(This is only a general review and is not intended to be all inclusive; for full regulatory requirements, see the Section 503 of the Rehabilitation Act and VEVRAA Final Rules published by the OFCCP here:)

http://www.dol.gov/ofccp/OFCCPNews/LatestNews.htm#news

Federal contractors around the country have been scrambling to obtain information regarding the new Veteran and Disability regulations since they were posted online by the OFCCP on August 27, 2013. Then on Tuesday, September 24, 2013 the regulations were published in the Federal Register which started the 180-day clock for contractors to implement the updated regulations. Since the initial announcement, and the subsequent Final Rule publication, contractors have been scouring the web to find articles, webinars/, and resources associated with what many are considering the biggest regulatory change since the 1970s. Now that there is an abundance of information available, more advanced questions about implementation are starting to emerge, and along with that information comes the more challenging questions about managing the timeline and the various nuances associated with interpreting the regulations including the following questions:

  1. Do all the requirements need to be up and running on March 24, 2014? If not, do I have to manage multiple timelines?
  2. How do all of these changes affect my annual Affirmative Action Plan update if my plan date is before or after March 24, 2014?

The reality is that contractors have to manage two timelines. There is one timeline for the requirements that must be in place by March 24, 2014 (all parts excluding Part C) and another timeline that must be implemented to be compliant with Subpart C, which is predominantly about updating the annual Affirmative Action Plan. Below is a starter-kit summarizing the changes that need to be made in addition to some comments and concluding with lingering questions that are coming up as people work to interpret the meaning of these extensive changes. While we don’t have all the answers yet, it is important to be aware of the concerns and questions that people in the industry are expressing because these grey areas will affect how we manage costs, risk and compliance with OFCCP’s interpretation of the Final Rule(s).

Timeline #1 – Items that everyone must update by March 24, 2014:

Section 503 of the Rehabilitation Act of 1973, as amended (The Disability Regulations)

Regulatory Citation(s)

  • 41 CFR Part 60-741
  • Subpart A—Preliminary Matters, Equal Opportunity Clause
  • Section 60-741.1 Purpose, Applicability, and Construction
  • Section 60-741.2 Definitions
  • Section 60-741.3 Exceptions to the Definitions of “Disability” and “Qualified Individual” 
  • Section 60-741.4 Coverage and Waivers
  • Section 60-741.5 Equal Opportunity Clause 
  • Subpart B—Discrimination Prohibited
  • Section 60-741.21 Prohibitions 
  • Section 60-741.23 Medical Examinations and Inquiries
  • Section 60-741.25 Health Insurance, Life Insurance and Other Benefit Plans
  • Subpart D—General Enforcement and Complaint Procedures
  • Section 60-741.60 Compliance Evaluations 
  • Section 60-741.62 Conciliation Agreements 
  • Section 60-741.68 Reinstatement of Ineligible Contractors 
  • Subpart E—Ancillary Matters 
  • Section 60-741.80 Recordkeeping
  • Section 60-741.81 Access to records
  • Appendix A to Part 60-741—Guidelines on a Contractor’s Duty To Provide Reasonable Accommodation

Disability Regulations Highlights with Comments

    1. Utilize the definition of Disability from the Americans with Disabilities Act (“ADA”) Amendment Act of 2008 (“ADAAA”). The entire section 503 regulations, including purpose, applicability and construction, nondiscrimination provisions, etc., are revised to reflect compliance with the ADAAA.

      Comments: The new definition greatly expands the definition of disability so readers should take the time to review the updated materials posted by OFCCP and EEOC. We are also seeing the acronym IWD for Individual with a Disability used frequently. This fact sheet is a useful read: http://www.eeoc.gov/laws/regulations/adaaa_fact_sheet.cfm

    2. Update the EO Clause. The Final Rule permits contractors to incorporate the EO Clause into subcontracts by reference, but contractors must also include the following sentences in bold text:

      “This contractor and subcontractor shall abide by the requirements of 41 CFR 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.”

      1. Contractor required to:
        1. Provide notices of rights in accessible manner, with updated examples (e.g. Braille)
        2. Use electronic posting for employees not working in contractor’s physical location, if contractors provide computers to access posting, or knows employees can access
        3. Use electronic application process for electronic posting and store it with electronic application
        4. Add new paragraph to EO clause requiring contractors to state in solicitations and advertisements that they are equal opportunity employers of individuals with disabilities.

