By Brad Cave
Last week, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced Final Rules that are intended to improve job opportunities for disabled workers and veterans. Whether the rules will accomplish that purpose is uncertain; what is clear is that the new rules greatly increase affirmative action requirements and burdens on federal contractors. Under the new regulations, federal contractors and subcontractors face significantly increased documentation, data collection, recordkeeping and hiring goals.
Key Provisions of New Disability and Veterans Regulations
On August 27, 2013, OFCCP released the content of its Final Rules that change the regulations implementing Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act as amended by the Jobs for Veterans Act of 2002 (VEVRAA). Section 503 of the Rehabilitation Act of 1973 prohibits discrimination in employment decisions against individuals with disabilities and requires federal contractors and subcontractors to take affirmative action to recruit, hire, promote and retain disabled workers. VEVRAA prohibits federal contractors and subcontractors from discriminating against protected veterans and requires affirmative action in employing these veterans. The key provisions of the Final Rules that change the regulations implementing these laws include:
- A 7% Utilization Goal for Qualified Individuals with a Disability. For the first time, contractors must strive to employ disabled workers at a level that reaches 7% of each job group. For contractors with 100 or fewer employees, the 7% goal applies to the contractor’s entire workforce, rather than each job group. OFCCP states that this is not a quota and failure to meet the disability utilization goal will not, by itself, constitute a violation of the regulation. However, OFCCP requires contractors to conduct an annual utilization analysis to find deficient areas and determine specific actions to rectify identified problems.
- Establishing Hiring Benchmarks for Veterans. Without setting a specific utilization goal for hiring veterans, OFCCP will require federal contractors to establish hiring benchmarks each year for protected veterans. Contractors may choose to use the national percentage of veterans in the civilian labor force, as updated annually by OFCCP (currently 8%), as a benchmark, or may establish their own benchmark using a combination of data from the Bureau of Labor Statistics, Veterans’ Employment and Training Service and the contractor’s unique hiring circumstances.
- Collect and Retain Comparison Data on Disabled and Veteran Applicants and Employees. Under the Final Rules, contractors must document quantitative comparisons of the number of disabled workers and veterans who applied for jobs and the number hired. The data must be compiled annually and retained by the contractor for three years in order to track trends and measure outreach efforts.
- Ask Applicants and Employees to Self-Identify as Individuals with a Disability and as a Veteran. The Final Rules mandate that employers invite applicants at both the pre-offer and post-offer stage to self-identify themselves as individuals with a disability and as veterans. The Final Rules further require that contractors invite their current employees to self-identify at least every five years. OFCCP offers sample self-identification language.
- Mandated Equal Opportunity Clause in Subcontracts. Under the Final Rules, contractors must include specific language to incorporate the equal opportunity clause into subcontracts so that subcontractors know their responsibilities as federal contractors.
- Provide OFCCP Access to Records. The Final Rules specify that contractors must allow OFCCP to review documents related to a focused review or compliance check either on-site or off-site, at OFCCP’s option. OFCCP can request that contractors reveal all formats in which they maintain records and then request the records in whatever format OFCCP chooses.
- Updates to Comply with the ADAAA. The Final Rule related to the disability regulations updates the regulations in light of the revised definition of “disability” and certain nondiscrimination provisions under the ADA Amendments Act of 2008 (ADAAA).