Why and When a Government Contractor Needs an Affirmative Action Plan

December 17, 2019 at 5:00 AM
government contractor hr.jpg

If your company contracts with the federal government, either directly or as a subcontractor, you may need to have a written affirmative action plan in place. Whether you require one or not depends on the number of employees you have and the size of your contracts.

Because this is such an important requirement for federal contractors, it’s one area of human resources you want to get right. Let’s take a look at what affirmative action plans are, why they’re important, and when your company should have one.

What Is an Affirmative Action Plan?

All employers in the United States are expected to follow federal and state equal opportunity laws. They are prohibited from unlawful discrimination when hiring and discrimination against current employees on the basis of race, gender, national origin, or the presence of a disability.

For companies that contract with the federal government, the legal bar is set higher. Not only must contractors refrain from discrimination but they also have to have a written plan in place that outlines the affirmative actions the company uses to promote equality in the workplace. Affirmative actions can include proactive steps to prevent discrimination, training programs, and outreach efforts to hire women, minorities, individuals with a disability, or veterans.

Having a written plan is only the first step. You also have to implement the programs and policies outlined in your plan. The law also says that contractors have to update their affirmative action plan once a year.

Why Is Affirmative Action Important?

Affirmative action is way more than a hurdle for your HR department to deal with. It’s the foundational tool for creating and supporting a diverse and fair economic and social structure in the United States. By requiring an affirmative action plan for federal contractors, the government is doing a couple of important things:

  • Ensuring taxpayer dollars spent on federal contracts go to organizations that adhere to certain standards of diversity and equality
  • Setting an example for all businesses in the US to follow

When Federal Contractors Are Legally Bound to a Plan

If you’re a small business with 49 employees or less, you don’t need a plan, no matter how much your company contracts with the government. The laws requiring a plan only apply to federal contractors and subcontractors with 50 or more employees:

  • If you have $50,000 or more in direct federal contracts or subcontracts, you need to maintain a written plan for women, minorities, and for individuals with a disability.
  • If you have a single contract for $150,000 or more, you’ll also need a written plan for veterans.

Does your company need help writing an affirmative action plan so you can legally contract with the federal government?

At InterConnect Human Resources, we have 25 years of experience working with contractors of all sizes. We can help you create a plan including everything from statistical analysis of your company’s utilization of protected groups to guidance on how to implement your affirmative actions. Our team can also help you update it every year to ensure your company is compliant with existing equity standards. Get in touch with us today and let’s get started.