The United States Department of Labor, Office of Federal Contract Compliance Programs (“OFCCP”) has issued two final rules that will require significant changes to covered federal contractors’ and subcontractors’ (“contractors”) affirmative action programs for veterans and individuals with disabilities. One of the new rules makes changes to the regulations implementing the Vietnam Era Veterans Readjustment Assistance Act (“VEVRAA”) and the other relates to Section 503 of the Rehabilitation Act of 1973 (“Section 503”).
Contractors will be required to comply with the new rules effective March 24, 2014 with the exception of Subpart C regulations. The effective date for compliance with Subpart C regulations will vary depending on whether the contractor has an affirmative action plan in place on March 24, 2014. Contractors who do have such plans in place on March 24, 2014 will be permitted to delay compliance with Subpart C until the beginning of their first plan year after March 24, 2014.
According to the OFCCP’s news release concerning the new rules, Patricia A. Shiu, Director of the OFCCP, says “strengthening these regulations is an important step toward reducing barriers to real opportunities for veterans and individuals with disabilities.”
Practically speaking, the new rules will require significant interface with internal and external resources including recruiters, information technology experts, and contract administrators. Contractors are well advised to begin implementation required for compliance with the new rules now. Highlights of the most significant new requirements are listed below.
New Benchmark and Utilization Goals
The VEVRAA rule requires contractors to measure their success in recruiting and employing veterans by annually adopting a benchmark based either on the national average of veterans in the workplace, which is currently 8%, or on their own benchmark which must be based on the best available data.
The Section 503 rule introduces a utilization goal for contractors and subcontractors with more than 100 employees for 7% of each job group in the workforce to be qualified individuals with disabilities. Employers with less than 100 employees can apply the 7% goal to the workforce as a whole rather than each job group. The OFCCP has referred to this goal as “aspirational” and has said that it is not a quota.
New Data Collection and Analysis Requirements
Both of the new rules contain new data collection and analysis requirements for covered federal contractors and subcontractors. Annual analysis of the hiring and utilization results will be required. Contractors whose utilization falls below the 7% utilization goal for individuals with disabilities or the veterans benchmark will be required to identify problem areas and develop action-oriented programs to address the underutilization.
Records concerning the total number of job openings and jobs filled, the total number of job applicants for all jobs and the number of applicants identified to be veterans or to have disabilities; and the total number of applicants hired and the total number of individuals with disability and veterans hired must be kept for three years.
New Invitation to Self-Identify Requirements
Both of the new rules contain specific information relating to requirements for self-identification as either a protected veteran or an individual with disabilities by applicants and current employees. These invitations must be extended both pre-offer and post-offer. The disabilities invitation must be extended on a mandatory OFCCP-issued invitation form. A sample veterans' invitation form, which is suggested but not required, is provided in the regulations. Importantly, the permitted pre-offer invitation for veterans must be limited to identifying only whether the individual falls within the general category of protected veteran status while the post-offer invitation must invite identification of a specific category of protected veteran. The rules provide detailed information on the permitted and required timing of these invitations, who in the contractor organization has access to the information, and how the information can be stored.
Additionally, contractors will be required to survey their existing workforce every five years with the first survey conducted in the first year following the effective date of the final rules.
Outreach and Recruitment Efforts
Contractors will be required to conduct annual outreach and recruitment assessments for veterans and individuals with disabilities to evaluate the effectiveness of these efforts during the previous plan year. A written assessment with certain required elements will be required as part of the affirmative action plan.
Other New Requirements
The final rules also require that contractors revise all contract and purchase order forms to include new enhanced EO Clause language. Content and font is regulated.
Numerous other obligations have been enhanced or added, including obligations for posting job openings with state job service agencies, obligations for posting the EEO is the Law poster electronically, and affirmative action plan narrative definitions and other requirements.
Where to Get Additional Information
OFCCP has provided fact sheets and frequently asked questions in an effort to assist with compliance: Final Rule on VEVRAA Fact Sheet and Final on Rule on Section 503 of the Rehabilitation Act Fact Sheet. Additionally, OFCCP has posted two webinars which it has conducted on the final rules.
In January 2014, Smith Anderson, in partnership with Ellen Shong & Associates, will be conducting a two-part webinar with practical guidance on preparing for compliance with the new rules. Registration for the webinar will be sent in early January.