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Basic provisions/Requirements
The Executive Order requires covered contractors and subcontractors to refrain from discrimination and to engage in affirmative steps to ensure that applicants and employees receive equal employment opportunity regardless of race, color, religion, sex, and/or national origin. Sexual harassment is a violation of the Executive Order.
The Order requires all covered contractors and subcontractors to 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.
The Department of Labor's regulations prohibit discrimination in such employment practices as recruitment, rates of pay, upgrading, layoff, promotion, and selection for training. Employers may not make distinctions based on race, color, religion, sex or national origin in recruitment or advertising efforts, employment opportunities, wages, hours, job classifications, seniority, retirement ages, or job fringe benefits such as employer contributions to company pension or insurance plans. The regulations include other requirements, such as those summarized below.
Nonconstruction (supply and service) contractors and subcontractors that employ 50 or more persons and that also satisfy at least one of four additional criteria (e.g., having a federal contract of $50,000 or more) must develop written affirmative action programs (AAPs). Usually an AAP must cover each of the contractor's establishments.
If a contractor wishes to establish an AAP other than by establishment, the contractor may reach agreement with OFCCP on the development and use of functional AAPs, which are organized along functional or business lines. The AAP is a management tool designed to encourage equal employment opportunity.
In general, the AAP will describe the policies, practices and procedures that the contractor or subcontractor uses to ensure that all qualified applicants and employees receive equal opportunities for employment and advancement. If the contractor or subcontractor is not employing women or minorities at a rate to be expected given their availability in the relevant labor pool, the AAP will include specific practical steps to address the issue. Contractors with AAPs must implement them, keep them on file, and update them annually.
Covered contractors and subcontractors, regardless of company size, may not use exclusionary policies that treat men and women differently.
Covered contractors and subcontractors also may not depend on state "protective" laws to deny employment to qualified female applicants. Such "protective" laws include those prohibiting women from performing certain types of occupations, from working more than a certain number of hours, or from lifting more than a certain amount of weight.
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 www.eeoc.gov/facts/fs-preg.html. All covered contractors and subcontractors must also provide equal fringe benefits.
Moreover, employers 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 the Executive Order.
Employment discrimination and equal opportunity in supply & service contracts
Editor's Note: Executive Order 11246 consists of two sections as described below. The Code of Federal Regulations listed in this topic are the same for both except for one CFR section. CFR 60-2 applies to Section A (nonconstruction) and CFR 60-4 applies to construction contracts.
- Section A requirements apply to nonconstruction (supply and service) contractors. The regulations prescribe the contents of affirmative action programs, standards and procedures for evaluating the compliance of affirmative action programs implemented pursuant to this part, and related matters.
- Section B requirements apply to all contractors and subcontractors which hold any Federal or federally assisted construction contract in excess of $10,000. The regulations in this part are applicable to all of a construction contractor's or subcontractor's construction employees who are engaged in on site construction including those construction employees who work on a non-Federal or nonfederally assisted construction site. This part also establishes procedures which all Federal contracting officers and all applicants, as applicable, shall follow in soliciting for and awarding Federal or federally assisted construction contracts. Procedures also are established which administering agencies shall follow in making any grant, contract, loan, insurance, or guarantee involving federally assisted construction which is not exempt from the requirements of Executive Order 11246, as amended.
In addition, this part applies to construction work performed by construction contractors and subcontractors for Federal nonconstruction contractors and subcontractors if the construction work is necessary in whole or in part to the performance of a nonconstruction contract or subcontract.
Section A requirements (supplies and services)
Who is covered
Executive Order 11246 and its implementing regulations 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.
Contracts covered by the Executive Order and regulations may be for the purchase, sale or use of personal property, nonpersonal services, or both. In this context, the term "personal property" includes supplies and contracts for the use of real property, such as lease arrangements, unless the contract for the use of real property is itself considered real property (such as with easements). The term "nonpersonal services" includes services such as utilities, construction, transportation, research, insurance, and fund depository. Agreements in which the parties stand in the relationship of employer and employee are not covered.
The following types of contracts and subcontracts are exempt from the Executive Order:
- Those not exceeding $10,000.
- Those for indefinite quantities, unless the purchaser has reason to believe that the cost in any one year will be over $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 (1) the contract is essential to national security, and (2) noncompliance with a particular requirement of the Executive Order or the regulations with respect to the process of awarding the contract is essential to national security.
- Specific contracts or subcontracts, if the Deputy Assistant Secretary decides that special circumstances in the national interest require such an exemption.
- Contractor facilities not related to contract performance, as determined by the Office of Federal Contract Compliance Programs (OFCCP).
- Contracts and 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 to perform work connected with carrying out the activities of the religious entity.
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 or national origin. In most cases, complaints must be filed within 180 days of the discriminatory action. Anyone may call OFCCP with a question about interpreting the regulations, filing a complaint, or any other related matter.
Penalties/Sanctions
OFCCP investigates for violations of the Executive Order through compliance evaluations or in response to complaints. 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, (1) initiate an administrative enforcement proceeding by filing an administrative complaint against the contractor, or (2) 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 the Executive Order, 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, debarment, and/or other sanctions.
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 for investigation and resolution.
Section B requirements (construction)
Who is covered
Executive Order 11246 and its implementing regulations 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, the Executive Order and the regulations cover contractors and subcontractors who hold any federally assisted construction contract in excess of $10,000. Under Section III of the Executive Order, 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 the Executive Order. All applicants must also agree to cooperate with the Secretary of Labor in enforcing the Order.
The following types of contracts and subcontracts are exempt from the Executive Order:
- Those not exceeding $10,000.
- Those for indefinite quantities, unless the purchaser has reason to believe that the cost in any one year will be over $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 (1) the contract is essential to national security, and (2) noncompliance with a particular requirement of the Executive Order or the regulations with respect to the process of awarding the contract is essential to national security.
- Specific contracts or subcontracts, if the Deputy Assistant Secretary decides that special circumstances in the national interest require such an exemption.
- Contractor facilities not related to contract performance, as determined by the Office of Federal Contract Compliance Programs (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 to perform work connected with carrying out the activities of the religious entity.
Basic provisions/Requirements
The Executive Order and the 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, and/or national origin.
Covered 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 in their area. 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, 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. Sexual harassment is also a violation of the nondiscrimination provisions of the Executive Order.
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.
- Covered contractors and subcontractors also may not depend on state "protective" laws to deny employment to qualified female applicants. Such "protective" laws include those prohibiting women from performing certain types of occupations, from working more than a certain number of hours, or from lifting more than a certain amount of weight.
- 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. Such employers must also provide equal fringe benefits.
- 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 the Executive Order.
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, or national origin. In most cases, complaints must be filed within 180 days of the discriminatory action. Anyone may call OFCCP with a question about interpreting the regulations, filing a complaint, or any other related matter.
Penalties/Sanctions
OFCCP investigates for violations of the Executive Order either through compliance evaluations or in response to complaints. If a violation is found, OFCCP may ask the contractor or subcontractor to enter into conciliation negotiations. If conciliation efforts fail, OFCCP may (1) initiate an administrative enforcement proceeding by filing an administrative complaint against the contractor, or (2) 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 the Executive Order, 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.
The Executive Order 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 employers in the private sector.
Required records/Reports (Sections A and B)
An affirmative action plan (AAP) is required for minorities and women. Applications and other personnel records that support employment decisions (e.g., hires, promotions, and terminations) are considered "support data" and must be maintained for the AAP. AAPs must be updated annually; AAPs and documentation of good-faith efforts must be retained for two years. If there are fewer than 50 employees or contract is less than $150,000, the retention period is one year.