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Published: 2013-09-04

New Employment Rules for Federal Contractors and Subcontractors



The U.S. Department of Labor announced two new final rules to improve the hiring and employment of veterans and people with disabilities on August 27, 2013.

Both of these rules will apply to federal contractors and subcontractors. Under current law, federal contractors and subcontractors are prohibited from discriminating against, and are required to affirmatively recruit, hire, train and promote, qualified veterans and people with disabilities.

According to the Bureau of Labor Statistics, the annual unemployment rate for post-September 2001 veterans, referred to as "Gulf War-era II veterans," is higher than the rates for all veterans and for nonveterans. In 2012, the unemployment rate was 9.9 percent for Gulf War-era II veterans, as compared to non-veterans at 7.9 percent.

The unemployment rate for working age people with disabilities in 2012 was 15%, compared with an unemployment rate of 8% for working age individuals without disabilities, and the poverty rate for individuals with disabilities, age 18 to 64, was 28.8 percent, compared to 12.5 percent for individuals without a disability.

According to the Office of Federal Contract Compliance Programs, the two new rules will address these disparities, reduce barriers to equal employment opportunity, and strengthen the regulations that implement current law.

Veterans

The new rule affecting veterans will update requirements under the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA).

Some of the highlights of the new rule include:

1. Contractors must use a quantifiable metric to measure their success in recruiting and employing veterans. They will now be required to annually adopt a benchmark either based on the national percentage of veterans in the workforce (currently 8 percent), or their own benchmark based on the best available data.

2. Contractors must maintain several quantitative measurements and comparisons for the number of veterans who apply for jobs and the number of veterans they hire.

3. Contractor job listings must be provided in a format that the state agency can access and use to make the job listings available to job seekers.

4. Prime contractors must include specific, mandated language in their subcontracts alerting subcontractors to their responsibilities as federal contractors.

5. Contractors must invite applicants to self-identify as protected veterans at both the pre-offer and post-offer phases of the application process, and the final rule includes sample invitations to self-identify that contractors may use.

6. Contractors must allow the Office of Federal Contract Compliance Programs to review documents related to a compliance check or focused review, either on-site or off-site, at Office of Federal Contract Compliance Programs' option.

Current contractors with a written affirmative action program (AAP) already in place on the effective date of the final rule will have additional time to comply with the AAP requirements.

People with Disabilities

The rule affecting people with disabilities updates requirements under Section 503 of the Rehabilitation Act of 1973.

Highlights of the changes made by the final rule include:

1. A new hiring goal for federal contractors and subcontractors that 7 percent of each job group in their workforce be qualified individuals with disabilities. The Department of Labor advises that this is a "utilization goal" and not a quota or a ceiling that would in any way limit the employment of individuals with disabilities. There is no fine, penalty or sanction for failing to meet this goal.

2 .Contractors are required to invite applicants to voluntarily self-identify as an individual with a disability at the pre-offer stage of the hiring process, in addition to the existing requirement that contractors invite applicants to voluntarily self-identify after receiving a job offer.

3. Contractors are required to invite incumbent employees to voluntarily self-identify every five years, using prescribed language that will be provided on the Department of Labor's website in the near future.

4. Contractors must maintain several quantitative measurements and comparisons for the number of individuals with disabilities who apply for jobs and the number of individuals with disabilities they hire in order to create greater accountability for employment decisions and practices.

5. Prime contractors must include specific, mandated language in their subcontracts alerting subcontractors to their responsibilities as federal contractors.

6. Contractors must allow the Office of Federal Contract Compliance Programs to review documents related to a compliance check or focused review, either on-site or off-site, at Office of Federal Contract Compliance Programs' option.

7. The new rule also implements changes necessitated by the passage of the ADA Amendments Act (ADAAA) of 2008 including a revision of the definition of "disability."

The new rules will become effective 180 days after their publication in the Federal Register. To keep updated on the implementation of these two new rules and for more detailed requirements, go to www.dol.gov/ofccp/VEVRAARule/ and www.dol.gov/ofccp/503Rule/.