OFCCP Enacts New Affirmative Action Rules Covering Qualified Individuals With Disabilities

Today, the OFCCP published new regulations in the Federal Register concerning the affirmative action requirements of government contractors and subcontractors concerning the disabled and special veterans.  These regulations become effective on March 24, 2014 and apply to affirmative action plans with plan years that begin after that date.   Today, I’ll focus on the affirmative action requirements for the disabled under section 503 of the Rehabilitation Act and will describe the new veteran requirements tomorrow.   As has been previously publicized, the OFCCP will now for the first time begin requiring contractors to invite disabled and veteran applicants to self-identify during the application/pre-offer process (instead of just during the post-offer phase) and to use utilization goals, much as contractors are now required with women and minorities.  However, OFCCP will set the utilization goals instead of permitting the contractors to establish their own specific goals based on the availability of qualified  individuals in the relevant population of the reasonable recruitment area based on the last census.  In particular, OFCCP expects all contractors to meet a 7% nationwide utilization goal for disabled employees in each work group, or for employers with less than 100 employees, a 7% utilization goal for the entire workforce.  Contractors will also be required every 5 years to invite incumbent employees to self-identify their disabilities as that information sometimes changes over time.  OFCCP will also expect prime contractors to utilize more specific language in their contracts to educate their subcontractors about their responsibilities.  Finally, the new regulation updates the OFCCP rules to be consistent with the new requirements in, and regulations promulgated by the EEOC under, the ADAA.   Today’s Federal Register republishes 41 C.F.R. part 60-741 in its entirety and contains a section by section summary of every change created by the new rules.  Accordingly, affirmative action employers will need to substantially revise their affirmative action plans for disabled and veterans in order to comply with the new rules.

National Utilization Goal.  The most significant change in the Rehabilitation Act regulations is that the new rule adopts a 7% national goal for the employment of qualified disabled individuals by government contractors and subcontractors within each job group.  There is a lot of room to criticize the OFCCP’s approach.  The census does not measure this information and the American Community Survey understates the number of individuals covered by the Rehabilitation Act.  Therefore, the OFCCP increased the percentage of disabled individuals revealed by the ACS survey to compensate for the understatement.  As explained by the OFCCP:

The [ACS] estimates are not statistically significant when broken down to the degree of detail required by the supply and service goals framework. Contractors therefore would not be able to use the job groups established under Executive Order 11246 to establish goals for individuals with disabilities, and would often be unable to utilize the geographic recruitment areas established under the Executive Order when determining the availability of individuals with disabilities (as queried in the ACS).

                 . . .

we used the mean across these EEO–1 groups to estimate that 5.7 percent of the civilian labor force has a disability as defined by the ACS.

                . . . .

OFCCP recognizes that the 7 percent figure is less precise than the geographically specific availability information that contractors are familiar with under the Executive Order 11246 program, and that for some jobs in some locations availability of qualified individuals may be less than 7 percent.  . . . . Because the goal is intended solely as a tool, the final rule clearly states that a failure to meet the goal will not, in and of itself, result in a violation of section 503 or a finding of discrimination.

Despite the obvious shortcomings (which is likely to lead to litigation), the OFCCP is implementing a national “round” goal of 7% to avoid the implication of a “false level of precision.”  As described by the OFCCP:

the final rule clarifies  . . .  what contractors must do when the goal is not met. More specifically, the final rule identifies steps for the contractor to take to ascertain whether there are impediments to equal employment opportunity and, if impediments are found, to correct any identified problems. If no impediments are identified, then no corrective action is required. The goal is not a rigid and inflexible quota which must be met, nor is it to be considered either a ceiling or a floor for the employment of particular groups.

Moreover, the final rule creates an exception for small employers which “ permits contractors with a total workforce of 100 or fewer employees to apply the 7 percent goal to their entire workforce as a whole, rather than to each job group.”

 In the past, contractors have been required to make the entire AAP for disabled and veterans available for inspection upon request to applicants and employees, unlike the 11246 plans.  However, now that employers will be required to analyze utilization goals, critique their efforts and utilize other metrics which may involve confidential employee data, the new regulation permits employers to withhold those portions of the AAP which includes “the data metrics required by § 60–741.44(k)” [the analysis of the self-identification data].

