Understanding the Changing Risk Landscape of Equal Employment Opportunity Compliance

Understanding the Changing Risk Landscape of Equal Employment Opportunity Compliance

According to an article by Berkshire Associates, compliance with Equal Employment Opportunity (EEO) regulations has become more complex following the Trump Administration’s revocation of Executive Order 11246. Organizations, especially federal contractors, previously depended on federal affirmative action plans (AAPs) to meet overlapping state and local requirements. Today, that approach is no longer sufficient. 

A growing patchwork of state, city, and county obligations, many opaque and subject to change without notice, now demands a more nuanced and proactive compliance strategy. For compliance professionals, this evolving regulatory environment introduces new layers of operational risk and legal exposure that cannot be ignored.

The article says that first, organizations must identify where they conduct business and with which government entities. This includes not only current engagements but also proposed contracts and grants. Mapping this activity is essential, as most state and local EEO requirements are contract-specific and vary widely in scope, frequency, and enforcement. Attempting to rely solely on static third-party resources to track obligations can leave gaps, especially as jurisdictions modify their requirements in response to political or social pressures.

The variation in compliance thresholds is equally significant. Some jurisdictions require action from businesses with as few as five employees or impose obligations only if contract values exceed a certain amount. Non-compliance can result in severe penalties, including financial sanctions, delayed payments, or exclusion from future contracts.

The article suggests that equal employment opportunity compliance must now be integrated into broader enterprise risk management efforts by proactively cataloging contracts, monitoring legal developments, and partnering with knowledgeable consultants, which can help mitigate regulatory risks, protect contracting opportunities, and ensure long-term organizational resilience.