3H Executive Order 11246 Review of Records
During the process of reviewing records as a part of the on-site review, the CO must record any matters that appear questionable. The CO should follow up on these matters by gathering additional documentation, interviewing employees and interviewing any other relevant people.
In this section are discussions on the review of various contractor records, including items such as payroll records, employment activity records, collective bargaining agreements and personnel policies.
In reviewing the contractor’s payroll records, the CO should determine at least three things:
- The number of months of payroll activity to review in order to evaluate progress toward work hour participation rate goals;
- The existence of uniformity in the assignment of employees to various project sites; and
- The equity or lack thereof in allowing or granting overtime and other benefits.
a. Number of Months to Review. Review the contractor’s payroll records for at least a six-month period. This review is to evaluate progress toward attaining work hour participation rate goals for minorities and women in each trade. CO’s must review payroll records to determine the percentage of work hours by minorities and women out of the total hours worked by the contractor’s employees in each trade.
b. Uniformity of Assignment. Evaluate the records to determine whether there is uniformity in the assignment of employees to various project sites (federal and nonfederal; commercial and residential; urban and rural). COs will determine whether certain types of projects pay more than others and, if so, whether women and minorities are provided equal opportunities for assignment to the better paying jobs.
c. Equitable Overtime. Evaluate the records to determine whether overtime, incentives, bonuses and other job benefits (e.g., holiday bonuses, pay advances, loans, and profit sharing) are provided without regard to race, color, or sex.
COs must determine how the contractor processes applications, union referrals and walk-in applicants. They must determine if the contractor is disproportionately rejecting qualified minorities and women. COs must also determine the contractor’s reasons for the rejections. When selection procedures are found to have an adverse impact, COs must refer to the procedures discussed in FCCM Chapter 1 for additional guidance.202
Like supply and service evaluations, COs will analyze the contractor’s hiring, promotions and separations, as well as conduct a compensation analysis when reviewing the contractor’s employment activity. For guidance on conducting the compensation analysis, see FCCM 1P. The findings of the analyses must be included in the Narrative Summary of the Construction SCER, with supporting documents attached.
If the project is located on or near an Indian reservation, the CO should, during a review of employment activity records, inquire if the contractor has extended a publicly announced preference in employment to Indians living on or near the Indian reservation. This hiring preference is permitted under Executive Order 11246. However, contractors and subcontractors extending such a preference shall not discriminate among Indians on the basis of religion, sex, or tribal affiliation, and use of such a preference does not excuse a contractor from complying with the other requirements in 41 CFR Chapter 60.203
202. COs should be aware, however, that the adverse impact guidance discussed in FCCM 2M, is based on the UGESP recordkeeping requirements for contractors with 100 or more employees. As most construction contractors have smaller workforces, they would instead be subject to the simplified recordkeeping requirements at 41 CFR 60-3.15(A)(1) that apply to contractors with less than 100 employees.
203. 41 CFR 60-1.5(a)(7).
When a contractor asserts that hiring is controlled through a union hiring hall in accordance with a collective bargaining agreement, the CO must review the agreement to verify the assertion. If the collective bargaining agreement is not clear, the CO should contact the union hall to determine the process. If the collective bargaining agreement does not support the contractor’s claim, the CO must evaluate the contractor’s good faith efforts without considering its relationship with the union hiring hall.204
204. See Standard Federal Equal Employment Opportunity Construction Contract Specifications (Executive Order 11246), paragraph 5, set forth at 41 CFR 60-4.3(a).
COs will examine solicitations, purchase orders and subcontracts to ensure inclusion of the appropriate clauses as described in FCCM 3B01 and 3B02 above. In addition, COs will examine the contractor’s notification to its unions of its commitments under Executive Order 11246, Section 503 and VEVRAA.205
205. 41 CFR 60-1.4(a), 41 CFR 60-1.4(b), 41 CFR 60-300.5(a), and 41 CFR 60-741.5(a).
As in a supply and service compliance evaluation, COs will examine the contractor’s personnel policies and practices. COs will determine whether contractor policies make prohibited distinctions in the conditions of employment based on sex. Below are some areas of inquiry for COs.
a. Conditions of Employment. COs must examine whether contractor policies make prohibited distinctions in conditions of employment based on sex. Contractors must not make employment decisions based on stereotypes about how males and females are “supposed” to look or act. Such employment decisions are a form of sex discrimination prohibited by Executive Order 11246, as amended.
b. Distinctions Based on Marital Status or Caregiver Responsibilities. A CO should examine written policies and conduct interviews with contractor staff and employees regarding the implementation of policies and practices to identify whether distinctions between married and unmarried people apply equally to both sexes, including distinctions between single parents and married parents based on gender. In addition, the CO should assess contractor policies and practices to ensure that sex-based stereotypes about actual and perceived caregiving responsibilities are not in effect.
c. BFOQ. Contractors may not hire or employ employees on the basis of sex unless sex is a BFOQ reasonably necessary to the normal operation of the contractor’s particular business or enterprise. As a part of most on-site visits, the CO will examine job qualifications as stated by the contractor. Under Title VII, sex has been found to be a BFOQ in extremely rare instances. Among them are:
- Authenticity. Jobs involving a need for authenticity or genuineness, such as actors or models.
- Personal Privacy. Jobs where the performance of essential job elements would entail substantial invasion of personal privacy. This is limited to situations where the normal operation of the contractor’s business depends on the employee being the same sex as its employees or customers and there is no other way to ensure privacy. This is different from customer preference.
d. Employment Opportunities. Contractors may not exclude individuals from jobs they believe are dangerous or unsuitable for women to perform unless sex is a BFOQ. OFCCP follows Title VII principles when determining whether a policy excluding women from a job because of a concern about reproductive hazards is discriminatory. If a question relating to reproductive hazards arises during a compliance evaluation, the CO should discuss the issue with his or her supervisor.
e. Compensation Discrimination. The CO will also examine possible compensation discrimination issues. Compensation discrimination encompasses discrimination salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and retirement. Contractors cannot make distinctions in compensation on the basis of sex. FCCM 1M provides additional information on this issue.
f. Employment Advertising. The CO will examine the contractor’s advertisements in newspapers online and in other media. The advertisements must not recruit or advertise for individuals for certain jobs on the basis of sex. Use of sex-specific terms for jobs (such as “linemen”) is suspect but is not automatically a violation of Executive Order 11246. Where sex-specific language is used in conjunction with prominent language that clearly indicates the contractor’s intent to invite applications without regard to applicants’ sex, COs should not find a violation.
Several examples of the types of issues that COs may encounter related to a review of personnel policies are provided in 2K, Compliance with the Sex Discrimination Regulations.