Federal Contractors Get Ready for Change: What OFCCP s New Disability and Veterans Regulations Mean for You Sponsored By:

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1 Federal Contractors Get Ready for Change: What OFCCP s New Disability and Veterans Regulations Mean for You Sponsored By: Presented by: Susan Schoenfeld Senior Legal Editor, BLR Wednesday, February 26, :00 p.m. to 3:00 p.m. Eastern 1:00 p.m. to 2:00 p.m. Central 12:00 p.m. to 1:00 p.m. Mountain 11:00 a.m. to 12:00 p.m. Pacific 2013 BLR and HR Hero Business & Legal Resources and HR Hero. All rights reserved. These materials may not be reproduced in part or in whole by any process without written permission. This program has been approved for 1.00 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI).The Program ID number will be ed to the registered participant at the completion of the conference. For more information about certification or recertification, please visit the HRCI website at

2 Federal Contractors Get Ready for Change: What OFCCP s New Disability and Veterans Regulations Mean for You Sponsored by Agenda What is happening at OFCCP? New regs and upcoming deadlines Changes to Section 503 and VEVRAA What to do now (and later) 2013 BLR Business & Legal Resources. All rights reserved. 2

3 What is Happening at OFCCP? Support from current administration Increased funding and staffing Increased audits and regulatory action 2013 BLR Business & Legal Resources. All rights reserved. 3 New Regulations Published in 9/24/2013 Federal Register Effective 3/24/2014 Extended effective date for Subpart C (program requirements), but OFCCP says begin compliance efforts ASAP 2013 BLR Business & Legal Resources. All rights reserved. 4

4 New Regulations: Deadlines What happens on March 24, 2014? Subpart A (EO clause, job posting) Subpart B (nondiscrimination) Subpart D (enforcement) Subpart E (recordkeeping) 2013 BLR Business & Legal Resources. All rights reserved. 5 New Regulations: Subpart C Deadlines Invitations to self-id AA policies AAP contents Utilization goals and benchmarks 2013 BLR Business & Legal Resources. All rights reserved. 6

5 Subpart C: OFCCP s Recommendations Begin complying with Subpart C before new plan year Strongly encourage compliance as soon as practicable Invite applicants to voluntarily self-identify, institute policies, document 2013 BLR Business & Legal Resources. All rights reserved. 7 New Regulations What happens if you are not ready? Technical violations No discrimination findings, but must determine where impediments exist 2013 BLR Business & Legal Resources. All rights reserved. 8

6 Section 503: IWDs Nondiscrimination and affirmative action for individuals with disabilities (IWDs) Written Affirmative Action Plan (AAP): 50+ employees and covered contract of $50,000 or more NEW: includes construction contracts 2013 BLR Business & Legal Resources. All rights reserved. 9 Section 503: IWDs 7% utilization goal 100+ employees, apply 7% goal to job groups Smaller employers can use EEO-1 job categories Less than 100 employees, apply 7% to workforce as a whole 2013 BLR Business & Legal Resources. All rights reserved. 10

7 Section 503: IWDs Outreach and Recruiting Undertake "appropriate outreach and positive recruitment activities Track and fully report on all outreach and recruiting efforts Requires A LOT more effort 2013 BLR Business & Legal Resources. All rights reserved. 11 Section 503: IWDs Outreach and Recruiting (cont.) Enlist the assistance and support of: State Vocational Rehabilitation Service Agency (SVRA) Employment One-Stop Career Center (One-Stop) American Job Center Nearest the contractor s establishment 2013 BLR Business & Legal Resources. All rights reserved. 12

8 Section 503: IWDs Outreach and Recruiting (cont.) Suggested actions to fulfill EEO opportunities for IWDs: Formal briefing sessions for recruiters Formal arrangements for referral of applicants, follow-up, and feedback on disposition Special efforts at educational institutions, work study 2013 BLR Business & Legal Resources. All rights reserved. 13 Section 503: IWDs Assessment of Outreach and Recruiting Review efforts of past 12 months Evaluate effectiveness of outreach and recruiting efforts Document each evaluation, list criteria and data for each effort (current year and 2 previous years) 2013 BLR Business & Legal Resources. All rights reserved. 14

9 Section 503: IWDs Assessment of Outreach and Recruiting (cont.) Conclude whether each effort was effective. Conclude whether the totality of outreach and recruiting efforts was effective for IWDs. Important If efforts were not effective, identify and implement alternative efforts BLR Business & Legal Resources. All rights reserved. 15 Section 503: IWDs Data Collection For current year and two most recent previous years: # of applicants who self-id d as IWDs, or otherwise known as IWDs; Total # job openings and total # jobs filled; Total # applicants for all jobs; # applicants with disabilities hired; Total # applicants hired 2013 BLR Business & Legal Resources. All rights reserved. 16

