New Federal Requirements Imposing Hiring Goals for Veterans and People with Disabilities to Affect Approximately 171,000 Companies

By Laurie A. Petersen and Samantha J. Wood 09/13/2013 10:44:00

On August 27, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a Final Rule that makes changes to the regulations implementing the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act of 1973. These changes are intended to improve hiring of veterans and people with disabilities.

The Final Rule will make the following changes to the regulations affecting VEVRAA:

1. It will completely rescind 41 C.F.R. 60-250 and replace it with the revised 41 C.F.R. 60-300. Veterans who were formerly protected only under 41 C.F.R. 60-250 will be protected from discrimination under 41 C.F.R. 60-300.
2. It will require federal contractors and subcontractors to establish annual hiring benchmarks. It will require federal contractors to either:
   
   A.  Adopt a hiring benchmark equal to the national percentage of veterans in the civilian labor force (currently 8 percent); or
   
   B.  Establish their own benchmark by taking into account (i) the average percentage of veterans in the civilian labor force in the state where the contractor is located over the preceding three years; (ii) the number of veterans, over the previous four quarters, who participated in the employment service delivery system in the state where the contractor is located; (iii) the applicant and hiring ratios for the previous year; (iv) the contractor’s recent assessments of the effectiveness of its outreach and recruitment efforts; and (v) any other factors, such as the nature of the job and its location, that would affect the availability of qualified protected veterans.
3. It will require federal contractors to annually document and update, and maintain for three years the following quantitative comparisons regarding applicants and employees:
   
   A.  The number of protected veteran applicants;
   
   B.  The total number of job openings and number of jobs filled;
   
   C.  The total number of applicants for all jobs;
   
   D.  The total number of protected veterans applicants hired; and
   
   E.  The total number of applicants hired.
4. Beyond records comparing applicants, employees, and the hiring benchmark requirement, it will require records to contain an evaluation of outreach and recruitment efforts. Companies must be able to provide documentation to show that they have tried to meet the benchmark otherwise they risk having their federal contracts revoked.
5. It will require federal contractors to make the following adjustments to its hiring process:
   
   A.  Contractors must invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process.
   
   B.  When listing a job opening, contractors must provide information in a manner and format permitted by the appropriate State or local job service.
6. It will require federal contractors to use specific language when incorporating the equal opportunity clause into a subcontract by reference to alert subcontractors to their responsibilities as Federal contractors.
7. It will require contractors to provide OFCCP all records upon request and allow OFCCP to complete a compliance check either on or off-site.

The Final Rule will make the following changes to the regulations implementing Section 503 of the Rehabilitation Act of 1973 at 41 C.F.R. 60-741:

1. It will implement changes necessitated by the passage of the ADA Amendments Act of 2008 by revising the definition of “disability” and certain nondiscrimination provisions.
2. It will require federal contractors to adopt a hiring goal of 7 percent to each of their job groups or to their entire workforce if the contractor has 100 or fewer employees.
3. It will require federal contractors to annually document and update, and maintain for three years the following quantitative comparisons regarding applicants and employees:
   
   A.  The number of applicants disabilities;
   
   B.  The total number of job openings and number of jobs filled;
   
   C.  The total number of applicants for all jobs;
   
   D.  The total number of applicants with disabilities hired; and
   
   E.  The total number of applicants hired.
4. It will require federal contractors to conduct annual assessments of problem areas and establish specific action-oriented programs to address the problems.
5. It will require federal contractors to make the following adjustments to its hiring process:
   
   A.  Contractors must invite applicants to self-identify as individuals with disabilities at both the pre-offer and post-offer phases of the application process.
   
   B.  When listing a job opening, contractors must provide information in a manner and format permitted by the appropriate State or local job service.
6. It will require federal contractors to invite employees to self-identify as individuals with disabilities every five years.
7. It will require federal contractors to use specific language when incorporating the equal opportunity clause into a subcontract by reference to alert subcontractors to their responsibilities as Federal contractors.
8. It will require contractors to allow OFCCP to request and review documents related to a compliance check either on or off-site.

According to the director of OFCCP, such new rules are expected to affect approximately 171,000 companies doing business with the federal government. Although these rules will not become effective for 180 days after publication in the Federal Register, contractors are encouraged to begin updating their employment practices as soon as possible.

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