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OFCCP Issues Substantially Revised Government Contracting Regulations Regarding Veterans and the Disabled

August 30, 2013

 On August 27, 2013, the Office of Federal Contract Compliance Programs (OFCCP), the federal agency responsible for enforcing the affirmative action and non-discrimination responsibilities of government contractors, released two final rules – one revising the regulations implementing the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) and the other revising the regulations implementing Section 503 of the Rehabilitation Act. 

 VEVRAA protects the employment rights and requires affirmative action by government contractors for disabled veterans, recently separated veterans, Armed Forces service medal veterans, and other protected veterans who served during a war or in a campaign or expedition for which a campaign badge has been authorized.  Section 503 does the same for individuals with disabilities. 

 The OFCCP found that the old regulations were not effective in increasing the employment opportunities for protected veterans and disabled individuals under these laws.  According to the OFCCP, the unemployment rates for these categories of individuals were disproportionately high.  The new rules are intended to update and strengthen the nondiscrimination and affirmative action obligations of government contractors. 

Of particular import, the revised VEVRAA regulations now require government contractors to establish hiring benchmarks for protected veterans, using one of two approved methods.  One is use a benchmark equal to the national percentage of veterans in the civilian labor force (currently 8%), which will be published and updated annually by OFCCP. The other is for the contractor to establish its own benchmarks using certain data from the Bureau of Labor Statistics (BLS) and Veterans’ Employment and Training Service/Employment and Training Administration (VETS/ETA), as well other factors that unique to the contractor. The OFCCP states that it will publish the data soon in a Benchmark Database.  The contractor must also now track the applicant and hiring data for protected veterans.  These veterans will also be invited to self-identify at both the pre- and post-offer stage.

As for the revised Section 503 regulations, the OFCCP has now established a nationwide 7% utilization goal for qualified individuals with disabilities.  This goal is applied to each job group or, if the contractor has 100 or less employees, to the entire workforce.  Contractors will now be required to conduct an annual utilization analysis and assessment of problem areas, and develop specific action-oriented programs to address any identified problems.  As with veterans, contractors must track applicant and hiring data, and issue the invitation to self-identify at the pre- and post-offer stage.

These rules will take effect 180 days after publication in the Federal Register, anticipated shortly.  Current contractors who have already implemented written affirmative action program (AAP) will have additional time to comply with the new requirements.

 The practical effect of these newly revised regulations on contractors is a greatly increased burden in terms of recruiting, hiring, and data collection.  Unlike before, there will now be a data component to the required VEVRAA and Section 503 AAPs, which (like the Executive Order 11246 AAP) will need to be updated on an annual basis.