10 Section 503: IWDs Self- Identification Pre-offer and post-offer phases Use OFCCP form (available on Do not alter form, electronic version permitted 2013 BLR Business & Legal Resources. All rights reserved. 17 Section 503: IWDs Self- Identification (cont.) Pre-offer When the applicant applies or is considered for employment Post-offer After offer but before work starts 2013 BLR Business & Legal Resources. All rights reserved. 18

11 Section 503: IWDs Self- Identification (cont.) Incumbents Within first year of new requirements 5-year intervals thereafter Reminder at least once in years between invitations 2013 BLR Business & Legal Resources. All rights reserved. 19 Section 503: IWDs Self- Identification (cont.) If an individual refuses to self-id Contractor may make its own visual identification Based on clearly observed disabilities (e.g., blindness) or accommodation request Contractors may not guess or speculate 2013 BLR Business & Legal Resources. All rights reserved. 20

12 Section 503: IWDs Utilization Analysis Annually Assessment of problem areas Establish specific, action-oriented programs to address identified problems 2013 BLR Business & Legal Resources. All rights reserved. 21 Section 503: IWDs Utilization Analysis (cont.) If less than the 7% utilization goal: Take steps to determine if impediments to EO exist Develop and execute action-oriented programs to correct problem areas 2013 BLR Business & Legal Resources. All rights reserved. 22

13 Section 503: IWDs Utilization Analysis (cont.) Failure to meet a utilization goal will not be a violation of the regulations Will not lead to a fine, penalty, or sanction, BUT Failure to set a goal, conduct utilization analysis, and assess problem areas will get you in trouble 2013 BLR Business & Legal Resources. All rights reserved. 23 Section 503: IWDs Other Changes Definition of disability to align with Americans with Disabilities Act Amendments Act (ADAAA) EO clause (incorporate by specific reference clause) Tag lines in job ads for IWDs ( Disability, not D ) 2013 BLR Business & Legal Resources. All rights reserved. 24

14 Section 503: IWDs Other Changes (cont.) Review personnel policies Self-audit Physical and mental qualifications Compliance evaluations (Frito-Lay, extending scope) 2013 BLR Business & Legal Resources. All rights reserved. 25 Section 503: IWDs Other Changes (cont.) Record format and provide documents to OFCCP Electronic posting Availability of AAPs 2013 BLR Business & Legal Resources. All rights reserved. 26

15 VEVRAA: Protected Veterans Nondiscrimination and AA for protected veterans Written AAP: 50+ employees and covered contract of $100,000 or more Part regs rescinded, pre-jva 12/1/ BLR Business & Legal Resources. All rights reserved. 27 VEVRAA: 8% Hiring Benchmark New 8% hiring benchmark for protected veterans Apply to the workforce as a whole, by AAP establishment Not to individual job groups 2013 BLR Business & Legal Resources. All rights reserved. 28

16 VEVRAA: 8% Hiring Benchmark (cont.) May choose to set own benchmark Most contractors likely to use OFCCP s 8% figure Either way, document the hiring benchmark used 2013 BLR Business & Legal Resources. All rights reserved. 29 VEVRAA: Setting Your Hiring Benchmark Based on 5 factors % vets in civilian labor force in state (BLS stats) # of vets in state ESDS in previous 4 quarters Applicant ratio and hiring ratio for the previous year Contractor s recent outreach and recruitment assessments and Any other factors (nature of job openings, location affecting availability) 2013 BLR Business & Legal Resources. All rights reserved. 30

17 VEVRAA: Setting Your Hiring Benchmark (cont.) Document each of the factors The relative significance of each of the factors Retain benchmark records for 3 years 2013 BLR Business & Legal Resources. All rights reserved. 31 VEVRAA: Types of Protected Veterans Disabled veterans Recently separated veterans (3 years) Recipients of Armed Forces service medal Veterans who served in active duty in a war or campaign for which a campaign badge was authorized 2013 BLR Business & Legal Resources. All rights reserved. 32

18 VEVRAA: Job Listings Immediately list all employment openings List with state workforce agency job bank or with the nearest ESDS List with ESDS at least concurrently with any other effort Still exceptions for jobs outside U.S., exec jobs, and jobs < 3 days 2013 BLR Business & Legal Resources. All rights reserved. 33 VEVRAA: Job Listings (cont.) Provide job vacancy information: In any manner and format permitted by the local ESDS Which will allow ESDS to provide veterans priority referrals Local ESDS rules vary, so beware 2013 BLR Business & Legal Resources. All rights reserved. 34

19 VEVRAA: Job Listings (cont.) Advise ESDS in each state with establishments: You are a federal contractor, so ESDS can ID you as such You want priority referrals of protected vets for job openings at all locations in the state 2013 BLR Business & Legal Resources. All rights reserved. 35 VEVRAA: Job Listings (cont.) Provide ESDS with: Name and address of each hiring location in state Contact information for each location s hiring official Contact information for any external job search orgs used 2013 BLR Business & Legal Resources. All rights reserved. 36

