Companies interested in doing business with the State of Minnesota should be aware that a state contract may trigger affirmative action obligations.
What Are the Requirements?
If a company has more than 40 full-time employees within the State of Minnesota and is pursuing a contract for goods and services in excess of $100,000.00, the company must produce to the contracting state agency a certificate of compliance which confirms the existence of the company’s affirmative action plan. Minn. Stat. § 363A.36. Similar to an affirmative action plan required when contracting with the federal government, a Minnesota plan regards the employment of racial minorities, women, and qualified disabled individuals. To obtain the certificate of compliance, the company must first submit its affirmative action plan to the Minnesota Department of Human Rights for approval. Certificates are valid for a period of two years. Separate contracts of less than $100,000.00 are generally not aggregated to trigger the threshold amount.
What about companies who are headquartered outside the State of Minnesota who bid on state contracts?
Those companies must also obtain and submit a certificate of compliance if the contract value is in excess of $100,000.00 and the company has more than 40 full-time employees in the state where the company has its principal place of business. Alternatively, the out-of-state company can certify that it is in compliance with federal affirmative action requirements.
Certain Minnesota cities and counties also have affirmative action plan requirements for contractors. Minnesota companies seeking to do business with other state or local governments may face similar affirmative action plan requirements.
Takeaway: Companies seeking to do business with the State of Minnesota or other governmental entities should look before they leap when entering into contracts that may trigger affirmative action requirements.