Last summer, Tufts Associated Health Plans Inc. agreed to pay more than $370,000 to settle allegations that it violated federal contract compliance regulations by retaliating against victims of discrimination.
The US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) had earlier accused the Massachusetts-based company of violating federal affirmative action requirements.
According to the OFCCP, in May 2009, Tufts agreed to hire minority workers as customer service representatives to settle a finding that its hiring practices discriminated against minorities. Less than a year after that agreement, one of the workers complained to the OFCCP that he had been terminated due to his race and retaliated against due to his status as a member of a protected class. The worker claimed that minorities recruited under the OFCCP-mandated affirmative action program were segregated from other employees and had to abide by tougher standards during training. After an investigation, the office found that Tufts had retaliated against twelve class members.
“Our job is to protect workers, promote diversity, and enforce the law,” said OFCCP Director Patricia A. Shiu in a statement. “That responsibility to workers continues long after an investigation ends. Any effort to retaliate against workers who have already been victimized by unfair treatment only compounds the problem and will not be tolerated by this administration.”
Like Tufts, every company that contracts or subcontracts with the federal government for more than $10,000 is required to avoid discriminating against employees based on sex, race, color, religion, national origin, disability, or status as a protected veteran. Nearly one-quarter of American workers are employed by a company that does business with the federal government, according to the Labor Department, so a significant number of companies come under the jurisdiction of the OFCCP.
The changing regulatory landscape has increased the pressure on contractors to comply with affirmative action requirements as well as an aggressive enforcement agenda by the OFCCP. Since the National Equal Pay Task Force was introduced in 2010, the OFCCP has substantially increased the number of enforcement actions addressing pay discrimination, one of the areas targeted for enhanced review.
If companies with federal contracts or subcontracts are found to be noncompliant in regard to equal employment and affirmative action, they can face mandatory changes in their employment policies as well as bad publicity. In the worst-case scenario, they may even be barred from working with the government. The laws governing the affirmative action programs for contractors are lengthy and complicated, so companies need to spend significant time to ensure compliance and to avoid trouble.
Three Laws, Many Rules
The OFCCP enforces three laws, which together govern equal employment opportunities for persons employed by federal contractors. These laws ban discrimination and require federal contractors and subcontractors to take affirmative action to ensure that all individuals have an equal opportunity for employment. These laws are:
1. Executive Order 11246. EO 11246 prohibits federal contractors and subcontractors and federally assisted construction contractors and subcontractors, who generally have contracts that exceed $10,000, from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin. It also requires contractors to take affirmative action to ensure that equal opportunity is provided in every aspect of employment.
Companies must also make good faith efforts to achieve the goals that the OFCCP sets for employing women and minorities in “all crafts and trades” in their area where the contracts are to be performed.
2. Section 503 of the Rehabilitation Act of 1973. Section 503 requires affirmative action for qualified individuals with disabilities for all federal contracts over $10,000. It also stipulates that contractors and subcontractors who hold contracts over $50,000 and who have fifty or more employees must develop and maintain a written affirmative action program.
3. The Vietnam Era Veterans Readjustment Assistance Act of 1974. This law requires affirmative action for all personnel practices regarding covered veterans on contracts of $100,000 or more. The law requires certain affirmative action steps for disabled veterans, armed forces service medal veterans, recently separated veterans, and other protected veterans who served during a war, a campaign, or an expedition for which a campaign badge was authorized. Covered contractors and subcontractors with fifty or more employees must develop and maintain a written affirmative action program.
To ensure compliance with all of its conditions, the OFCCP periodically audits the employment practices of contractors. During these evaluations, the OFCCP looks at virtually every aspect of the company’s employment practices, including recruitment, job placement, training, promotion, pay, and termination. When the OFCCP identifies problems, it will recommend corrective action. Individual employees and organizations working on behalf of employees can also file complaints alleging violations.
If the OFCCP identifies a problem, it will normally enter into a “conciliation agreement” with the contractor. This can include back pay, job offers, seniority credit, promotions, or other forms of relief for victims. Companies may also need to institute new training programs, special recruitment efforts, or other actions.
Contact a credible Affirmative Action Compliance firm like First Advantage Consulting today. We can help you navigate the overwhelming laws associated with the OFCCP.
For more info see: http://www.accountingweb.com/article/how-federal-contractors-can-navigate-maze-affirmative-action-compliance/222697