Overview

On August 27, 2013, the Office of Federal Contract Compliance Programs (OFCCP) released Final Rules that impose new requirements on federal contractors. These new requirements are aimed at strengthening the regulatory affirmative action provisions covering both the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act, as well as to aid contractors in their efforts to recruit and hire protected veterans and individuals with disabilities. Historically, federal contractors were required to have affirmative action programs to benefit these individuals, but there were no requirements in terms of quantitative analysis to guide contractors in measuring success.

The Final Rules are anticipated to be published in the Federal Register within two weeks and will then be effective 180 days from the date of publication. Both rules apply not only to direct federal contractors, but also to subcontractors to the nth degree if certain thresholds are met.

The Final Rule regarding veterans protected by VEVRAA will compel federal contractors to comply with several new requirements, including:

  • Establishing annual hiring benchmarks for protected veterans. The Final Rule provides two methods for establishing the hiring benchmark. Under the first option, contractors may utilize the national percentage of veterans in the workforce, which currently sets a benchmark of 8 percent. Otherwise, contractors may set their own benchmark based on a consideration of several factors outlined by the OFCCP.
  • Documenting and annually updating several quantitative comparisons of those protected veterans who apply for positions and those who are hired.
  • Providing applicants with the opportunity to self-identify as a protected veteran at both the pre-offer and post-offer phases of the application process.
  • Incorporating an equal opportunity clause into subcontracts by reference.
  • Posting job openings with state or local job services.
  • Allowing the OFCCP access to documents as part of a compliance check or focused review either on-site or off-site, at the OFCCP's discretion.

The Final Rule regarding individuals with disabilities protected by Section 503 similarly imposes several new requirements on federal contractors, including:

  • Establishing a 7 percent utilization goal for qualified individuals with disabilities.
  • Documenting and annually updating several quantitative comparisons of individuals with disabilities who apply for positions and those who are hired.
  • Providing applicants with the opportunity to self-identify as an individual with a disability at both the pre-offer and post-offer phases of the application process.
  • Providing employees the opportunity to self-identify as an individual with a disability at least once every five years.
  • Incorporating an equal opportunity clause into subcontracts by reference.
  • Allowing the OFCCP access to documents as part of a compliance check or focused review either on-site or off-site, at the OFCCP's discretion.

In light of these Final Rules, federal contractors should consider preparing for these new affirmative action obligations by updating employment policies to reflect new requirements, revising subcontract and purchase order information to include new equal opportunity clauses, updating hiring processes to gather appropriate pre-offer and post-offer self-identification information and post job openings in appropriate sources, determining hiring benchmarks for protected veterans, and creating affirmative action plans that comply with the new regulations.