Frequently Asked Questions

TERO stands for Tribal Employment Rights Ordinance or Office. TERO Ordinances require that all employers who are engaged in operating a business on reservations give preference to qualified Indians in all aspects of employment, contracting, and other business activities. TERO Offices were established and empowered to monitor and enforce the requirements of the tribal employment rights ordinance.

The primary purpose of the TERO program is to enforce tribally enacted Indian Preference law to ensure that Indian/Alaska Native people gain their rightful share of employment, training, contracting, subcontracting, and business opportunities on and near reservations and native villages.

•  To address the deplorable rate of poverty, unemployment, and underemployment that exists among native people living on reservations.
• To eliminate discriminatory and other historical barriers tribal members face while seeking employment and business opportunities on or near reservations.
• To ensure that tribal members receive their rightful entitlements as intended and required under the Tribal and federal Indian preference employment law.

A Tribe’s authority to enact and enforce an Indian/Native employment preference law is grounded in its inherent sovereign status. This legal doctrine is the most fundamental principle of Indian law and is supported by several Supreme Court decisions. Inherent sovereign powers derive from the principle that certain powers do not necessarily come from delegated powers granted by express acts of Congress but are inherent powers of a limited sovereign that have never been taken away. Tribes have a primary relationship with the federal government as sovereign powers. This is recognized in both treaties and federal statutes. The sovereignty of tribes has been limited from time to time by treaties and federal legislation; however, what has not been expressly limited remains within tribal sovereignty.

• SETS CONDITIONS: Mandates the tribal requirements for Indian preference that all covered employers must comply with to be eligible to perform work on reservations.
• ESTABLISHES AUTHORITY: Empowers the TERO Staff with sufficient authority to enforce all provisions of the TERO ordinance fully.
• ASSIGNS RESPONSIBILITY: Defines and describes the duties and responsibilities of TERO staff.
• DELINEATES PENALTIES FOR VIOLATIONS: Clearly spells out penalties employers may face for violations of tribal law.
• PROVIDES DUE PROCESS: It provides principles of legal fairness to all parties involved in compliance or violation dispute issues.

The core characteristics of the program provide additional and valuable insights into why the law and enforcement program is needed and applied. The following are three vital characteristics of TERO.

1. TERO is a true act of self-determination. The decision to enact a Tribal employment rights ordinance is based on each individual tribe’s needs and priorities.
2. TERO programs are action-orientated. TERO offices are a no-nonsense, hands-on, result-orientated, and process-driven compliance program.
3. TEROs are systematically structured programs. Key elements of the structure include:

• LEGAL FRAMEWORK: TERO utilizes a sound and comprehensive framework encompassing Tribal, Federal, contract, and, where applicable, State employment law.
• ADMINISTRATIVE STRUCTURE: TERO programs have a well-developed administrative structure that utilizes a thorough enforcement process.
• SYNERGISTIC PARTNERING: TERO programs apply synergistic partnering principles in relationships with employers in an effort to develop relationships that benefit both parties.

Indian preference is a unique legal right that tribal members have that entitles them to first consideration for all employment, training, contracting, subcontracting, and business opportunities that exist on and, in some cases, near reservations.

The answer to this question is no. Indian preference first appeared in Federal regulations in 1834. Since then, most new laws and regulations related to tribes and Indian people include preference provisions. Tribal Employment Rights Ordinances (TEROs) were initially enacted by tribes in late 1976 and early 1977. Today, there are almost 300 Tribes and Alaska Native Villages that are covered by TERO ordinances.

The answer to this question is no. There are no federal laws that prohibit Indian Preference. Tribes are exempt from Title VII of the Civil Rights Act and several other employment laws. Numerous court cases have upheld this exemption (see Morton v. Mancari in the appendix section on the applicability of federal law, page #4 of that section). Additionally, court rulings have held that Indian preference is a political preference and not a racial preference and, as such, does not violate the dictates of federal employment law.

TERO has jurisdiction over all employers operating within the exterior boundaries of the reservation as legally defined by treaty or legislation including ceded lands, territories, and lands where jurisdiction has not been extinguished. TERO jurisdiction covering employers working on fee land projects has been greatly reduced by the Montana v. U.S. A. case.