      Comments: It is also our understanding that the words veteran and disability should be spelled out and that use of the abbreviated letters, at least for Veterans and Individuals with a Disability, is not acceptable. Also, Contractors may not merge the Disability and Veteran EO clause text into a single paragraph as clarified by OFCCP in their instructional webinar held on August 30, 2013. Looking at the items above, readers should recognize an obvious need for investment into their electronic application process. OFCCP is going to put more focus into accessibility such as assistive technology and I suspect this will be an area that contractors struggle with. For those who have attended various Industry Liaison Group meetings over the last year or so, there is a consistent theme coming not from the OFCCP alone, but from many respected subject matter experts in the industry that compliance budgets need to increase by 25% or more. This is not just random hyperbole, it is reality based on thorough assessments of the changing expectations of government compliance. From this authors’ perceptive there will be a direct, linear relationship between investment in electronic technology to manage the recruitment and selection process and successful compliance and shorter audits. Those who convince the executives or “C-Suite” to advance the technology will be the lucky ones and those who cannot expand their compliance budget are in for a difficult ride.

      Update: OFCCP has added a new response under their Frequently Asked Questions page to address the advertisement and solicitation question.
      Question from the OFCCP FAQ Page: May contractors satisfy the EEO tagline requirement by abbreviating “disability” and “protected veteran status” as “D” and “V,” respectively?
      Answer from the OFCCP FAQ Page: Contractors may refer to those protected by Section 503 or VEVRAA by abbreviation, but such abbreviations must be commonly understood by those seeking employment. Simply using “D” and “V” are not adequate abbreviations for this reason. For those protected by Section 503 or VEVRAA, the tagline should at a minimum state “disability” and “vet” so that the tagline will be clearly understood by jobseekers.

    3. Reasonable accommodation expectation.
      1. New requirement that reasonable accommodation obligation extends to contractor’s use of electronic or online job application systems; and if contractor uses such a system, it provide necessary reasonable accommodations for qualified individuals with disabilities not able to use this system with equal opportunity to apply for and be considered for jobs
      2. Assistive technologies are best practice, but not required
      3. Contractors encouraged to voluntarily develop and implement written reasonable accommodations procedures
    4. 3-year recordkeeping requirement for:
      1. Documentation and assessment of external outreach and recruitment efforts
      2. New data collection requirements
      3. Records related to benchmark

      Comments: The proposed regulations had a more rigorous expectation for reasonable accommodations that did not make it to the Final Rule. However, there are still recommended Best Practices that can be developed and I recommend that contractors make the effort to have a clearly defined program for applying for a reasonable accommodation because OFCCP is going to be focusing on this for years to come. There are recommendations within the OFCCP resources pages regarding Best Practices. Also, the three-year recordkeeping requirement is causing confusion because it is different than the two-year requirement under EO 11246. We have yet to see any legal challenges so far.

VEVRAA: Compliance Action Items to be implemented on March 24, 2014

  • 41 CFR Part 60-300
  • Subpart A—Preliminary Matters, Equal Opportunity Clause
  • Section 60-300.1 Purpose, Applicability and Construction
  • Section 60-300.2 Definitions
  • Section 60-300.5 Equal Opportunity Clause
  • Subpart B—Discrimination Prohibited
  • Section 60-300.21 Prohibitions
  • Subpart D—General Enforcement and Complaint Procedures
  • Section 60-300.60 Compliance evaluations
  • Subpart E—Ancillary Matters
  • Section 60-300.80 Recordkeeping
  • Section 60-300.81 Access to records
  • Appendix A to Part 60-300—Guidelines on a Contractor’s Duty To Provide Reasonable Accommodation
  • Appendix B to Part 60-300—Sample Invitation to Self-Identify
  • Appendix C—Review of Personnel Processes
    • New definitions. Including “pre-JVA veteran,” “protected veteran,” and “active duty wartime or campaign badge veteran,” with references throughout regulations, such as in the sections prohibiting discrimination
    • EO Clause. Contractors required to:
      • Provide job listings “in any manner or format” that ESDS permits that will allow it to provide priority referrals to contractor
      • Provide ESDS additional information (such as status as Federal contractor and contact information for hiring official in each location in the state; request for priority referrals) and update annually; send contact information also to any outside job search companies
      • Provide notices of rights in accessible manner, with updated examples (e.g. Braille)
      • Use electronic posting for employees not working in contractor’s physical location, if contractors provide computers to access posting, or knows employees can access
      • Use electronic application process for electronic posting and store it with electronic application
      • Notify union about its nondiscrimination obligations
      • State in solicitations and advertisements they are equal opportunity employer of protected veterans
      • Incorporate EO clause by reference in contracts and purchase orders only by citing the regulations and using mandatory language to alert subcontractors of their federal contractor obligations
    • Compliance evaluations.
      • OFCCP can request data beyond the date of the Scheduling Letter
      • OFCCP can review documents during compliance check, or conduct focused reviews, either on-site or off-site
    • 3-year recordkeeping requirement for:
      • Documentation and assessment of external outreach and recruitment efforts
      • New data collection requirements
      • Records related to benchmark

