New Affirmative Action Requirements and Non-discrimination Obligations for Federal Contractors and Subcontractors Regarding Veterans and Persons with Disabilities

On September 24, 2013, the Office of Federal Contract Compliance Programs (OFCCP) of the U.S. Department of Labor (DOL) established final rules defining Section 503 of the Rehabilitation Act of 1973 (“RA”) and the Jobs for Veterans Act of 2002, which amended the Vietnam Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”). The RA and VEVRAA prohibit employers from discriminating against veterans and disabled persons and require federal contractors to pursue affirmative steps to hire individuals belonging to these categories. The final rules, codified at 41 C.F.R. §§60-300 and 60-741, went into effect on March 24, 2014 and establish affirmative action and non-discrimination requirements for government contractors and subcontractors. Employers are expected to take necessary steps within the next six months to comply with their new obligations.

The new obligations established by the DOL include non-binding hiring benchmarks for veterans and disabled persons. Federal contractors are now required to take necessary steps to meet a benchmark of 7% in hiring individuals with disabilities, and to set an annual goal for hiring veterans that matches the national percentage of veterans in the labor force, which is currently at 8%, or calculate its veteran benchmark according to state-specific data published by he OFCCP and the employer’s own experience with application, hiring and recruiting. Federal contractors with 100 or fewer employees may be in compliance with these new rules if they meet the benchmark across their entire workforce instead of each job group. However, an employer may not be penalized solely based on their failure to meet these benchmarks or if they have a legitimate reason for not being able to meet these requirements. For instance, employers located in areas with a very low veteran population and contractors who need specialized type of training that is not available in the veteran community may be able to justify lower affirmative action goals. Employers that cannot meet the benchmarks established by these new rules are required to maintain a three-year record of the reasons for setting lower goals.

Aside from these hiring benchmarks, the new rules require federal contractors and subcontractors to invite individuals to self-identify as veterans or disabled during the application process, the offer period and post-hiring period, during the first year of employment and at least once every five years. Contractors must use specific language while inviting individuals to identify themselves as disabled, and they may follow the DOL’s recommended language for identification of veterans. Additionally, contractors must regularly inform employees that they may update their disability status at any time. Furthermore, these employers must keep record of this information, maintain these disclosures confidential and provide records to the OFCCP upon request.

Additionally, contractors are required to review the prior year’s efforts to hire veterans and disabled individuals and to make necessary changes to their affirmative action programs to meet the required benchmarks. The new rules offer a list of actions that contractors can adopt to improve their recruitment of veterans and persons with disabilities. In fact, the requirement to maintain records is intended to encourage businesses to evaluate whether veterans or individuals with disabilities require accommodations, and to allow employers to take necessary actions to provide necessary accommodations.

To ensure that these rules also apply to subcontractors, federal contractors are required to include equal opportunity provisions in their subcontracts. Employers are encouraged to update their affirmative action program policy statements to reflect these new requirements, add references to the Code of Federal Regulations to subcontract templates, and establish an annual review process of the effectiveness of their affirmative action programs. Contractors that already have an established affirmative action plan may maintain their plan until the end of the year. Contractors failing to take steps to comply with these requirements may face penalties or have their federal contracts revoked.

If you are a veteran or a person with a disability and believe that you have been a victim of employment discrimination, please contact The Harman Firm, LLP