Government contractors are subject to a host of ancillary requirements that do not bear directly on the contractual work. Two important areas are equal opportunity and affirmative action programs. Both requirements first arose under a civil rights era executive order, EO 11246, which has been revised several times since first issued.

In this blog–the first of a multiple-part series–we’ll discuss equal opportunity. In subsequent ones, we’ll focus on affirmative action programs and other labor regulations. To ease our discussion, we’ll focus on the requirements for service and supply contractors. Perhaps later we’ll address equal opportunity and affirmative for construction contractors.

FAR 52.222-26 (Equal Opportunity)

Except for a handful of exempt contracts, FAR 52.222-26 (Equal Opportunity) is included in most federal government contracts. The requirement activates if, during any 12-month period (including the 12 months before the contract starts), the contractor receives federal contracts or subcontracts above the aggregate value of $10,000. Given this low threshold, most contractors and subcontractors are bound by FAR 52.222-26 and the regulations at 41 C.F.R. § 60-1.

What are some exempt contracts? Well, the requirements don’t apply to contracts or subcontracts performed outside the United States by employees not recruited within the United States. Also exempt are contracts and subcontracts with state or local governments, religious entities, and certain educational institutions, among others.

General Requirements

Generally, contractors and subcontractors must refrain from certain actions, such as:

  • Discriminating against any employee or job applicant based on race, color, religion, sex, sexual orientation, gender identity, or national origin.
  • Discharging or discriminating against any employee or job applicant because the individual inquired about or discussed the employee or applicant’s compensation or the compensation of another employee or applicant (though there is an exception for employees who have access to other employee’s compensation as part of their job functions).

Also, contractors and subcontractors must take certain affirmative actions, such as:

  • Contractors must ensure that they don’t treat employees differently according to their race, color, religion, sex, sexual orientation, gender identity, or national origin in the following areas: employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination, compensation, and selection for training.
  • In all advertising for employees, a contractor must state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

Posting, Policies, Records, and Reporting

Contractors must disseminate the prohibition on discrimination, noted above, to their employees. In that regard, they must incorporate the prohibition in company manuals or handbooks and post the prohibition.

Record keeping also factors into compliance with the equal opportunity clause. Normally contractors must keep records for two years after the record or personnel action is made. (But the period shrinks to one year for contractors with less than 150 employees.) These records include, among other things, records of hiring, assignment, promotion, demotion, transfer, lay off, termination, compensation, and selection for training.

Contractors and first-tier subcontractors with 50 or more employees and $50,000 or more in contracts also have a reporting requirement. Annually (before September 30), those contractors and subcontractors must submit an EEO-1 to the Equal Employment Opportunity Commission.

Enforcement and Penalties

To ensure compliance, contractors must allow the Office of Federal Contract Compliance Programs (OFCCP) to access its premises during normal business hours to conduct on-site compliance evaluations and to investigate complaints.

OFCCP can investigate and assess administrative penalties. Or OFCCP can refer cases to the Department of Justice for judicial enforcement.

Either way, the penalties for violations can be steep. They range from from terminating or suspending a contract to debarment.

Compliance

Compliance with equal opportunity requirements demands conscious and persistent effort. For the unwary, noncompliance lurks around each regulatory corner. So, it’s key to learn the full set of requirements and to implement concrete compliance processes. In that regard, you might find useful OFCCP’s Technical Assistance Guide for supply and service contractors or its Technical Assistance Guide for construction contractors.

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If you have any questions regarding equal opportunity compliance or other labor laws applicable to Government contractors, such as the Service Contract Act, give us a call at 913-354-2630.

Understanding the Basics: Government Contractors and Equal Opportunity was last modified: January 6th, 2022 by John Mattox