Please Note: The tips outlined in this guide should not be used in place of legal advice.
Maintaining compliance is a necessary but complicated process. Compliance laws and regulations, like adhering to safety and overtime rules, are put in place to protect workers. Violating compliance laws can result in fines, lawsuits and even jail time in severe cases. For example, in March 2024, an Ohio manufacturer faced multiple complaints, leading OSHA to propose $321,000 in penalties. But there are other types of compliance, like adhering to anti-discrimination laws when it comes to hiring and managing employees. The Office of Federal Contract Compliance (OFCCP) specifically exists to make sure federal contractors and subcontractors, which includes companies who win bids for federal infrastructure projects, provide fair employment opportunities and taking affirmative actions in hiring and advancing diverse individuals.
Understanding the OFCCP’s role and the laws they enforce can help companies maintain compliance and reduce their risk of violations.
The Role of the OFCCP
The OFCCP has close working relationships with other Departmental agencies, such as: the Department of Justice, the Equal Employment Opportunity Commission and the DOL, the Office of the Solicitor, which advises on ethical, legal and enforcement issues; the Women’s Bureau, which emphasizes the needs of working women; the Office of Apprenticeship, which establishes policies to promote equal opportunities in the recruitment and selection of apprentices; and the Employment and Training Administration, which administers Labor Department job training programs for current workforce needs.
The OFCCP governs employment-related activities in the following areas:
- Recruitment
- Hiring
- Promotions
- Compensation
- Transfers
- Terminations
The OFCCP enforces three employment laws: Executive Order 11246, Section 503 of the Rehabilitation Act and VEVRAA.
Executive Order 11246
Applies to: Federal contractors and subcontractors earning $10,000 or more in federal business annually. A federal contractor or subcontractor with a federal contract exceeding $50,000 with 50 or more employees must also maintain an Affirmative Action Program (AAP). As of April 1, the OFCCP started accepting online submissions to certify they’ve developed and maintained AAPs.
Purpose: This law prohibits discrimination in all employment-related activities. Specifically, contractors must no discriminate in any employment-related activity based on an employee’s:
- Race
- Color
- Religion
- Sex
- Sexual Orientation
- Gender Identity
- National Origin
Section 503 of the Rehabilitation Act
Applies to: Federal contractors and subcontractors with a contract amount of $15,000 or greater. Contractors and subcontractors with over 50 employees and a contract exceeding $50,000 must also have an AAP in place under Section 503 Subpart C.
Purpose: Section 503 prohibits employers from discriminating against qualified individuals with disabilities. Under Section 503 Subpart C, contractors must also take affirmative action to employ and advance qualified individuals with disabilities.
Disabilities under Section 503 include:
- A physical or mental impairment that limits one or more major life activities of that individual
- A previous record of such impairment
- Being regarded as having such an impairment
Vietnam Era Veterans Readjustment Assistance Act (VEVRAA)
Applies to: Federal contractors and subcontractors with a contract amount of $100,000 or more and 50 or more employees.
Purpose: VEVRAA exists to prohibit employment discrimination against protected veterans. VEVRAA also establishes a hiring benchmark, indicating that 6.4% of the total workforce should be veterans.
What is a protected veteran?
- An individual who served on active duty in the U.S. Military who did not receive a dishonorable discharge. This includes:
- Disabled Veterans
- Recently separated veterans (within the last three years)
- Active duty wartime or campaign badge veterans
- Armed forces service medal veterans
Learn more about protected veteran status here.
What You Should Do to Stay Compliant
Here are a few ways companies can reach OFCCP compliance. These tips are not all-inclusive.
- Don’t Discriminate – Don’t discriminate on the basis of race, color, religion, sex, sexual orientation, gender identity and national origin.
- Invest in Workforce Management Software – Recruiting and hiring with an Applicant Tracking System (ATS), making promotion and compensation decisions with a Performance Management System and delivering manager training on non-discriminatory practices can all be done with software solutions. The proper workforce management software can help contractors stay compliant with the OFCCP.
- Keep Records of All Employee-Related Decisions – Federal contractors and subcontractors should maintain records of all employee-related decisions for a minimum of two years. This can easily be accomplished with a centralized recordkeeping system, but contractors may also use paper files.
- Create and Maintain an Affirmative Action Program – Affirmative Action Programs (AAP) are designed to ensure equal employment opportunity in all employment-related activities. AAPs aren’t required for every federal contractor or subcontractor, but it’s a good practice to create and maintain one regardless of the contract dollar amount or number of employees. You never know when you might win a bid for additional federal contracts. AAPs must be reviewed and updated annually.
- Include the Equal Employment Opportunity Tagline in All Job Ads – Include something like this in every job posting: “Equal Opportunity Employer, including disabled and veterans.”
- Advertise Jobs with Diverse Job Boards – Good faith recruiting efforts should include outreach to individuals with disabilities and veterans. This can be done by utilizing state and local workforce job sites and niche job boards for job postings.
- Track Job Board Search Terms – When searching on third-party job boards, recruiters must track and save the search terms used to find candidates for each search conducted.
- Track Hiring Decisions – The OFCCP’s main source of failed audits lies in defending hiring decisions. Each applicant that is reviewed must have a reasoning behind what happens next. Whether or not you decide to hire them, provide reasoning for that decision. Disposition codes can help determine and organize hiring decisions at a glance.
- Include Voluntary Self-Identification Forms – Use a voluntary self-identification form in your job application. This will help track the success of affirmative action outreach. Include a questionnaire with options for race/ethnicity, gender, veteran status and disability status. Be sure to include a response like “I do not wish to answer,” for each question, as the information provided by a candidate should be voluntary.
- Post EEO Posters – Federal contractors are legally required to have an EEO poster on the premises. Click here to download an EEO poster from the OFCCP website.
Assess Your Compliance Today
There are many aspects of OFCCP compliance not included in this guide. But help is available. ExakTime’s parent company, Arcoro, offers several HR software solutions that help those in construction and field services better hire, manage and grow their workforces, like its ATS, onboarding, learning and performance management systems. Arcoro also partners with several compliance specialists, like Arvo, Circa, ClickSafety, myHRcounsel and SkillSignal.
Not sure where to start? Contact us to request a Free HR Assessment to determine if Arcoro can help you maintain a higher level of OFCCP compliance.
