News & Announcements

Is a Functional Affirmative Action Program Right For You?

Posted Tuesday, August 13, 2019 6:26 am

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) released FAQs addressing the recently revised Functional Affirmative Action Program (“FAAP”).

Regulations generally require covered federal contractors and subcontractors to prepare affirmative action plans based on the company’s establishments or locations.  OFCCP’s FAAP program allows a company to organize its affirmative action plan to reflect how the company operates functionally as opposed to where its facilities and people are physically located.  A contractor insterested in establishing an FAAP must reach an agreement with OFCCP.

In general, to be suitable for an FAAP, the functional or business unit must exist and operate autonomously.  In addition, it must:  (1) have at least 50 employees; (2) have its own managing official; and (3) have the ability to track and maintain its own personnel activity.

According to the OFCCP, the changes reflected in Directive 2013-01 Revision 2, effective June 20, improve the application process for FAAP agreements and ease burdens associated with maintaining agreements.  OFCCP summarized the key changes 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.

The OFCCP’s FAAP FAQs provide definitions and information on the requirements, application process, and maintenance of FAAP agreements.

Interested employers should review the directive and FAQs, and examine their businesses to determine whether FAAPs will work for them.

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