LEL Flash | Issue: September 2013

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Issue: September 2013

Special Feature

Proposed Final Rules Announced for Federal Contractor Recruiting and Employment of Protected Veterans and Individuals with Disabilities

Note: this article is written from a management perspective. Coverage on this topic from an employee perspective will be presented in a future issue of the FLASH.

Federal contractors, i.e., companies that do business with the federal government in any one of many ways, learned on August 27, 2013 that the Office of Federal Contract Compliance Programs (OFCCP) intends to publish in the Federal Register proposed final regulations affecting the recruitment and employment of individuals with disabilities and protected veterans. The new regulations, when they go into effect, will heighten affirmative action requirements for federal contractors under section 503 of the Rehabilitation Act of 1973 (29 U.S.C. §793) and section 4212 of the Vietnam Era Veterans Readjustment Assistance Act of 1974 (38 U.S.C. §4212). This would have a huge impact as the number of federal contractor employers is estimated to exceed 200,000 companies.

Editors' Note: On September 24, 2013, the final rules were published in the Federal Register (78 Fed. Reg. 58,614 and 78 Fed. Reg. 58,682). The rules become effective 180 days after publication, on March 24, 2014.

OFCCP began the process of attempting to strengthen the regulations relating to affirmative action for veterans and people with disabilities with proposed changes to the regulations published in 2011. A significant volume of public comment followed. Although the announcement of the "final rules" on August 27, 2013 was not accompanied by a contemporaneous publication in the Federal Register, once the final rules are published, the stated effective date is 180 days later. That's assuming, of course, that the Office of Management and Budget (OMB) approves the published rules sometime after their publication in the Federal Register. If and when these steps are completed, contractors will need to incorporate the changes into their affirmative action plans beginning with the next effective plan year.

According to Patricia Shiu, the OFCCP's Director, the new rules are an "important step toward reducing barriers to real opportunities for veterans and individuals with disabilities." The OFCCP attempts to achieve this goal under §503 by adopting the definition of "disability" set forth in the Americans with Disabilities Amendment Act of 2008 (the "ADAAA"), 42 U.S.C. §12101. The final rule under §4212 similarly seeks to broaden coverage by tweaking the categorical definitions covering recently separated veterans, Armed Forces service medal veterans, disabled veterans and active duty wartime or campaign badge veterans. These changes represent an attempt to align the rule with the statutory language found in The Jobs for Veterans Act of 2002.

Under the new rules, OFCCP requires federal contractors to establish hiring benchmarks for protected veterans and utilization goals for individuals with disabilities. The §503 regulation will require federal contractors to set a 7% utilization "goal," which is not a rigid and inflexible quota that must be met, but rather a goal used to decide if impediments to equal opportunity exist and to then develop and execute action-oriented programs to ensure equal employment opportunity for individuals with disabilities. The §4212 regulation will require federal contractors to establish a hiring "benchmark" for protected veterans each year. Contractors may use as their benchmark the national percentage of veterans in the civilian labor force, which is published and updated annually on the OFCCP's website, or an alternative goal established after considering and analyzing multiple factors. As with the "goal" under §503, the "benchmark" under §4212 is not a rigid and inflexible quota that must be met, but, rather, an assessment tool to guide future recruiting efforts.

The regulations contain additional steps for contractors to take with regard to inviting applicants and employees to "self-identify" as protected veterans or individuals with disabilities. Once effective, the rules will require that federal contractors annually document: (1) the number of applicants who self-identified as having a disability or being a protected veteran or who are otherwise known to be within those groups; (2) the total number of job openings and total number of jobs filled; (3) the total number of applicants for all jobs; (4) the number of applicants hired who are protected veterans or persons with disabilities; and (5) the total number of applicants hired. The documentation must be maintained for three years.

This is just a brief overview of the regulations. Federal contractors should study the announced regulations and consult with experienced employment counsel. Despite the time period explained above that must ultimately play out before the rules have the effect of law, the reverberations of the August 27, 2013 announcement and publication will be felt nationally in the form of continued discussion about employment opportunities for protected veterans and individuals with disabilities.

Brian Bulger and Julie Trester are Section members and partners in the Chicago office of Meckler Bulger Tilson Marick & Pearson LLP.


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Jeremy J Glenn, Meckler Bulger et al | Elana Hollo, National Labor Relations Board | Monique Gougisha Doucette, Ogletree Deakins | Amy F. Shulman, Broach & Stulberg LLP

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