Last month, the Department of Labor (“DOL”) issued two regulations that require federal contractors to employ more veterans and individuals with disabilities, updating long-existing federal laws. For over 40 years, the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRA”) and Section 503 of the Rehabilitation Act (“Section 503”) have required federal contractors and subcontractors to affirmatively recruit and hire veterans and disabled individuals. The DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) has updated its implementation of both laws, changing benchmarks for veteran recruiting and employment, and increasing hiring goals for federal contractors and subcontractors.

Here’s a summary of the VEVRA Rule:

  • Rescinds old law. The outdated 41 CFR 60-250 is rescinded entirely, but protects veterans under 41 CFR Part 60-300.
  • Sets hiring benchmarks. Contractors must establish annual hiring benchmarks for protected veterans, choosing between (1) “a benchmark equal to the national percentage of veterans in the civilian labor force,” or (2) “[establishing] their own benchmarks using certain data from the Bureau of Labor Statistics and [OFCCP’s VETS/ETA].”
  • Record-keeping. Contractors must document the number of veterans that apply and the number they hire. These records must be kept for three years.
  • Self-identification. Contractors must invite applicants to self-identify as protected veterans (the rule gives sample invitations that contractors may use).
  • Incorporate equal opportunity clause. Specific language must be incorporated into a subcontract by reference, which will flow-down the requirements to federal subcontractors.
  • Provide job listings. Contractors must provide information about job openings in the format permitted by the relevant State or local job service.
  • Give OFCCP access to records. Contractors must give OFCCP access to review documents and check for compliance.

And a summary of the Section 503 Rule:

  • 7% goal. Contractors must apply a 7% utilization goal for qualified disabled individuals. The goal applies to each job group (or the entire workforce for contractors with 100 or less employees) and contractors must conduct annual utilization reviews.
  • Record-keeping. Contractors must document the number of disabled individuals that apply for jobs and the number of those they hire. These records must be kept for three years.
  • Self-identification. Contractors must invite applicants to self-identify as an individual with a disability (the rule prescribes the language that contractors must use). Employees must be invited to self-identify every five years.
  • Incorporate equal opportunity clause. Specific language must be incorporated into a subcontract by reference, which will flow-down the requirements to federal subcontractors.
  • Give OFCCP access to Records. Contractors must give OFCCP access to review documents and check for compliance.
  • ADA Amendments Act. The rule revises the definition of “disability” and certain nondiscrimination provisions.

You can read the full language of the VEVRA Rule here and the Section 503 Rule here.

Contractors need to be aware of these changes and the requirements they impose. Further, contractors should anticipate increased administrative costs as they begin to implement these new compliance measures.

These final rules are expected to be published in the Federal Register later this month and will take effect 180 days after publication. Accordingly, contractors will need to be ready to implement these requirements by the spring of 2014.