U.S. Department of Labor Adopts New Regulations Regarding Hiring Benchmarks for Veteran and Disabled Employees

By: Steven D. Irwin, Esq.

Currently, federal contractors and subcontractors are prohibited from discriminating in employment against veterans and individuals with disabilities, and are required to take affirmative action to recruit, hire, promote and retain these existing or potential employees. This week, however, the U.S. Department of Labor (“DOL”) posted new regulations, effective March 24, 2014, requiring for the first time that federal contractors adopt specific hiring benchmarks for veterans and utilization goals for the disabled. Persistent relative underemployment of veterans and the disabled compared to others in the workforce led to these more stringent regulations, which are premised on the belief that measuring success will reduce that disparity.

In the case of protected veterans, contractors must establish annual hiring benchmarks, either by establishing a goal equal to the national percentage of veterans in the civilian labor force or by establishing a benchmark that takes into consideration their unique hiring circumstance as well as other Office of Federal Contract Compliance Programs (“OFCCP”) requirements. In contrast, contractors generally will be expected to aspire to have individuals with disabilities make up 7% of their workforce. These benchmarks are not quotas and employers will not necessarily be penalized for failing to meet them. At the same time, Patricia A. Shiu, Director of the OFCCP, declared that failure to achieve these goals may indicate that an organization’s hiring practices, outreach, and recruitment are insufficient and that there will be consequences for non-compliance.

Under the new rules, contractors must document quantitative comparisons of the number of veterans or individuals with disabilities who apply for jobs and the number of those hired, and must update these statistics annually. This data must be maintained for three years so that trends can be monitored, and the OFCCP within the DOL may elect to review a contractor’s records for compliance on-site or off-site. Furthermore, applicants must be invited to self-identify as a protected veteran or disabled person both at the pre-offer and post-offer phases of the application process.

Federal contractors must use new, specific language in the equal opportunity clause in its subcontracts which reflect these changes, in order to alert federal subcontractors to their new responsibilities. In addition, jobs must be listed in a format that will facilitate publication of these employment opportunities to the applicants targeted by the new rules. The fact that Vice President Joe Biden announced the advent of these new standards underscores the need for federal contractors to expect to be held accountable.

This alert summarizes some but not all of the changes encompassed in the DOL’s new regulations. Leech Tishman lawyers develop affirmative action plans for federal contractors and assist them in complying with their affirmative action and nondiscrimination obligations. They have experience guiding employers through OFCCP audits and stand prepared to advise clients as they navigate these groundbreaking changes in enforcement of the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act.

Steven D. Irwin is a partner at Leech Tishman and practices in the Employment, Government Relations and Litigation Practice Groups. He can be reached at 412.261.1600 or sirwin@leechtishman.com. Please feel free to contact either Steve with any questions regarding these new regulations.

Leech Tishman is a firm dedicated to providing full-service commercial legal services to individuals, businesses, and institutions. We combine a deep understanding of our clients and their businesses with skilled legal counsel to find solutions. We offer legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employment, energy, environmental, safety & toxic torts, estates & trusts, government relations, insurance coverage & corporate risk mitigation, intellectual property, litigation, real estate, and taxation. Leech Tishman has offices in Pittsburgh, PA, Chicago, IL, New York, NY, Los Angeles, CA and Wilmington, DE. For more information call 412.261.1600 or visit www.leechtishman.com.

*Depending on the start- and end-dates of a federal contractor’s affirmative action plan year, some federal contractors may have additional time to comply with federal contractors’ requirements relating to developing affirmative action programs, invitations to self-identify and hiring targets.