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OFCCP releases finalized rules revising VEVRAA and Rehab Act Section 503 regulations to require hiring benchmarks and goals

August 27th, 2013  |  Cynthia L. Hackerott  |  2 Comments

Just days after publicly releasing its newly revised Federal Contract Compliance Manual (dated “July 2013”, but posted on August 23, 2013), the OFCCP released its highly anticipated final rules revising its regulations regarding affirmative action for workers with disabilities and protected veterans. The final rules, released less than one month after they were sent to the Office of Management and Budget (OMB) for approval, revise the OFCCP’s regulations at 41 CFR Parts 60-250 and 60-300 that implement the provisions of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) and the regulations in 41 CFR Parts 60-741 that implement the provisions of Section 503 of the Rehabilitation Act of 1973, as amended (Section 503). According to an OFCCP announcement on August 27, 2013, the rules will be published shortly in the Federal Register and will take effect 180 days following publication. The final rules and other related information are now available on the OFCCP’s website. The VEVRAA rule is at http://www.dol.gov/ofccp/VEVRAARule/ and the Section 503 rule is at http://www.dol.gov/ofccp/503Rule/.

These rules, announced by Vice President Biden during an August 27 address to The American Legion in Houston, Texas, will — for the first time ever — provide metrics which, according to the OFCCP will measure federal contractors’ progress toward achieving equal opportunity for people with disabilities and protected veterans. The agency characterizes these metrics as “management tools that inform decision-making and provide real accountability.” In addition, the OFCCP asserts that the rules will facilitate the success of companies that do business with the federal government, by increasing their access to a large, diverse pool of qualified workers.

The VEVRAA rule requires contractors to establish an annual hiring benchmark, either based on the national percentage of veterans in the workforce (currently 8 percent), or based on the best available data and factors unique to their establishments. The Section 503 rule establishes an aspirational 7 percent utilization goal for the employment of individuals with disabilities.

The OFCCP says the rules are clearly needed because the unemployment for certain veterans and persons with disabilities is disproportionately high. Specifically, the annual unemployment rate for post-September 2001 veterans (i.e. veterans from Iraq and Afghanistan) is higher than the rates for all veterans and for nonveterans. The unemployment rate for working-age people with disabilities in 2012 was 15 percent, compared with a rate of 8 percent for working age individuals without disabilities, despite years of technological advances that have made it possible for many people with disabilities to apply for and successfully perform a broad array of jobs.

VEVRAA rule. The OFCCP notes the following as highlights of the VEVRAA final rule:

  • Rescission of 41 CFR Part 60-250: The final rule rescinds the outdated 41 CFR Part 60-250 in its entirety. However, veterans that were formerly protected only under Part 60-250 will still be protected from discrimination under the revised 41 CFR Part 60-300.
  • Hiring benchmarks. The final rule requires that contractors establish annual hiring benchmarks for protected veterans. Contractors must use one of two methods to establish their benchmarks. 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. 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 be 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.
  • Data collection: The final rule requires 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 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 protected veterans at both the pre-offer and post-offer phases of the application process. The final rule includes sample invitations to self-identify that contractors may use.
  • Incorporation of the EO Clause: The final rule requires that specific language be used when incorporating the equal opportunity clause into a subcontract by reference. The mandated language, though brief, will alert subcontractors to their responsibilities as federal contractors.
  • Job Listings: The final rule clarifies that when listing their 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 rule clarifies 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 rule requires 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 the agency requests.

Section 503 rule. Highlights of the Section 503 rule include:

  • Utilization goal: The final rule establishes a nationwide 7 percent utilization goal for qualified individuals with disabilities (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. 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 the 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. Of note, among the materials posted on the OFCCP’s website is a letter, dated August 8, 2013, from the EEOC’s Office of Legal Counsel regarding the invitation to self-identify — http://www.dol.gov/ofccp/regs/compliance/sec503/OLC_letter_to_OFCCP_8-8-2013_508c.pdf
  • Incorporation of the EO Clause: The final rule requires that specific language be used when incorporating the equal opportunity clause into a subcontract by reference. The mandated language, though brief, will alert subcontractors to their responsibilities as federal contractors.
  • Records Access: The final rule clarifies 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 rule requires 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 the agency 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.

Rulemaking background. The OFCCP published a Notice of Proposed Rulemaking (NPRM) regarding it revisions to the agency’s VEVRAA revisions on April 25, 2011 (76 FR 23358), and the comment period, which was originally scheduled to end on June 22, 2011, was extended to close on July 11, 2011 (76 FR 36482). On July 30, 2013, the OFCCP submitted the final rule for OMB approval. The NPRM on the Section 503 revisions was published in the Federal Register on December 9, 2011 (76 FR 77056), and the comment period, which was originally scheduled to end on February 7, 2012, was extended to close on February 21, 2012 (77 FR 7108). The OFCCP submitted the final rule for OMB review on July 31, 2013.

As of the evening of August 27, 2013, OMB approval of the final rules had not yet been reflected on the OMB’s RegInfo.gov website.

Webinars. The OFCCP will hold webinars on the VEVRAA final rule on August 29, 2013 (http://www.dol.gov/find/vevraa-1) and September 11, 2013 (http://www.dol.gov/find/vevraa-2). OFCCP Webinars on the Section 503 final rule will take place on August 30, 2013 (http://www.dol.gov/find/section503-1) and September 18, 2013 (http://www.dol.gov/find/section503-2). All the webinars will start at 2:00 p.m. Eastern Time.

Responses

  1. R.P.Landreville says:

    September 10th, 2013 at 4:43 pm

    Does the agency have an example of a format that can be used for the preparation of a AAP for construction affirmative acion program that includes the revised regs for hanidcapped and Veterans.

  2. Cynthia L. Hackerott says:

    October 1st, 2013 at 3:52 pm

    So far, the OFCCP has not provided any sample formats for AAPs under the revised regulations. However, the agency has indicated that there will be more technical assistance and information coming as the anticipated effective date of the regulatory revisions (March 24, 2014) approaches. Keep checking the “landing pages” for the VEVRRA rule and the Section 503 rule for the latest compliance assistance updates.

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