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Affirmative Action Update: New Mandates for Federal Contractors and Subcontractors Take Effect

December 31, 2000

New federal regulations governing the preparation of affirmative action plans by federal non-construction contractors and subcontractors under Executive Order 11246 went into effect on December 13, 2000. The new regulations, issued by the Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP"), modify the legal obligations of federal contractors in a number of respects. For example, the new regulations require contractors to record, where possible, the ethnicity (as well as the race and gender) of employees and job applicants; significantly streamline prior affirmative action program requirements; and contain a new mandatory equal opportunity survey.

Executive Order 11246 prohibits federal government contractors and subcontractors from discriminating in employment, and requires those contractors to take affirmative action to ensure that employees and applicants are treated without regard to race, color, religion, sex, or national origin. The OFCCP originally issued regulations implementing the Executive Order more than thirty years ago. The original regulations required non-construction contractors with at least 50 employees and at least $50,000 in government contracts to develop a written affirmative action program (which must set forth goals to overcome any underutilization of women and minorities) for each of their establishments, and contained extensive requirements regarding these plans. With respect to construction contractors, the original regulations provided that the OFCCP, rather than the contractor, would establish goals and specific affirmative action that the contractors must undertake.

Streamlined Requirements for Affirmative Action Programs

The new regulations, which apply only to non-construction contractors, change the OFCCP's past regulatory approach in several respects. Specifically, under the new regulations, the size and complexity of the required written affirmative action programs will be reduced in the following respects:

Equal Opportunity Survey and Confidentiality of Wage Data

The new regulations also provide that the OFCCP will designate a substantial number of non-construction contractors each year to prepare and file an Equal Opportunity ("EO") Survey, which will contain at least the following information: applicants, hires, promotions, terminations, compensation, and tenure by race and gender. The EO Survey will serve the dual purposes of assisting employers in self-auditing the relative success of their affirmative action efforts and employment practices, and identifying contractors to be selected by the OFCCP for compliance evaluations.

In response to employers' concerns that wage information contained in the survey may be disclosed to competitors, the new regulations indicate that the OFCCP will treat this information as confidential to the extent such information is exempt from disclosure under the Freedom of Information Act.

Although the survey requirement does not apply to construction contractors, the OFCCP has stated that it will consider expanding the survey to include them in the future. The OFCCP has also indicated that it has no current plans to extend the survey to colleges and universities.

Goals, Not Quotas

While the new regulations substantially overhaul many of the prior requirements, the regulations reaffirm the principle that a contractor's compliance with Executive Order 11246 will not be judged solely by whether or not it has met numerical goals, but, rather, by its demonstrated good faith affirmative action efforts.