OFCCP Issues Proposed Rules Governing Affirmative Action Efforts Required by Federal Contractors

On December 9, 2011, the Department of Labor’s Office of Federal Contractor Compliance Programs (“OFCCP”) issued proposed rules which would replace and strengthen affirmative action requirements under Section 503 of the Rehabilitation Act (“Section 503”). Section 503, and its corresponding rules currently impose affirmative action obligations on employers who are parties to federal contracts in excess of $10,000.

Section 503 obligations currently require covered federal contractors to make “good-faith” efforts to practice affirmative action in favor of individuals with disabilities when making employment decisions (i.e. hires, promotions, transfers, terminations, etc.). Under OFCCP’s proposed regulations, covered federal contractors would be required to set a hiring goal of 7% of their workforce being employees with disabilities. Additionally, OFCCP is considering imposing, within this 7% “utilization goal,” a sub-goal of 2% for individuals with certain “severe disabilities.” OFCCP is requesting employers comment on its proposed rules, and has specifically invited comments on its proposed “utilization goals.”

It is important to note that this “utilization goal” is not a mandatory quota or a hiring ceiling, but a goal all federal contractors would have to attempt to meet and comprehensively demonstrate its efforts to meet this goal.

What’s New Under the Proposed Regulations

In addition to a proposed 7% hiring goal for individuals with disabilities, OFCCP has proposed many additional changes. Below you will find a list of some of the major changes OFCCP is proposing:

• Revising the definitions of “disability,” “major life activities,” “substantially limits,” and other statutory terms within the existing Section 503 regulations to conform with the Americans With Disabilities Amendments Act (“ADAA”) and the Equal Employment Opportunity Commission’s (“EEOC’s”) final regulations implementing that new law;

• Mandating specific steps for recruitment, training, recordkeeping, and disseminating policies, similar to those required under Executive Order 11246 (“EO 11246”), the Executive Order mandating affirmative action for minorities and females;

• Requiring more comprehensive data collection and recordkeeping requirements which is almost identical to that already imposed by EO 11246, such as:

o The documentation and processing of individuals’ requests for reasonable accommodations;

o Tracking the total number of referrals from applicable employment service delivery systems and from groups and organizations with which the contractor has “linkage agreements;”

o Tracking the total number of applicants, the number of applicants who are known to be disabled, and the ratio of known disabled applicants to total applicants;

o Tracking the total number of job openings, the number of jobs filled, the number of known individuals with disabilities hired, and the ratio of known disabled hires to total hires; and

o Tracking the total number of job openings, the number of jobs that are filled, and the ratio of job openings to job openings filled.

• Mandatory job listing requirement which would require federal contractors to provide additional information updated regularly to certain employment service delivery systems;

• Requirement that federal contractors engage in recruitment efforts and enter into “linkage agreements” with several disability-focused employment sources listed by OFCCP;

• Mandating that federal contractors review their personnel processes on an annual basis, as opposed to “periodically” under the existing rules, including mandating specific steps the federal contractor must take, at a minimum, in the review of its personnel processes;

• Requirement that federal contractors must document personnel actions taken with regard to individuals with disabilities “to provide greater transparency between the contractor, its applicants/employees, and OFCCP as to the reasons for their personnel actions;”  and

• OFCCP is also considering a requirement that federal contractors submit annual reports containing their measurements and computations of all of the above as it relates to recruitment, application, and hiring of individuals with disabilities, regardless of whether the federal contractor has been selected for audit.

The above list contains only some of the new requirements OFCCP is considering imposing on federal contractors under Section 503. The proposed rules include a number of additional requirements which would transform the current affirmative action plan (“AAP”) which federal contractors are required to develop under Section 503 into an AAP which closely resembles the AAPs required under EO 11246. Under Section 503, however, there is no distinction between construction contractors and non-construction contractors, like under EO 11246.

Identification of Individuals with Disabilities

An additional change OFCCP has proposed and that deserves special attention is a potential mandate that federal contractors both conduct an annual survey of their current employees to give employees an opportunity to self-identify voluntarily as persons with disabilities and a requirement that federal contractors allow job applicants to self-identify voluntarily as disabled whenever applying or when considered for employment.

While it may seem this self-identification requirement would run afoul of the ADAA, it does not. OFCCP has stated that while the ADAA generally prohibits inquiries about disability prior to an offer of employment, it does not prohibit the collection of this information by a federal contractor in furtherance of its Section 503 obligations to employ and advance in employment qualified individuals with disabilities. If approved, OFCCP would require that federal contractors invite applicants to self-identify by using language developed by OFCCP and published on its website. According to OFCCP, this will ensure consistency in all pre-offer invitations that are made, and will reassure applicants that the request is routine and executed pursuant to obligations created by OFCCP.  This proposed invitation would only ask for self-identification as to the existence of a disability and not the type of disability or the nature or severity of the person’s limitations.

What Should I Do Now?

While the new Section 503 rules have only been proposed by OFCCP, OFCCP is seeking comments on its proposed changes, and is specifically seeking comment on “the amount of time” federal contractors would have to devote to the new requirements, particularly, the time it would take to “develop the computations and comparisons required.” OFCCP does not think “these requirements will present an onerous burden to contractors.”

If you are a federal contractor, or considering entering the federal contract arena, Leech Tishman’s Employment Practice Group suggests you review the proposed rules and offer your comments to OFCCP regarding the proposed changes.

Those wishing to comment on the proposed rules must submit their comments by Tuesday, February 7, 2012. All comments must contain the proposed rules’ regulatory identification number 1250-AA02, and may be submitted one of three ways:

1. Electronically through the federal eRulemaking portal;

2. Via facsimile to: (202) 693-1304 (for comments of six pages or less); or

3. Via mail to: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Leech Tishman’s Employment Practice Group has experience working with OFCCP, the Department of Labor, and the agencies’ rules and regulations. We are happy to answer any questions you may have about the Section 503 proposed rules, drafting your affirmative action plans, or any issue facing federal contractors.

Please feel free to contact the Employment Group with any questions regarding the OFCCP’s proposed rules regarding affirmative action or any other employment law issue.

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