities for efficiencies and risk that can be measured. Committed to putting her clients’ organizational goals first and foremost while balancing legal risk, Laura views herself as an extension of her clients’ team, responsible for providing proactive guidance and engaging in transparent, ongoing communication. Staying the course with employers across their organizational journey while balancing legal compliance obligations throughout their employees’ lifecycle ensures Laura’s position as a go-to resource.

Laura works with companies across all industries—both new and well-established multi-national organizations of all sizes—to realize the combined vision of legal compliance, increased productivity and economic growth enhanced by a focus on pay equity.  As part of the pay equity journey, she advises employers on the evolving pay transparency landscape, working to align compliant practices with the practical realities of the business world.

Laura partners closely with government contractors to understand, implement and demonstrate compliance with their EEO regulatory and compliance obligations. She also works closely with non-government contractor clients to conduct risk assessments of their programs, policies, and training to align with federal and state anti-discrimination requirements.

Laura is the editor and a principal contributor of the GovCon Employment Exchange blog and presents on pay equity and government contractor obligations. To round out her days, Laura enjoys spending time with her family and friends attending sports events, working out, riding her bike, playing pickleball and taking in Colorado’s incomparable sunsets.

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