HR Management & Compliance

New Affirmative Action Requirements for Individuals with Disabilities

In August, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs–OFCCP—announced a final rule that requires significant new efforts on the part of government contractors, including a 7% utilization goal, self-identification, and a new utilization analysis.

The changes are to the regulations implementing Section 503 of the Rehabilitation Act of 1973, which prohibits employment discrimination against individuals with disabilities.

BLR Senior Legal Editor and affirmative action expert Susan Schoenfeld explains how the new regulations will impact government contractors.

Effective Date in March 2014

According to the OFCCP, the new rules will become effective 180 days after their publication in the Federal Register, which the OFCCP expects to occur in mid-September—making the likely effective date sometime in March 2014.

As of the effective date, contractors must comply with all elements of the Final Rule except for the new Affirmative Action Program requirements in Subpart C. The OFCCP will provide contractors with additional time to come into compliance with these Affirmative Action Program (AAP) requirements, during which it will provide technical assistance to facilitate the transition for contractors.

What this means is that contractors with a written AAP in place on the Final Rule’s effective date may maintain that AAP until the end of their AAP year and delay their compliance with the AAP requirements of Subpart C of the Final Rule until the start of their next AAP cycle.

The new final rule creates many new requirements, including:

7% Utilization Goal

Covered contractors and subcontractors will be required to establish a new 7% utilization goal for individuals with disabilities. The OFCCP arrived at the 7% utilization goal figure primarily by using information taken from the disability data collected as part of the American Community Survey—a census-type collection effort by the U.S. government.

Under the new rule, covered contractors and subcontractors with 100 or more employees must use the national 7% utilization goal, and, in most instances, apply it to the same job groups created for the Executive Order 11246 affirmative action program.

If you are a small contractor using the EEO-1 job categories as your job groups in your Executive Order AAP, the OFCCP says you can apply the 7% utilization goal to your EEO-1 job categories. However, if you are a contractor with a total workforce of 100 or fewer employees, you may apply the goal to your workforce as a whole.

So, how are covered contractors and subcontractors going to get information on disability?

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Applicants must be given the opportunity to self-identify at both the pre-offer and post-offer phases of the application process, using a form to be created by the OFCCP for this purpose. Incumbent employees must also be invited to self-identify every 5 years, using prescribed language, and the contractor must remind employees that they may voluntarily update their disability status at least once during the 5 years between invitations.

Unfortunately, many people with disabilities will likely choose not to self-identify.

Data Collection

Under the new rule, contractors must collect specific data relating to applicants and hires on an annual basis and maintain them for a period of 3 years. The required data:

  • The number of applicants who self-identified as individuals with disabilities, or who are otherwise known to be individuals with disabilities
  • The total number of job openings and total number of jobs filled
  • The total number of applicants for all jobs
  • The number of applicants with disabilities hired
  • The total number of applicants hired

So, once contractors collect all of this data, what does the OFCCP require them to do with it?

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Utilization Analysis

Covered contractors and subcontractors must conduct an annual utilization analysis and assessment of problem areas and establish specific action-oriented programs to address any identified problems.

If the contractor’s analysis shows that the percentage of individuals with disabilities is less than the 7% utilization goal, the contractor must take steps to determine whether and where impediments to equal employment exist.

This includes assessing its existing personnel processes, the effectiveness of its outreach and recruitment efforts, the results of its affirmative action program audit, and any other areas that might affect the success of the affirmative action program.

After conducting this assessment, the contractor must develop and execute action-oriented programs to correct any identified problem areas.

The OFCCP says that failure to meet a utilization goal will not be a violation of the regulations and will not lead to a fine, penalty, or sanction. However, failure to set a goal and conduct utilization analysis and assessment of problem areas may result in adverse action by the OFCCP.

In tomorrow’s Advisor, more new affirmative action requirements, plus an introduction to SmartPolicies®, BLR’s popular collection of prewritten HR policies.

1 thought on “New Affirmative Action Requirements for Individuals with Disabilities”

  1. 7% is a goal, not a requirement, correct? And there’s no penalty or violation for not meeting the goal? It all just seems so toothless and nothing more than busywork and bureaucracy.

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