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

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with…

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with employers to build programs that benefit employees and create a stable, high-functioning workplace. Understanding that an inclusive, values-based culture provides a crucial competitive advantage in the modern workplace, Laura enjoys counseling companies on the development of proactive and equitable pay and diversity practices.

In Laura’s version of the reimagined workplace, attention to human capital issues, especially DEI and pay equity, would be the rule rather than the exception nationwide and she works with companies across all industries—both new and well-established multi-national organizations of all sizes—to realize this vision for her clients’ ongoing success. She helps clients understand all issues across the spectrum of their journey, helping to establish regular analyses as well as counseling organizations on implementation and compliance obligations, where applicable. Committed to putting her clients’ organizational goals first and foremost, Laura views herself as an extension of her clients’ team, responsible for providing proactive guidance and engaging in transparent, ongoing communication.

Laura also represents companies in OFCCP matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming from OFCCP regulations. She personally oversees the development of hundreds of Affirmative Action Plans for clients each year and is intimately involved in the defense of OFCCP audits. Her approach to compliance is one of facilitation and conciliation while simultaneously advocating in the best interests of her clients.

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Photo of Christopher T. Patrick Christopher T. Patrick

Chris Patrick is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. and is a member of the Firm’s Affirmative Action Compliance and OFCCP Defense practice group and Pay Equity resource group.

Chris partners with employers on practical solutions to ensure…

Chris Patrick is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. and is a member of the Firm’s Affirmative Action Compliance and OFCCP Defense practice group and Pay Equity resource group.

Chris partners with employers on practical solutions to ensure equal employment opportunity (EEO), including counseling on affirmative action, pay equity and transparency, and diversity. In short, Chris develops actionable strategies under privilege that identify and eliminate unseen barriers to EEO in personnel practices—often informed by trends in employee data.

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