Minnesota Department of Transportation

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Frequently Asked Questions: Contractors Working On or Near Tribal Land

The Minnesota Department of Transportation (MnDOT), through the Office of Civil Rights (OCR), promotes and encourages Indian employment on transportation projects on or near reservations. This commitment to maximizing employment opportunities for American Indians is authorized by the federal regulations (23 USC §140(d)), and expressed in the Special Provisions Relating to Indian Employment (Word).

These frequently asked questions provide some essential background information for prime contractors or subcontractors working on or near one of the 11 reservations in Minnesota.

When are the Special Provisions Relating to Indian Employment included?

The Special Provisions Relating to Indian Employment (Special Provisions) are included in federal-aid proposals calling for highway construction either on or near reservations. They are located in Division S of the project proposal and accessible below:

When is a project “near” a reservation?

The Federal Highway Administration considers a project to be “near” a reservation when located “within a reasonable commuting distance.” Each tribe has a different interpretation of reasonable commuting distance.

Further, there is no agreement or documentation between MnDOT and each tribe outlining that distance. For the purposes of including the Specials Provisions, some districts and counties discuss the preferred mileage on an annual basis with the applicable tribe or consider near a reservation to be projects within 60 miles of reservation boundaries.

Do the obligations of the prime contractor differ depending on whether the project is on or near a reservation?

Yes. Regardless of whether the project is on or near a reservation, the prime contractor will need to work with the tribal government to use American Indian labor. This means reaching out to the designated TERO officer or tribal employment representative to identify and discuss employment opportunities. The Special Provisions, located in Division S of the project proposal, set forth the name, tribe, and contact information of the TERO officer or tribal representative.

However, if any part of the project is located on reservation lands, the contractor must also address the specific TERO tax and/or Indian employment preference requirements set forth in the applicable Tribal Employment Rights Ordinance (TERO). This conversation with the designated TERO officer or tribal employment representative must occur before bid submission.

What is TERO?

A Tribal Employment Rights Ordinance (TERO) requires all employers conducting business on reservations to give preference to qualified American Indians in employment, contracting, and other business activities. It also calls for the levying of a TERO tax.

What is a TERO tax?

A TERO tax is the assessment prime contractors must pay on highway construction projects occurring anywhere on tribal land. Each tribe levies a different TERO tax.

Is the Indian employment preference in TEROs legal?

There are no federal laws prohibiting Indian employment preference. Tribes are exempt from Title VII of the Civil Rights Act and several other major federal employment laws. Court rulings have held that Indian preference is a political preference, not a racial preference. Thus, it does not violate federal employment law.

Does an Indian employment preference mean that the prime contractor must use American Indian employees on a project?

Not necessarily. The prime contractor is required to give qualified American Indian candidates preference for any employment vacancies that might arise during the course of the project. Furthermore, it must convey the Indian employment preference to its subcontractors along with any other valuable employment information shared during the course of the conversation with the TERO officer or tribal employment officer.

Does an Indian employment preference mean that subcontractors must use American Indian employees on a project?

Subcontractors, upon learning of the applicable Indian employment preference from the prime contractor, must give qualified American Indian candidates preference for any employment vacancies that might arise during the course of the project.

How does the prime contractor know who to contact?

The Special Provisions, located in Division S of the project proposal, set forth the name, tribe, and contact information of the TERO officer or tribal representative. The same information is accessible on the Minnesota Tribal Government Employment Contacts document (PDF).

What if the project is on or near the reservation, and has an OJT goal?

MnDOT strongly urges the prime contractor to consider American Indians for designated OJT positions. More information on the OJT program is accessible.

Does the prime contractor have additional requirements under the Special Provisions?

The prime contractor is required to submit the “MnDOT Indian Employment Tracking Form (PDF)” to MnDOT Office of Civil Rights no later than 30 days after project acceptance. The form must list all American Indians hired for the project by the contractor after being referred by the TERO officer or tribal employment representative.

What about suspension or termination of an employee referred by the TERO officer or tribal representative?

If the Contractor is considering suspending or terminating an employee hired under the Indian employment preference, it must seek assistance from the referring TERO officer or tribal employment representative in resolving the problem prior to release of the employee.

Nothing in the Special Provisions is intended to interfere with the ability to dismiss any employee for cause including, but not limited to, lack of adequate skills or training, inability to perform because of state or federal law, or breach of the safety standards or other standards of conduct.

What if the contractor does not meet its obligations under the Special Provisions?

If the Contractor or subcontractor does not comply with the Special Provisions, the matter is addressed with both OCR, and the TERO officer or tribal employment representative. Furthermore, the Contractor must honor any request by the TERO officer or tribal employment representative to discuss Indian employment issues.