Days ago, on August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a Final Rule which increases the affirmative action obligations of federal contractors and subcontractors, which have been in place for over 40 years, with regard to individuals with disabilities (IWD) and military veterans.  The Final Rule impacts both Section 503 of the Rehabilitation Act (Section 503) and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). The most significant change is the addition of a specific hiring goal or benchmark to help ensure the success of affirmative action with regard to these two groups of protected individuals.

Section 503In order to meet the new hiring goal which was added to Section 503,  7% of a contractor’s employees must be qualified individuals with disabilities.  If the contractor has 100 or less employees, the 7% applies to the entire workforce.  If it has more than 100 employees, the 7% applies to each job group.  An annual utilization analysis and assessment must be conducted by contractors every year, and specific plans must be established to correct any problems identified.  Additionally, the Final Rule makes changes to the “disability” definition, so that 504 is in compliance with the ADA Amendments Act of 2008.

VEVRAAThe Final Rule now requires contractors to establish yearly hiring benchmarks for veterans.  There are two methods contractors can choose from.  The first is to simply use the national percentage of veterans in the civilian labor force as its benchmark.  The second is to create a benchmark tailored to the contractor’s unique hiring circumstances, using certain data which will be available in the Benchmark Database on the OFCCP website. Other changes to VEVRAA caused by the Final Rule include:

(1) 41 CFR Part 60-250 is rescinded in its entirety (although the veterans formerly protected by it are still protected under 41 CFR Part 60-300); and

(2) contractors must post job listings in a particular format that is easily accessible to job seekers.

With regard to both Section 503 and VEVRAA, the Final Rule also imposes these additional requirements upon contractors:

(1) contractors must annually document the number of job applicants with disabilities/veteran status and compare it to the number of those individuals that are hired (and maintain the data for 3 years);

(2) contractors must allow applicants/employees to identify themselves as persons with a disability/veteran status at any of the following occasions:  during the pre or post-offer phases of the application process, and/or every five years of employment (specific language must be used);

(3) contractors must use specific language when incorporating the equal opportunity clause into a subcontract, to alert subcontractors to their responsibilities as Federal contractors; and

(4) contractors must, upon OFCCP’s request, provide access to records related to a compliance check or focused review, either on-site or off, at the OFCCP’s discretion.

The Final Rule is in the process of being published in the Federal Register.  It will become effective 180 days after it is published.  However, contractors with a written affirmative action program that is in place as of the effective date will be afforded additional time for compliance.

Most of these new requirements cannot be acted upon yet as the specific information (such as the required language and the Benchmark Database) is not yet available.  However, it is a good idea to prepare your staff for these upcoming changes now.