Author: Marta Moakley, XpertHR Legal Editor

August 30, 2013

The Office of Federal Contract Compliance Programs (OFCCP) has announced long-awaited new rules modifying compliance obligations under the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act (Section 503). Federal contractors and subcontractors should review the final rules' strengthened affirmative action provisions to ensure compliance, especially with respect to record retention requirements (OFCCP's most-cited violation). Current federal contractors with a written affirmative action plan (AAP) in place have additional time to comply with the final rules.

Employers have been awaiting these final rules for some time: OFCCP has been meeting with stakeholders since 2010 and has received more than 400 comments on its Notice of Proposed Rulemaking. Labor Secretary Tom Perez stated that by issuing these rules "We are clarifying expectations, making legal requirements more effective and facilitating compliance with the law." OFCCP enforces the laws' requirements that contractors take affirmative action to recruit, hire, promote and retain protected veterans and individuals with disabilities.

Pertinent provisions of the VEVRAA Final Rule include:

  • Hiring benchmarks. Federal contractors and subcontractors will have to establish annual hiring benchmarks for veterans using one of two methods: a benchmark based on the national percentage of veterans in the workforce, or a benchmark reflecting the contractor's particular hiring circumstances;
  • Data collection and records. Contractors must compile information regarding the number of protected veteran applicants and hires. Contractors must retain this information for a minimum of three years. In addition, contractors must allow OFCCP to review documents either on site or off site, at OFCCP's option and in an available format that OFCCP requests.
  • Invitation to self-identify. Contractors must invite applicants to self-identify at the pre- and post-offer phases of the hiring process. Sample language is included in the Final Rule.
  • Required equal opportunity clause. When incorporating the equal opportunity (EO) clause into a subcontract by reference, contractors must use specific language.

A webinar explaining the VEVRAA rule will take place on Wednesday, September 11, 2013 at 2:00 pm.

Pertinent provisions of the Section 503 Final Rule include:

  • Utilization goal. Contractors must apply a 7 percent utilization goal for qualified individuals with disabilities - a very specific compliance goal. Contractors must conduct an annual utilization analysis and implement processes to address any compliance problems.
  • Revised definition of disability. The Final Rule incorporates necessary changes resulting from the ADA Amendments Act (ADAAA) of 2008 and altering certain nondiscrimination provisions of regulations.
  • Data collection and records access. As with the VEVRAA rule, contractors must compile information regarding the number of applicants and hires with disabilities. Contractors must retain this information for a minimum of three years. In addition, contractors must allow OFCCP to review documents either on site or off site, at OFCCP's option and in an available format that OFCCP requests.
  • Mandated clauses. Like the VEVRAA rule, contractors must include an invitation to self-identify using language to be specified by OFCCP. In addition, contractors must use specific language when incorporating an EO clause into a subcontract by reference.

A webinar explaining the Section 503 rule will take place on Wednesday, September 18, 2013 at 2:00 pm.

A final rule becomes effective 180 days after its publication in the Federal Register.