20 VEVRAA: Job Listings (cont.) Report information changes to ESDS simultaneously with next listing May advise if no longer bound by the job listing requirements 2013 BLR Business & Legal Resources. All rights reserved. 37 VEVRAA: Outreach and Recruiting Resources Suggested resources for recruiting: Local Veterans Employment Representatives Department of Veterans Affairs Regional Office Veterans counselors and coordinators ( Vet- Reps ) on college campuses Service officers of the national veterans groups active in the area 2013 BLR Business & Legal Resources. All rights reserved. 38

21 VEVRAA: Outreach and Recruiting Resources (cont.) New rule IDs suggested activities for recruiting: Hold formal briefing sessions for recruiters Efforts with educational institutions VA work study Career days and other activities 2013 BLR Business & Legal Resources. All rights reserved. 39 VEVRAA: Assessing Outreach and Recruiting Review efforts of past 12 months Evaluate effectiveness of outreach and recruiting efforts Document each evaluation, list criteria and data for each effort 2013 BLR Business & Legal Resources. All rights reserved. 40

22 VEVRAA: Assessing Outreach and Recruiting (cont.) Conclude whether each effort was effective Conclude whether the totality of outreach and recruitment efforts were effective Important If efforts were not effective, identify and implement alternative efforts 2013 BLR Business & Legal Resources. All rights reserved. 41 VEVRAA: Data collection For current year and two most recent previous years: # applicants who self-id d as PVs, or otherwise known to be PVs; Total # job openings and total # jobs filled Total # applicants for all jobs # of PV applicants hired Total # applicants hired 2013 BLR Business & Legal Resources. All rights reserved. 42

23 VEVRAA: Self-Identification With Subpart C, contractors must invite veterans to self-id: Pre-offer, no vet type required, same time as EO demographics collected Post-offer, ID vet type OFCCP sample self-id form available 2013 BLR Business & Legal Resources. All rights reserved. 43 VEVRAA: Other Changes EO clause Self-audit, review personnel policies Physical and mental qualifications Use of electronic posting Compliance evaluations 2013 BLR Business & Legal Resources. All rights reserved. 44

24 What To Do Now Before March 24, prepare to: Comply with new job listing requirements Put disability/protected veteran tag lines in all job solicitations Use EO clause in all covered federal subcontracts 2013 BLR Business & Legal Resources. All rights reserved. 45 What to Do Now (cont.) Before March 24: Ensure policies are updated to reflect ADAAA and new protected veteran types Prepare to comply with OFCCP s revised enforcement procedures Prepare to comply with OFCCP s revised records/access provisions 2013 BLR Business & Legal Resources. All rights reserved. 46

25 What to Do on March 24 Use prescribed EO clauses in all covered contracts and subcontracts Send labor organizations notices Begin listing compliant job announcements with ESDS/other sources 2013 BLR Business & Legal Resources. All rights reserved. 47 What to Do on March 24 (cont.) Use EEO tags for Disability/Vets Post revised bulletin board notices. May begin using new voluntary self-id 2013 BLR Business & Legal Resources. All rights reserved. 48

26 What to Do When New AAP Year Begins (After 3/24/14) MUST begin soliciting self-id Track job openings, positions filled, etc. for AAP metrics Survey existing workforce for IWDs status Use new statistics, assessments, and utilization analyses in new plans 2013 BLR Business & Legal Resources. All rights reserved. 49 Affirmative Action Resources BLR s Regs for Federal Contractors Resource Center OFCCP s VEVRAA site OFCCP s Section 503 site BLR Business & Legal Resources. All rights reserved. 50

27 Questions 2013 BLR Business & Legal Resources. All rights reserved. 51 A 100% flawless audit success rate. 11 million jobs to date, delivered to career centers nationwide. First-in-class product features, some of which the Office of Federal Contract Compliance (OFCCP) has adopted as new mandatory regulations. The only solution guaranteeing local outreach. 700 committed, satisfied customers. Contact SourceCast at or info@sourcecast.net today! 2013 BLR Business & Legal Resources. All rights reserved. 52

28 Disclaimers *This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.

29 Susan Schoenfeld Susan Schoenfeld, J.D., is a Senior Legal Editor for BLR s human resources and employment law publications. Ms. Schoenfeld has practiced in the area of employment litigation and counseling, covering topics such as affirmative action, disability discrimination, wrongful discharge, sexual harassment, and general employment discrimination. She has litigated numerous cases before the U.S. Court of Appeals, state court, and at the U.S. Department of Labor. In addition to litigating employment cases in state and federal court, she provided training and counseling to corporate clients regarding employmentrelated issues. Prior to entering private practice, Ms. Schoenfeld was an attorney with the Civil Rights Division at the U.S. Department of Labor in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for the Office of Federal Contract Compliance Programs, the Directorate of Civil Rights, and the Mine Safety and Health Administration. Ms. Schoenfeld received her undergraduate degree, cum laude, with honors, from Union College, and her law degree from the National Law Center at George Washington University.

