Employment Law Guide

Federal Contracts-Equal Opportunity in Employment: Employment Nondiscrimination and Equal Opportunity in Construction Contracts

Executive Order 11246, as amended (Parts II, III, and IV)(https://www.dol.gov/ofccp/regs/statutes/eo11246.htm)
(41 CFR Parts 60-1, 60-3, 60-4, 60-20, and 60-50(https://www.dol.gov/dol/cfr/Title_41/Chapter_60.htm))

Who is Covered

Executive Order 11246 and its implementing regulations are administered by the Office of Federal Contract Compliance Programs (OFCCP) and cover employers with Federal contracts or subcontracts that exceed $10,000, or that will (or can reasonably be expected to) accumulate to more than $10,000 in any 12-month period.

Covered contracts may be for the purchase, sale, or use of personal property, nonpersonal services, or both. In this context, the term "nonpersonal services" includes services such as construction. Agreements where the parties stand in the relationship of employer and employee are not covered.

In addition, E.O. 11246 and the implementing regulations cover contractors and subcontractors who hold any federally assisted construction contracts in excess of $10,000. Under Section III of E.O. 11246, in all contracts for construction to be financed wholly or partially by Federal financial assistance, all applicants for Federal financial assistance must include a specific clause notifying the construction contractor that it is covered by E.O. 11246. All applicants must also agree to cooperate with the Secretary of Labor in enforcing E.O. 11246.

The following types of contracts and subcontracts are exempt from E.O. 11246:

• Those not exceeding $10,000 with the exception of transportation bills of lading and certain types of agreements with financial institutions
• Contracts for indefinite quantities when the contracting agency determines that the cost in any one year will not exceed $10,000
• Those for work that is performed outside the U.S. by employees who were not recruited in the U.S.

Specific exemptions may apply to the following:

• Contracts and subcontracts with certain religiously-oriented educational institutions
• Contracts and subcontracts for work on or near Indian reservations
• Contracts and subcontracts involving national security, if the head of the contracting agency determines both that the contract is essential to national security, and noncompliance with a particular requirement of E.O. 11246 or the regulations with respect to the process of awarding the contract is essential to national security
• Specific contracts or subcontracts, if the Director for the Office of Federal Contract Compliance Programs decides that special circumstances in the national interest require such an exemption
• Contractor facilities not related to contract performance, as determined by the OFCCP
• Contracts or subcontracts with state or local governments, except for the specific government entity that participates in work on or under the contract

Moreover, contractors or subcontractors that are religious entities may grant employment preferences to individuals of a particular religion but must comply with other requirements of E.O. 11246.

E.O. 11246 and its implementing regulations apply only to the specific state or local government entities that participate in work on or under a Federal contract or subcontract. This coverage is narrower than that which applies to private sector employers.

Basic Provisions/Requirements

E.O. 11246 and the implementing regulations require covered contractors and subcontractors to refrain from discrimination and take affirmative steps to ensure that applicants and employees receive equal employment opportunity regardless of race, color, religion, sex, sexual orientation, gender identity or national origin. Additionally, a complaint may be filed if an individual believes they've experienced discrimination because they asked about, discussed or disclosed their pay or the pay of their co-workers.

Covered construction contractors and subcontractors must make good faith efforts to achieve goals set by OFCCP for the employment of women and minorities in all crafts and trades on their work sites. These contractors and subcontractors must pursue such goals on all their construction work, whether or not Federal or federally assisted. They must also include a specific equal opportunity clause in each of their nonexempt contracts and subcontracts. The Order and the regulations provide the required language for this clause.

Although they are not required to create written affirmative action programs (AAPs), construction contractors and subcontractors must follow the regulations that require Federal and federally assisted construction contractors and subcontractors to take specific affirmative steps to ensure equal employment opportunity. Contractors and subcontractors must also fully document their affirmative action efforts.

