Are you a federal contractor or subcontractor? If so, take note - at the end of August 2013, the DOL announced new rules implementing some fairly major changes to affirmative action requirements applicable to certain federal contractors. These requirements will go into effect on March 24, 2014. This post lays out briefly what those requirements are so that you are ready when the requirements go into effect in 2014. So grab your beverage of choice, settle in and get ready for a good read.
Rewinding a bit…since 1963, certain federal contractors have been required to comply with Executive Order 11246, which prohibits discrimination on the basis of race, color, religion, national origin or sex. Executive Order 11246 imposes an obligation on covered federal contractors to prepare a written affirmative action plan. Likewise, Section 503 of the Rehabilitation Act of 1973 ("Section 503") and the Vietnam Era Veterans' Readjustment Assistance Act of 1974 ("VEVRAA") also have nondiscrimination and affirmative action requirements based on disability and veteran status.
On September 23, 2013, the DOL issued final regulations significantly expanding covered contractors' obligations under Section 503 and VEVRAA as they pertain to contractors' written affirmative action plans ("AAP").
What triggered these changes? The regulatory framework surrounding Section 503 has been around since the 70's. However, despite the technological advances that our society has seen since then, the DOL discovered that there remains a substantial disparity in the employment rate of individuals with disabilities and according to the OFCCP (the enforcement arm of the DOL), it is finding more violations of Section 503 during compliance investigations. In the same vein, since the regulations implementing VEVRAA were published in 1976, increasing numbers of veterans are returning from active duty and many face substantial obstacles to finding employment. As a result, the DOL felt it was time to adjust the regulations to address these issues.
The major changes in these rules are outlined below. While the requirements will go into effect on March 24, 2014, the DOL has indicated that if the effective date falls in the middle of your AAP year, you may delay compliance with the AAP requirements of the new rules until the start of your next AAP cycle. Best practices, however, dictate that you become familiar with the new requirements and adjust your employment practices and IT systems in preparation for full compliance.
If you are a covered federal contractor, what do these new changes mean for you? First, let's define a "covered federal contractor." You are a covered federal contractor under Section 503 if you have 50 or more employees and a contract (or subcontract) of $50,000 or more. You are a covered federal contractor under VEVRAA if you have any government contract or subcontract of $100,000 or more entered into after December 1, 2003 for the purchase, sale or use of personal property or nonpersonal services. Assuming you meet one or both of those thresholds, what must you do for your affirmative action plans that follow the March 24, 2014 effective date?
For purposes of Section 503, covered federal contractors now must:
- Apply a 7% utilization goal for qualified individuals with disabilities. This can be applied to your job groups or to your entire workforce if you have 100 or fewer employees. The DOL is clear that this is not to be considered a "quota," but rather an "aspirational utilization goal" designed to provide contractors with a yardstick against which you can measure the success of your efforts.
- Collect and maintain data that identifies the number of individuals with disabilities who apply for jobs and the number of those that are hired.
- Invite applicants to self-identify as an individual with a disability both at the pre-offer and post-offer stage of the application process (language is provided by the OFCCP for this purpose). You must also invite incumbent employees to self identify every five years.
- Include specific language incorporating the EO clause in all subcontracts in order to alert subcontractors to their responsibilities as federal contractors.
- Allow the OFCCP access to records reAlated to a compliance check, which may include offsite access if requested. You must also specify to OFCCP every format in which you maintain records (i.e., electronic) and provide the records in that format to OFCCP if requested.
For purposes of VEVRAA, covered federal contractors now must:
- Establish annual hiring benchmarks for protected veterans using one of two methods:
- based on the national percentage of veterans in the civilian labor force, as posted on OFCCP's website; or
- based on the consideration of five specified factors using, in part, data published by the Bureau of Labor Statistics and Veterans' Employment and Training Service/Employment and Training Administration (this information will also be made available on OFCCP's website).
- Collect and maintain data that identifies the number of protected veterans who apply for positions with the contractor and the number hired.
- Invite applicants to self identify as protected veterans both at the pre-offer and post-offer stage of the application process.
- Include specific language incorporating the EO clause in all subcontracts in order to alert subcontractors to their responsibilities as federal contractors and request their cooperation.
- Allow the OFCCP access to records related to a compliance check, which may include offsite access if requested. You must also specify to OFCCP every format in which you maintain records (i.e., electronic) and provide the records in that format to OFCCP if requested.
- When listing open jobs with State workforce agencies (an existing requirement), you must now provide job listings in "any manner or format" that the State agency permits that will allow it to provide priority referrals to you.
Depending on how much of that beverage of choice you have remaining, while you are welcome to read the full text of the regulations, the Department of Labor has published a Section 503 and VEVRAA crosswalk that provides a helpful overview of the changes between the existing vs. the final rules.
This has given a basic overview of your requirements under the new regulations. Stay tuned and check back regularly for additional nuggets that will assist you as you begin drafting your AAPs to take into account these new requirements.
For any questions regarding these new DOL Affirmative Action Rules, please contact Kimberly Blankenship.