30 SourceCast is the leading provider of Web-based HR compliance solutions with unsurpassable results. SourceCast specializes in providing Human Resources with hassle-free job distribution, reporting, and local outreach. With the inception of VETcentral, our VEVRAA solution, and VOCcentral, our Section 503 solution, SourceCast is able to build upon a 100% flawless audit success rate, 11 million jobs to date delivered to career centers nationwide, first-in-class product features, some of which the Office of Federal Contract Compliance (OFCCP) has adopted as new mandatory regulations, the only solution guaranteeing local outreach, and 700 committed, satisfied customers. Originally, SourceCast provided compliance through our two main flagship products: VOCcentral and VETcentral. Recently, we added Divercity Outreach to the fleet, our unique local outreach tool. With this latest addition, we are proud to announce that we now provide an all-encompassing compliance solution for Section 503 and VEVRAA. SourceCast provides each product with a commitment and excellence, paired with a flawless audit success rate in order to deliver the only solution that accurately addresses OFCCP compliance requirements.

31 Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You Sponsored by

32 Vice President, HR & Compensation Markets: Founder: Managing Editor, HR: Senior Legal Editor: Manager, CMS: Art Direction: Matthew T. Humphrey Robert L. Brady, JD Patricia M. Trainor, JD, SPHR Susan Schoenfeld, JD Isabelle B. Smith Vincent Skyers This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers.) 2014 BLR BUSINESS & LEGAL RESOURCES All rights reserved. This report may not be reproduced in part or in whole by any process without written permission from the publisher. Authorization to photocopy items for internal or personal use or the internal or personal use of specific clients is granted by Business & Legal Resources. For permission to reuse material from any reports from the Top 10 Best Practices in HR Management for 2013 series, ISBN , please go to or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, CCC is a not-for-profit organization that provides licenses and registration for a variety of uses. ISBN Printed in the United States of America Questions or comments about this publication? Contact: BLR Business & Legal Resources 100 Winners Circle, Suite 300 P.O. Box Nashville, TN

33 TABLE OF CONTENTS What happens on March 24, 2014?...1 What happens if you are not in compliance on March 24?...2 What the final rule requires Section 503: Individuals with disabilities percent utilization goal...3 Outreach and recruiting...3 Assessment of external outreach and recruitment efforts for IWDs...5 IWD self-identification...6 Data collection...7 Utilization analysis...8 Other changes...8 VEVRAA: Protected veterans percent hiring benchmark...10 Types of protected veterans...11 Job listings...11 Outreach and recruiting...12 Assessment of external outreach and recruitment efforts for protected veterans...14 Veterans self-identification...15 Data collection...15 Other changes...16 Affirmative action resources...17 Appendix...19 iii

34 VEVRAA & Section 503 Compliance that recruits for you! Compliance Guaranteed Audit-Proof Reports Anytime Increase Your Reach Contact us to A product by

35 FEDERAL CONTRACTORS GET READY FOR CHANGE: WHAT THE FINAL DISABILITY AND VETERANS REGULATIONS MEAN FOR YOU Sponsored by On March 24, 2014, the U.S. Department of Labor s Office of Federal Contract Compliance Programs (OFCCPs) final rule requiring affirmative action requirements for individuals with disabilities under Section 503 of the Rehabilitation Act of 1973 and for protected veterans under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) takes effect. The long anticipated final regulations will substantially impact government contractors and their affirmative action plans for individuals with disabilities and protected veterans. What happens on March 24, 2014? As of March 24, 2014, covered contractors must comply with all elements of the VEVRAA and Section 503 final rules, except that contractors will be allowed to delay the new Affirmative Action Plan (AAP) requirements in Subpart C of the final rules (pertaining to the program requirements). Regardless, contractors must begin reviewing new program requirements and planning for change now in order to be ready for the March 24, 2014, compliance deadline. The OFCCP has stated that it will provide contractors with additional time between March 24 and contractors new plan year date to come into compliance with the new rule requirements, during which time the OFCCP will provide technical assistance to facilitate the transition for contractors. Contractors with a written AAP in place on the final rule s effective date may maintain their AAPs until the end of their AAP year and delay compliance with the new AAP requirements of Subpart C of the final rule until the start of the next AAP cycle. So, for example, if a contractor s plan year runs from October 1, 2013, to October 1, 2014, the contractor need not change its AAPs for veterans and disabled individuals until the new plan year, beginning on October 1, Note, however, that contractors will be required to People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 1

