The U.S. Department of Labor (DOL) has issued two final rules intended to improve the employment of people with disabilities and veterans. The rules update requirements under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). These laws require federal contractors and subcontractors to affirmatively recruit, hire, train and promote qualified people with disabilities and veterans, respectively. Enforced by the Department’s Office of Federal Contract Compliance Programs (OFCCP), the rules will become effective 180 days after their publication in the Federal Register.
The Section 503 rule introduces a hiring goal for federal contractors and subcontractors that 7 percent of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination — similar to those that have long been required to promote workplace equality for women and minorities.
Section 503 prohibits federal contractors and subcontractors from discriminating in employment against individuals with disabilities (IWDs). The Final Rule strengthens the affirmative action provisions of the regulations to aid contractors in their efforts to recruit and hire IWDs, and improve job opportunities for individuals with disabilities. The Final Rule also makes changes to the nondiscrimination provisions of the regulations to bring them into compliance with the ADA Amendments Act of 2008.
Highlights of the Final Rule include:
Utilization goal: The Final Rule establishes a nationwide 7% utilization goal for qualified IWDs. Contractors will apply the goal to each of their job groups, or to their entire workforce if the contractor has 100 or fewer employees. Contractors must conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems.
Data collection: The Final Rule requires 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. Having this data will assist contractors in measuring the effectiveness of their outreach and recruitment efforts. The data must be maintained for three years to be used to spot trends.
Invitation to Self-Identify: The Final Rule requires 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 OFCCP. The Final Rule also requires that contractors invite their employees to self-identify as IWDs every five years, using the prescribed language. This language will be posted on the OFCCP website.
Records Access: The Final Rule clarifies that contractors must allow OFCCP to review documents related to a compliance check or focused review, either on-site or off-site, at OFCCP’s option. In addition, the Final Rule requires contractors, upon request, to inform 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 Rule implements 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.
The final rule is intended to provide contractors with the tools needed to evaluate their own compliance and proactively identify and correct any deficiencies in their employment practices. Because the existing regulations implementing section 503 do not provide contractors with adequate tools to assess whether they are complying with their nondiscrimination and affirmative action obligations to recruit and employ qualified individuals with disabilities, the revisions of the final rule should assist contractors in averting potentially expensive violation findings by OFCCP.
The major provisions in the Final Rule would:
- Establish, for the first time, a 7% workforce utilization goal for individuals with disabilities. This goal is not a quota or a ceiling that limits or restricts the employment of individuals with disabilities. Instead, the goal is a management tool that informs decision-making and provides real accountability. Failing to meet the disability utilization goal, alone, is not a violation of the regulation and it will not lead to a fine, penalty, or sanction. OFCCP is mindful that smaller contractors may find it more difficult to attain the goal in each of their job groups. Therefore, the final rule permits contractors with a total workforce of 100 or fewer employees to apply the 7% goal to their entire workforce, rather than to each job group.
- Require contractors to invite applicants to voluntarily self-identify as an individual with a disability at the pre-offer stage of the hiring process, in addition to the existing requirement that contractors invite applicants to voluntarily self-identify after receiving a job offer. The purpose of this data collection is to provide contractors with useful information about the extent to which their outreach and recruitment efforts are effectively reaching people with disabilities.
- Require contractors to invite incumbent employees to voluntarily self-identify on a regular basis. The status of employees may change and a regular invitation to self-identify provides employees a way to self-identify for the first time, or to change their previously reported status. Providing a regular invitation should contribute to increased self-identification rates. Improving data collection is important to assessing employment practices.
- Require contractors to maintain several quantitative measurements and comparisons for the number of individuals with disabilities who apply for jobs and the number of individuals with disabilities they hire in order to create greater accountability for employment decisions and practices. Having this data will enable contractors and OFCCP to evaluate the effectiveness of contractors’ outreach and recruitment efforts, and examine hiring and selection processes related to individuals with disabilities.
- Require prime contractors to include specific, mandated language in their subcontracts in order to provide knowledge and increase compliance by alerting subcontractors to their responsibilities as Federal contractors.
Current contractors with a written affirmative action program (AAP) already in place on the effective date have additional time to come into compliance with the AAP requirements. The compliance structure seeks to provide contractors the opportunity to maintain their current AAP cycle.
The VEVRAA rule provides contractors with a quantifiable metric to measure their success in recruiting and employing veterans by requiring contractors to annually adopt a benchmark either based on the national percentage of veterans in the workforce (currently 8%), or their own benchmark based on the best available data. The rule strengthens accountability and record-keeping requirements, enabling contractors to assess the effectiveness of their recruitment efforts. It also clarifies job listing and subcontract requirements to facilitate compliance.