Takeaways

• As federal affirmative action policies have shifted, state-level responsibilities can be a higher and different bar.
• California reinforces its commitment to nondiscrimination in public contracting through various requirements.
• California contractors should assess compliance with state law and other applicable obligations.

Article

As federal policies shift from affirmative action and diversity, equity, and inclusion initiatives — particularly through Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which rescinded affirmative action mandates for federal contractors — states are filling the void.

Several states, including California, and municipalities are reinforcing their commitment to nondiscrimination through compliance certification requirements. Employers seeking to do business with California should prepare to meet these obligations.

California’s Nondiscrimination Requirements for State Contractors

Under California law, companies must develop and maintain a written nondiscrimination program meeting specific requirements to enter into a public works or service contract over $5,000 with the state. The law applies broadly, with limited exceptions. It mandates contractors include in each covered contract the specific nondiscrimination clause verbatim, which prohibits discrimination based on all protected characteristics under California law.

Contractors also must notify relevant labor organizations of their nondiscrimination obligations, include equal opportunity language in all job advertisements, and ensure all subcontractors are bound by the same requirements. These requirements support compliance throughout the contracting chain.

Compliance Statements, Reporting Obligations

When bidding on a California state contract, eligible prospective contractors must submit a statement affirming compliance with the nondiscrimination obligations. The declarations are made under penalty of perjury, emphasizing the seriousness of the commitment. Contractors also may be required to submit periodic reports demonstrating ongoing compliance.

Enforcement, Complaints

California’s regulatory framework allows any interested person to file a written complaint with the Civil Rights Department (CRD) or the awarding agency. If the CRD finds a violation, it may order corrective action, impose penalties, refer the matter for contract remedies, such as suspension or termination, or disqualify the contractor from future awards.

Practical Implications for Contractors

Given the increased scrutiny at both the state and federal levels — and the potential for perceived conflicts between evolving standards — contractors should consider deliberate steps to keep nondiscrimination programs current and compliant with California law and other applicable obligations.