36 Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! comply with the other requirements of the final rule, in subparts A (equal opportunity (EO) clause, job posting), B (nondiscrimination), D (enforcement), and E (recordkeeping), by the March 2014 effective date. Although the OFCCP created a grace period for Subpart C, it is very important for contractors to begin exploring compliance options right away. Many of the changes required by the final rules will require a large investment of time and effort to understand and come into compliance. In addition, since the final rule was published, the OFCCP has stated that it does not encourage contractors to wait until the new plan year to begin new program activities under Subpart C, such as soliciting self-identification of protected veteran or disability status. In fact, the OFCCP recently recommended that all contractors begin complying with Subpart C of the new regulations before the issuance of their first AAP under the new rules and strongly encouraged contractors to take these steps as soon as practicable after the March 24 effective date. What happens if you are not in compliance on March 24? The OFCCP issued the final rules under Section 503 and VEVRAA to update and strengthen contractors affirmative action and nondiscrimination responsibilities in order to address what it calls a substantial disparity in the employment rate of individuals with disabilities (IWDs) and protected veterans. Failure to meet the technical requirements of the new rule, such as proper use of the new EO statement and fulfilling job-listing requirements as required under the new rule, will result in a finding of noncompliance. Failure to meet the newly established goals and benchmarks for hiring veterans and disabled individuals will not result in a finding of discrimination, but will require the contractor to undertake detailed and timeconsuming steps to determine whether and where impediments to equal employment exist. Make no mistake. The OFCCP will be working hard to enforce the new rules, compelling contractors to come into compliance with the new requirements. In recent years, the OFCCP has undertaken an unprecedented effort to conduct compliance reviews and enforcement efforts. The new final rules reflect those continued efforts. In addition, the agency s budget and personnel levels have increased for several years, resulting in nearly 19,000 reviews of federal contractor establishments and more than $45 million in financial remedies for 84,000 workers who the OFCCP believed were affected by discrimination. Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 2

37 When the final rules take effect on March 24, 2014, the OFCCP will focus its compliance efforts on affirmative action requirements for protected veterans and individuals with disabilities as it never has before. Affirmative action professionals fully expect a dramatic increase in the number of AAP audits the OFCCP will conduct for protected veterans and IWDs. Armed with the new final regulations, the OFCCP will be checking new AAPs for protected veterans and IWDs very carefully to ensure that the new compliance requirements are met. In order to avoid an unsuccessful compliance review, contractors must be aware of what the new final rule requires and how to comply. For a checklist of activities contractors should be undertaking to prepare for the March 24, 2014, effective date (and beyond), see the Appendix to this report. What the final rule requires Section 503: Individuals with disabilities The Section 503 final rule creates many new requirements for affirmative action in disability, including: 7 percent utilization goal Covered contractors and subcontractors will be required to establish a new 7 percent utilization goal for IWDs. The OFCCP arrived at the 7 percent utilization goal figure primarily by using information taken from the disability data collected as part of the American Community Survey a census-type collection effort by the U.S. government. Under the new rule, covered contractors and subcontractors with more than 100 employees must use the national 7 percent utilization goal and, in most instances, apply it to the same job groups created for Executive Order AAPs. Smaller contractors that use EEO-1 job categories as job groups in their Executive Order AAP can apply the 7 percent utilization goal to those EEO-1 job categories. A contractor with a total of 100 or fewer employees need only apply the utilization goal to its workforce as a whole (i.e., no job categories or group utilization analysis is necessary). Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Outreach and recruiting The final Section 503 rule requires that contractors undertake appropriate outreach and positive recruitment activities. In order to prove that appropriate outreach and recruiting activities were undertaken, contractors must carefully track and fully report on all outreach and Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 3

38 Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! recruiting efforts. Compliance with the new tracking and reporting requirements will substantially add to the administrative burden of maintaining affirmative action compliance efforts. The rule contains the following list of suggested outreach organizations and activities that may be undertaken to satisfy this requirement: The State Vocational Rehabilitation Agency (SVRA), State mental health agency, or state developmental disability agency in the area of the contractor s establishment; The Employment One-Stop Career Center (One-Stop) or American Job Center nearest the contractor s establishment; The Department of Veterans Affairs Regional Office nearest the contractor s establishment ( Entities funded by the Department of Labor that provide recruitment or training services for individuals with disabilities, such as the services currently provided through the Employer Assistance and Resource Network (EARN) ( Local Employment Network (EN) organizations (other than the contractor, if the contractor is an EN) listed in the Social Security Administration s Ticket to Work Employment Network Directory ( Local disability groups, organizations, or Centers for Independent Living (CIL) near the contractor s establishment; Placement or career offices of educational institutions that specialize in the placement of individuals with disabilities; and Private recruitment sources, such as professional organizations or employment placement services that specialize in the placement of individuals with disabilities. It is important to note that OFCCP's "suggested" methods of outreach and recruitment are not exclusive. Contractors may choose to implement additional and different methods for locating and recruiting qualified IWDs. The final Section 503 rule also suggests that contractors consider taking specific actions to provide equal employment opportunities for IWDs, including: Hold formal briefing sessions, preferably on company premises, with representatives from recruiting sources, including facility tours and clear and concise explanations of current and future job openings, position descriptions, worker specifications, explanations of the company s selection process, and Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 4

