Section 342 of the Dodd-Frank Act requires specified federal agencies and departments, including the Treasury Department, to ensure fair inclusion and utilization of minorities, women, and minority-owned and women-owned businesses in all business and activities of the agency, including equal employment and affirmative action by contractors and subcontractors.  On March 20, 2014, the Treasury Department issued Final Rules implementing Section 342.  The Final Rule will go into effect on April 21.

The Final Rules require Treasury Department contractors with service contracts of more than $150,000 to undertake good-faith efforts to employ women and minorities.  The Final Rule defines the good-faith efforts that contractors must take to ensure fair inclusion and utilization, including “actions by the contractor intended to identify and, if present, remove barriers to minority and women employment or expansion of employment opportunities for minorities and women within its workforce.”  The Rule provides examples of such efforts, including “recruiting minorities and women, providing job-related training, or other activit[ies] that could lead to those results.”  The Final Rules require contractors to maintain documentation of their good-faith efforts, including records relating to subcontractor’s race, ethnicity, and/or gender ownership status, and the contractor’s plans to take affirmative action with respect to the employment of minorities and women.

Although there is substantial overlap between the requirements imposed by the Final Rules and regulations issued under Executive Order 11246, they are not identical.  Therefore, the steps undertaken by contractors to comply with Section 342 will not satisfy all of their obligations under Executive Order 11246 and will not preclude OFCCP compliance evaluations or enforcement actions.  In addition to the Treasury Department, the Federal Deposit Insurance Corp., the Federal Housing Finance Agency, the Federal Reserve banks, the National Credit Union Administration, and the Office of the Comptroller of the Currency have adopted regulations under Section 342.