OFCCP Adopts Final Rules Expanding Disability Hiring Requirements

Posted on by Philipp Pierson in Labor & Employment.

Over the past several years, the Department of Justice’s Office of Federal Contract Compliance Programs (OFCCP) has undertaken several revisions to its regulations governing equal employment opportunity.  One of the more important revisions amended Title 41 of the Code of Federal Regulations, Part 60-741: Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors Regarding Individuals with Disabilities.  The initial advanced notice of proposed rulemaking was published in July 2010; 400 comments and several revisions and notices later, the final rules were adopted and published in the Federal Register on September 24, 2013.

These rule amendments become effective March 24, 2014, and make several important changes that federal government contractors will need to recognize.  A few of the amendments impose concrete new compliance requirements, while others merely update goals and provide guidance.  Some of the major changes included in the final rule-making are as follows:

New Utilization Goal for Contractors

For the first time, the OFCCP has adopted a national utilization goal for individuals with disabilities: federal government contractors are directed by § 60-741.45 to adopt a goal of seven percent utilization of disabled employees.  Put another way, contractors are to aim to ensure that seven percent of their workforce is composed of individuals with disabilities, as defined under the Americans with Disabilities Act.  Contractors are directed to annually evaluate their workforces to determine their utilization rates.  For contractors with more than 100 employees, the calculation must be made with respect to each job group in the contractor’s workforce, with a goal of seven percent utilization of disabled employees within every job group.  For those with 100 or fewer total employees, the seven percent goal may be applied to each job group, or to the contractor’s entire workforce as a whole.

In either case, the new rules make clear that this seven percent goal is not a quota, and that the failure of a contractor to meet this number is not, in itself, a violation.  Rather, the goal is to be used as a management tool and a way for contractors to measure their progress.  But a contractor’s failure to meet the seven percent utilization number will require that contractor to “take steps to determine whether and where impediments to equal employment opportunity exist.”  Such steps would include an assessment of personnel policies and a review of its efforts to recruit disabled applicants.

This portion of the new rule originally included a discussion concerning another goal of two percent of all federal contractors’ workforces to be made up of those with severe disabilities.  This would have been a separate “sub-goal,” with the two percent utilization of those with severe disabilities forming a portion of the overall seven percent utilization of those with disabilities.  This separate sub-goal, however, was dropped from the adopted version of the rule, with the OFCCP noting that it lacked a reliable method for calculating a proper goal and for determining what conditions the sub-goal would encompass.

Invitation to Voluntarily Self-Identify

Revised § 60-741.42 creates a new form entitled “Voluntary Self-Identification of Disability” to be used by applicants and employees.  Contractors should not be misled by the use of the term “voluntary” – disabled applicants and employees may self-identify as disabled or not, at their discretion, but the contractor’s use of the form is mandatory.

Existing rule language already required contractors to extend an invitation to self-identify as disabled to job applicants at the “post-offer” stage, meaning after an offer of employment has been extended but before the applicant begins his or her job duties.  This new revision extends this obligation to individuals making their initial application for employment and to current employees; in all cases, this invitation to self-identify will now be made using the standard form published on the OFCCP’s web-site.

The information collected concerning applicants, post-offer applicants and employees is to be kept confidential, and to be maintained in the contractor’s data analysis file (and not in the medical files of individual employees).  Contractors are required to provide this self-identification information to the OFCCP upon request, and the information will be used to evaluate the contractor’s hiring, selection, and recruitment practices.  In other words, the collected information may be used to evaluate the individual contractor itself, and not merely as part of a general industry-wide or nation-wide analysis of employment information.  This rule section also clarifies that contractors are prohibited from compelling or coercing applicants and employees to self-identify as disabled.

Required Contents of Affirmative Action Program

Federal contractors are already required, by § 60-741.44, to implement affirmative action hiring programs with respect to individuals with disabilities.  This new rulemaking amends several paragraphs of this subsection to update and expand requirements for federal contractors.  Among the most notable changes:

– Contractors are now required to send written notification of their affirmative action policies to subcontractors, vendors, and suppliers with whom they do business.

– Data concerning the numbers of applicants with disabilities and the number of such applicants hired must be collected and maintained by contractors for at least three years.

– Annual self-assessments are now required, through which contractors are directed to analyze their own efforts and to review the effectiveness of their outreach and recruitment concerning individuals with disabilities.  Such self-assessments are to be documented, with the records retained for at least three years.

OFCCP to be Given Off-Site Access to Contractors’ Records

Both § 60-741.60 and § 60-741.81 contain new language providing that, when conducting compliance checks, focused reviews, and complaint investigations, the OFCCP must now be given “off-site” access to materials (meaning access other than at the contractor’s own establishment).  Several contractors and associations commented on this rule amendment, raising concerns over confidentiality and the security of documents.  The OFCCP’s official analysis downplays the risks associated with such off-site access; however, contractors would be well-advised to remain aware of the possibility that a review of their affirmative action program and any supporting documentation (a term not specifically defined) may be undertaken virtually anywhere.

The newly-amended rules span over 30 sections and address a wide variety of issues.  The requirements discussed above address only some of the most pressing aspects.  Federal contractors should be ready to begin looking at their disability-related affirmative action programs and preparing to comply with these new requirements as soon as possible.