State Affirmative Action Requirements Challenge Contractors

Even though the federal government is no longer mandating affirmative action by federal contractors for minorities and women, several state affirmative action requirements remain in place for state contractors. 

A surprisingly large number of states have laws that require state contractors to develop affirmative action plans in line with Executive Order 11246, the 1965 order that established affirmative action for contractors and which President Donald Trump negated with Executive Order 14173 in January, according to Joshua Roffman, an attorney with Roffman Horvitz in McLean, Va. States with affirmative action requirements include California, Connecticut, Illinois, Kentucky, Maine, Minnesota, New Jersey, New York, Ohio, Rhode Island, and Wisconsin.

Few states enforce the laws, however, Roffman noted.

There are also some localities with affirmative action mandates, according to Joanna Colosimo, SHRM-SCP, vice president of workforce analytics & compliance strategy and principal consultant at DCI Consulting in Washington, D.C. These cities include: 

• Baltimore
• Eugene, Ore.
• Madison, Wis.
• Minneapolis
• Portland, Ore.
• St. Paul, Minn.

Requirements depend on the contractor’s relationship with the state or locality, contract spending, and employee numbers, she said. 

Which Employers Are Covered?

Coverage thresholds vary. For instance, in California, the “California Nondiscrimination Program” applies to employers that have 50 employees and a contract of at least $5,000 with the state of California. Covered employers must meet the requirements regarding the completion of a California nondiscrimination program, which includes an analysis of employment selection procedures, a workforce analysis, and a utilization analysis (this item applies specifically to employers with 250 or more employees). This is comparable to the analysis that had been conducted under EO 11246, Colosimo explained.

In Illinois, employers that have at least 15 employees and a contract with the state of Illinois must meet the requirements of the law regarding public contracts, which may include the preparation of an affirmative action plan, she added.

Employers that have a contract of over $100,000 with the state of Minnesota must get a workforce certificate and do annual affirmative action reporting.

With the revocation of EO 11246, some employers wrongly assume they no longer need to comply with state requirements, Colosimo cautioned. “It is crucial for organizations to understand the state and local laws they must still follow despite the revocation,” she said.

Enforcement Approaches Vary

In some states, affirmative action programs are treated as a routine task where submissions are reviewed and contracts granted, or certification proceeds with minimal scrutiny, Colosimo said.

However, this is not the case everywhere, she added. “The state of Minnesota exemplifies a jurisdiction that rigorously enforces compliance through its affirmative action program, adhering strictly to its guidelines and regulatory framework before awarding state contracts,” Colosimo said.

The Minnesota Department of Human Rights (MDHR) reviews submitted documents for annual affirmative action reporting and often finds that the plans lack required information, such as an accurate utilization analysis and workforce analysis, she noted. The MDHR requires additional documentation to support the utilization analysis. 

“In instances where these criteria are not met, the MDHR may hold pending contracts with the state of Minnesota or metropolitan agencies, refraining from executing contract awards or disbursing payments to contractors until a new workforce certificate of compliance is issued by the department,” Colosimo said.

New Jersey requires the periodic submission of workforce data, said David Goldstein, an attorney with Littler in Minneapolis. But many states simply require commitments to equal employment opportunity, he noted.

States typically do not have the resources to conduct detailed statistical analysis of the data submitted by contractors, said Zev Grumet-Morris, an attorney with Duane Morris in Chicago. 

“Consequently, they do not typically initiate discrimination proceedings against contractors,” he said. “What they will do, however, is suspend or revoke contracts more freely than the OFCCP [Office of Federal Contract Compliance Programs] has done.”

Misconceptions Linger

There are still some misconceptions about affirmative action, including state affirmative action mandates, Colosimo said. For example, “Most of these requirements do not require quotas, preferences, or set-asides; the affirmative action plans typically reaffirm nondiscrimination in employment.”

That’s because preferences, quotas, and set-asides are prohibited by Title VII of the Civil Rights Act of 1964, said Craig Leen, an attorney with K&L Gates in Washington, D.C.

Trump’s January executive order (EO 14173) did not eliminate anti-discrimination laws such as Title VII or state affirmative action requirements, Colosimo noted. Title VII prohibits discrimination based on race, color, national origin, sex (including sexual orientation and gender identity or expression), and religion.

EO 14173 also did not end affirmative action for veterans or people with disabilities under Section 503 of the Rehabilitation Act or the Vietnam Era Veterans’ Readjustment Assistance Act. 

But what’s to come for some state regulations — specifically those that incorporate EO 11246 regulations as their state affirmative action regulations — remains to be seen. “Now that those regulations are no longer mandatory under federal law and will likely soon be removed from the Code of Federal Regulations entirely, state contractors should reach out to their states and determine how best to proceed,” Leen said. “It’s a good time to determine a compliance strategy and to get advice of counsel.”