39 recruiting literature. The company official in charge of the contractor s affirmative action program should be in attendance when possible; Make formal arrangements for referral of applicants, follow up with sources and feedback on disposition of applicants; Recruitment efforts at all educational institutions should incorporate special efforts to reach students who are individuals with disabilities; Participate in work-study programs for students, trainees, or interns with disabilities (found through outreach to state and local schools and universities, and through EARN); Make employees with disabilities available for participation in career days, youth motivation programs, and related activities in their communities; Take any other positive steps the contractor deems necessary to attract individuals with disabilities not currently in the workforce who have requisite skills and can be recruited through affirmative action measures (i.e., locating such individuals through state and local agencies supported by the U.S. Department of Education s Rehabilitation Services Administration (RSA) ( local Ticket-to-Work Employment Networks, or local chapters of groups or organizations that provide services for individuals with disabilities); Consider applicants in the hiring process who are known to have disabilities for all available positions for which they may be qualified when the position(s) applied for is unavailable. Assessment of external outreach and recruitment efforts for IWDs In addition to conducting the various outreach and recruiting efforts described above, the final Section 503 rule requires that contractors assess the success of those efforts by doing the following: 1. Annually review the outreach and recruitment efforts taken over the previous 12 months. 2. Evaluate the effectiveness of the outreach and recruitment efforts taken over the previous 12 months in identifying and recruiting qualified IWDs. 3. Document each evaluation, including at a minimum the criteria (including data, listed below) used to evaluate the effectiveness of each effort and a conclusion as to whether each effort was effective. Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 5

40 Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! 4. Conclude. Draw a conclusion as to whether the totality of the outreach and recruitment efforts was effective in identifying and recruiting qualified individuals with disabilities. If the conclusion of the evaluation is that the totality of the outreach and recruitment efforts was not effective in identifying and recruiting qualified IWDs, contractors must identify and implement alternative efforts for outreach and recruitment listed in the final rule. For the purposes of assessment, the data to be reviewed and evaluated include (for the current year and the 2 most recent previous years): 1. The number of applicants who self-identified as IWDs or who are otherwise known to be IWDs; 2. The total number of job openings and total number of jobs filled; 3. The total number of applicants for all jobs; 4. The number of applicants with disabilities hired; and 5. The total number of applicants hired. Note: According to the OFCCP, jobs filled refers to all jobs the company filled by any means, be it through a competitive process or noncompetitively (e.g., through reassignment or merit promotion). It, therefore, should take into account both new hires into the company and those employees who were placed into new positions via promotions, transfers, and reassignments. In contrast, the number of those hired refers solely to those applicants (both internal and external to the contractor) who are hired through a competitive process, including promotions. The total number of job openings refers to the number of individual positions advertised as open in a job vacancy announcement or requisition. For example, if one job vacancy announcement or requisition includes five open positions and results in four hires, the contractor would document this as five job openings and four jobs filled. All records relating to the assessment of external outreach and recruiting efforts must be retained for 3 years. IWD self-identification Under the final Section 503 rule, all applicants must be given the opportunity to self-identify as an IWD at both the preoffer and postoffer phases of the application process, using a form to be created by the OFCCP for this purpose. The form must be used as it is created by the OFCCP no contractor changes or customization will be allowed. An electronic version of the form may be used, as long as it Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 6

41 follows OFCCP s specific criteria for font, OMB number labeling, and text. When OFCCP s self-identification form is finalized, the agency says it will post a copy for use on the agency website ( The invitation to self-identify as an IWD must be provided to each applicant when the applicant applies or is considered for employment. The invitation may be included with the application materials for a position but must be separate from the application. The final rule also requires that incumbent employees be invited to self-identify as an IWD during the first year after the contract becomes subject to the rule requirements and every 5 years thereafter. The contractor must use the prescribed language in OFCCP s soonto-be released self-identification form in soliciting self-identification. Covered contractors are also required to remind employees that they may voluntarily update their disability status at least once during the 5 years between invitations to self-identify. If an employee or applicant does not self-identify as being disabled, the final Section 503 rule allows the contractor to make its own visual identification, based on either clearly observed disabilities (i.e., blindness) or disclosure by the applicant during the application process (i.e., request for an accommodation during the hiring process). However, it is important to note that contractors may not guess or speculate when doing so. Data collection Under the final Section 503 rule, on an annual basis, covered contractors and subcontractors must collect specific data relating to applicants and hires and maintain such records for a period of 3 years. The data to be collected by each covered contractor and subcontractor are: The number of applicants who self-identified as IWDs or who are otherwise known to be IWDs; The total number of job openings and total number of jobs filled; The total number of applicants for all jobs; The number of applicants with disabilities hired; and The total number of applicants hired. The definitions for job openings and jobs filled described in the section on assessment of external outreach and recruitment (above) apply to the requirements for IWD data collection. Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 7

