On August 27, 2013, the Office of Federal Contract Compliance Programs (“OFCCP”) announced a Final Rule that makes changes to the regulations implementing the Vietnam Era Veterans’ Readjustment Assistance Act, as amended (“VEVRAA”), at 41 CFR Part 60-300, and to Section 503 of the Rehabilitation Act of 1973 (“Rehabilitation Act”). The key changes include new components to contractors’ affirmative action plans, new self-identification requirements, new recordkeeping requirements, new job listing requirements, new equal opportunity clause requirements, and the rescission of part 60-250 of VEVRAA.

OFCCP revised the VEVRAA regulations in an effort to update and strengthen contractors’ affirmative action and nondiscrimination responsibilities with respect to covered veterans and disabled individuals. It found that increasing numbers of veterans are returning from tours of duty and having difficulties finding employment thereafter. Specifically, Gulf War-era veterans currently have an unemployment rate far higher than the national average. Similarly, the OFCCP found that a substantial disparity exists in the employment rate of individuals with disabilities and that this should not be the case, given the technological advancements that have made it possible for people with disabilities to apply for and successfully perform a broad array of jobs.

The biggest change is that contractors who are required to develop written affirmative action plans (“AAPs”) must now also establish a hiring benchmark for protected veterans each year and a hiring goal for qualified individuals with disabilities.

Contractors may establish their veteran hiring benchmarks in one of two ways. First, contractors may establish a benchmark equal to the national percentage of veterans in the civilian labor force, as posted in the Benchmark Database on the OFCCP Web site. Alternatively, contractors may establish their own benchmark by taking into account the following five factors: (1) the average percentage of veterans in the civilian labor force in the state where the contractor is located over the preceding three years; (2) the number of veterans over the previous four quarters who participated in the employment service delivery system in the state where the contractor is located; (3) the applicant and hiring ratios for the previous year; (4) the contractor’s recent assessments of the effectiveness of its outreach and recruitment efforts; and (5) any other factors, such as the nature of the job or its location, that would affect the availability of qualified protected veterans.

The Rehabilitation Act’s new regulations include a goal for federal contractors that 7 percent of each job group in their workforce be made up of qualified individuals with disabilities. When the percentage of individuals with disabilities in one or more job groups is less than this utilization goal, the contractor must take steps to determine whether and where impediments to equal employment exist. After conducting this assessment, the contractor must develop and execute action-oriented programs to correct any identified problem areas.

Federal contractors must expand their self-identification programs for applicants and employees under the new regulations. In addition to the requirement that employers invite covered veterans and individuals with disabilities to self-identify as such after they have received an offer but before beginning work, the new regulations also require an opportunity for them to self-identify prior to receiving an offer so that contractors may track veteran and disabled applicants. Contractors are permitted to include this invitation to self-identify with their application materials or with the invitation to self-identify that they already use to gather information about applicants’ gender, ethnicity, and race. Contractors must also re-survey the workforce with respect to disabilities every five years.

The new regulations also impose new recordkeeping requirements. The new VEVRAA regulations require contractors to document and update certain comparisons and information regarding applicants and employees annually. With respect to applicants, employers must keep records about the number of protected veteran applicants, the total number of job openings and the number of jobs filled, and the total number of applicants for all jobs. With respect to employees, employers must keep records about the total number of protected veteran applicants hired and the total number of applicants hired. In terms of outreach, contractors must also now retain records pertaining to evaluations of outreach and recruitment efforts, records pertaining to the data collection of comparisons regarding applicants and employees, and records related to the hiring benchmark requirement.

Similarly, the new Rehabilitation Act regulations require that employers document and update records, including the total number of applicants for employment, the number of applicants who are known individuals with disabilities, the total number of job openings, the number of jobs filled, and the number of individuals with disabilities hired.

In addition to the requirement that federal contractors list job openings with the appropriate employment service delivery system, they must also, under these new regulations, indicate on their job listings that they are a federal contractor, such as by noting “VEVRAA Federal Contractor” on the listings. They must also indicate their desire for priority referrals of protected veterans for its openings and provide the contact information for the contractor official responsible for hiring at each hiring location who can verify the information in the job listing.

Contractors are still permitted to incorporate the required Equal Opportunity Clause into subcontracts by reference by citing to the regulations, 41 CFR 60-300.5(a), but it now must also include the following sentences in bold text immediately following the citation: “This contractor and subcontractor shall abide by the requirements of 41 CFR 60-300.5(a). This regulation prohibits discrimination against qualified protected veterans, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified protected veterans.”

Similarly, the new regulations to the Rehabilitation Act require the inclusions of this sentence in bold text: “This contractor and subcontractor shall abide by the requirements of 41 CFR 60- 741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.”

Currently, part 60-250 protects veterans, including Vietnam- Era Veterans, Recently Separated, Special Disabled, and Other Protected Veterans, and applies only to contracts that have not been entered into or renewed since December 1, 2003. This part 60-250 has now officially been rescinded, and any contractors who are covered by both the new regulations and the old part 60-250 must continue to provide required affirmative action and protection to those categories of veterans protected under 60-250. These categories are now encompassed in the definition of “pre- JVA veterans.”

The effective date of these new regulations is expected to be in March 2014, 180 days after they are published in the Federal Register in the coming days. Contractors who already have an AAP in place on the effective date may delay compliance with the new AAP requirements until they create their next plans, although they must comply with all other requirements on the effective date.

Federal contractor employers should prepare to update their affirmative action plans, outreach efforts, recordkeeping, selfidentification forms and processes, job listing forms and processes, and sub contract language in accordance with these new regulations in 2014.