COUNSELOR’S CORNER Does Your Financial Institution Have Affirmative Action Obligations? Likely Yes! Are You Compliant? Likely No! Kelli P. Lieurance, Baird Holm, LLP The Office of Federal Contract Compliance Programs (“OFCCP”), a division of the U.S. Department of Labor (“DOL”), has long been tasked with enforcing laws promoting equal employment opportunity and affirmative action, specifically as they affect federal contractors and subcontractors, and very likely financial institutions. While the Trump Administration’s OFCCP tempered the more aggressive stance of prior administrations, the Biden Administration’s OFCCP has signaled a return to more targeted compliance enforcement, particularly by introducing a new requirement for covered contractors to certify their compliance (or non-compliance) with affirmative action obligations on an annual basis. Before we go further, you may find yourself thinking, “Affirmative action? Federal contractors? I’ve never heard of this, so surely this doesn’t apply to my financial institution.” Unfortunately, that conclusion is likely incorrect. Even though financial institutions are accustomed to government regulations, many are simply unaware of their affirmative action obligations. On the other hand, even financial institutions aware of their obligations have grown complacent because it was unlikely that the OFCCP would select them for a compliance review (i.e., audit). Instead, those financial institutions focused on other “higher priority” regulatory obligations and hoped the OFCCP would not notice their noncompliance. That strategy is now obsolete. Jurisdiction The OFCCP administers and enforces three legal authorities that require equal employment opportunity and affirmative action — Executive Order 11246 (“EO 11246”) (covering gender/race), as amended; Section 503 of the Rehabilitation Act of 1973 (“Section 503”) (covering individuals with disabilities), as amended; and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”) (covering protected veterans), as amended, 38 U.S.C. § 4212. These laws prohibit federal contractors and subcontractors from discriminating based on race, color, religion, sex, national origin, disability, sexual orientation, gender identity, and protected veteran status, and require affirmative action if certain jurisdictional thresholds are met. NEBANKERS.ORG 16
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