42 Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Utilization analysis The final Section 503 rule requires that covered contractors and subcontractors conduct an annual utilization analysis and assessment of problem areas and establish specific action-oriented programs to address any identified problems. If the contractor s analysis shows that the percentage of IWDs is less than the 7 percent utilization goal, the contractor must take steps to determine whether and where impediments to equal employment exist. This includes assessing existing personnel processes, the effectiveness of its outreach and recruitment efforts, the results of its AAP audit, and any other areas that might affect the success of the AAP. After conducting this assessment, the contractor must develop and execute action-oriented programs to correct any identified problem areas. The OFCCP says that failure to meet a utilization goal will not be a violation of the regulations and will not lead to a fine, penalty, or sanction. However, failure to set a goal or conduct utilization analysis and assessment of problem areas may result in adverse action by the OFCCP. Other changes In addition to these major changes, other additional important changes included in the final Section 503 rule are: Definitions. The definition of disability has been revised, pursuant to the Americans with Disabilities Act Amendments Act (ADAAA) of The ADAAA expanded the definition of a covered disability. EO clause. Each contracting agency and each contractor must include the mandated EO clause in each of its covered government contracts or subcontracts. The final rule permits contractors to incorporate the EO clause into subcontracts by reference, but only by citing to the EO clause in the regulations (41 CFR (a)) and including OFCCP s mandatory clause in bold text. Covered contractors must state in all solicitations or advertisements for employees that all qualified applicants will receive consideration for employment and will not be discriminated against on the basis of disability. Contractors may refer to those protected by Section 503 by abbreviation, but such abbreviations must be commonly understood by applicants for employment. Simply using D is not an adequate abbreviation for disability. For those protected by Section 503, the tag line should, at a minimum, state disability so that it will be clearly understood by jobseekers. Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 8

43 Review personnel policies. Contractors must ensure that its personnel processes provide for careful, thorough, and systematic consideration of the job qualifications of applicants and employees who are known IWDs for job vacancies, filled either by hiring or promotion, and for all training opportunities offered or available. Physical and mental qualifications. Contractors must provide and adhere to a schedule for the periodic review of all physical and mental job qualification standards to ensure that, to the extent qualification standards tend to screen out qualified individuals with disabilities, they are job-related for the position in question and are consistent with business necessity. Compliance evaluations. The final Section 503 rule cements OFCCP s position that it may obtain information pertinent to a compliance evaluation for periods after the date of the scheduling letter. Under the final rule, the OFCCP may extend the temporal scope of an evaluation and examine information after the date of the compliance evaluation scheduling letter, but only if the OFCCP deems it necessary to carry out its investigation of potential Section 503 violations. The final rule also requires that the contractor inform the OFCCP of the format(s) in which it maintains records and other information (e.g., Word, PDF, Excel ), and provide the records and information to the OFCCP in the available format(s) the OFCCP selects (from the contractor s available formats). The OFCCP may request that the contractor provide documents either onsite or off-site during compliance checks and that the OFCCP may conduct focused reviews both on-site and off-site. Electronic posting. For employees who do not work at the contractor s physical location, the OFCCP will allow a contractor to satisfy its posting obligation by posting the EEO notice in electronic format, provided, the contractor either provides these employees with computers that can access the electronic posting or has actual knowledge that the electronically posted notice is accessible to its employees. Availability of AAPs. Any applicant or employee who asks to inspect the contractor s AAP is entitled to view the entire plan, with the exception of the data metrics required by Section (k). The location and hours during which the program may be inspected must be posted at each establishment. Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 9

