|November 5, 2008|
Office of Federal Contract Compliance Programs (OFCCP)
Guide for Small Businesses with Federal Contracts
This guide is designed to give small businesses that have Federal contracts or subcontracts an introduction to the basic equal employment opportunity (EEO) requirements of Executive Order 11246, as amended, and its implementing regulations, which prohibit employment discrimination by Federal contractors and subcontractors and federally-assisted construction contractors and subcontractors. Executive Order 11246 also requires Federal contractors and subcontractors and federally-assisted construction contractors and subcontractors to take affirmative action to ensure that all individuals have an equal opportunity for employment without regard to race, color, religion, sex, or national origin.
The United States Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) administers and enforces Executive Order 11246 and its implementing regulations. OFCCP also enforces Section 503 of the Rehabilitation Act of 1973, which prohibits discrimination against qualified individuals with disabilities, and the affirmative action provisions of the Vietnam Era Veterans' Readjustment Assistance Act, which prohibits discrimination against qualified protected veterans.
This guide is intended for contractors that have nonconstruction contracts, which are also referred to as "supply and service" contracts. This guide is also for subcontractors that furnish supplies or services that are necessary to perform a Federal contract. While the basic EEO requirements are the same for all contractors and subcontractors, both construction and nonconstruction, a different set of affirmative action requirements have been established for contractors that have construction contracts. If your business has a Federal construction contract or a contract for construction work that is paid for with Federal funds, the affirmative action requirements that apply only to Federal or federally assisted construction contractors and subcontractors are set forth in the regulations in 41 CFR Part 60-4, and explained in OFCCP's Technical Assistance Guide for Federal Construction Contractors.
The basic EEO requirements of Executive Order 11246 are discussed in this guide. In addition to the basic EEO requirements, the regulations implementing Executive Order 11246 require supply and service contractors - generally, those with 50 or more employees and a contract of $50,000 or more - to develop and maintain a written affirmative action program (AAP). A detailed description of the written AAP requirements is beyond the scope of this guide. However, the AAP requirements for supply and service contractors are contained in 41 CFR Part 60-2, and guidance about how to comply with the AAP requirements is provided in the Federal Contract Compliance Manual.
This guide describes practical steps that can be taken to comply with some of these requirements. This guide is divided into three parts. Part I explains the basic EEO requirements of Executive Order 11246 and its implementing regulations. Part II provides examples of effective employer practices that foster equal employment opportunity and can help small businesses comply with some of their AAP requirements. Part III contains a directory of OFCCP offices.
Contractors have considerable flexibility in devising practices and programs that promote equal employment opportunity. The employer practices found in the guide are illustrative and should not be construed as requirements. Moreover, this guide does not create new or change current legal requirements.
What is OFCCP?
OFCCP is an agency within the U.S. Department of Labor's Employment Standards Administration. OFCCP has a national network of six Regional Offices, each with District and Area Offices in major metropolitan cities.
OFCCP conducts compliance evaluations to determine whether a contractor is complying with its obligation to maintain nondiscriminatory employment practices. OFCCP also investigates complaints filed against a Federal contractor that suggest discrimination against a group of individuals or discrimination that is systemic in nature. If the complaint alleges that a Federal contractor discriminated against an individual, OFCCP will refer the complaint to the Equal Employment Opportunity Commission (EEOC) for processing.
OFCCP encourages voluntary compliance and provides compliance assistance regarding the requirements of the EEO laws that apply to Federal contractors and subcontractors. You may find out more about OFCCP by accessing the OFCCP website .
How do I know if I am a Federal contractor or subcontractor subject to Executive Order 11246?
Basically, all Federal contracts and subcontracts are covered under Executive Order 11246 unless specifically exempted. Contracts and subcontracts of less than $10,000 generally are exempt from coverage under Executive Order 11246, though some contracts under that amount are covered, e.g. bills of lading. The regulations implementing the Executive Order exempt certain contracts and categories of contracts. The regulations contain exemptions for contracts involving work performed outside the United States; certain contracts with State or local governments; contracts with religious corporations, associations, and educational institutions; and contracts involving work on or near an Indian reservation. For a description of the exemptions, see the regulations 41 CFR 60-1.5. Additional assistance for determining whether a business is a Federal contractor may be found on DOL's e-laws website.
What is a Federal contract or subcontract?
A "Federal contract" is any agreement between a department or agency of the Federal Government and any person for the purchase, sale, or use of goods or services.
