Last fall, OFCCP was expected to publish in May 2016 proposed revisions to Executive Order 11246's affirmative action requirements for federal and federally-assisted construction contractors and subcontractors. OFCCP last updated its construction contractor regulations decades ago in the 1970s. The likelihood of OFCCP updating its regulations before the end of the Obama Administration is fading, especially since it did not refer to that proposal in its budget justification for fiscal year 2017. Nonetheless, there is no time like the present for construction contractors to brush up on their Executive Order 11246 knowledge and compliance.
A good starting point is confirming whether a company's contracts are federal construction contracts. Federal construction contracts involve construction, rehabilitation, alteration, demolition, or repair of buildings, highways, or other changes or improvements to federal property, including roads, land, and buildings. (See 41 CFR § 60-1.3). Federal construction contractors differ from non-construction contractors because the location and duration of their skilled employees' work is often temporary. (Examples of trades employees or skilled trades employees include carpenters, brick masons, concrete finishers, ironworkers, mechanics, and equipment operators). Once a building or repair is complete, the job of someone in a skilled trade often means the end of employment with the contractor.
As a result, construction contractors do not have to prepare written affirmative action plans under Executive Order 11246 for women and minorities. Instead, they must comply with Sixteen Specifications, which are affirmative action steps. (41 CFR 4.3[a]). The threshold for compliance with the Sixteen Specifications is a federal or federally-assisted construction contract or subcontract in excess of $10,000. (41 CFR § 60-4.1).
Highlights of the Sixteen Specifications include:
- Having a work environment free of harassment, intimidation, and coercion
- Establishing and maintaining current lists of minority and female recruitment sources and community organizations, and using those sources to recruit for positions
- Recording names, addresses, and telephone numbers of each minority or female applicant from a recruitment source
- Recording actions taken along with the reasons why an applicant was not hired
- Developing on-the-job training or participating in training programs expressly including minorities and women
- Distributing EEO policy inside and outside company
- Directing recruitment efforts to minority, female, and community organizations, to schools with minority and female students, and to minority and female recruitment and training organizations
Construction contractors also have to demonstrate good faith efforts to meet numerical affirmative action goals for minority and female trades workers in the construction industry. (See 41 CFR 60-4.6). OFCCP measures compliance by hours worked by minorities and women per trade in the geographic area. The goals consider all construction work performed in the geographic area regardless of whether the work is federal, federally-assisted, or not federal. This is an area of confusion for construction contractors, which often compute goals only on federal contracts.
Another common misconception among construction contractors is that they do not need to assess the differences in the hiring, promotion, and termination rates of minorities (or sub-races) and women compared to their non-protected counterparts. This is called an adverse impact analysis. They do, to ensure there is no need for further assessment or validation of a selection procedure. (See EEO and Affirmative Action Specification #11 and 41 CFR 60-3.3). During an audit, OFCCP runs its own analyses. Construction contractors should do these analyses under the shield of attorney-client privilege so if they identify problem areas, they can decide appropriate next steps without having to turn the analysis over to OFCCP's prying eyes.
Construction contractors also must keep applicant and employment records for one to two years from the date of the making of the record or the personnel action involved, whichever occurs later, depending on the contractor's size. This includes applicant and new hire self-identification forms, emails, letters, applications, resumes, and the like.
If OFCCP does defer its new construction contractor regulations until another administration, contractors will have time to assess their compliance. Construction contractors should confirm their forms asking applicants and employees to identify their races and sexes are current (and not from 1980). They should confirm they take some actions toward compliance with the Sixteen Specifications, such as ensuring appropriate outreach to minority and female recruitment sources for trades jobs. They should compute their goals by geographic area and trade and then analyze their trades workers' hours to see how they did. Construction contractors should have logs for applicants, hires, promotions, and terminations or a way to generate spreadsheets with that data and then, working with their legal counsel, run adverse impact analyses for applicants/hires, incumbents/promotions, and incumbents/terminations. Spending a little bit of time on these actions now will shorten time spent later preparing for or during an audit by OFCCP.
If you have questions about federal construction contractor affirmative action obligations toward women and minorities, please contact Pamela Ploor at 414-277-5661 or firstname.lastname@example.org.
This publication is designed to provide general information about the topics covered. Neither the publisher, the editor nor the author is engaged in providing legal services in the publication. Readers should not rely on the publication as legal advice or opinion about specific matters, facts, situations or issues and should consult lawyers about their particular circumstances before acting on any of the information in this publication because the information may not apply to them or their problems, or may not reflect current legal developments at the time.
Copyright © 2016 Quarles & Brady LLP