Spring 2025 Brings Changes to Minnesota Contractors’ State Affirmative Action Requirements

Quick Hits

• MDHR has revised multiple compliance-related documents for Minnesota government contractors.
• Key changes include new terminology, workforce certificate application form signature requirements, and more structured reporting periods for annual compliance reports.
• An annual compliance report must be submitted to MDHR each year, even if the Minnesota contractor does not currently hold a state government contract.

Background

Companies contracting with Minnesota state departments and agencies, certain metropolitan agencies, and the University of Minnesota must obtain a workforce certificate of compliance from MDHR if they have a Minnesota government contract that exceeds $100,000 and they have at least forty full-time employees in Minnesota or in the state of their primary place of business. Contracts with Minnesota cities, counties, townships, and other political subdivisions must exceed $250,000. Workforce certificates are required whether the company’s primary place of business is inside or outside Minnesota.

To obtain a workforce certificate, a Minnesota contractor must complete the workforce certificate application form, submit a Minnesota-compliant compliance plan, including a workforce and utilization analysis (WUA) and availability and underutilization analysis (AUUA), and pay a $250 application fee. Once received, the workforce certificate is good for four years and is tied to the contractor, not to a particular contract. Therefore, Minnesota contractors are not required to obtain a new certificate for each state contract exceeding $100,000 or local government contract exceeding $250,000. Contractors receiving a workforce certificate must post MDHR’s nondiscrimination poster at all establishments covered by the workforce certificate.

Each year during the four-year certification period, contractors must submit an annual compliance report, which is due to MDHR on the certificate’s anniversary date. Failure to submit an acceptable ACR may result in revocation of the workforce certificate and the inability to enter into state government contracts until an acceptable ACR is submitted and certificate reinstatement is requested and granted by MDHR’s commissioner. State government contractors are also subject to compliance reviews by MDHR.

Changes to MDHR’s Workforce Certificate Application Form

MDHR’s workforce certificate application form was updated in March 2025 and no longer references the Office of Equity and Inclusion for Minnesota Businesses. It also deleted language that Minnesota contractors must work to ensure that Minnesota’s workforce reflects the state’s demographics and replaced it with a statement that companies must maintain a workforce free of discrimination under the Minnesota Human Rights Act (MHRA).

The application checklist notes that the previously entitled “Affirmative Action Plan” is now known as the “Compliance Plan.” Further, it is no longer necessary that the workforce certificate application form be signed by the contractor’s president, chief executive officer, or board chair.

The application now includes new and comprehensive “Good Faith Efforts Agreements,” including an agreement to take prompt corrective action concerning violations of state human rights laws. Finally, the data privacy notice clarifies what information submitted with the application is and is not made available to the public.

Changes to the Affirmative Action Plan Template

In April 2025, MDHR changed the name of its AAP template from “Affirmative Action Programs for People of Color, Women and Individuals with Disabilities” to “Compliance Plan.” Differences between the old and new templates include:

• The compliance plan no longer includes the definitions of the terms used in the plan.
• The following sections were eliminated: “Internal and External Dissemination of Affirmative Action Policy and Plan”; “Action-Oriented Programs”; and “Goals & Timetables.”

• The compliance plan includes a new section entitled “Anti-Discrimination Policy.”
• The “Assignment of Responsibility for Affirmative Action Program” was reworked and retitled, “Equal Employment Opportunity Official and Role.”
• The compliance plan no longer includes references to affirmative action or affirmative action goals. These have been replaced with equal employment opportunity (EEO) objectives.
• The compliance plan no longer includes references to the utilization of businesses owned by women, people of color, and individuals with disabilities. Nor are there any references to full employment of women, people of color, and individuals with disabilities.

Contractors may wish to consider the following tips for preparing the compliance plan:

• adopting MDHR’s most recent template and limiting revisions to MDHR’s suggested language;
• ensuring the EEO official included in the EEO policy statement matches the EEO official listed in the workforce certificate application and in the compliance plan narrative;
• ensuring the EEO policy statement is signed by the president, CEO, or board chair for the legal entity seeking the workforce certificate; and
• ensuring the WUA and AUUA include all employees of the legal entity seeking the workforce certificate, including the top official of the legal entity (CEO or president), or at a minimum, all employees in Minnesota and at the company’s headquarters, including the company’s top official (CEO or president).

Changes to the MDHR Poster

The name of the new poster issued in 2025 is “Our Commitment to a Workplace Free from Discrimination.” It includes a new protected category for local human rights commission activity. It no longer includes any reference to affirmative action or AAPs.

Changes to the Annual Compliance Report

An annual compliance report (ACR) must be submitted to MDHR each year, even if the Minnesota contractor holds no current state government contracts.

Although the ACR packet includes a revision date of March 2025, the reports included therein appear to be unchanged, and interestingly still permit contractors to report on nonbinary employees.

What did change are the instructions for the ACR, both those included in the “Instructions & Requirements” tab of the ACR packet and on MDHR’s website. Contractors are now required to use 2018 (instead of 2010) census data to complete the “Availability and Underutilization Analysis” (AUUA) report. The instructions for the ACR used to read, “To make sure the Report is submitted on time, you can use a reporting period timeframe that is not more than 2 months prior to your certification date.” Under this old version of the instructions, contractors with a certification date of February 6 could pick any date between December 6 and February 6 to end their twelve-month ACR reporting period.

The revised instructions clarify MDHR’s previously unpublished rule change and now state, “To allow you enough time to compile the required data, your report can either start one or two months before the date your report is due. Each report must have the same start and end dates. For example, if your Workforce Certificate was approved 6.15.2024, your first ACR is due 6.15.2025.” Your reporting period can only be: 5.15.2024 to 5.14.2025, or 4.15.2024 to 4.14.2025.

MDHR’s unannounced rule change caused problems for many Minnesota contractors that had already submitted one or more ACRs using a reporting period that was not an exact date match to their workforce certificate. As a result, many contractors were required to revise and resubmit previously filed ACRs for the new date match reporting period.

Contractors may wish to consider the following tips for filing ACRs:

• checking the MDHR website to ensure the most recent ACR form and instructions are being used;
• confirming that the “Total Employees – Beginning of Reporting” period matches “The Total Current Employees” from the prior year’s ACR—unless this is the first ACR under a new workforce certificate; and
• confirming the ACR “balances” before submitting it to MDHR; i.e., Total Employees Beginning of Reporting Period + Total Hires – Employees Transferred Out + Employees Transferred In – Employees Terminated must = Total Current Employees.

If the ACR does not “balance,” it will be rejected.

Contractors may also want to consider the following:

• using “Total Current Employees” to prepare the AUUA;
• using the whole person test to determine underutilization of women and minorities in the AUUA;
• confirming the completion of Section F of the AUUA listing the recruitment area and census/standard occupational classification (SOC) codes used for each job group; and
• when preparing the narrative report of the company’s steps to increase the utilization of females and/or minorities for any job groups where they are underutilized per the AUUA, making sure to include additional or different steps from the prior year ACR narrative for continuing areas of underutilization.

The letter template is optional.

Conclusion

Minnesota takes its affirmative action requirements for state government contractors seriously, and MDHR’s compliance officers are sticklers for their rules. It is rare for a workforce certificate application and/or ACR to be approved without a request for revisions.

Ogletree Deakins’ Government Contracting and Reporting Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Reporting, and Minnesota blogs as additional information becomes available.

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