Self-identification.  The next most significant change is that contractors will now be required to invite employees and applicants to voluntarily self-identify their disability status on a standard OFCCP-designed form. The invitation should be extended at the same time that applicants are invited to self-identify as women or minorities.  In addition, as is currently required, contractors must again invite candidates to self-identify after a job offer has been extended and then invite employees to change or self-identify their disability every five years.   Thing is, OFCCP still hasn’t designed the applicant self-identification form and says that once it does, it will post it on its website.   As with minorities and women, contractors will be permitted to identify applicants and employees as disabled even when the employees or applicants do not voluntarily self-identify when “(1) The disability is  obvious (e.g., someone is blind or missing a limb) or (2) the disability is known to the contractor (e.g., an individual says that he or she has a disability or requests reasonable accommodation for a disability).” As with information about women and minorities,

disability demographic information must be kept confidential and maintained in a data analysis file. Such information may not be included in an individual’s personnel file. Contractors are also reminded that they may not guess or speculate when identifying an individual as having a disability. Nor may they assume that an individual has a disability because he or she ‘‘looks sickly’’ or behaves in an unusual way.

Notably, contractors are also not required to maintain the self-identification information in the employee’s confidential medical file because OFCCP wants the information to be available to the contractor to conduct utilization analyses, etc.

Once this data is collected, the contractor will be expected to analyze it during its annual audit to determine the effectiveness of its affirmative action program and outreach efforts.  As explained by the OFCCP, “the final rule requires that contractors need only collect and maintain the raw data regarding the number of applicants with disabilities, the total number of job openings and jobs filled, the total number of applicants, the number of applicants with disabilities hired, and the total number of applicants hired.”        In particular, the new regulation provides as follows:

The contractor shall document the following computations or comparisons pertaining to applicants and hires on an annual basis and maintain them for a period of three (3) years:

(1) The number of applicants who self-identified as individuals with disabilities pursuant to § 60–741.42(a), or who are otherwise known to be individuals with disabilities;

(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.

                . . .

Officers will not be using the applicant and hiring data to conduct underutilization or impact ratio analyses, as is the case under Executive Order 11246, and enforcement actions will not be brought solely on the basis of statistical disparities between individuals with, and without, disabilities in this data. Rather, Compliance Officers will look to see whether the contractor has fulfilled its various obligations under § 60–741.44, including its obligation, pursuant to § 60–741.44(f)(3), to critically  analyze and assess the effectiveness of its recruitment efforts, using the data in paragraph (k) and any other reasonable criteria the contractor believes is relevant, and has pursued different or  additional recruitment efforts if the contractor concludes that its efforts were not effective.

Reasonable Accommodation Procedures.  While the OFCCP recommends that employers utilize written reasonable accommodation procedures as a best practice, it ultimately elected to not require the adoption of such policies and procedures in writing as it had previously proposed.  A sample policy is attached to the final rule as Appendix B.

Advertising and Solicitations.  Contractors will now be required to add the word "disability” to their EEO statement in job advertisements and solicitations.  For instance, contractors now need to say: ‘‘all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, disability or national origin.’’

Federal contracts and subcontracts.  Contractors will be required to include the following clause in all of its covered contracts and purchase orders in excess of $10,000,:

This contractor and subcontractor shall abide by the requirements of 41 CFR 60– 741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.’’

Assessment of external outreach and recruitment efforts. Contractors will also be required  on an annual basis to evaluate their affirmative action efforts over the last three years and to maintain their analytic records for three years:

The contractor shall, on an annual basis, review the outreach and recruitment efforts it has taken over the previous twelve months to evaluate their effectiveness in identifying and recruiting qualified individuals with disabilities. The contractor shall document each evaluation, including at a minimum the criteria it used to evaluate the effectiveness of each effort and the contractor’s conclusion as to whether each effort was effective. Among these criteria shall be the data collected pursuant to paragraph (k) of this section  for the current year and the two most recent previous years. The contractor’s conclusion as to the effectiveness of its outreach efforts must be reasonable as determined by OFCCP in light of these regulations. If the contractor concludes the totality of its efforts were not effective in identifying and recruiting qualified individuals with disabilities, it shall identify and implement alternative efforts listed in paragraphs (f)(1) or (f)(2)of this section

Internal dissemination of affirmative action policy.  The new rule also makes mandatory certain actions to disseminate the policy among the workforce:

The contractor shall implement and disseminate this policy internally as follows: (i) Include it in the contractor’s policy manual or otherwise make the policy available to employees; (ii) If the contractor is a party to a collective bargaining agreement, it shall notify union officials and/or employee representatives of the contractor’s policy and request their cooperation;

While these are the most salient changes, the devil is in the details.  All contractors are recommended to read the new rule and explanatory comment in detail.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.