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Federal contractors are subject to several anti-discrimination and anti-retaliation rules in addition to those covering private employers. The Office of Federal Contract Compliance Programs (OFCCP) is generally responsible for enforcing these requirements.

These rules include, but are not limited to:

  • Executive Order 11246, as amended: Prohibits discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin. The Executive Order also requires government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of employment (see the next chapter of this guide for more information).
  • Executive Order 13665: Generally prohibits federal contractors and subcontractors from taking adverse employment actions against applicants and employees for asking about, discussing, or sharing information about their pay or their co-workers’ pay.
  • Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended: Prohibits federal contractors and subcontractors from discriminating in employment against individuals with disabilities, and requires these employers to take affirmative action to recruit, hire, promote, and retain these individuals.
  • Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), as amended: Prohibits federal contractors and subcontractors from discriminating in employment against protected veterans, and requires these employers to take affirmative action to recruit, hire, promote, and retain these veterans.

 

Executive Order 11246 prohibits discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin (protected characteristics). The Executive Order also requires government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of employment. Affirmative action may include training programs, outreach efforts, and other positive steps to broaden the pool of individuals for hiring and promotions.

Coverage:

Executive Order 11246 applies to federal contractors and federally–assisted construction contractors and subcontractors who do over $10,000 in government business in one year.

Basic Requirements:

Under Executive Order 11246, contractor responsibilities generally include:

EEO Clause in Contracts:

Among other things, the clause must state that the contractor will not discriminate against any employee or applicant because of race, color, religion, sex, sexual orientation, gender identity, or national origin and that the contractor will take affirmative action to ensure that applicants and employees are treated fairly, without regard to these protected characteristics.

Annual EEO-1 Report:

Employers subject to EEO-1 reporting must provide employment data categorized by race/ethnicity, gender, and job category to the Equal Employment Opportunity Commission (EEOC) no later than September 30th annually. Generally, the EEO-1 report is required for federal contractors with 50 or more employees and a contract of $50,000 or more. Other employers are also required to report if they have 100 or more employees.

Bidders and Prospective Contractors:

Each bidder or prospective prime contractor and proposed subcontractor must state in the bid, or in writing at the outset of negotiations for the contract, whether it has:

  • Developed, and has on file at each establishment, an affirmative action program;
  • Participated in any previous contract or subcontract subject to the equal opportunity clause; and
  • Filed all reports due under the applicable filing requirements.

Preventing Segregated Facilitates

Contractors must ensure that facilities provided for employees are not segregated based on protected characteristics. The contractor’s obligation extends to ensuring that its employees are not assigned to perform services at any location, under the contractor’s control, where the facilities are segregated.

Workers Assigned Abroad:

When hiring workers in the United States, the nondiscrimination protections under Executive Order 11246 apply, regardless of the policies of the country where the work is to be performed or for whom the work will be performed.

Fees for Private Clubs:

Contractors that maintain a policy or practice of paying membership fees or other expenses for employee participation in private clubs or organizations must ensure that the policy or practice is administered without regard to protected characteristics.

EEO Statement in Job Ads:

Contractors may satisfy this requirement in a number of ways, including expressly stating in job ads that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

Uniform Guidelines on Employee Selection Procedures:

If tests and selection procedures are shown to have a disproportionate effect on a protected group, the contractor must conduct an analysis to determine whether the tests or selection procedures are valid and job-related. Contractors should follow the Uniform Guidelines on Employee Selection Procedures (UGESP). For more information, see 41 CFR Part 60-3.

Notices:

Federal contractors must post the Equal Opportunity Is the Law poster and the Pay Transparency Nondiscrimination Provision.

Recordkeeping:

Contractors must keep any personnel or employment record for at least two years from the date the record is made or from the date of the personnel action, whichever is later. However, if the contractor has fewer than 150 employees or does not have a government contract of at least $150,000, the minimum record retention period is one year from the date the record is made or the personnel action is taken, whichever is later.

These records include, but are not limited to, records pertaining to hiring, assignment, promotion, demotion, transfer, layoff or termination, rates of pay or other terms of compensation, and selection for training or apprenticeship, requests for reasonable accommodation, the results of any physical examination, job advertisements and postings, applications, resumes, and any expressions of interest through the Internet or related electronic technologies as to which the contractor considered the individual for a particular position. See 41 CFR Sec. 60-1.12 for more information.

OFCCP Access to Records and Worksites:

Contractors must permit the OFFCP to access its premises during normal business hours for the purpose of conducting on-site compliance evaluations and investigations. Contractors must also permit the inspection and copying of accounts and records, including computerized records, and other material that may be relevant to the matter under investigation.

