Review and update your affirmative action plan

If you are a government contractor that operates on a calendar-year basis (January 1 to December 31), don’t forget to review and update your affirmative action plan (AAP).

Federal regulations require government contractors to have affirmative action plans if they have 50 or more employees and have at least one contract worth $50,000 or more.  See 41 C.F.R. § 60-2.10(c).  If you are a first-time government contractor that meets these criteria, you have to prepare your affirmative action plan within 120 days of being awarded your contract.

Failure to have a written affirmative action plan can be grounds for breach of the government contract.  In addition, the following can also be grounds for breach:

1. Employment discrimination.
2. Failure to report your employment statistics (file an EEO-1 form).
3. Failure to maintain proper employment records used to develop the employment statistics.

In addition, in 2014, new regulations were adopted that require affirmative action programs for hiring veterans.  The “trigger” point for this requirement is a bit higher:  at least one contract of $100,000 or more.  See 41 C.F.R. § 60-300.1 and following.

Bottom-line for government contractors

If the Office Federal Contract Compliance Programs (OFCCP) audits your company, the auditor will ask for your current-year AAP.  That’s why a government contractor must update its AAP every year.