Publication

U.S. Department of Labor’s New Affirmative Action Rules and Their Impact on Government Contractors and Subcontractors

By Revée Walters and Ed Tolchin, Offit Kurman Attorneys At Law On August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) amended the regulations implementing Section 503 of the Rehabilitation Act of 1973 and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act with the purpose of mandating new and sweeping affirmative action requirements for federal contractors and subcontractors relating to their employment of individuals with disabilities (IWDs) and veterans. The Final Rule will be published in the Federal Register shortly and is effective 180 days after its publication. However, current contractors with a written affirmative action program (AAP) already in place on the effective date will have some additional time to come into compliance with the AAP requirements, depending on their AAP compliance cycle.

Employment of Individuals with Disabilities

The final rule establishes a nationwide goal of 7% utilization for qualified IWDs. Contractors must apply the goal to each of their job groups, or to their entire workforce if the contractor has 100 or fewer employees. Annual utilization analyses and assessment of problem areas are mandated, and identified problems must be addressed with specific ameliorative programs. The rule requires that contractors invite applicants to self-identify as IWDs at both the pre-offer and post-offer phases of the application process, using language prescribed by OFCCP. The Final Rule also requires that contractors invite their employees to self-identify as IWDs every five years, using prescribed language to be posted on the OFCCP website. This aspect of the rule is similar to the current program of gathering information regarding race, ethnicity and gender. To assure compliance with the Americans with Disabilities Act and the need to maintain confidentiality, contractors must maintain self-identification forms separate from other application records.

Employment of Veterans

Under the new rule contractors are required to establish annual hiring benchmarks for hiring veterans. These benchmarks must either be based on the national percentage of veterans in the workforce (currently 8 percent) or a percentage customized by the contractor so long as it is based on statistics provided by the Bureau of Labor Statistics. Contractors must allow applicants to self-identify and may only request that the applicant provide a general indication that they meet the criteria for one or more protected veteran categories as opposed to a request for their specific protected veteran status category.

Assure Compliance

These changes place a greater responsibility on contractors to be diligent in their record keeping and to focus more on their outreach and recruitment efforts of IWDs and veterans to ensure a more inclusive work force for federal contract projects. Additionally, contractors are tasked with clarifying job listings to demonstrate their compliance with recruitment of IWDs and veterans, and advising subcontractors of these same responsibilities by including the equal opportunity clause in their subcontracts with specific mandated language.

About the Authors

Revée Walters is an associate in the practice areas of business litigation, landlord tenant law, and family law. She represents a wide variety of clients in mediations, agency proceedings, and state and federal court. She can be reached at rwalters@offitkurman.com or 240-507-1768. Ed Tolchin is a principal in the practice areas of government contracting, business litigation, and technology matters. He represents prime and subcontractors in contract negotiation and formation matters and in disputes involving both government and commercial business issues. He can be reached at etolchin@offitkurman.com or 240-507-1769. 4817-5537-8709, v. 1