OFCCP Jurisdiction Update
A few months ago, the Office of Federal Contract Compliance Programs (OFCCP) released a new “Jurisdictional Thresholds” infographic that is “intended to help employers, employees, and other interested parties easily determine when OFCCP’s Executive Order 11246, Section 503 of the Rehabilitation Act (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) regulations apply to companies doing business with the federal government.” That infographic is available here.
The infographic includes recent increases to the monetary thresholds needed to require AAP compliance. It includes the increase to Section 503’s coverage threshold from $10,000 to $15,000, and VEVRAA’s recent increase from $100,000 to $150,000, in what the OFCCP refers to as “inflationary adjustments.” Such changes were incorporated into the Federal Acquisition Regulations (FAR) earlier this year, but the changes are not yet reflected in 41 CFR 60 Parts 300 or 741. Note, Executive Order 11246 is not subject to inflationary adjustment.
What does this mean for federal contractors?
For many federal contractors, the increased thresholds change very little. For instance, for Section 503, the bulk of a contractor’s affirmative action obligations come into play at the $50,000 mark, which is when the affirmative action plan obligations kick in. For this reason, Section 503’s change from $10,000 to $15,000 affects fewer contractors. Likewise, with regard to VEVRAA compliance, many federal contracts are worth significantly more than $150,000, so the $50,000 increase is not particularly profound for those contractors either.
For smaller or lower dollar contractors, however, the VEVRAA change may provide some relief. Specifically, if a contractor has a single federal contract that is less than $150,000, it may no longer have to comply with some of VEVRAA’s obligations, such as developing a VEVRAA AAP or establishing veteran hiring benchmarks. This may particularly affect contractors in the health care industry whose obligations hinge on relatively low TRICARE dollar amounts.
Of course, whether jurisdiction applies to your organization will hinge on a variety of factors. We recommend contacting your affirmative action counsel for discussion and analysis of these issues.