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Federal contractors have heightened nondiscrimination responsibilities

According to the Office of Federal Contract Compliance Programs (OFCCP), federal contractors employ about one-fifth of the national workforce, including many in Kentucky. It is important for these employers to understand that, depending on the size of their annual federal contracts and how many people they employ, they are likely subject to specific anti-discrimination in employment standards.

Three main laws impose on most government contractors specific legal duties in hiring and employment practices.

Executive Order 11246

Originally signed by President Lyndon Johnson in 1965 and amended over the years, Executive Order 11246 forbids most federal contractors with more than $10,000 in federal contracts in one year from discriminating against job applicants and employees based on race, color, sex, religion, national origin, sexual orientation and gender identity.

This order also requires that covered federal contractor employers engage in affirmative action to facilitate equal treatment and opportunity in their workplaces. The executive order in effect forbids wage secrecy rules – federal contractors may not discriminate against applicants or employees who discuss their compensation with other workers. Sharing information about pay helps people understand whether their wage levels are discriminatory.

Section 503 of the Rehabilitation Act

Section 503 is a federal statute forbidding employment discrimination based on disability. It applies to federal contractors and subcontractors with annual federal contract value of at least $15,000. This provision also requires affirmative action efforts to employ and retain people with disabilities.

Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA)

Federal contractors and subcontractors with annual contracts of at least $150,000 may not discriminate based on protected veteran status. (Even though the VEVRAA statute refers to Vietnam, it covers most veterans since that conflict as well.) VEVRAA has extensive requirements for outreach to, recruitment of and hiring protected veterans.

Other responsibilities

Although it can vary depending on number of employees and annual value of their federal contracts, contractors also may have related recordkeeping and record retention responsibilities. They may be required to include specific language about equal opportunity in certain legal documents or advertisements for jobs. Some must post information about veterans’ rights in employment physically at the worksite and online.


The OFCCP, part of the U.S. Department of Labor (DOL), conducts audits of federal contractors to check for compliance with these rules, and contractor employees can file complaints with OFCCP alleging violations.

For example, in Dec. 2021, the DOL issued a news release announcing settlement of discrimination charges stemming from a “routine OFCCP compliance evaluation” in which the federal contractor, a security company, agreed to pay more than $1.1 million in back wages plus interest to more than 2,000 victims of racial or sex-based discrimination. The contractor also agreed to take “corrective action” like conducting special trainings as well as monitoring wage levels and job placements for equality.

This post is a high-level overview of legal responsibilities that can be very complex and detailed. Any Kentucky employer that is a federal contractor or subcontractor should understand these laws and implement compliant processes to avoid legal and financial liability.  An experienced Kentucky employment attorney can provide guidance, advice and representation.