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Straight Talk: OFCCP’s Final Disability Rules Significantly Expand Federal Contractors’ Obligations

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently announced a Final Rule that makes changes to the regulations implementing Section 503 of the Rehabilitation Act (“Section 503”) (for a discussion of the OFCCP’s recently revised VEVRAA rules issued on this same date, click here ). Section 503 prohibits federal contractors and subcontractors (“contractors”) from discriminating in employment against individuals with disabilities (“IWDs”) and requires the employers to take affirmative action to recruit, hire, promote, and retain these individuals. The OFFCP maintains the Final Rule strengthens the affirmative action provisions of the regulations to aid contractors in their efforts to recruit and hire protected IWDs and improve job opportunities for individuals with disabilities. The Final Rule also includes revisions to the nondiscrimination provisions of the regulations to bring them into compliance with the ADA Amendments Act of 2008 (“ADAAA”).

The Final Rule was published in the Federal Register on September 27, 2013 and, therefore, is effective March 24, 2014 (i.e., 180 days after its publication). Federal contractors should not, however, view this relatively short “grace period” as an excuse to procrastinate but rather as a time to proactively plan and prepare. Given the number of additional obligations set forth in the Final 503 Rule, contractors should immediately begin formulating a plan of action. To assist in this endeavor (or possibly shock contractors into action), the OFCCP has published a comprehensive comparison of the Existing 503 Rule and the Final 503 Rule, which is available here.

Prior to the OFCCP’s adoption of the Final Rule, many in the business community roundly criticized the proposed amendments on the ground they would impose substantial costs and record-keeping burdens on contractors with only speculative benefits to the goal of hiring individuals with disabilities. In spite of this heated opposition, the OFCCP ultimately adopted the majority of controversial provisions of the proposed regulations based in large part on the old adage “you get what you measure.” The following is a list of what appears to us to be the most significant and/or controversial changes in the Final 503 Rule:

  • Utilization Goal: Final Rule establishes an “aspirational” goal of 7% as a benchmark, against which contractors must compare their workforce. This aspirational goal is not a “quota” or “hiring goal” and failure to meet the goal, alone, is not a violation. Contractors will apply the goal to each of their job groups, or to their entire workforce if the contractor has 100 or fewer employees. Contractors must conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems.

    [Compare with current regulation: There is not a specific numeric goal for disabled individuals.]

  • Data Collection: Final Rule requires contractors to document and update annually several quantitative comparisons including the number of IWD applicants; total number of applicants for all jobs; total number of job openings and jobs filled; number of IWDs hired; and total number of applicants hired. This data must be maintained for three (3) years to be used to “spot trends.”

    [Compare: No specific requirement to collect data or prepare quantitative reports for disabled individuals. Current regulation describes several “recommended external outreach and recruitment actions,” and requires contractors to implement an audit and reporting system to assess the effectiveness of its AAP.]

  • Invitation to Self-Identify: Final Rule requires contractors invite applicants to self-identify at both the pre-offer and post-offer phases of the application process, using “prescribed language” by OFCCP. Final Rule also requires contractors to invite their current employees to self-identify as IWDs every five (5) years, using prescribed language. Although the OFCCP has indicated the prescribed language will be posted on its website, as of the date of this posting, the link on the OFCCP’s website to the Section 503 Invitation to Self-Identify is not functional and states only “coming soon.”

    [Compare: Requires only post-offer invitations to all applicants to voluntarily self-identify as an individual with a disability. There is no requirement that contractors survey or resurvey their current workforce regarding disability status.]

  • Incorporation of the EO Clause: Final Rule requires citation in each subcontract to the Equal Opportunity (“EO”) Clause and the inclusion of the following specific mandatory language (in bold print): “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.”

    [Compare: Permits the EO Clause to be included in subcontracts “by reference” rather than verbatim, but does not specify the manner or require mandatory language.]

  • ADAAA: Final Rule implements changes necessitated by the passage of the ADA Amendments Act of 2008 (ADAAA) by revising definitions relating to “disability” including “major life activities,” “major bodily functions,” “regarded as” having a disability and “substantially limits.”

    [Compare: Utilizes pre-ADAAA definitions relating to disability.]

We will continue to keep contractors posted as other developments occur with regard to the Final 503 Rule. In the interim, contact us if you have any questions or would like assistance in formulating a plan of action to be in compliance by the upcoming deadline. Now is definitiely the time to act!