In a bid to boost the workforce participation of individuals with disabilities and veterans, the Office of Federal Contract Compliance Programs (OFCCP) has issued new rules that became effective on March 24, 2014. These new rules apply to all Federal contractors subject to Executive Order 11246.
The new disability-related rules:
• Establish a "utilization goal" of 7% for individuals with disabilities at the job group level in every covered workforce. This means that in a job group with 100 employees, 7 should be individuals with disabilities. OFCCP stresses that this is not a quota but only a “goal,” and that failure to reach that percentage mark, alone, will not lead to penalties or sanctions;
• Require employers to invite job applicants to voluntarily self-identify on specially designated OFCCP forms as individuals with disabilities at the pre-offer stage (in contrast to the Americans with Disabilities Act (ADA), which forbids employers from inquiring about disabilities until a job offer has been made);
• Require employers to invite existing employees to self-identify as individuals with disabilities; this disability survey must be completed within the first year after becoming subject to the new rule and employers must use the self-identification form created by OFCCP to conduct this survey; for contractors already subject to these provisions, this one year period begins to run starting on March 24, 2014, the effective date of these new regulations (thus a current contractor would need to conduct this disability survey of their workforce before March 24, 2015);
• Once this initial disability survey is completed, the contractor must conduct a new updated survey at least once every five years; in addition, at least once between each five-year re-survey period, the contractor must remind its employees that they may voluntarily update their disability status;
• Require contractors to collect statistics regarding the number of disabled job applicants and employees, ostensibly to promote greater accountability for employment decisions and practices;
• Require contractors to advise sub-contractors in specific terms to promote compliance; and
• Make changes to the definition of “disability” required by changes to the ADA.
The new rules pertaining to veterans:
• Require covered employers to collect data reflecting their efforts in recruiting and hiring veterans and compare it to the currently set "benchmark" of 8% for veterans in the entire workforce (OFCCP will update this hiring benchmark annually or the contractor can calculate its own benchmark taking into account various factors);
• Gather statistics showing the number of veterans who apply for jobs and are hired by inviting applicants to voluntarily self-identify as a veteran on forms created by the contractor;
• Require posting job opportunities with appropriate state employment services;
• Require contractors to advise sub-contractors in specific terms to promote compliance, noting applicable preferences for veterans; and
• Repeal certain portions of outdated and superseded regulations.
The final rule also requires covered contractors to annually record the number of job openings, number of jobs filled, number of applicants for all jobs, number of applicants who self-identify as being a protected veteran or having a disability, the number of applicants hired, number of applicants with disabilities hired and number of applicants hired who are protected veterans. While this data can be compiled for a contractor’s entire workforce, since OFCCP audits will continue to be based on a single establishment, contractors may want to maintain this data separately for each establishment.
Contractors that are required to complete affirmative action plans annually do not need to make any revisions if their plan is in place by March 24, 2014. Only affirmative action plans that are drafted or renewed after March 24, 2014 must comply with the new regulations. The new rules also extend the record retention period to three years for all relevant records related to protected veterans and individuals with disabilities.
Although they are variously presented as "utilization goals" or "benchmarks," several decades of experience with OFCCP suggests that the agency will, in fact, treat these desired percentages as quotas. Inviting individuals with disabilities to "self-identify" as disabled may well produce unintended consequences and fuel failure-to-hire discrimination charges. On the other hand, the Supreme Court has so expanded the definition of "disability" that many employers may find, to their surprise, that covered individuals make up far more than the desired 7%. The data collection and reporting requirements for both rules represent a significant expansion of OFCCP’s already onerous compliance burden.
