New Regulations from the OFCCP: What Will it Mean for Your Company?

 If your organization is a federal contractor, or would like to be someday, this article may help you understand the new regulations from the Department of Labor (DOL) Office of Federal Contract Compliance Programs (OFCCP).  These new rules set requirements for federal contractors and subcontractors to recruit, hire, train and advance eligible veterans and persons with disabilities.  These new rules will become effective 180 days after their publication in the Federal Register, which should be soon.

Why did the government feel that these new rules were necessary?  "Being a federal contractor is a privilege - one that comes with the reasonable responsibility to abide by the law and provide equal employment opportunity to all workers," says Labor Secretary Tom Perez.

Even though the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act have been in place for decades, "the laws haven't always worked as intended," says Perez.  "These new rules are a win-win.  They will benefit veterans and people with disabilities, who belong in the economic mainstream of the nation but have faced unfair barriers in the job market.  They will benefit employers who do business with the federal government, increasing their access to a large, diverse pool of qualified workers.  And they will benefit the entire nation, as these rules help us fulfill the American promise of equal opportunity for all."

Below, we will introduce you to the regulations, one by one, and then highlight the actions that your organization (most likely your human resource professional) will need to take.

Highlights of the Final Rule regarding Vietnam Era Veterans' Readjustment Assistance Act

VEVRAA Hiring Benchmarks: requires contractors to establish a yearly benchmark for hiring qualified veterans. 
What this means to HR: A benchmark can be obtained in one of two ways.  1) Using the benchmark provided by the OFCCP (which will be updated annually by them) or, 2) Calculating it on your own using data and statistics from the Bureau of Labor Statistics and Veterans' Employment and Training Service/Employment and Training Administration AND other factors regarding your organization's unique hiring situation or circumstances.

VEVRAA Data Collection: requires that contractors keep quantitative data on the hiring of veterans.
What this means to HR: create yearly a quantitative comparison of the number of qualified veterans who apply for jobs and the number of those veterans who are hired.  You must keep this data on file for 3 years.  Use this data to identify trends and problem areas.

VEVRAA Self-Identification: requires that contractors ask all job applicants pre-offer and post-offer to self-identify as a protected veteran.
What this means to HR: You will probably need to add a section to your employment application for this purpose.  You can use samples that will be included in the Final Rule.

VEVRAA Job Posting: requires that contractors use a format for posting jobs that is approved by state and local job services so that the information can be easily accessed and made available to job seekers.
What this means to HR: if you don't already have it, obtain the approved format for job listing and begin using it whenever you post a job.

 

Highlights of the Final Rule regarding Section 503 of the Rehabilitation Act (for individuals with disabilities, or IWDs)

Section 503 Utilization Goal: establishes the goal of 7% utilization of qualified IWDs for any contractor's entire workforce or for the workforce AND individual job groups for contracts with over 100 employees.
What this means to HR: You will need to do three things. 1) Conduct a yearly analysis of your organization's utilization of qualified IWDs, 2) Conduct a yearly assessment of any problem areas in this regard and 3) Create and implement an action plan to address any problem areas found.

Section 503 Data Collection: requires that contractors keep quantitative data on the hiring of IWDs.
What this means to HR: Create yearly a quantitative comparison of the number of qualified IWDs who apply for jobs and the number of those who are hired.  You must keep this data on file for 3 years.  Use this data to identify trends and problem areas.

Section 503 Self-Identification: requires that contractors ask all job applicants pre-offer and post-offer to self-identify as an IWD.  It also requires that contractors invite their employees to self-identify every 5 years as an IWD.
What this means to HR: You will probably need to add a section to your employment application for this purpose.  You will also need to put a process in place to ask employees to self-identify every 5 years as IWDs.  You can use the language that will be posted soon on the OFCCP website. 

Section 503 ADAAA: revises the definition of the term "disability" and some of the provisions of the ADAAA.
What this means to HR: Although it is not clear in the release of this information from the OFCCP, this new rule is probably referring to the new EEOC revisions as of May of 2013.  HR professionals should already have begun to widen their definition of "disabled" to include those with conditions such as cancer, epilepsy, diabetes and intellectual disabilities.

Highlights Common to Both VEVRAA and Section 503

Use of Equal Opportunity clause for subcontractors: requires that specific language be used in any EO clause placed in a subcontract.
What this means to HR: Work with other departments to make sure the correct wording is being used in any subcontracts.  The required language should be included in the Final Rule.

Records Access: requires that contractors allow OFCCP to have access to all relevant documents in any format in which they are kept by the contractor.
What this means to HR: if a request is made by the OFCCP to view relevant documents (related to compliance), you must tell them all the different formats in which the documents or records are being kept, then allow them access to those documents in whatever format they ask for, either on-site or off-site.

 

Did the OFCCP make any concessions to these rules that are favorable to employers?

Yes, regarding the benchmark for hiring veterans, the regulations will look at the entire workforce of an organization, not individual job groups.

Also, the new regulations will require the organization to apply the 7% benchmark for hiring persons with disabilities to individual job groups, but ONLY for employers with 101+ employees.  For organizations with 100 or fewer employees, the new rules will apply to the workforce as a whole.

Finally, the DOL recognizes that this represents significant changes for contractors.  They will be making assistance available for organizations that need help understanding how to comply.

 

Begin now to update your technology and your hiring/recruiting practices.  The only leeway you will have on the timetable for compliance will be with your Affirmative Action Plan.  If you already have an AAP in place on the effective date of the new rules, you will be allowed to keep your plans until the end of your plan year and will start complying with the new rules at the start of your new plan cycle.

As always, call us at The HR Group, Inc. (336-292-1911) if we can be of assistance to you in determining how to proceed with these new regulations, with your hiring processes or with your Affirmative Action Plans.