The Office of Federal Contract Compliance Programs (“OFCCP”) issued two Final Rules updating requirements under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”) and Section 503 of the Rehabilitation Act of 1973 (“Section 503”). The Final Rules require certain federal contractors/subcontractors to conduct a quantitative analysis regarding the number of applicants and hires of veterans and individuals with disabilities at a contractor’s facility. The Final Rules went into effect March 24, 2014; however, contractors with an affirmative action program (“AAP”) in place by March 24, 2014, have until the start of their next AAP cycle to comply with the new requirements relating to AAPs. 

The VEVRAA rule applies to employers with USD100,000 or more in federal contracts/subcontracts (although the AAP requirements only apply to those with a single contract of USD100,000 or more and 50 or more employees). The Section 503 rule applies to employers with USD10,000 or more in federal contracts (although the AAP requirements only apply to those with USD50,000 or more in federal contracts and 50 or more employees). 

Under VEVRAA, applicable contractors must set a “hiring benchmark” for protected veterans each year. Contractors can choose to use aggregate data published by OFCCP, which is currently set at 8 percent, or form their own benchmark using a five factor test, which involves analyzing state specific data. Section 503 establishes a 7 percent “utilization goal” for individuals with disabilities and requires contractors to survey their current workforce every five years regarding disability status. Failure to hire sufficient veterans or individuals with disabilities will not, by itself, result in a violation and penalties. However, if the targets are not met, contractors must review their recruitment efforts and determine if they are effective. This determination must be reasonable as judged by the OFCCP. 

Covered contractors must also:

  • include an equal opportunity clause in covered government contracts;
  • invite applicants to voluntarily self-identify as a protected veteran or individual with a disability;
  • comply with recordkeeping and data collection requirements;
  • engage in increased outreach efforts; and
  • include certain language in job postings. 

When inviting individuals to self-identify under Section 503, contractors must use the form issued by the OFCCP, available here. In addition, Appendix B of the VEVRAA Final Rule includes a sample invitation to self-identify as a protected veteran. Contractors may choose to use this sample form. 

Planning Tip:   Federal contractors/subcontractors should analyze whether and which portions of the Final Rules will apply to them. Contractors should ensure their record-keeping and applicant tracking systems can accommodate new information regarding veterans and individuals with disabilities and train recruiting and hiring personnel on new requirements under the Final Rules. Applicable contractors should also survey their applicants and employees to collect information for the “hiring benchmark” for veterans or “utilization goal” for individuals with disabilities, and update their AAPs accordingly. Contractors should consult with counsel to establish a plan of action and timeline for coming into compliance with the Final Rules.