States Continue to Enforce Their Affirmative Action Requirements

By: Bill Osterndorf

While the federal government is ending most affirmative action obligations, the states continue to enforce their affirmative action requirements. The revocation of Executive Order 11246 and the various efforts to end diversity, equity, and inclusion efforts by the federal government have not affected obligations to comply with state equal opportunity and affirmative action laws. 

Relationship Between State and Federal Affirmative Action Requirements 

There are areas where there may be a relationship between state and federal affirmative action requirements. 

• Affirmative action obligations for employers are based on the fact there is a contract with the relevant unit of government, whether this is a state or the federal government.
• Some states have requirements that use the (former) federal affirmative action requirements, including those under Executive Order 11246, as a starting point. 
• States may accept a recent Notice of Compliance issued after a federal affirmative action review as a substitute for other information that was to be submitted. 
• For construction projects, states will often use federal reporting and federal requirements as a base for state affirmative action obligations. 

While there may be a relationship between state and federal affirmative action requirements, federal requirements do not control state mandates. States have the right to create and implement their own standards and responsibilities. Actions like the revocation of Executive Order 11246 do not absolve employers of affirmative action obligations they have when they are state contractors. 

States Have Requirements Specific to Each State 

A common assumption is that state affirmative action requirements are similar to the federal requirements. A second common assumption is that state requirements do not vary much from state to state. Both of these assumptions are false. 

Among the states that have affirmative action requirements are the following: 

• California
• Illinois 
• Kentucky 
• Minnesota 
• New Jersey 
• Ohio 
• Wisconsin

• California and Minnesota are among the states that require a utilization analysis to determine where an employer should add members of protected groups to the workforce.
• Kentucky and Minnesota require an annual submission from employers in order to maintain their status as a certified contractor with the state. 
• New Jersey requires three years of personnel activity data on hires, promotions, transfers, and terminations when an employer’s certification must be renewed. 
• Kentucky and Ohio require the use of an online portal to provide information about a state contractor. 
• New Jersey and Wisconsin require the submission of a report that is similar to an EEO-1 report. 
• Minnesota and New Jersey routinely question information that is submitted when the information does not conform to standards established by the state. 

It is typical for states to have unique requirements for their contractors, and it is not unusual for state affirmative action requirements to change without formal notice to the public. States do not necessarily have the same kind of notice requirements as the federal government when making regulatory changes.  

The source of state affirmative action requirements also varies from state to state. Affirmative action requirements for any given state may be found in state statutes, state administrative code, policies or procedures found on a state website, or through other sources. Learning what is currently required for any particular state can be a complicated process. 

Sanctions for Failure to Meet State Affirmative Action Requirements 

Like the federal government, most states do not have monetary fines for failure to meet affirmative action requirements. Minnesota is an exception in this regard. Minnesota can fine a state contractor $5,000 per contract for a lack of compliance. 

It is rare for states to conduct formal compliance reviews of their contractors. States typically do not have the resources to perform statistical analyses on data submitted by employers. Thus, it is rare for a state to begin the kind of discrimination action that may result in a significant backpay settlement as a result of an affirmative action compliance review. 

The true power that the states hold when enforcing their affirmative action requirements is the authority to suspend or deny contracts. It is extremely rare for the federal government to request the suspension or cancellation of a contract as an outgrowth of an affirmative action compliance review. Conversely, states routinely threaten and often do take action to suspend, cancel, or fail to award contracts because an employer does not provide required affirmative action information. 

New State Affirmative Action Requirements 

While multiple states have had affirmative action requirements in place for some time, it seems likely that there will be new state affirmative action requirements enacted in the next few years. The federal government is likely to significantly limit, or even abandon, enforcement of affirmative action laws. This will give the states that currently have affirmative action laws an incentive to strengthen their requirements. It will also give states without affirmative action requirements a reason to implement these requirements. 

Massachusetts may be one state that decides to strengthen its affirmative action requirements for contractors with the state. Currently, state contractors are prohibited from engaging in discrimination and are required to certify that they are in compliance with applicable equal employment opportunity laws. However, Massachusetts recently based a law meant to collect pay data from employers in the state in order to determine whether there are disparities in pay. It would be a natural next step for Massachusetts to enhance the type of information it requests from its contractors to ensure contractors are providing equal opportunity to employees. There is currently no concrete action being taken by Massachusetts in this regard, but it is a good example of a state to monitor. 

DCI will continue to monitor industry developments and provide updates as they occur.