44 VEVRAA: Protected veterans The final VEVRAA rule now requires covered federal contractors and subcontractors to collect data on veteran status and take specific, action-oriented steps in order to comply with the new affirmative action requirements for veterans. Those new requirements include: Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! 8 percent hiring benchmark The final VEVRAA rule establishes a new 8 percent hiring benchmark for protected veterans, which contractors must apply to the workforce as a whole, by AAP establishment, not to individual job groups. Contractors may choose to either adopt the benchmark determined by the OFCCP, which is based on the national percentage of veterans in the civilian labor force (currently 8 percent), or in the alternative, covered contractors may choose to set their own benchmark. If a covered contractor chooses to set its own hiring benchmark for veterans, the contractor must take the following factors into account: 1. The average percentage of veterans in the civilian labor force in the state(s) where the contractor is located over the preceding 3 years, as calculated by the Bureau of Labor Statistics and published on OFCCP s website; 2. The number of veterans, over the previous 4 quarters, who were participants in the employment service delivery system in the state where the contractor is located, as tabulated by the Veterans Employment and Training Service and published on OFCCP s website; 3. The applicant ratio and hiring ratio for the previous year, based on the data collected by the contractor; 4. The contractor s recent assessments of the effectiveness of its external outreach and recruitment efforts; and 5. Any other factors, including but not limited to the nature of the contractor s job openings and/or its location, which would tend to affect the availability of qualified protected veterans. Contractors may also set different benchmarks at different establishments. However, unless a contractor has a compelling reason to set a benchmark that is different from OFCCP s established figure, and to avoid additional scrutiny by the OFCCP, it is likely that most contractors will use OFCCP s annually designated hiring benchmark rather than setting their own benchmarks. Contractors must document the hiring benchmark used either OFCCP s figure or a benchmark established by the contractor. If the Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 10

45 contractor establishes its own benchmark figure, it must document each of the factors that it considered in establishing the hiring benchmark and the relative significance of each of the factors. A record of benchmarks must be retained for 3 years. Types of protected veterans The final VEVRAA regulations define protected veteran as falling into one of four new categories, as defined in the regulations at Sec : Disabled veterans; Recently separated veterans (3 years); Recipients of armed forces service medal; and Veterans who served in active duty in a war or campaign for which a campaign badge was authorized. The last category replaces the former category for other covered veteran. The OFCCP believes that use of the new, fourth category will reduce confusion and what they believed was a tendency to categorize veterans as protected when they were not. Job listings VEVRAA s regulatory requirements for listing positions are quite onerous and can be burdensome for employers not familiar with the regulations and the rules of local job service systems. The final VEVRAA rule requires that covered contractors list all employment openings with the appropriate employment service delivery system (ESDS) where the opening occurs nearest to where the job opening occurs. Effective March 24, 2014, federal contractors subject to the final VEVRAA rule are required to provide information about job vacancies in any manner and format permitted by the appropriate ESDS, which will allow that system to provide priority referral of veterans protected by VEVRAA for that job vacancy. Permitted formats may vary greatly between each ESDS, and contractors will be required to know what the acceptable manner and format of reporting job vacancies is for each system they use. The final rule allows contractors to utilize a privately run job service or exchange to satisfy the job-listing requirements, as long as the service or exchange provides the information to the appropriate ESDS in any manner and format that the ESDS permits, which will allow that system to provide priority referral of protected veterans. Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 11

46 Sponsored by People. Excellence. Commitment. SourceCast is HR s comprehensive OFCCP compliance solution for local outreach, job distribution, positive recruitment and OFCCPapproved reporting. Call for a free demo and let us secure your compliance, today! The final VEVRAA rule also requires that contractors advise the ESDS in each state where it has establishments that: 1. It is a federal contractor, so that the ESDS is able to identify them as such; and 2. It desires priority referrals from the state of protected veterans for job openings at all locations within the state. The contractor must provide the ESDS with the name and location of each hiring location within the state and the contact information for the contractor official responsible for hiring at each location. The contractor official may be a chief hiring official, a human resources contact, a senior management contact, or any other manager for the contractor who can verify the information set forth in the job listing and receive priority referrals from ESDSs. If the contractor uses any external job search organizations to assist in its hiring, the contractor must also provide to the ESDS the contact information for the job search organization(s). The disclosures required by the final 2013 VEVRAA rule must be made simultaneously with the contractor s first job listing at each ESDS location after the effective date of the final rule (March 24, 2014). If the information in the disclosures changes since it was last reported to the ESDS location, the contractor must provide updated information simultaneously with its next job listing. There is no need to advise the ESDS of subsequent contracts if the contractor is still covered by VEVRAA. The contractor may advise the ESDS when it is no longer bound by the job-listing requirements. There are still exceptions to the VEVRAA job-posting requirements when the employment opening is filled outside of the United States and territories, or when the position is an executive, top management position, a position that will be filled from within the contractor s organization, or for temporary positions lasting less than 3 days. Outreach and recruiting As with the final rule for Section 503, the final VEVRAA rule identifies a number of suggested resources for recruiting and developing onthe-job training opportunities for veterans. Those resources include: Local Veterans Employment Representative in the local employment service office (i.e., One-Stop) nearest the contractor s establishment; Department of Veterans Affairs Regional Office nearest the contractor s establishment; Federal Contractors Get Ready for Change: What the Final Disability and Veterans Regulations Mean for You 12