A "Federal subcontract" is an agreement or arrangement with a Federal contractor either (1) for the furnishing of supplies or services or for the use of real or personal property, which is necessary to the performance of any one or more Federal contracts; or (2) under which any portion of the Federal contractor's obligation under any contracts is performed, undertaken, or assumed. Thus, some but not all contracts with a Federal contractor will trigger coverage under the laws administered by OFCCP.
What are the basic EEO requirements of a Federal Contractor?
The basic EEO requirements of a Federal contractor are:
Title VII of the Civil Rights Act of 1964, as amended (Title VII), is a Federal law that protects individuals against employment discrimination. Executive Order 11246 is similar to Title VII. Executive Order 11246 prohibits Federal contractors and subcontractors from engaging in workplace employment discrimination on the basis of race, color, religion, sex, or national origin.
What is Employment Discrimination?
Employment discrimination takes different forms. Employment discrimination is illegal and generally results when a person is treated differently (usually less favorably) because of his or her race, color, religion, sex, or national origin. In addition, employment discrimination can result when a neutral policy or practice has an adverse impact on the members of any race, sex, or ethnic group and the policy or practice is not job related or required by business necessity.
Here is an example of prohibited employment discrimination:
Alpha Production Company needs to hire entry-level laborers. The job requires heavy lifting and physical exertion, but does not require any technical skill. Alpha Production believes that all of its employees should have a high school diploma. So the company does not consider applicants who did not finish high school for the laborer job.
The high school diploma requirement disqualifies a greater number of Hispanic candidates for the laborer job at Alpha Production than Non-Hispanic White candidates. According to the most recent Census data, in the counties from which Alpha Production draws its applicants for laborer jobs, 94.2% of the white population 18 years and older has completed high school, but only 46.9% of the Hispanic population 18 years and older has completed high school. Alpha Production could not provide a business justification for using the high school diploma requirement. Thus, Alpha Production has engaged in prohibited discrimination.
Be Very Careful With Employment Tests:
Professionally developed tests can be used to make employment decisions, so long as the tests are fair and nondiscriminatory. You should be aware of the legal requirements that apply when tests and other assessment instruments are used to select employees. We recommend reviewing the guide developed by O*Net and titled Testing and Assessment: An Employer's Guide to Good Practices, which is available on the DOL website. In addition, you might consult legal counsel or a Human Resource advisor before instituting any employment tests.
Federal contractors are required to post OFCCP's Equal Employment Opportunity Poster in a conspicuous place. A good place to post it is in a locker or lunchroom or an area where employees can take breaks. You can obtain the Equal Employment Opportunity Poster by contacting the nearest OFCCP office. A Directory of OFCCP offices is found in Part III of this guide. You can see a sample poster on the OFCCP website.
Federal contractors are required to state in all solicitations or advertisements for employment that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, or national origin.
Federal contractors are required to maintain any personnel or employment records made or kept by the contractor.
Examples of records that must be maintained:
Time Periods for Keeping Employment Records:
When a complaint is filed against a Federal contractor, or when a Federal contractor is selected to undergo a compliance evaluation, the contractor is obligated to allow OFCCP access to its premises for the purpose of conducting an on-site investigation. The contractor must permit OFCCP to inspect and copy the books and records that may be relevant to the matter under investigation and pertinent to compliance with the requirements of Executive Order 11246.
The Standard Form 100, Employer Identification Report (EEO-1 Report) requires that employers report on the number of employees by race, ethnicity and gender for each of nine job categories. The EEO-1 Report must be filed annually, not later than September 30, by:
The Joint Reporting Committee (JRC), which is comprised of representatives from the Department of Labor and the Equal Employment Opportunity Commission, handles the processing of EEO-1 Reports. EEO-1 Reports may be filed electronically through a secure web-based internet or may be filed in paper format. More information on the EEO-1 Report can be obtained from any of the following contacts:
There are a number of actions a contractor might take to ensure that its employment practices are not limiting the employment opportunities of the members of any gender, race, or ethnic group. Following are examples of employer practices that foster equal employment opportunity and can help small businesses comply with some of their affirmative action program requirements.
Whether you are required to recruit broadly to address an identified problem in your workforce, or you just want to ensure that recruiting efforts reach all qualified applicants, the following practices are effective in promoting equal employment opportunity:
Employers that periodically perform self-audits of their employment practices are much better able to avoid employment barriers and ensure that they are providing equal opportunity for applicants and employees. There are three kinds of self-audits that you can do:
Here is how to perform each kind of self-audit:
This self-audit focuses on employment qualifications or standards used in making various employment decisions and how women and minorities fared in those decisions. This generally involves a comparison of applicants or employees who are competing for a particular job or promotion or to retain a particular job. This self-audit should be conducted as soon after an employment decision is made as possible. You can even do a self-audit of a proposed employment decision, to ensure that there is no discrimination, before the final decision is made. Here are some examples of what information about the employment decision you should consider:
Review where the female and minority employees work within your organizational structure. A helpful way to do this is to identify the gender, race, and ethnicity of each employee for each job within each department on an organizational chart. Look for concentrations of female or minority employees, especially in lower-paying jobs. Similarly, look for areas where female and minority employees seem to be absent or poorly represented, especially in higher-paying jobs. Also, look at the ways employees are promoted from lower ranking jobs to the higher-ranking jobs.
