Record Keeping Requirements in Affirmative Action (Part 1)
One of the most common violations issued by Office of Federal Contract Compliance Programs (OFCCP) during a compliance review is failure to properly maintain employment and personnel records. While the federal affirmative action regulations provide specific record retention requirements, there continues to be a great deal of uncertainty as to the type information that needs to be kept, how that information needs to be stored, and how long that information needs to be maintained.
Contributing to the confusion regarding record keeping requirements is the fact that record keeping requirements are different for each of the three federal affirmative action laws: Executive Order 11246 (which affects minorities, females, and other groups), the Vietnam Era Veterans’ Readjustment Assistance Act (which affects protected veterans), and Section 503 of the Rehabilitation Act (which affects individuals with disabilities). This article, which is the first of two, will explore record keeping requirements found in the regulations related to Executive Order 11246.
Information That Must Be Maintained
The affirmative action regulations under the Executive Order outlines the types of records that need to be maintained. 41 CFR § 60-1.12 (a) says the following:
“Such records include, but are not necessarily limited to, records pertaining to hiring, assignment, promotion, demotion, transfer, lay off or termination, rates of pay or other terms of compensation, and selection for training or apprenticeship, and other records having to do with requests for reasonable accommodation, the results of any physical examination, job advertisements and postings, applications, resumes, and any and all expressions of interest through the Internet or related electronic data technologies as to which the contractor considered the individual for a particular position, such as on-line resumes or internal resume databases… tests and test results, and interview notes”
The regulations under Executive Order 11246 state that federal contractors or subcontractors must be able to identify the race, gender, and ethnicity of each employee in all employment and personnel records. When dealing with applicants, the regulations allow for the race, gender, and ethnicity to be identified only where possible.
In addition to maintaining employment and personnel records, federal contractors and subcontractors are required to preserve their current affirmative action plan (AAP) and retain documentation on good faith efforts made to reach placement goals. Federal contractors and subcontractors are also required to preserve the AAP and documentation on good faith efforts for the prior AAP year unless the federal contractor and subcontractor was not previously subject to the federal affirmative action regulations.
Format Used to Maintain Records
Many organizations currently maintain some or all employment and personnel records in an electronic format. The regulations allow for federal contractors and subcontractors to use an electronic record keeping system to preserve employment and personnel records. The record keeping requirements apply equally whether the records are kept in a paper format or in an electronic format. If files are stored electronically, federal contractors and subcontractors must be able to convert electronic files into paper copies. A best practice is to maintain these records in a centralized location. This will allow for easy and quick access to the records should OFCCP request them during a compliance review.
OFCCP has the right to request and review employment and personnel records. The affirmative action regulations indicate that employment and personnel records must be accessible and available for inspection and copying upon request during an OFCCP compliance review. OFCCP may request an electronic transfer of data or may request access to paper versions of this information.
How Long Records Must Be Maintained
The length of time that federal contractors and subcontractors are required to preserve employment and personnel records depends on two factors; the number of employees the federal contractor or subcontractor has and the dollar amount of an organization’s federal contracts or subcontracts.
- Contractors and subcontractors with fewer than 150 employees or that have no contract valued at $150,000 or more must keep employment and personnel records for a minimum period of one year from the creation of the record, or the making of a personnel action, whichever occurs later.
- Contractors and subcontractors who have more than 150 employees or contracts valued at $150,000 or more are required to maintain employment and personnel records for a period of two years from the making of the record, or the making of a personnel action, whichever occurs later.
If OFCCP were to initiate a compliance review, the federal contractor or subcontractor is required to retain all personnel and employment records at least until OFCCP completes the agency’s review and makes a final determination to close the review.
Failure to Preserve Records
If it is discovered during the course of an OFCCP compliance review that employment and personnel records were not preserved, OFCCP has the right to make a presumption that the documents that were not maintained would have been unfavorable to the federal contractor or subcontractor. To overcome this presumption, the federal contractor or subcontractor would have to show that the destruction of or failure to preserve the records resulted from circumstances beyond the contractor’s control.
During an OFCCP compliance review, missing or incomplete documentation can be problematic if statistically significant disparities are discovered that involve any racial group or gender. Without documentation to prove that employment decisions were not based on race or gender, a federal contractor or subcontractor will have difficulties defending itself against claims of discrimination. This could lead to a conciliation agreement with OFCCP that may include a financial settlement.
When there are missing or incomplete records, OFCCP could also issue a conciliation agreement requiring a federal contractor or subcontractor to make substantial changes to record keeping systems and procedures. For instance, the agency may require the contractor or subcontractor to change the method it uses for collecting and storing demographic survey forms. These changes could prove to be a challenge since customizing systems that are already in place can be costly and can take time to implement.
What Federal Contractors and Subcontractors Should Do
It is important for federal contractors and subcontractors to review current record keeping systems and procedures. As part of this self-review, contractors and subcontractors should take affirmative action requirements into consideration and examine the capture and storage of data on personnel activity and employment decisions. If changes are necessary, contractors and subcontractors should develop a plan to implement the required changes as soon as possible. Doing so helps ensure compliance with federal record keeping requirements and may help avoid a conciliation agreement in the event of an OFCCP compliance review.