On August 27, the U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) announced a final rule intended to promote the hiring and employment of people with disabilities by federal government contractors. The rule makes changes to the regulations implementing Section 503 of the Rehabilitation Act of 1973, which prohibits employment discrimination against individuals with disabilities, and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). 
The final rules were published in the Federal Register on September 24 and can be kindly described as voluminous and difficult to decipher. This article provides guidance on the key revisions to the Section 503 and VEVRAA regulations that affect contractors that are required to prepare affirmative action plans (AAPs).
Voluntary self-identification
The final rules require contractors to invite applicants and employees to voluntarily self-identify under both Section 503 (“qualified individual with a disability” ) and VEVRAA (“protected veteran” ) at the pre- and postoffer stages of the hiring process as well as every five years of employment. The preoffer invitation to self-identify can be made when applicants are asked to self-identify for race and gender purposes. Contractors are required to invite applicants to voluntarily self- identify again at the postoffer stage before applicants begin job duties.
During the first year after the regulations go into effect and every five years thereafter, contractors are required to invite current employees to voluntarily self-identify. Under Section 503, the self-identification forms must be maintained in “data analysis files” separate from employees’ medical files. VEVRAA requires the forms to be maintained in a separate file but permits information regarding employees’ medical considerations or history to be kept in employees’ medical files. Both laws require that the information remain confidential.
Data collection
Contractors will have to ensure that their HR information and applicant tracking systems have the capability to track information about disabilities and veteran status. Under Section 503 and VEVRAA, the following information must be tracked:
- The total number of applicants;
- The number of applicants who self-identified as individuals with a disability or protected veterans (or who were otherwise known to be protected veterans);
- The total number of job openings and the total number of jobs filled;
- The total number of applicants who were hired; and
- The number of applicants with disabilities or the number of protected veterans hired.
VEVRAA benchmarks for hiring
For the first time, VEVRAA sets a hiring benchmark for “protected veterans.” The benchmark is set by either (1) adopting the OFCCP’s published benchmark (currently 8%) or (2) developing a unique benchmark by applying five factors set forth by the OFCCP in the regulations. If setting a unique benchmark, contractors should be prepared to defend the selection factors and should retain for three years documentation that statutory factors were considered. The annual hiring benchmark should be included in the text of AAPs and maintained on-site in the event of an OFCCP audit.
Section 503 utilization goal
Section 503 sets a 7% utilization goal (not a hiring benchmark) for each job group in a contractor’s AAP. For each job group with less than 7% utilization of qualified individuals with a disability, contractors must evaluate whether there are impediments to employment by examining their personnel policies and processes, reviewing the effectiveness of outreach and recruitment activities, and performing internal audits of employment activities.
The director of the OFCCP will review the 7% utilization goal periodically and adjust it as needed. If a contractor’s entire workforce has fewer than 150 employees, the contractor can apply the 7% utilization goal across all employees. Utilization data is not required to be presented in AAPs, but contractors must maintain the information and will likely be required to present the data during an OFCCP audit.
Outreach and recruitment activities and applicant tracking
Contractors that use electronic or online job application systems must provide reasonable accommodations to ensure that disabled individuals are able to apply for positions. Contractors should ensure that their online job application systems are accessible and compatible with assistive technologies.
Both Section 503 and VEVRAA outline recommended recruitment and outreach activities. Contractors are required to assess their outreach and recruitment activities for the previous 12 months in their AAPs. The effectiveness of each outreach effort must be reviewed by evaluating the current and two most recent years of data. If the contractor or the OFCCP determines that the outreach or recruitment activities are not successful, the contractor must implement new efforts identified in the regulations.
Review of personnel processes
Contractors are now required to review their personnel processes “periodically” and modify them as needed. AAPs must include a narrative section discussing the review and modification of the contractor’s personnel processes. The rule also requires contractors to create a schedule for reviewing physical and mental job qualifications. Although the final rule did not adopt a proposed requirement that contractors review their personnel processes annually, it is anticipated that the OFCCP will vigorously enforce such an obligation.
Notice and record-keeping requirements
Contractors are now obligated to send annual written notices of their affirmative action policies to all subcontractors, subcontracting vendors, and suppliers.
The final rule did not adopt the proposed five-year record-keeping requirements. Instead, there are two- and three-year record-keeping requirements. The following records must be maintained for three years:
- Outreach efforts, along with an annual evaluation of the efforts;
- Written notices of policies sent to subcontractors, vendors, and suppliers;
- Applicant and new hire data; and
- Hiring benchmarks.
All other records must be maintained for two years. There are questions about the scope of data required for records that must be maintained for three years. As a best practice, it is recommended that contractors retain all data and documents for three years.
Effective date of AAP-related obligations
Generally, the regulations will go into effect 180 days after the final rules were published in the Federal Register. The final rules were published September 24, 2013, which makes March 24, 2014, the effective date of the regulations. However, certain provisions in the regulations do not require immediate compliance.
Provisions effective March 24, 2014, include:
- Revise equal employment opportunity (EEO) clause;
- Send notices of contractor’s commitment to taking affirmative action to labor organizations;
- Revise bulletin board notices;
- Revise intranet or Internet postings if appropriate;
- Review EEO tagline in job advertisements; and
- Use voluntary self-identification forms and processes.
Provisions effective for the first AAP after March 24, 2014, include:
- Describe review of personnel processes in AAP;
- Schedule and describe review of physical and mental job qualifications in AAP;
- Send policy notices to subcontractors, vendors, and suppliers;
- Assess effectiveness of outreach and recruitment efforts;
- Report applicant and new hire data;
- Document VEVRAA hiring benchmark;
- Develop utilization analysis for qualified individuals with disabilities;
- Develop corrective action plans for areas of underutilization; and
- Use voluntary self-identification forms and processes.
Bottom line
This is a lot of information to absorb. To ensure compliance with the revised regulations, contractors should first review the text of the regulations and obtain compliance assistance if needed.
Second, contractors should assess their current systems and develop an action plan and implementation team. Third, contractors should design and deploy the required programs, processes, and procedures.
Elizabeth Bradley is an attorney with Fortney & Scott, LLC in Washington, D.C. She may be contacted at ebradley@fortneyscott.com.