Federal contractors, large and small, will be feeling the pressure over the coming years as the Office of Federal Contract Compliance Programs (OFCCP) readies itself for a full-fledged assault on employers.
The OFCCP has announced two Final Rules to improve hiring and employment of veterans and persons with disabilities. The new rules had been highly anticipated for the last several years and are part of the Obama administration’s policy initiative to increase employment of disabled and veteran workers.
The first Final Rule updates requirements under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) of 1974. It provides federal contractors with a quantifiable hiring metric either based on the national percentage of veterans in the workforce (currently eight percent) or their own benchmark based on the best available data. The latter must be established on a facility-wide basis. The OFCCP intends to post a Benchmark Database to assist contractors in that process. The benchmarks are designed to measure the progress and effectiveness of the contractor’s good faith efforts, and are not designed to be “objectives or targets.”
The first Final Rule requires contractors to invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process. The pre-offer self-identification process is an additional requirement beyond that currently imposed on federal contractors. The Final Rules include sample invitations to self-identify that contractors may use.
The first Final Rule also requires that specific language be used when incorporating the equal opportunity clause of the government contract into a subcontract by reference. The mandated language will alert subcontractors to their responsibilities as federal contractors. Similarly, the contractors’ affirmative action policy must be included in its employee handbook or otherwise made available to employees.
The rule clarifies that contractors must allow the OFCCP to review documents related to a compliance check or focused review, either on-site or off-site, at OFCCP’s option. It also requires contractors, upon request by the OFCCP, to inform the OFCCP of all formats in which it maintains its records and provide them to the OFCCP in whichever of those formats the OFCCP requests.
The second Final Rule concerns Section 503 of the Rehabilitation Act of 1973. Section 503 prohibits federal contractors and subcontractors from discriminating in employment against individuals with disabilities and requires those employers to take affirmative action to recruit, hire, promote, and retain those individuals.
The rule introduces a utilization goal for federal contractors and subcontractors that seven percent of each job group in their workforce be qualified individuals with disabilities (IWD). Contractors will apply the utilization goal to each of their job groups, unless they have fewer than 100 employees. Those smaller employers apply the goal to their entire workforce. If actual representation falls below the seven percent goal, contractors must engage in good faith efforts to improve the representation of IWDs in the job group.
Contractors will be required to conduct an annual utilization analysis and assessment of problem areas and establish specific programs to address any identified problems. They will be required to document and update annually several qualitative comparisons for the number of IWDs who apply for jobs and the number of IWDs they hire. The data must be maintained for three years to be used to spot trends.
The second Final Rule requires that contractors invite applicants to self-identify as IWDs at both the pre-offer and post-offer phases of the application process, using language prescribed by OFCCP. The pre-offer self-identification process is an additional requirement beyond that currently imposed on federal contractors. The Final Rule also requires that contractors invite their employees to self-identify as IWDs every five years, using the prescribed language. That language has not yet been posted by the OFCCP.
The pre-offer solicitation to self-identify as an IWD will not conflict with the Americans with Disabilities Act (ADA) according to the OFCCP. The OFCCP has obtained a letter from the EEOC’s Office of General Counsel confirming that the pre-offer solicitation requirement will not conflict with the ADA.
Interestingly, the second Final Rule encourages but does not require contractors to have accessible websites. The 2011 proposed regulation had contained a requirement that meant that federal contractors had to ensure that its recruitment websites would have to be accessible to persons with disabilities. The OFCCP backed off that requirement and instead encourages contractors to make its information and communications technologies accessible. Also, a contractor must make sure there is an alternate means for a person with a disability to access the information on the website and apply for jobs in a timely manner.
Both Final Rules are scheduled to go into effect on Feb. 25, 2014. The OFCCP has announced an extended compliance date for the affirmative action program requirements. Contractors who have veterans and disability affirmative action plans developed under the old regulations in place on that date will not be required to comply with the new affirmative action requirements until the start of the new cycle.
Also, in July 2013, the OFCCP issued a revised Federal Contract Compliance Manual (FCCM). The FCCM was first issued in 1979 and had been periodically updated by directives. The 2013 edition of the FCCM is the first complete overhaul of this document. The FCCM includes new material that reflects the OFCCP’s recent focus on hiring, overrepresentation of both protected and non-protected groups, and corporate policies. The FCCM contains definitions of the key words and phrases used by the OFCCP, an explanation of the desk audit purpose and process, information on the scope of a compliance evaluation conducted by the OFCCP, an emphasis on onsite reviews, and marching orders enabling compliance officers’ discretion in requesting additional information during a compliance audit.
With these new tools, the OFCCP is expected to put increased pressure on federal contractors and subcontractors. Employers must begin preparing for these new requirements.