    Comments: Similar contents under veterans as the updated disability regulations where the definition of Protected Veteran is changing and the EO Clause requires a fixed paragraph to be added. One interesting addition, related to the Frito-Lay case, is OFCCP’s statement about requesting data beyond the date of the scheduling letter. The case between OFCCP and Frito-lay has gone back and forth for several years now and OFCCP added material in the updated Federal Contractor Compliance Manual (FCCM) to address their position clarifying their intent to collect data beyond the letter when an issue has been identified. According to the FCCM, Compliance Officers must now seek approval from his/her supervisor before proceeding.

    Timeline #2 – Updated items that contractors must implement as part of their annual Affirmative Action Plan update.

    For compliance with the new Affirmative Action requirements under Subpart C of both the disability and veteran regulations, contractors must update their annual AAP to include the regulatory requirements listed below. The question that arises as mentioned in the beginning of this discussion is when must the new items be utilized? The answer is two-fold. For those with AAPs being updated between now and March 24, 2014 the contractor is expected to utilize the current regulations now and then integrate the changes in the following plan cycle. For contractors who have annual plans that will be updated after March 24, 2014, those contractors will need to implement Subpart C at that time without the benefit of an additional plan cycle.

    Subpart C—Affirmative Action Program for Individuals with a Disability

    Section 60-741.40 General Purpose and Applicability of the Affirmative Action Program Requirement
    Section 60-741.41 Availability of Affirmative Action Program
    Section 60-741.42 Invitation to Self-Identify
    Section 60-741.44 Required Contents of Affirmative Action Programs
    Section 60-741.45 Reasonable Accommodation Procedures
    Section 60-741.46 Utilization Goals
    Section 60-741.47 Voluntary Affirmative Action Programs for Employees With Disabilities
    Section 60-741.48 Sheltered workshops

    Disability Highlights with Comments

    • AAP review and update. AAP reviewed and updated annually by designated official
    • Self-identification processes. New self-identification process with required language for invitation, for pre-offer, post-offer and current employees (within first year of implementation, every five years, and at least one time in between); all rules pertaining to these processes
    • New required AAP contents.
      • Policy statement stating the top U.S. executive’s support for affirmative action program
      • Updates accommodation example to refer to alternate formats, such as Braille or large print
      • Revises annual review of personnel processes to state, with respect to use of information technology, that contractor shall ensure applicants and employees with disabilities have equal access to its personnel processes, including providing necessary accommodation
      • Reasonable accommodation to physical and mental limitations:
        • Emphasizes that contractors have obligation to:
          • Provide reasonable accommodation as a matter of nondiscrimination
          • Ask if accommodation is needed if an individual with a disability is having performance problems likely related to the disability
        • Development and use of written reasonable accommodation procedures is best practice, and guidance to contractors that choose voluntarily to develop and use such accommodations is provided in Appendix B of Final Rule
      • Contractor sends written notification of its AA policy to subcontractors and request their cooperation
      • Contractors must conduct annual self-assessment of outreach and recruitment efforts, and document the review; if the totality of efforts is not effective, contractor must identify and implement alternative efforts
      • Contractors must document outreach and recruitment activities and retain records for three years
      • Contractor required to: 1) include the AA policy in its policy manual; and 2) (if union) notify union officials of the policy and to request their cooperation
      • Adds new paragraph requiring data collection requiring contractors to document and update annually: 1) for applicants, the total number of applicants for employment; 2) total number of job openings and number of jobs filled; and 3) total number of applicants hired and number of applicants with disabilities who are hired; data retained for three years
      • Required Seven (7%) national utilization goal for employment of qualified individuals with disabilities, and all of the rules pertaining to this requirement
    • Voluntary affirmative action programs for employees with disabilities. New section expressly permitting contractors to develop and implement training and employment for employees with disabilities (e.g. job training programs for people with developmental disabilities; linkage agreements to recruit program trainees)
      • Contractors who adopt the above programs must include in the AAP a description of the program and official responsible for it
      • AAP also should include annual report of activities under such programs
      • Contractor may not use such programs to segregate individuals with disabilities or limit their employment opportunities

