Hunton Employment & Labor Perspectives

On December 8, 2011 the Office of Federal Contract Compliance Programs (the “OFCCP”) published a Notice of Proposed Rulemaking in the Federal Register that would revise the regulations implementing Section 503 of the Rehabilitation Act of 1973, including setting hiring goals for individuals with disabilities.

Section 503 prohibits discrimination by federal contractors and subcontractors against individuals on the basis of disability and requires affirmative action on behalf of qualified individuals with disabilities.  However, there continues to be a substantial discrepancy in unemployment rates between working age individuals with and without disabilities.  The current unemployment rate for individuals with disabilities is thirteen percent, one and one half times the rate of individuals without disabilities.  Moreover, almost eighty percent of individuals with disabilities remain outside of the labor force, compared to about thirty percent of those without disabilities. 

OFCCP’s proposed rule strengthens the affirmative action provisions by detailing specific actions contractors must take in the areas of recruitment, training, record-keeping and policy dissemination.  The proposed rule applies to contractors with at least 50 employees and contracts worth $50,000 or more. 

National Utilization Hiring Goal

The most significant proposed change to Section 503 is the establishment of a national utilization goal for individuals with disabilities.  This is the first time the federal government has tried to set fixed numerical targets for the number of people with disabilities in a company’s workforce.  Under the proposed rule, federal contractors are required to set a hiring goal of seven percent disabled workers in each job group in the workforce.  The goal is neither a quota, nor a restrictive hiring ceiling, and a failure to attain the goal does not necessarily constitute a violation of Section 503 or OFCCP’s regulations.  The U.S. Department of Labor noted that the goal is meant to serve as an important tool for employers to measure their progress towards achieving equal employment opportunity, and for assessing where in the workforce barriers to such opportunity remains. 

While the OFCCP is suggesting a national utilization goal of seven percent, it is asking for comments on using a range of values between four and ten percent.  Additionally, it is asking for comments regarding the concept of using a two percent sub-goal for individuals with certain particularly severe or targeted disabilities and if instated, what disabilities should be included in this sub-goal.

Effects On Data Collection, Record Keeping And Personnel Policies

Along with the creation of a hiring goal, the proposed rule expands data collection and record keeping requirements.  Currently, Section 503 requires that contractors maintain specific data such as the total number of applicants, the total number of job openings, and the number of jobs filled.  The proposed rule increases a contractor’s data collection obligations by requiring it to compile annually disability related data such as the number of individuals with disabilities applying for positions and the number of disabled individuals who were hired. 

In addition, the proposed rule mandates that contractors must invite applicants to voluntarily self-identify as “an individual with a disability” at the pre-offer stage of the hiring process, as well as invite post-offer voluntary self identification by anonymously surveying all employees annually.  Contractors will be required to invite applicants and employees to self-identify by using the language prescribed by the OFCCP.  An employee will only be asked about the general existence of a disability and not for information regarding the specific type.  The OFCCP is seeking comments on the potential self-identification text. 

Furthermore, the proposed rule adds an entirely new provision which requires contractors to develop and implement written procedures for processing requests for reasonable accommodations. 

Contractors’ personnel policies and procedures will also be affected by the proposed rule. First, the statutory terms within the existing Section 503 will be revised to conform with the ADA Amendments and the EEOC’s regulations implementing the ADA.  All personnel policies and procedures must be updated to reflect this change, as well as include an affirmative action plan.  Second, Section 503 provides recommended steps contractors must take to review their personnel processes, as well as physical and mental job qualifications.  Presently, these reviews are to be done “periodically.”  However, the proposed rule changes this provision and requires these self-reviews to be completed annually. 

Recruitment And Outreach Efforts

The proposed rule also imposes additional recruitment and outreach requirements.  In accordance with the proposed rule, contractors will have to engage in a minimum of three specific types of outreach and recruitment efforts.  The effectiveness of these efforts in identifying and recruiting individuals with disabilities must be reviewed annually, and this review must be documented.  Additionally, job openings must be listed with one-stop career centers and other appropriate employment delivery systems in order to increase the pools of qualified applicants.  Additionally, all records relating to a contractor’s recruitment and outreach efforts must now be kept for five years, which departs from the standard two year retention period.

Comments To The Proposed Rule

The public may comment on the proposed rule at www.regulations.gov or by mail to Debra A. Carr, OFCCP, Room C-3325, 200 Constitution Ave., NW, Washington, D.C., 20210.  All comments must be received by February 7, 2012 and include the identification number (RIN) 1250-AA02.  Federal contractors should continue to monitor the regulatory activity of the OFCCP and be prepared to make adjustments to their human resources practices and technologies to comply with the OFCCP’s expanded requirements.