The Most Common Mistake in AAP Audit Preparation

The Most Common Mistake in AAP Audit Preparation
by Nina Le-Tse, Consultant, Biddle Consulting Group

Biddle Consulting Group has worked with a high volume of Federal contractors under OFCCP audit. Having worked with contractors in many industries and ranging in size from fifty employees to over one hundred thousand employees within the various OFCCP regions, we consistently encounter recordkeeping as the one common issue that easily results in the highest number of conciliation agreements. Many people are not aware of the fact that OFCCP has access to all of your transaction (i.e., Applicants, Hires, Promotions, and Terminations) data in the event of an audit. The OFCCP will use their internal systems to conduct adverse impact analyses based on the transaction data that was provided to determine if there is a substantial difference in selection rates between men and women and/or whites and minorities. If there is statistical significance in the summary data provided, OFCCP will request the raw data that was compiled for the desk audit submittal. Once they have the detailed data, it is much more difficult to go back and “fix” flawed files. Resubmitting data repeatedly only results in more suspicion on the part of the OFCCP and could likely end up in an on-site visit.
Conducting adverse impact analyses is not just about the result of the statistical test; it’s about having the right data. If there is adverse impact in the initial analysis of hires data being compared to applicants, there are often appropriate refinements that you can make to the data. For example:
· Only include applicants who are associated with hires in the plan. If you had an applicant pool tied to a job requisition that closed before making a hire then those applicants do not need to be included in your submittal.
· Applicants may occur outside the 12-month transaction period if they are linked to hires that occurred within the appropriate 12-month period
· Applicants do not belong in the file if they applied for a position after the last hire in the 12-month plan period. If you have a calendar year plan where your last hire was November 30th, then you should not have any applicant data in December as part of your current AAP. They may be linked to a hire in your future AAP but not the current one.
· Applicants should only be listed once unless they applied for and were considered for more than one job.
· A hired candidate’s race and gender should be reconciled against the original applicant file
· Remember that you must keep all applicant records for two years whether they are in your AAP or not.
The OFCCP is also focused on low applicant-to-hire ratios and high percentages of unknown race and gender. Be sure to track all considered applicants for the analyzed hires and invite all applicants to self identify their race and gender.
While the updated “Definition of an Applicant” should be applied at the onset, you may further refine the data by reviewing it to be sure that each of the four requirements are met.
Document all your selection process is one of the key elements to good recordkeeping. If you have multiple employees tracking the applicant flow log, make sure that they follow the same protocols. Keep all applicant records including those used to develop your affirmative action plan(s) for the minimum of two years (or one year if you qualify for the exemption).