The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently released sweeping changes to its regulations requiring covered government contractors and subcontractors to engage in affirmative action for veterans and disabled individuals.
The regulations expand current obligations and require covered government contractors and subcontractors to:
Implement written affirmative action plans for veterans and disabled individuals that include a goal of hiring/employing disabled employees at the rate of at least 7% of the workforce, and hiring veterans at the rate of at least 8%, or the contractor’s own benchmark for veterans based on available data;
Invite applicants and employees to self-identify as being disabled and/or covered veterans at the time of application, after receiving a job offer, and every five years for disability status. This will require contractors and subcontractors to revise their pre-employment self-identification forms to include disability and veteran status, and to update their application flow logs to include tracking by these categories. Under existing OFCCP practice, it is critical that a contractor identify each position that an applicant applied and was considered for;
Collect and annually review/audit data on the number of applicants who have self-identified as being disabled or a covered veteran, the total number of job openings and jobs filled, the total number of applicants for all jobs, the number of veterans and disabled individuals hired, and the total number of applicants hired. This data must be retained for three years. Note that in the case of an OFCCP audit, contractors and subcontractors that have not gathered the required applicant data will be unable to recreate this data at that time;
Include new bold print language in covered subcontracts alerting the subcontractor of its affirmative action and non-discrimination obligations;
Identify and link with recruitment sources dedicated to providing job opportunities to veterans and the disabled, assure that all job openings are made available to qualified veterans and the disabled, and provide state and local job services with all job openings for positions other than senior management with a notice (i) that it is a federal contractor/subcontractor, (ii) that it desires priority referrals of veterans for all openings, and (iii) providing the name, location, and contact information for the responsible person for hiring at all locations in that state; and
Identify, upon request from the OFCCP, all formats in which affirmative action records are kept so that the OFCCP can decide which format it prefers, and make those records available off site if requested by the OFCCP.
The requirement to develop a written affirmative action plan applies to all entities (with 50 or more employees) that contract with the federal government for the purchase, sale or use of personal property or nonpersonal services (including construction) in excess of $50,000 (for purposes of disability affirmative action), $50,000 (for purposes of veterans affirmative action if the contract was entered before December 1, 2003), and $100,000 (for purposes of veterans affirmative action if the contract was entered or modified after December 1, 2003).
The regulations become effective 180 days after publication in the Federal Register. Publication is expected to occur by the end of September. Affirmative action plans must be updated to comply with the new regulations at the start of the contractor’s next standard 12-month affirmative action plan review and updating cycle. However, all other requirements, including the changes to applicant self-identification and applicant flow log forms, must be implemented on the effective date, expected to be during March 2014.
If you are a covered government contractor or subcontractor, we recommend that you promptly initiate these required steps, and if necessary work with your affirmative action consultant to prepare for these changes.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.