This self-audit may suggest potential problems that require further investigation. One common problem that might be uncovered by this self-audit is the practice of steering women to different jobs based on stereotypical beliefs about physical or intellectual qualifications, or temperament as well. For example, a manufacturing company has a number of openings for two entry-level jobs. One of the entry-level jobs involves heavy lifting and pays more than the other job. The manufacturer engages in sex-based discrimination when it hires only male applicants for the job that involves heavy lifting, and hires only female applicants for the other entry level job.
In general, jobs requiring the same qualifications and duties while having dissimilar rates of pay, promotional opportunity, access to training, better benefits / perks, etc., should be audited.
An Organizational Display allows you to see how your company's workforce is structured and where in that structure women and minorities are represented or absent. Click to view what an Organizational Display looks like:
This self-audit uses statistics and works well when you are reviewing a number of employment decisions made over a period of time. OFCCP will be offering on its web site in the near future a Self-Audit Tool, in Excel format, that you can download to help you perform this type of audit. The Self-audit Tool provides directions on how to use it. In order for the Self-audit Tool to be of benefit to your company, you need to gather and keep the following information:
If you need help, contact us directly via letter, telephone (1-800-397-6251), or through our web site.
Dear (Agency Representative),
As a government contractor, (Name of Contractor), must comply with the provisions of Executive Order 11246, as amended, and other existing laws related to Equal Employment Opportunity (EEO). Part of our commitment to EEO is to take affirmative action to ensure that job seekers are recruited; job applicants are considered for employment opportunities; and employees are treated without regard to their race, color, religion, sex, national origin, or status as a qualified individual with a disability or Vietnam era or other protected veteran.
You can support and share in our commitment when you assist us with our employment needs. As we contact you for assistance in filling specific open positions, we wish your help in identifying qualified applicants for consideration. Whenever possible, please refer qualified minorities, women, persons with disabilities, Vietnam era veterans, and other protected veterans.
Although, we specifically have requested that (Name of Source) refer minority group members and women, (Name of Contractor) welcomes referrals of all qualified applicants regardless of their race, color, religion, sex, national origin, or status as a qualified individual with a disability or protected veteran.
Your assistance in referring all qualified candidates will help us to achieve our commitment to Equal Employment Opportunity. Thank you in advance for your cooperation.
Human Resources Manager
APPENDIX II - Sample Letter to Community Based Organization
(Mexican American Community Services Agency)
Dear (Mr. or Ms. Name of Contact Person):
(Name of Contractor) is an equal opportunity and affirmative action employer that does not discriminate in employment and ensures equal employment opportunity for all persons regardless of their race, color, religion, sex, national origin, or status as a qualified individual with a disability or Vietnam era or other protected veteran. (Name of Contractor)'s policy applies to all terms and conditions of employment. To achieve our goal of equal opportunity, we maintain an affirmative action program through which we take good faith efforts to recruit, hire and advance in employment qualified minorities, women, persons with disabilities, Vietnam era veterans, and other protected veterans. We would appreciate the Mexican American Community Services Agency's assistance in (Name of Contractor) efforts to achieve its affirmative action and equal opportunity goals.
Therefore, we request that the Mexican American Community Services Agency refer qualified minorities, women, persons with disabilities, and protected veterans for available positions at (Name of Contractor). We have enclosed a list of our current employment openings to enable the Mexican American Community Services Agency to better identify qualified applicants.
Although, we specifically have requested the Mexican American Community Services Agency to refer minority group members and women, (Name of Contractor) welcomes referrals of all qualified applicants regardless of their race, color, religion, sex, national origin, or status as a qualified individual with a disability or protected veteran.
WE WANT TO KNOW WHAT YOU THINK
OFCCP is interested in improving the relationship with its customers and improving the compliance assistance information and materials provided to the public. If you have interacted with OFCCP through:
you have reviewed and/or received compliance assistance materials and you note areas that we can improve, please let OFCCP know your comments or suggestions by sending an email to OFCCP's public mailbox at OFCCP-Public@dol.gov.