EEO Laws on Government Contractors
Political debates and election campaigns focus on jobs and job creation, and small businesses are key players in these topics. More than 99 percent of U.S. employers are small businesses, according to the U.S. Small Business Administration. Therefore, it's no surprise that the U.S. Department of Labor imposes EEO laws and fair employment regulations on businesses that provide services and products to the federal government. Federal agencies spend close to $100 billion a year with small businesses.
The U.S. Department of Labor and the U.S. Equal Employment Opportunity Commission enforce a number of laws that apply to businesses that have contracts with the federal government. The EEOC enforces equal employment opportunity, or EEO, laws such as Title VII of the Civil Rights Act, the Americans with Disabilities Act and the Age Discrimination in Employment Act that apply to all businesses, regardless of whether they are federal contractors. The U.S. Department of Labor enforces Executive Order 11246, the Davis-Bacon Act and the Service Contract Act, which specifically apply to federal contractors.
Title VII, the ADA and the ADEA prohibit discrimination based on non-job-related factors, such as age, color, disability, national origin, race, religion and sex. Small businesses with as few as 15 workers must adhere to many of the EEO laws. The ADEA applies to employers with at least 20 workers. Although these EEO laws apply to both contractors and non-contractors, they're worth mentioning because contractors, small businesses and large organizations alike, generally are held to a higher standard by virtue of their commitment to meeting the needs of agencies that guarantee rights and serve the public.
Executive Order 11246
The Labor Department enforces Executive Order 11246, the regulation that mandates federal contractors' compliance with affirmative action. Companies that employ at least 50 workers and sell at least $50,000 in products or services to the government must produce written affirmative action plans annually. However, companies with at least $10,000 in government contractors are strictly held to nondiscriminatory employment practices. The written plans must include documentation on applicants and employees to ensure the company provides equal access to employment regardless of non-job-related factors, such as age, disability, national origin, race, sex and veteran status. In addition, government contractors must develop outreach methods to improve the diversity of their applicant pools so they attract qualified applicants from underrepresented groups, such as minorities, women, workers with disabilities and veterans.
Paying competitive and fair wages is another obligation for government contractors to extend equal employment opportunities. Therefore, contractors must pay what the government calls "prevailing wages" under the Davis-Bacon Act and Service Contract Act, which requires that bids and proposals for construction projects offer wages that are in line with wages paid in the geographic area where the contractor performs the work. This is particularly important for small businesses, because the requirement to pay prevailing wages levels the playing field between small business and large organizations. The prevailing wage requirement prevents large organizations from underbidding small businesses by cutting wages for construction workers or promising wages that surpass those that smaller businesses can afford to pay.
- U.S. Small Business Administration: Small Business Procurement Scorecard Shows Progress Toward Meeting 23 Percent Goal for Small Business Contracting
- U.S. Small Business Administration: Advocacy Small Business Statistics and Research
- U.S. Department of Labor: Facts on Executive Order 11246 - Affirmative Action
- U.S. Department of Labor: Frequently Asked Questions Pertaining ot the Issuance of Wage Determinations Under the McNamara-O-Hara Service Contract Act (SCA) of 1965, as Amended
- Boston College Law Review: Title VII: Relationship and Effect on Executive Order 11246
- U.S. Department of Energy: A Desk Guide to the Davis-Bacon Act
- Monster: OFCCP Regulations: What Federal Contractors Need to Know
- Jupiterimages/Comstock/Getty Images