All construction contractors and subcontractors, whether or not federally assisted, are prohibited from discrimination based on race, color, religion, sex, sexual orientation, gender identity, and national origin in such employment practices as recruitment, rates of pay, hours, upgrading, layoff, promotion, selection for training, advertising efforts, job classifications, seniority, retirement ages, or job fringe benefits such as employer contributions to company pension or insurance plans. Additionally, E.O. 11246 prohibits contractors and subcontractors from taking adverse action against employees or applicants for asking about, discussing or disclosing their pay or the pay of their co-workers. Sexual harassment is also a violation of the nondiscrimination provisions of E.O. 11246.

The regulations also include other specific requirements, such as those summarized below.

• Covered contractors and subcontractors, regardless of company size, are barred from using exclusionary policies that treat men and women differently. For example, a contractor or subcontractor that hires or promotes a man who has young children cannot deny a job or a promotion to a woman because she has young children.
• Covered contractors and subcontractors are required to take all necessary actions to ensure that no one attempts to intimidate or discriminate against an individual for filing a complaint or participating in a proceeding under E.O. 11246.

Employee Rights

Anyone has the right to file a complaint with OFCCP if he or she believes that a Federal contractor or subcontractor has discriminated on the basis of race, color, religion, sex, sexual orientation, gender identity or national origin. Additionally, a complaint may be filed if an individual believes they've experienced discrimination because they asked about, discussed or disclosed their pay or the pay of their co-workers. In most cases, complaints must be filed within 180 days of the discriminatory action. Anyone may contact OFCCP with a question about interpreting the regulations, filing a complaint, or any other related matter.

Recordkeeping, Reporting, Notices and Posters

Notices and Posters

Contractors and subcontractors who hold a single Federal contract or subcontract in excess of $10,000 or who hold contracts or subcontracts with the Federal government in any 12-month period that have a total value of more than $10,000 are required to post the Equal Employment Opportunity (EEO) notice, EEO is the Law poster (PDF) and supplement. Federal contractors and subcontractors who (1) hold government bills of lading; (2) serve as a depository of Federal funds in any amount; or (3) act as issuing and paying agents for U.S. savings bonds and notes must also post the EEO is the Law poster and supplement.

The notice must be posted in conspicuous places available to employees and applicants for employment and representatives of each labor union with which the covered contractor or subcontractor has a collective bargaining agreement, such as, the personnel office, work-out facility, lunchroom, or company bulletin board. There is no particular size requirement.

The notice is also available in Spanish and Chinese. Posting of the notice in languages other than English is not required.

Additionally, contractors and subcontractors who hold a single Federal contract or subcontract in excess of $10,000 or who hold contracts or subcontracts with the Federal government in any 12-month period that have a total value of more than $10,000 are required to post the Pay Transparency Nondiscrimination Provision. Federal contractors and subcontractors who (1) hold government bills of lading; (2) serve as a depository of Federal funds in any amount; or (3) act as issuing and paying agents for U.S. savings bonds and notes must also post the Pay Transparency Nondiscrimination Provision.

This posting requirement may be accomplished by posting the provision electronically or by posting a copy of the provision in conspicuous places available for employees and applicants. There is no particular size requirement.

Recordkeeping

Personnel records. Federal contractors are required to maintain any personnel or employment records made or kept by the contractor. Examples of records that must be maintained include:

• Job descriptions
• Job postings and advertisements
• Records of job offers
• Applications and resumes
• Interview notes
• Tests and test results
• Written employment policies and procedures
• Personnel files

Federal contractors and subcontractors with fewer than 150 employees or a contract of less than $150,000 have to keep records for one year from the date of the making of the personnel record or personnel action, whichever occurs later.

Federal contractors and subcontractors with 150 or more employees or who have a government contract of $150,000 or more are required to keep employment records for two years from the date of the making of the personnel record or personnel action, whichever occurs later.

For any record contractors maintain, they must be able to identify the gender, race, and ethnicity of each employee; and where possible, the gender, race, and ethnicity of each applicant or Internet applicant, whichever is applicable to the particular position.

