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Does My Company Need an Affirmative Action Plan?

How do you know if your company needs to maintain a federal affirmative action plan for women and minorities, veterans, and individuals with disabilities? Here are the questions you’ll need to ask to make that determination:

How many employees do you have?

Does your company have 50 or more employees?  If your company has less than 50 employees then you do not need to maintain a written affirmative action plan regardless of federal contracting status.

How do you define “employee” for the purpose of affirmative action regulations? An employee is defined as an individual on the payroll for whom the company withholds Social Security.

Do you have federal contracts or subcontracts?

Does your company have federal contracts or subcontracts, serve as a depository of federal funds, hold FDIC or NCUA insurance, or act as an issuing or paying agent for US savings bonds?   If your company does not meet any of these criteria then you do not need to maintain a written affirmative action plan regardless of number of employees.  If it does meet one or more of these criteria, it’s requirements will vary based on employee population and size of federal contracts or subcontracts.

How do you define subcontract for the purpose of affirmative action regulations? Your company is a federal subcontractor if the goods or services you provide are necessary to the performance of a prime federal contract.

What kind of federal contracts or subcontracts do you have?

If your company has 50 or more employees, does it have $50,000 or more in direct federal contracts?  If your company has federal contracts that total $50,000 or more, then you need to maintain a written affirmative action plan for women and minorities and individuals with disabilities. (Exception: construction contractors do not need to have written affirmative action plans for women and minorities.  They must, however, abide by a number of record keeping and recruiting guidelines.  The regulations for veterans and individuals with disabilities do require written plans for construction contractors.)

If your company has 50 or more employees, does it have $100,000 or more in a single federal contract?  If your company has a single federal contract of $100,000 or more then you will also need a written plan for veterans.

If your company has 50 or more employees, does it have $50,000 or more in federal subcontracts?  If your company has a single federal subcontract of $50,000 or more, or the total amount of federal subcontracts equals $50,000 or more, then you need to maintain a written affirmative plan for women and minorities and individuals with disabilities.

If your company has 50 or more employees, does it have $100,000 or more in a single federal subcontract?  If your company has a single federal subcontract of $100,000 or more then you will also need a written affirmative action plan for veterans.

If your company has 50 or more employees, does it serve as a depository for federal funds for any amount or issue and redeem US savings bonds for any amount?  If your company meets these criteria then you need a written plan for minorities and women.  If your company serves as a depository of $50,000 or more, or has a contract in excess of $50,000 for issuing and redeeming US savings bonds, then you will need a written affirmative action plan for individuals with disabilities. If your company serves as a depository of $100,000 or more, or has a contract in excess of $100,000 for issuing and redeeming US savings bonds, then your company will need a written affirmative action plan for veterans.

If your company has 50 or more employees, is it covered by FDIC or NCUA deposit insurance?  If so, OFCCP expects it to develop affirmative action plans for women and minorities, individuals with disabilities, and veterans.

Do you still have questions about your status as an affirmative action employer or need guidance on next steps?  Feel free to contact HudsonMann – we’re happy to be a resource.

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