On August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) released two final rules updating the Affirmative Action regulations regarding recruiting and hiring of veterans and persons with disabilities, which are mandatory for federal government contractors. The final rules increase the responsibilities of contractors and subcontractors to hire veterans and persons with disabilities and require more detailed reporting of the contractor’s efforts in this regard.

These rules had been pending for some time, having first been proposed in April 2011. They were finalized after a turnover in the leadership at the Department of Labor and Office of Management and Budget. According to the Department of Labor, these updated regulations were necessary because the employment rates for veterans and persons with disabilities lag well behind the employment rate for the general population.

The final rules have several common components. Both rules:

  • Create greater accountability for employment decisions and practices by requiring that federal contractors annually document and update several quantitative measurements and comparisons of the numbers of veterans and persons with disabilities that are interviewed and hired by the contractor. Contractors will be required to retain this for a period of three years.
  • Require that contractors invite applicants to self-identify as a protected veteran or person with disability, as the case may be, at both the pre-offer and post-offer phases of the employment application process.
  • Mandate that specific language be used when incorporating the Equal Employment Opportunity clauses into a subcontract by reference, to better alert subcontractors that they have equal employment opportunity obligations.
  • Clarify that contractors must allow OFCCP to review documents related to a compliance check or focused review, as well as inform OFCCP of all formats in which it maintains its records and provide those records to the OFCCP upon request.

In addition to these commonalties, each rule carries further requirements specific to the relevant regulation. Under the new rule for the veterans affirmative action program, contractors must:

  • Establish annual hiring benchmarks for protected veterans using one of two methods: contractors may choose to establish a benchmark equal to the national percentage of veterans in the civilian labor force, which will be updated and published annually by the OFCCP; or contractors may establish their own benchmarks using certain data provided by the Bureau of Labor Statistics and any factors that reflect the contractor’s unique hiring circumstances.
  • Publish their job listings with the appropriate state employment service agency in a format that the state agency can access and use to make the job listings available to job seekers who are veterans.

The rule governing the affirmative action programs for persons with disabilities creates:

  • A requirement that contractors meet a 7% nationwide utilization goal for persons with disabilities. This goal will apply to each of the contractors “job groups” or, if the contractor has less than 100 employees, to the entire job group. Additionally, contractors must conduct an annual utilization analysis and assessment of the causes of any failures to meet the 7% goal and to establish specific action items that address any identified problems.
  • A revised definition of “disability” that is in line with the Americans with Disabilities Act (ADA) Amendments Act of 2008.

The rules are expected to be published in the Federal Register within the next two weeks and will become effective 180 days following publication. However, current contractors with a written Affirmative Action Plan already in place on the effective date have additional time to bring their plan into compliance. This will allow contractors to maintain their current Affirmative Action Plan cycle. Notwithstanding, contractors should now begin review of their current plans and maintenance policies to ensure compliance with the new regulations once effective. Such review may include changes in a contractor’s record retention practice and/or information on technology policies and software.

We strongly advise that you seek counsel to review your current policies or to assist in drafting new policies to ensure that you are compliant with the new standards.