All covered employers operating a business within tribal/village jurisdiction are required to provide Indian and Native preference in employment, training, contracting, sub-contracting, and all other aspects of employment. Below are several specific examples employers are required to comply with. Employers must:

• Submit an acceptable compliance plan detailing the steps they will take to ensure compliance with the TERO requirements. Note: TERO compliance plans are closely fashioned after those used by OFCCP for affirmative action compliance.
• Utilize the TERO skills bank for all referrals and consider Indian/ Native applicants before interviewing or hiring non-Indian/ Natives.
• Agree to hire no less than a specific number of Indians/ Natives in each job classification and cooperate (where feasible) with tribal training programs to hire a certain number of trainees.
• Eliminate all extraneous job qualification criteria or personnel requirements that may act as barriers to Indian/ Native employment. EEOC guidelines on legal BFOQs are used by TEROs.
• Agree to acknowledge and respect tribal religious beliefs and cultural differences and to cooperate with TERO to provide reasonable accommodations.
• All contractors claiming preference must file for certification as Indian-owned businesses.

Yes. There are several exemptions. Most TERO ordinances exempt direct employment by the Tribe, Federal, State, or other governments and their subdivisions, non-profit corporations, churches, schools, etc. However, all contractors, regardless of the source of funding, are covered by the TERO requirements. At the individual level, the only exemption allowed Is for the employer's “core crew or key person,” which is defined as:

“…a member of a contractor’s or subcontractor’s crew who is a regular, permanent employee and is a supervisor or other key position such that the employer would face a serious financial loss if that position were filled by a person who had not previously worked for the contractor.”

Violation of TERO requirements may result in severe sanctions. If it is determined that employers have willfully violated TERO requirements, tribes have the power to:

• Deny such party the right to commence business within the reservation/village.
• Impose a civil fine on such party ranging from $500 to $5000. per each violation.
• Terminate or suspend such party’s operation and deny them from doing further business within the reservation or village.
• Order the removal of unlawfully hired non-Natives and take action to ensure future compliance. It can also order the back payment of lost wages to aggrieve Natives.

Yes. Employers are entitled to due process of law. Their rights are protected by both provisions included in the TERO ordinance and by the enforcement process and procedures used by TERO officers to ensure employer compliance. Both TERO officers and commissions are well-trained to investigate and utilize the facts and merits of a case before taking action against an employer. The TERO investigative process is designed to weed out frivolous and capricious charges brought on against employers.

Most tribes impose a TERO fee on all employers doing business on reservations. The fees collected by the TERO are used to finance operational costs and program services. Services include recruiting, referrals, screening, job counseling, orientations, employee Support services, compliance, charge processing, investigations, and community awareness education sessions. It is not clear if Native Village governments can impose a fee on employers, but many federal agencies have negotiated special contracts with a tribal TERO for the services listed above 

Yes. Tribal authority to tax is equal to that of any other government. Taxation is a basic right of a sovereign government. The power of Indian tribes to tax has been confirmed by the U.S. Supreme Court in Merrion v. Jicarilla Apache Tribe 455 U.S. 130 (1882). Taxation, licenses, and other fees are a valuable source for financing tribal governmental operations. TERO programs have the unique ability to generate their own operating income as well as contribute to the general fund of the Tribe.

No. There are over 550 (federally recognized) independent tribal nations throughout the United States. While there is much in common between tribes, each is diverse in its own community culture, needs, values, and priorities. Each tribe, therefore, makes its own legislative decisions to meet its own set of wants and needs.

No. TERO fees range from 1 to 14, with a national average of about 5.5. The much lower Tribal taxes/fees preempt other taxes on tribal reservation projects and often result in substantial savings to contractors; most states' taxes, for example, are in the 6-10 range.

No. Since TERO programs practice proactive enforcement, the compliance plans signed by the TERO and employer prior to the commencement of work generally prevent disputes. Most TERO ordinances provide for compliance and enforcement visits to worksites during normal business hours but not to the detriment of operations. A TERO sanction of an employer for violations of the law could cause a delay or shutdown of an employer’s operation. With this in mind, note that TERO would apply sanctions after all efforts to resolve the case have failed in the most severe circumstances and only in strict accordance with the process of Tribal law.

TERO programs use a variety of legal tools to ensure that Indian/Native people receive their rightful share of employment and other economic opportunities both on and near reservations and villages. TERO officers use various legal tools. The list of laws ranges from tribal Indian preference to federal laws that protect against unlawful discrimination. The basic federal laws permit Indian preference and include special initiatives between the TERO and the federal enforcement agency.