OFCCP Issues Final Rules Regarding the Employment of Vets and Disabled Workers
On August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs announced Final Rules that make changes to the regulations implementing Section 503 of the Rehabilitation Act of 1973 (“Section 503”), and the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”). This is a huge change for federal contractors, as previously, contractors did not have to perform statistical analyses of their employment practices related to veterans and individuals with disabilities. The Final Rules change that.
Section 503
Section 503 prohibits federal contractors and subcontractors from discriminating in employment against individuals with disabilities (“IWDs”), and requires contractors to take affirmative action to recruit, hire, promote, and retain such individuals. The following are some of the highlights of the Final Rules:
- Utilization Goals: The Final Rules establish a nationwide 7% utilization goal for qualified IWDs. Contractors with more than 100 employees must apply the goal to each of their job groups. Contractors with fewer than 100 employees must apply the goal to the entire workforce.
- Contractors must also conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems. The OFCCP claims that such goals are different than “goals” used under E.O. 11246 because the Section 503 goal focuses on the entire workforce, as opposed to those employees newly placed into a position. According to the OFCCP, failure to meet the goal will not lead to a fine, penalty or sanction; rather, it appears that the OFCCP will evaluate the contractor’s outreach efforts to meet the goal and use such considerations when determining overall compliance.
- Applicant/Hire Data Collection: The Final Rules require that contractors document and update annually several quantitative comparisons for the number of IWDs who apply for jobs and the number of IWDs they hire. Such data is to be used to measure the effectiveness of the contractor’s outreach and recruitment efforts. The data must be maintained for three years in order to “spot trends.”
- Invitation to Self-Identify: The Final Rules require that contractors invite applicants to self-identify as IWDs at both the pre-offer and post-offer phases of the application process, using language prescribed by the OFCCP. The Final Rules also require that contractors invite their current employees to self-identify as IWDs every five years, using the prescribed language. This language will be posted on the OFCCP website in the near future.
- Incorporation of the EO Clause: The Final Rules require that specific language be used when incorporating the equal opportunity clause into a subcontract by reference.
- Records Access: The Final Rules clarify that contractors must allow the OFCCP to review documents related to a compliance check or focused review, either on-site or off-site, at the OFCCP’s option. In addition, the Final Rules require contractors, upon request, to inform the OFCCP of all formats in which it maintains its records and provide them to OFCCP in whichever of those formats OFCCP requests.
- ADAAA: The Final Rules implement changes necessitated by the passage of the ADA Amendments Act (ADAAA) of 2008 by revising the definition of “disability” and certain nondiscrimination provisions of the implementing regulations.
VEVRAA
VEVRAA prohibits federal contractors and subcontractors from discriminating in employment against protected veterans, and requires these employers to take affirmative action to recruit, hire, promote, and retain these veterans. The following summarizes some of the key changes:
- Hiring Benchmarks: The Final Rules require that contractors establish annual hiring benchmarks for protected veterans. Contractors must use one of two methods to establish their benchmarks. First, contractors may choose to establish a benchmark equal to the national percentage of veterans in the civilian labor force, which will be published and updated annually by the OFCCP (currently 8%). Alternatively, contractors may establish their own benchmarks using certain data from the Bureau of Labor Statistics (“BLS”) and Veterans’ Employment and Training Service/Employment and Training Administration (“VETS/ETA”) that will also be published by the OFCCP, as well other factors that reflect the contractor’s unique hiring circumstances. The data will be posted in the Benchmark Database in the near future.
- The OFCCP claims that such benchmarks are different than “goals” used under E.O. 11246; the benchmarks are to be used only as a barometer to gauge the success of recruitment efforts.
- Data Collection: The Final Rules require that contractors document and update annually several quantitative comparisons for the number of veterans who apply for jobs and the number of veterans they hire. The goal is to measure the effectiveness of outreach and recruitment efforts. The data must be maintained for three years.
- Invitation to Self-Identify: The Final Rules require that contractors invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process. The Final Rules include sample invitations to self-identify that contractors may use at each phase.
- Incorporation of the EO Clause: The Final Rules require that specific language be used when incorporating the equal opportunity clause into a subcontract by reference.
- Job Listings: The Final Rules clarify that when listing job openings, contractors must provide that information in a manner and format permitted by the appropriate State or local job service, so that it can access and use the information to make the job listings available to job seekers.
- Records Access: The Final Rules clarify that contractors must allow the OFCCP to review documents related to a compliance check or focused review, either on-site or off-site, at the OFCCP’s option. In addition, the Final Rules require contractors, upon request, to inform the OFCCP of all formats in which it maintains its records and provide them to the OFCCP in whichever of those formats OFCCP requests.
What do you do now?
The Final Rules will be published in the Federal Register shortly (likely in the next two weeks) and are effective 180 days after its publication. However, current contractors with a written affirmative action program (“AAP”) already in place on the effective date have additional time to come into compliance with some of the newer AAP requirements.
We will continue to review each of the Final Rules in their entirety and provide additional guidance related to complying with these new obligations. Stay tuned!
Read the Full Newsletter: Health Law Advisory August 30, 2013