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Treasury Proposes Clause for Inclusion of Women and Minorities in Contractors’ Workforces

On August 21, the U.S. Department of Treasury issued a
proposed rule that would amend the Department’s Acquisition Regulation to
comply with the Dodd-Frank Act. Dodd-Frank Section 342 created an Office of
Minority and Women Inclusion in certain agencies, including Treasury. Specifically
the proposed rule requires that those agencies’ contractors ensure women and
minorities are included in the contractor’s workforce. Here, Treasury is
implementing that requirement through a clause in relevant contracts with the
agency.

The contract clause would require the contractor to try to
include women and minorities in its workforce through a good faith effort. The
Dodd-Frank Act includes stiff penalties for contractors who fail to make that
effort, such as termination of a contract. In general, “good faith” means
actions consistent with the Equal Protection Clause and with Title VII — actions
that are non-discriminatory and that include publication and outreach to under-represented
groups. The rule applies to all contracts with Treasury for services above the
threshold of $150,000.

Overall, when the rule takes effect, businesses will
not have to do much to comply. The rule simply requires contractors to reaffirm
the existing requirement that they include women and minorities in their
workforce through a contract clause. This is because contractors subject to
this rule are currently covered by EEOC demographic reporting guidelines and
Department of Labor affirmative action plan requirements. In order to stay in
compliance with all of these regulations, government contractors should do
their best to employ a diverse workforce and to utilize all nondiscriminatory
best practices. As always, businesses with questions about compliance should
consult an attorney for recommendations and guidance.