    Comments: This section is easily the most controversial and talked about area of change and even with all the information out there, many questions and concerns still linger. The reality is that we will simply have to follow the rules and wait and see how it all works out knowing that OFCCP and the private sector may not see eye to eye on all the details. The facts are that contractors must comply by updating their Affirmative Action Plans and begin collecting data in similar fashion as they would for the current EO 11246 plans for women and minorities. The analysis must be for each establishment and they must be separated by job group.

    VEVRAA: Veteran highlights with comments

    Subpart C—Affirmative Action Program

    • Section 60-300.40 Applicability of the affirmative action program requirement
    • Section 60-300.41 Availability of affirmative action program
    • Section 60-300.42 Invitation to self-identify
    • Section 60-300.43 Affirmative action policy
    • Section 60-300.44 Required contents of affirmative action programs
    • Section 60-300.45 Benchmarks for hiring
      • AAP review and update. AAP reviewed and updated annually by designated official
      • Availability of AAP. Full AAP (excluding numerical reporting) electronically upon request, so long as requester is able to access electronic version
      • Self-identification process. New self-identification process for pre-offer and post-offer
      • New obligation language. Contractor’s nondiscrimination and affirmative action obligations to replace “because of status as a” protected veteran with “against” a protected veteran
      • New required AAP contents.
        • Policy statement stating the top U.S. executive’s support for affirmative action program
        • Contractor sends written notification of company’s AA policy to subcontractors and request their cooperation
        • Contractors must conduct annual self-assessment of outreach and recruitment efforts and document the review; if the totality of efforts is not effective, contractor must identify and implement alternative efforts
        • Contractors must document outreach and recruitment activities and retain records for three years
        • Contractor required to: 1) include the AA policy in its policy manual; and 2) (if there is a union) notify union officials of the policy and to request their cooperation
        • Contractor must document all actions taken to comply with audit requirement and retain as an employment record
        • Adds new paragraph requiring data collection requiring contractors to document and update annually: 1) total number of applicants for employment and number of applicants who are protected veterans; 2) total number of job openings and number of jobs filled; and 3) total number of applicants hired and number of applicants hired who are protected veterans; data retained for three years
        • Required benchmarks for hiring protected veterans, and all rules pertaining to this goal

      Additional Thoughts

      As the industry works to implement the new regulations we can all expect the discussion to rage on for years about how to interpret and implement the many components of the Final Rule(s). Contractors should monitor the debate between the OFCCP and the many wise attorneys and consultants out there because it will shape the future of compliance during this significant expansion. As someone who has been involved in Affirmative Action Planning for almost two decades now I am always learning from my peers and as part of that learning process I would like to share a few questions and comments about the new regulations that I have either heard from others or come up with on my own. My hope is to spur further discussion in the best interests of the contracting community.

