July 13, 2020

Volume X, Number 195

July 13, 2020

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Clients with Government Contracts Could be at Risk of Severe Repercussions If Not Fully Compliant

The U.S. Department of Labor (“DOL”) requires federal government contractors and subcontractors to develop formal affirmative action programs (“AAPs”) to recruit and advance qualified minorities, women, persons with disabilities and covered veterans, within 120 days of executing a covered government contract or subcontract. 

These employers are also required to update their AAPs annually, include specific language in contracts concerning non-discrimination, and abide by non-discrimination obligations. The Office of Federal Contract Compliance Programs (“OFCCP”) within the DOL regularly conducts compliance evaluations (“audits”) to ensure that these written programs are in place and to evaluate possible claims of discrimination. Once the OFCCP is on-site, the compliance officer/investigator may examine other documents within DOL’s regulatory jurisdiction – including payroll records, I-9 forms, etc.

The contractor/subcontractor may not even be aware that it is subject the OFCCP requirements. Significantly, failure to maintain an AAP may ultimately result in the loss of a lucrative federal contract/subcontract, the loss of outstanding payments due under existing federal contracts, and monetary penalties imposed for proven discrimination and non-compliance with other DOL regulations (relating to I-9’s and minimum wage/over time, for example).

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume V, Number 98


About this Author

Barnes & Thornburg LLP’s securities litigators have tried securities fraud, securities enforcement, and corporate control cases to verdict. We have been involved in some of the largest and most complex cases of the last decade - including Enron, Global Crossing, litigation arising out of the Madoff and Petters Ponzi schemes, and others.