Despite significant shifts, including the revocation of Executive Order (EO) 11246 by the current administration’s EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” employers must still adhere to several key non-discrimination requirements. This article outlines best practices for maintaining compliance and fostering a fair, inclusive workforce in our new context.
Understanding the Executive Order and Title VII Obligations
While the revocation of EO 11246 on January 21, 2025, marks a substantial change from the status quo, federal contractors are still required to uphold non-discrimination practices through other legislative frameworks, including Title VII of the Civil Rights Act of 1964. The Executive Order (EO) reinforces these obligations, requiring all federal contractors to certify they will not engage in “illegal discrimination”, which includes illegal diversity, equity, and inclusion (DEI) practices. This applies to all facets of employment, ensuring fair treatment regardless of race, ethnicity, sex, or other protected categories.
Section 3 (iv) (A) & (B) of the EO requires companies to certify “compliance in all respects with all applicable Federal anti-discrimination laws” and that it “does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws”. Certifying falsely may expose federal contractors to violations under the False Claims Act.
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Maintaining Obligations Under VEVRAA & Section 503
While EO 11246 may no longer apply, obligations under other critical legislation, such as the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act, remain intact. Consequently, federal contractors are still required to conduct annual Affirmative Action Plans (AAPs) to ensure non-discriminatory practices in hiring, promoting, and compensating veterans and individuals with disabilities.
Continuing to Monitor and Analyze Non-Discrimination Practices
A best practice for employers is to continue to monitor and analyze their workforce composition across several areas, including employment, applicant pools, and selection decisions throughout the total talent lifecycle. This analysis should encompass all protected groups, including traditionally protected groups like women and racial minorities as well as white individuals and males. This ensures an inclusive approach to non-discrimination, preventing any inadvertent bias. Ensuring any selection decision is merit-based is critical in maintaining compliance.
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Importance of Data Collection
It is also strongly recommended that employers continue to collect race, ethnicity, and sex data on all job applicants and employees. This data allows employers to effectively assess whether their practices are fair and where improvements may be needed. Some states and local jurisdictions still mandate the collection and reporting of such data, and compliance with these laws remains essential.
Regulatory Requirements and the UGESP
Under the Uniform Guidelines on Employee Selection Procedures (UGESP), contractors are required to collect and report certain data in ways that have been consistent since 1978. The UGESP is incorporated into Title VII which emphasizes that this data collection is necessary, and its importance remains unchanged despite changes in the broader executive orders. It is essential for employers to continue to follow these guidelines to avoid potential compliance issues.
Understanding the Timeline and Future Developments
Under the EO issued on January 21, 2025, federal contractors may continue their program following EO 11246 until April 21, 2025, and provide that safe harbor. In addition, by May 21, 2025 recommendations will be submitted to the administration for consideration. We anticipate forthcoming guidance to result from this, offering contractors clarity on how to adapt to the evolving regulatory environment.
Replacing Placement Goals With Benchmarks
Under the EO, contractors are encouraged to reconsider the use of placement goals and goal attainment, and instead, consider benchmarks for tracking non-discriminatory practices. This shift represents a move toward a more holistic, outcome-based approach to your workforce.
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Conduct DEI Risk Assessments
Finally, one of the most proactive strategies employers can adopt is to conduct a DEI Risk Assessment. These assessments help identify potential areas where “illegal DEI” practices may inadvertently creep into organizational strategies or policies. By ensuring DEI efforts are aligned with legal requirements, employers can safeguard against violations and promote a truly inclusive work environment.
Conclusion: Evolving But Essential Compliance
The regulatory environment surrounding non-discrimination in federal contracting is evolving, but the fundamental principles of fairness remain constant. Employers must be proactive in analyzing their workforce, collecting essential data, and aligning their policies with the legal frameworks that govern non-discriminatory practices. By staying informed and adopting best practices, contractors can successfully navigate this evolving landscape and maintain compliance with all non-discrimination obligations.
To equip your organization with software and solutions that address incoming policies and evolving best practices, contact us today or reach out to your dedicated consultant or account manager.
About the Author
Amanda Carcaterra is a Senior Business Consultant at Affirmity where she works with clients to ensure workforce compliance around EEO programs. She has worked in the Affirmative Action and Diversity sector for close to 20 years—10 of which were with a major airline heading up their HR Compliance department which involved managing their Affirmative Action, Diversity, ADA Accommodation, and Background and Fingerprint screening programs. She was instrumental in enforcing the Affirmative Action Programs and gaining leadership buy-in by utilizing the AAP metrics to strengthen diversity across the organization.