How to Navigate Federal Contractor Status and Compliance Obligations

Author: Brightmine Editorial Team

An employer should closely observe its obligations as a federal contractor. Compliance is not optional. Federal contractors in the United States are subject to a range of legal compliance obligations under US law. These laws impose affirmative action, non-discrimination and reporting duties that can significantly impact business operations. Failure to comply can lead to audits, fines, contract termination and even disqualification from future federal work, creating both financial and operational risks.

Beyond avoiding penalties, understanding these obligations helps protect an organization's reputation and ensures smooth business continuity. Compliance readiness positions an employer to compete effectively for federal contracts and maintain strong relationships with government agencies. By proactively managing these requirements, companies can turn compliance into a strategic advantage rather than a costly surprise during an Office of Federal Contract Compliance Programs (OFCCP) review.

Follow these steps to determine whether an employer qualifies as a federal contractor and which laws apply.