On August 27, the U.S. Department of Labor’s (DOL) Office of
Federal Contract Compliance Programs (OFCCP) announced a final rule intended to
promote the hiring and employment of people with disabilities by federal
government contractors. The rule makes changes to the regulations implementing
Section 503 of the Rehabilitation Act of 1973, which prohibits employment
discrimination against individuals with disabilities, and Section 4212 of the
Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).
The final rules were published in the Federal Register on
September 24 and can be kindly described as voluminous and difficult to
decipher. This article provides guidance on the key revisions to the Section
503 and VEVRAA regulations that affect contractors that are required to prepare
affirmative action plans (AAPs).
Voluntary self-identification
The final rules require contractors to invite applicants and
employees to voluntarily self-identify under both Section 503 (“qualified
individual with a disability” ) and VEVRAA (“protected veteran” ) at the pre-
and postoffer stages of the hiring process as well as every five years of
employment. The preoffer invitation to self-identify can be made when
applicants are asked to self-identify for race and gender purposes. Contractors
are required to invite applicants to voluntarily self- identify again at the
postoffer stage before applicants begin job duties.
During the first year after the regulations go into effect
and every five years thereafter, contractors are required to invite current
employees to voluntarily self-identify. Under Section 503, the
self-identification forms must be maintained in “data analysis files” separate
from employees’ medical files. VEVRAA requires the forms to be maintained in a
separate file but permits information regarding employees’ medical
considerations or history to be kept in employees’ medical files. Both laws
require that the information remain confidential.
Data collection
Contractors will have to ensure that their HR information
and applicant tracking systems have the capability to track information about
disabilities and veteran status. Under Section 503 and VEVRAA, the following
information must be tracked:
The total number
of applicants;
The number of
applicants who self-identified as individuals with a disability or protected
veterans (or who were otherwise known to be protected veterans);
The total number
of job openings and the total number of jobs filled;
The total number
of applicants who were hired; and
The number of
applicants with disabilities or the number of protected veterans hired.
VEVRAA benchmarks for hiring
For the first time, VEVRAA sets a hiring benchmark for
“protected veterans.” The benchmark is set by either (1) adopting the OFCCP’s
published benchmark (currently 8%) or (2) developing a unique benchmark by
applying five factors set forth by the OFCCP in the regulations. If setting a
unique benchmark, contractors should be prepared to defend the selection
factors and should retain for three years documentation that statutory factors
were considered. The annual hiring benchmark should be included in the text of
AAPs and maintained on-site in the event of an OFCCP audit.
Section 503 utilization goal
Section 503 sets a 7% utilization goal (not a hiring
benchmark) for each job group in a contractor’s AAP. For each job group with
less than 7% utilization of qualified individuals with a disability,
contractors must evaluate whether there are impediments to employment by
examining their personnel policies and processes, reviewing the effectiveness
of outreach and recruitment activities, and performing internal audits of
employment activities.
The director of the OFCCP will review the 7% utilization
goal periodically and adjust it as needed. If a contractor’s entire workforce
has fewer than 150 employees, the contractor can apply the 7% utilization goal
across all employees. Utilization data is not required to be presented in AAPs,
but contractors must maintain the information and will likely be required to
present the data during an OFCCP audit.
Outreach and recruitment activities and applicant tracking
Contractors that use electronic or online job application
systems must provide reasonable accommodations to ensure that disabled
individuals are able to apply for positions. Contractors should ensure that
their online job application systems are accessible and compatible with
assistive technologies.
Both Section 503 and VEVRAA outline recommended recruitment
and outreach activities. Contractors are required to assess their outreach and
recruitment activities for the previous 12 months in their AAPs. The effectiveness
of each outreach effort must be reviewed by evaluating the current and two most
recent years of data. If the contractor or the OFCCP determines that the
outreach or recruitment activities are not successful, the contractor must
implement new efforts identified in the regulations.
Review of personnel processes
Contractors are now required to review their personnel
processes “periodically” and modify them as needed. AAPs must include a
narrative section discussing the review and modification of the contractor’s
personnel processes. The rule also requires contractors to create a schedule
for reviewing physical and mental job qualifications. Although the final rule
did not adopt a proposed requirement that contractors review their personnel
processes annually, it is anticipated that the OFCCP will vigorously enforce
such an obligation.
Notice and record-keeping requirements
Contractors are now obligated to send annual written notices
of their affirmative action policies to all subcontractors, subcontracting
vendors, and suppliers.
The final rule did not adopt the proposed five-year
record-keeping requirements. Instead, there are two- and three-year
record-keeping requirements. The following records must be maintained for three
years:
Outreach efforts,
along with an annual evaluation of the efforts;
Written notices of
policies sent to subcontractors, vendors, and suppliers;
Applicant and new
hire data; and
Hiring benchmarks.
All other records must be maintained for two years. There
are questions about the scope of data required for records that must be
maintained for three years. As a best practice, it is recommended that
contractors retain all data and documents for three years.
Effective date of AAP-related obligations
Generally, the regulations will go into effect 180 days
after the final rules were published in the Federal Register. The final rules
were published September 24, 2013, which makes March 24, 2014, the effective
date of the regulations. However, certain provisions in the regulations do not
require immediate compliance.
Provisions effective March 24, 2014, include:
Revise equal
employment opportunity (EEO) clause;
Send notices of
contractor’s commitment to taking affirmative action to labor organizations;
Revise bulletin
board notices;
Revise intranet or
Internet postings if appropriate;
Review EEO tagline
in job advertisements; and
Use voluntary
self-identification forms and processes.
Provisions effective for the first AAP after March 24, 2014,
include:
Describe review of
personnel processes in AAP;
Schedule and
describe review of physical and mental job qualifications in AAP;
Send policy
notices to subcontractors, vendors, and suppliers;
Assess
effectiveness of outreach and recruitment efforts;
Report applicant
and new hire data;
Document VEVRAA
hiring benchmark;
Develop
utilization analysis for qualified individuals with disabilities;
Develop corrective
action plans for areas of underutilization; and
Use voluntary
self-identification forms and processes.
Bottom line
This is a lot of information to absorb. To ensure compliance
with the revised regulations, contractors should first review the text of the
regulations and obtain compliance assistance if needed. Second, contractors
should assess their current systems and develop an action plan and
implementation team. Third, contractors should design and deploy the required
programs, processes, and procedures.
Source: HR
Hero / Diversity Insight
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