Resource Center

The resources in this section are provided as background information and an introduction into government reporting requirements for those clients and human resource (HR) departments that want to do this work themselves.

Are you a Government Contractor?

You are considered a government contractor under affirmative action regulations (Executive Order 11246) if your company:

(1) holds a single federal contract, subcontract, or federally assisted construction contract or subcontract in excess of $10,000;
(2) holds federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or
(3) holds government bills of lading, serves as a depository of federal funds, is an issuing and paying agency for U.S. savings bonds and notes in any amount, and/or are a financial institution with federal share and deposit insurance.

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What Managers Need to Know About Affirmative Action

Affirmative Action

There are three main affirmative action arenas: 1) government contracts, 2) education, and 3) workplace. Workplace affirmative action means that federal contractors must complete an annual self-analysis and take affirmative steps to fix any problems identified in that analysis and to ensure that equal employment opportunity (EEO) is a reality in the workplace. Affirmative action obligations cover race, color, religion, gender, national origin, covered veteran status, and disabilities. Affirmative action does NOT require quotas nor does it mean preferences should be given.

Affirmative Action Program

“An affirmative action program is a management tool designed to ensure equal employment opportunity.” Federal contractors are required to have separate written programs for minorities and women, for covered veterans, and for people with disabilities. These programs commit contractors to policies, procedures, self-analysis, action-oriented programs, training and management reviews to ensure equal employment opportunity in all aspects of employment.

Essentially, organizations of 50 or more employees that have $50,000 contracts (or other covered relationships listed at 41 CFR 60-1.40) with the federal government or with other federal contractors are required to have written affirmative action programs.

Penalties or Sanctions

Failure to comply with affirmative action regulations can mean the loss of an organization’s federal government contracts. Compliance is enforced by the Department of Labor through its Office of Federal Contract Compliance Programs (OFCCP). Audits that reveal non-compliance can results in a conciliation agreement with the OFCCP requiring additional reporting obligations, front and back pay awards, or requirements to make specific hires.

Placement Goals

As part of the self-analysis process, a contractor’s workforce is examined to determine whether minorities or women are employed at a rate less than reasonably expected given availability. If the number of minority or female incumbents is less than reasonably expected, contractors must set goals for hiring and promotions during the year. These goals are not quotas but require that contractors take good faith efforts to meet these goals. Contractors are also required to set an annual protected veteran hiring benchmark (typically, about 7%), and utilization goal(s) for individuals with disabilities.

Good Faith Efforts

Good faith efforts are those steps that federal contractors take to increase external and internal measures to ensure access to job opportunities and fairness in hiring, promotion, termination, and pay. External measures include the communication of an organization’s EEO policy and outreach to organizations that serve minorities, females, covered veterans, and people with disabilities. Internal measures include the communication of an organization’s EEO policy and procedures to employees and managers, and the establishment of processes and procedures to ensure the EEO policy is observed.

Manager Requirements

All employees should be educated on an organization’s EEO policy and managers should practice nondiscrimination in all actions with employees or applicants.

Other Requirements

There are many technical reporting and record keeping requirements as part of a contractor’s affirmative action obligations. Additionally, contractors are required to make reasonable accommodations for religious observances and practices and for disabilities.