The Internet applicant regulations address recordkeeping and the use of the Internet and electronic data technologies in contractors' recruiting and hiring processes. This regulation includes soliciting data on the race, gender and ethnicity of applicants. For more detail about recordkeeping requirements for Internet applicants, see OFCCP's Frequently Asked Questions.

While covered construction contractors and subcontractors are not required to have a written AAP, they must maintain documentation of the actions they took to meet the contract specifications (the 16 Steps).

Reporting

All covered Federal contractors and subcontractors who have 50 or more employees, and who have a contract, subcontract, or purchase order amounting to $50,000 or more or serve as a depository of Government funds in any amount, or is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes are required to submit the Employer Information Report also known as the EEO-1 Report each year to Equal Employment Opportunity Commission and the Department of Labor's Office of Federal Contract Compliance Programs Joint Reporting Committee. For information on filing the EEO-1 Report see EEO-1 forms.

Note that covered contractors may be asked to submit AAPs and other employment records to OFCCP if selected for a compliance evaluation or because of a complaint investigation.

Penalties/Sanctions

OFCCP conducts compliance evaluations and complaint investigations assessing whether Federal contractors and subcontractors are in compliance with E.O. 11246. If a violation is found, OFCCP may ask the Federal contractor or subcontractor to enter into conciliation negotiations. If conciliation efforts fail, OFCCP may, through its attorneys (Solicitor of Labor), initiate an administrative enforcement proceeding by filing an administrative complaint against the contractor, or refer the matter to the Department of Justice for action by the Attorney General.

If OFCCP files an administrative complaint, the contractor or subcontractor has 20 days to request a review by an Administrative Law Judge (ALJ), who hears the case and recommends a decision. If the contractor or subcontractor is dissatisfied with the ALJ's decision, it may appeal the decision to the Department of Labor's Administrative Review Board. The Board issues the final decision, whether or not there is an appeal.

If the Board finds that the contractor or subcontractor has violated E.O. 11346, it may order the contractor or subcontractor to provide appropriate relief, which may include restoration of back pay and employment status and benefits for the victim(s) of discrimination. Depending on the circumstances, violations also may result in cancellation, suspension, or termination of contracts, withholding of progress payments, and debarment.

If the contractor or subcontractor is dissatisfied with the Board's decision, it may appeal that decision to the Federal courts.

Relation to State, Local, and Other Federal Laws

OFCCP generally refers individual complaints alleging discrimination based on race, color, religion, sex, or national origin to the Equal Employment Opportunity Commission.

Covered contractors and subcontractors that qualify as "employers" under Title VII of the Civil Rights Act of 1964 are required to comply with the Pregnancy Discrimination Act of 1978. Additional information on this law may be found at the Equal Employment Opportunity Commission's Facts About Pregnancy Discrimination webpage. Such employers must also provide equal fringe benefits, and make equal contributions for such benefits, for men and women.

Compliance Assistance Available

The Department of Labor provides employers, workers, and others with clear and easy-to-access information and assistance on how to comply with Executive Order 11246. Among the many resources available are:

• Facts on Executive Order 11246(https://www.dol.gov/ofccp/regs/compliance/aa.htm)
• Federal Contract Compliance Manual(https://www.dol.gov/ofccp/regs/compliance/fccm/fccmanul.htm): A reference tool for Federal contractors and their equal employment opportunity (EEO) and human resources managers. This manual describes the Department of Labor's Office of Federal Contract Compliance Programs' (OFCCP) standard operating procedures for OFCCP compliance officers.
• elaws Federal Contractor Compliance Advisor(/elaws/ofccp.htm) - This Advisor helps Federal contractors and subcontractors answer basic questions about coverage and compliance issues related to the equal employment opportunity laws administered by OFCCP.

DOL Contacts

Office of Federal Contract Compliance Programs (OFCCP)(https://www.dol.gov/ofccp/)
E-mail: OFCCP-Public@dol.gov
Tel: 1-866-4USADOL (1-866-487-2365) or 1-800-397-6251; TTY: 1-877-889-5627

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