      1. Question: When exactly do I start using the new self-ID forms for both Veterans and Individuals with a Disability (IWD)?
        Answer: This is a big question given its impact on the entire process. First of all, the consistent message from the first webinars/ given by OFCCP is that Federal contractors would start using the new self ID form in conjunction with their next Affirmative Action Plan update once the regulations have gone into effect. This suggests that plans updated prior to March 24, 2014 would not begin using the new form until the following plan cycle which could be as late as the first quarter of 2015, while others with plan updates coming shortly after the March 24, 2014 date would begin using them much sooner. Most blogs, articles, webinars/, etc. that I have followed are providing a similar message. However, there is scuttlebutt out there that the actual intent of the regulations is for ALL contractors to begin using the new self-ID form on March 24, 2014 and that OFCCP is putting the wrong message out there. With the new-year looming and with the required form for disability identification not yet being made available to the public by the OFCCP, we can expect this topic to continue to dominate the airwaves.
      2. Question: Can I change my plan date from after March 24 to before March 24 to take advantage of the additional implementation time?
        Answer: While the regulations do not prohibit changing of plan dates it does mean the contractor would be starting a new plan before the previous one was expired. I expect the shift would draw many questions (more like suspicion) from the OFCCP during an audit. So to can the answer may be yes, but recommended, not necessarily.
      3. Question: Will OFCCP be conducting Impact Ratio Analysis comparing overall hires to disabled hires?
        Answer: There have been many presentations stating that OFCCP will not conduct adverse impact analyses on the data and some of the discussion on analyzing ratios did not make it into the Final Rule. However, how confident are we that OFCCP won’t make these comparisons in an audit? I believe that this issue could use more guidance from OFCCP regarding how exactly will they analyze the data collected under the new Subpart C requirement(s)?
      4. Question: Do the Uniform Guidelines for Employee Selection (UGESP) apply to the updated regulations for Veterans and IWDs?
        Answer: The UGESP states “D. Limitations. These guidelines apply only to persons subject to Title VII, Executive Order 11246, or other equal employment opportunity requirements of Federal law. These guidelines do not apply to responsibilities under the Age Discrimination in Employment Act of 1967, as amended, not to discriminate on the basis of age, or under sections 501, 503, and 504 of the Rehabilitation Act of 1973, not to discriminate on the basis of handicap.” This would seem to eliminate Section 503 from the conversation. However, if the updated regulations fall under the equal employment opportunity requirements of Federal law, do the regulatory changes impact this limitation and what about the veteran regulations?
      5. Question: When exactly should I begin Comparing Incumbency to Goals?
        Answer: Since employers have not yet re-surveyed their employees based on the update requirements it would seem that employers have to wait until they have collected new data prior to comparing their workforce to the new Goals and Benchmarks. Is this the OFCCPs expectation as well?
      6. Question: Will the new self-ID form prevent me from requiring applicants to make a selection?
        Answer: As technology has progressed many contractors have taken advantage of the opportunity to require applicants to identify their race or gender during the application process by adding the option of “I choose not to identify” and then making that step a requirement for consideration. It is my understanding that the new, mandated form that OFCCP is providing will not provide for that option. Why is this relevant? It matters because contractors have been able to use the required selection to minimize the amount of follow-up efforts contactors have to make when trying to identify race and gender, and now disability and veteran status. The result will likely be a dramatic drop in known applicant information which in turn requires contractors to make additional, repeated efforts to try and collect the information. Maybe I am wrong but I am pretty sure that contractors don’t like having to try over and over to collect personal information and I am certain that contractors simply don’t have the resources to make repeated efforts to collect the race, gender and disability/veteran status.
      7. Question from the OFCCP FAQ Page: “Does the Final Rule change the requirement that contractors document the design and implementation of an audit and reporting system for their affirmative action program?”
        Answer from OFCCP FAQ page: OFCCP always intended that contractors document the actions they take to comply with the requirement to design and implement an audit and reporting system. The Final Rule makes this intention explicit by requiring that contractors document these actions and retain these documents as employment records.
        Follow-up comment: Is this different from tracking outreach and monitoring progress toward goals? What does an audit and reporting system look like? I could speculate that this could develop into part of the narrative where the goals and outreach are discussed. More information is needed.
      8. Rumor Alert: With all the concerns about implementing these new changes giving contractors heartburn, there is one rumor floating around that, if true, could ease the burden. While it likely cannot likely be confirmed, I think it’s worth sharing that I am hearing that 2014 will be more about technical support and implementation from OFCCP without the rigorous enforcement of number crunching, at least related to the new regulations. This of course does not at all suggest that OFCCP is going to soften their stance on all the regular issues such as compensation and hiring. I will be interested in opinions from our peers in this area.

      Good luck out there!