Mark Pestronk
Mark Pestronk

Q: A new corporate account has added the following proposed language to our travel management contract: "The parties hereby incorporate the requirements of 41 CFR Sections 60-1.4(a), 60-300.5(a) and 60-741.5(a) and 29 CFR Section Part 471, Appendix A to Subpart A, if applicable." What are all these requirements, and do they apply to our agency?

A: The quoted sentence refers to four federal regulations for government contractors and companies that do business with them. I gather that your new account holds a government contract that requires that the account put the quoted clause in subcontracts.

The regulations implement the laws that prohibit employment discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities and prohibit discrimination against all individuals based on their race, color, religion, sex or national origin. These regulations also require that contractors and subcontractors take affirmative action to employ (and advance in employment) individuals without regard to race, color, religion, sex, sexual preference, gender identity, national origin, protected veteran status or disability.

If your agency itself holds a government contract, you probably already know that you must obey these anti-discrimination laws, file annual employee-count reports with the Equal Employment Opportunity Commission and probably adopt an affirmative action program, depending on the size of your agency and your contract. These requirements also apply to "first-tier subcontractors," unless your agency falls within one of the exemptions.

A "first-tier subcontractor" is a supplier of goods or services to a company that holds a federal government contract, if the services help the contractor perform its contract. So if you provide travel services to a corporation's employees traveling under a government contract, you are a first-tier subcontractor.

Your subcontract does not need to refer to or incorporate the four regulations if your agency does not do over $10,000 with any one government contractor in any year. You can probably measure the dollar amount in reference to commissions and fees rather than sales volume.

Even if you are exempt from the quoted rules for contractors, your business must still obey the federal civil rights laws if you have 15 or more employees. Some states and many localities have similar laws with a lower or even no minimum number of employees.

If you are not exempt from the regulations, you must file a form called EEO-1 by Sept. 30 of each year, but only if you have 50 or more employees and a contract, subcontract or purchase order expected to amount to $50,000 or more in any year.

If you must file the EEO-1, you probably must also adopt an affirmative action program, which describes the steps you will take to raise the number of qualified minorities, women, persons with disabilities and covered veterans in your agency. Employers with written affirmative action programs must implement them and update them annually, but you do not have to submit them to the government.

My brief summary of all these rules and exceptions is no substitute for informed legal advice about this complicated subject.

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