Counselor's Corner — continued on page 18 Notably, the affirmative action obligations apply only to federal contractors and subcontractors with 50 or more employees and meet one of the criteria below. Assuming the employee threshold is met, a financial institution is covered if it: 1. Has a federal contract or subcontract in excess of $50,000 (EO 11246/Section 503) and $150,000 (VEVRAA); OR 2. Serves as a depository of government funds: a. In any amount (EO 11246), b. For $50,000 or more (Section 503), or c. For $150,000 or more (VEVRAA). OR 3. Serves as an issuing and paying agent for U.S. savings bonds and saving notes: a. In any amount (EO 11246), b. For $50,000 or more (Section 503), or c. For $150,000 or more (VEVRAA). Additionally, the OFCCP takes the position that financial institutions with federal share and deposit insurance (i.e., that participate in FDIC or NCUA programs) are also federal contractors and therefore subject to its jurisdiction. Consequently, most financial institutions have affirmative action obligations because they either serve as a depository of government funds, participate in FDIC or NCUA programs, or hold other federal contracts in excess of $50,000. If the above criteria applies, the financial institution must prepare and implement Affirmative Action Programs (AAPs) under the three affirmative action laws. As part of these AAPs, covered contractors must track the gender, race, disability, and veteran status of each individual who applies for a particular job, as well as analyzes other employment practices, such as transfers, promotions, and terminations, to ensure their practices reflect race- and gender-neutral employment processes. Covered contractors must also aim to meet certain disability utilization goals, and veteran hiring benchmarks. In other words, this is not just a written policy, but workforcespecific statistical analyses which must be prepared every year. The OFCCP has focused intently on these analyses, and held that ignorance of the requirement to maintain and/or analyze the data is not an excuse for non-compliance. The OFCCP has also recently focused on employer compensation practices that have a disparate impact on women and minorities. Covered contractors, therefore, must annually evaluate their compensation practices to determine the existence of any current or potential disparate compensation concerns. Indeed, the OFCCP now conducts detailed evaluations of employer compensation practices during all compliance reviews. Annual Certification via the OFCCP Contractor Portal Unfortunately, a financial institution can no longer hope to avoid OFCCP scrutiny. Beginning in 2022, the OFCCP now requires covered contractors to annually certify, on an annual basis, that they have compliant AAPs in place. Specifically, contractors must attest to one of the following options: 1. It has developed and maintained affirmative action programs at each establishment, as applicable, and/or for each functional or business unit. See 41 CFR Chapter 60. 2. It has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60. 3. It became a covered federal contractor or subcontractor within the past 120 days and has not yet developed applicable affirmative action programs. See 41 CFR Chapter 60. Contractors must also sign the following declaration: I attest that this Affirmative Action Program (AAP) certification is true and correct to the best of my knowledge. I understand that the penalty for making false Even though financial institutions are accustomed to government regulations, many are simply unaware of their affirmative action obligations. NEBRASKA BANKERS ASSOCIATION 17
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