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Federal Contractors Should be Planning Ahead for the New Section 503 and VEVRAA Rules
November 20, 2013
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On August 27, 2013, the Office of Federal Contract Compliance Programs (“OFCCP”) issued two Final Rules, making significant changes to the regulations implementing affirmative action under Section 503 of the Rehabilitation Act (“Section 503”) and the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”). Federal contractors that meet the affirmative action coverage threshold for Section 503 and VEVRAA have until March 24, 2014 – merely four months away – to implement the numerous changes adopted in OFCCP’s Final Rules.
OFCCP’s stated goals in amending the regulations implementing Section 503 are to reduce “barriers to equal employment opportunity for individuals with disabilities, and [address] income inequality and poverty.” Similarly, its goals in amending the regulations implementing VEVRAA (which was previously amended to include all veterans) are to create a “positive impact on the wages and employment prospects of many veterans” and to “level the playing field for veterans who are entitled to a fair shot at applying for, obtaining, and keeping good jobs with federal contractors.”
Section 503
Federal contractors or subcontractors with a contract of $10,000 or more are covered by Section 503. The requirement to maintain an affirmative action plan only applies to federal contractors or subcontractors with more than 50 employees and a contract of $50,000 or more, however. For those larger covered contracts, the changes to the regulations regarding affirmative action plans are significant, and include the following, among others:
- The regulations contain an “aspirational” utilization goal of 7% for the number of individuals with disabilities in a contractor’s workforce. Contractors must evaluate their utilization on an annual basis, identify problem areas, and implement action-oriented programs to correct problem areas.
- Contractors must engage in recruiting and the development of job training opportunities. Recruiting and job training sources include, but are not limited to, state vocational rehabilitation service agencies, state mental health agencies, or state developmental disabilities agencies, an American Job Center location, or a local Department of Veterans Affairs office.
- Contractors must evaluate the effectiveness of their recruitment efforts on an annual basis.
- Contractors must disseminate their affirmative action plans to employees or applicants on request, post an affirmative action policy, and include the policy in the employee handbook.
- Contractors must invite applicants and current employees to self-identify as an individual with a disability. Sample self-identification forms will be made available on OFCCP’s website.
VEVRAA
Federal contractors or subcontractors with a contract of $100,000 or more are covered by VEVRAA. The requirement to maintain an affirmative action plan only applies to federal contractors or subcontractors with more than 50 employees and a contract of $100,000 or more. Again, for those larger covered contracts where an affirmative action plan is required, the changes to the regulations are significant, and include the following, among others:
- Contractors must adhere to an annual hiring “benchmark” based either upon the national percentage of veterans in the civilian labor force (currently 8%) or the establishment of a benchmark using data from a combination of other sources specified in the regulations.
- Contractors must engage in outreach efforts by posting job listings (with some exceptions) with the appropriate state workforce agency and seek priority referrals from the state workforce agency.
- Contractors must evaluate the effectiveness of the recruitment efforts on an annual basis.
- Contractors must disseminate their affirmative action plans to employees or applicants on request, post an affirmative action policy, and include the policy in the employee handbook.
- Contractors must invite applicants to self-identify as a protected veteran.
- Contractors must maintain employment data for three years, including the number of applicants who self-identified as a protected veteran or are otherwise known to be a protected veteran, the total number of job openings and total number of jobs filled, the total number of applicants for all jobs, the number of protected veterans hired, and the total number of applicants hired.
- Contractors must undertake self-assessments and audits of their personnel practices to determine if they are effective in recruiting protected veterans or if protected veterans are screened out, among other requirements.
Covered contractors should begin planning for these significant changes now, as portions of the regulations take effect March 24, 2014. The required changes to a contractor’s affirmative action plan must be made for plans with a start date of March 24, 2014 or later.