In 2016, the OFCCP updated regulations prohibiting sex discrimination. Among other things, the updated regulations:

  • Clarify that the prohibition on sex discrimination prohibits discrimination on the basis of gender identity, transgender status, and gender stereotypes as well as pregnancy, childbirth, and related conditions.
  • Specify that denying accommodations for pregnancy, childbirth, or related medical conditions is unlawful if:
    • The contractor denies accommodations only to employees affected by pregnancy, childbirth, or related conditions;
    • The contractor provides accommodations to other employees whose ability or inability to perform their job duties is similarly affected, the denial of accommodations imposes a significant burden on those employees, and the contractor’s asserted reasons for denying accommodations do not justify that burden; or
    • Intent to discriminate is otherwise shown, for example, by evidence of discriminatory statements made by managers when denying requested accommodations.
  • Revise the definition of unlawful pay discrimination on the basis of sex. Contractors may not pay different compensation to similarly situated employees on the basis of sex and may not implement compensation practices that have an adverse impact on the basis of sex unless they can show them to be job-related and consistent with business necessity.
  • Expressly prohibit discrimination with regard to fringe benefits such as medical, hospital, accident, life insurance, and retirement benefits; profit-sharing and bonus plans; leave; and other terms, conditions, and privileges of employment.
  • Bar requirements for jobs or training that are based on an applicant’s or employee’s sex unless the contractor demonstrates that such requirements are a bona fide occupational qualification. Additionally, a contractor is prohibited from setting requirements, such as height or weight qualifications, that adversely affect applicants because of their sex unless it demonstrates that the qualifications are job-related and consistent with business necessity.

 

Affirmative Action for Non-Construction (Service and Supply) Contractors

While all federal contractors must take affirmative action, Executive Order 11246 requires that service and supply contractors with 50 or more employees and government contracts of $50,000 or more to develop and implement a written affirmative action program (AAP) for each establishment. The regulations define an AAP as a set of specific and result-oriented procedures to which a contractor commits to applying every good faith effort. The AAP must be reviewed and updated at least annually and include the following elements:

Organizational Profile:

Provides an overview of the workforce at the establishment and may assist in identifying organizational units where women or minorities are underrepresented or concentrated. The contractor must use either the organizational display or the workforce analysis (see below) as its organizational profile.

Display:

A detailed graphical or tabular chart, text, spreadsheet or similar presentation of the contractor’s organizational structure. The organizational display must identify each organizational unit in the establishment, and show the relationship of each organizational unit to the other organizational units in the establishment.

Workforce Analysis:

A listing of each job title as it appears in applicable collective bargaining agreements or payroll records ranked from the lowest paid to the highest paid within each department or other similar organizational unit including departmental or unit supervision.

Job Group Analysis:

A method of combining job titles within the contractor’s establishment. This is the first step in the contractor’s comparison of the representation of minorities and women in its workforce with the estimated availability of minorities and women qualified to be employed.

Placement of Incumbents in Job Groups:

A statement of the percentage of minorities and the percentage of women employed in each job group established in the job group analysis.

Determining Availability:

An estimate of the number of qualified minorities or women available for employment in a given job group, expressed as a percentage of all qualified persons available for employment in the job group.

Comparing Availability to Incumbency:

A comparison of the percentage of minorities and women in each job group determined with the availability for those job groups.

Placement Goals:

Objectives or targets reasonably attainable by means of applying every good faith effort to make all aspects of the entire affirmative action program work. Placement goals also are used to measure progress toward achieving equal employment opportunity.

Designation of Responsibility:

The assignment of responsibility and accountability for EEO and affirmative action to an official of the organization. He or she must have the authority, resources, support of and access to top management to ensure the effective implementation of the affirmative action program.

Identification of Problem Areas:

An in-depth analysis of its total employment process to determine whether and where impediments to equal employment opportunity exist.

Action-Oriented Programs:

Actions designed to correct any problem areas identified and to attain established goals and objectives. Contractors must demonstrate that they have made good faith efforts to remove identified barriers, expand employment opportunities, and produce measurable results.

Internal Audit and Reporting System:

A system that measures and monitors the effectiveness of the entire affirmative action program.

 

Affirmative Action Programs for Construction Contractors:

OFCCP has established a distinct approach to affirmative action for the construction industry. For example, the OFCCP, rather than the contractor, establishes goals and specifies affirmative action that must be undertaken by federal and federally assisted construction contractors. The regulations list the good faith steps construction contractors must take in order to increase the utilization of minorities and women in the skilled trades. For more information, see 41 CFR 60-4.2 and 41 CFR 60-4.3.

Executive Order 12989, as amended, requires contractors (and certain subcontractors) to use E-Verify to confirm that new hires are authorized to work in the United States. E-Verify is an Internet-based system that allows employers to electronically verify the employment eligibility of newly hired employees by comparing information provided on the employee’s Form I-9 to U.S. Department of Homeland Security databases.

The E-Verify requirement applies to a contractor if:

  • The contract was awarded on or after September 8, 2009, and includes the E-Verify clause;
  • The contract is for a period of work lasting 120 days or more;
  • The contract is valued at more than$150,000;
  • At least some portion of the work under the contract is performed in the United States.

Covered contractors must use E-Verify for all employees hired during the contract term and all employees performing work in the United States on the contract.