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Federal Contractors Take Notice – New OFCCP Regulations

New regulations affecting federal contractors are scheduled to go into effect on March 24, 2014.  The regulations involve federal contractors’ affirmative action and recordkeeping obligations for veterans and disabled workers.

The agency issuing the regulations is the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).  OFCCP regulates federal contractors.

Application to Construction Contractors

In general, contractors and subcontractors who hold a Federal or federally-assisted construction contract in excess of $10,000 are subject to regulatory requirements under one or more of the laws enforced by OFCCP.  The specific laws that are triggered depend on the value of the contract.  Once it has been determined that a contractor or subcontractor is subject to a law administered by OFCCP, the law applies to all of the contractor's or subcontractor's employees who are engaged in on-site construction, including those construction employees who work on a non-Federal or non-federally assisted construction site.

New Regulations Affecting Veterans

On August 27, 2013, OFCCP announced new regulations that will strengthen the affirmative action requirements for military veterans.  The regulations require covered federal contractors to engage in specific types of outreach and recruitment that target veterans, and evaluate their progress annually.  The regulations also require contractors to establish annual hiring benchmarks based on the national percentage of veterans in the workforce (currently 8%) or the employer’s own benchmark based on the best available data.

The regulations go into effect on March 24, 2014.  For more information, read OFCCP’s web page Final Rule: Vietnam Era Veterans’ Readjustment Assistance Act.

New Regulations Affecting Disabled Workers

Also on August 27, 2013, OFCCP announced new regulations regarding the hiring of disabled workers.  The regulations require covered federal contractors to set a hiring goal of having 7% disabled workers in each job group.  The regulations also have new requirements regarding the recruitment and training of individuals with disabilities, formal accommodation policies and procedures, and recordkeeping and data collection to track disabled applicants and new hires.  Applicants are to be invited to self-identify as disabled at the pre-offer stage, and incumbent employees will also periodically be invited to self-identify as disabled.

Like the new veterans’ regulations, these regulations go into effect on March 24, 2014.  For more information, read OFCCP’s web page Final Rule: Section 503 of the Rehabilitation Act.

Concerns and Pending Lawsuit

OFCCP has made it clear that the hiring goals are aspirational, and that failure to meet the goals will not be a violation leading to a penalty or other sanction.  Nonetheless, federal contractors are concerned about whether the goals will be used in conjunction with other factors, such as compensation irregularities, in enforcement actions by OFCCP.

On November 19, 2013, Associated Builders and Contractors (ABC) filed suit seeking court review of portions of the new regulations relating to disabled workers.  ABC stated that it does not “take issue with the legitimate affirmative action and nondiscrimination objectives,” but feels compelled to challenge the “unprecedented, wasteful and burdensome data collection and utilization analysis requirements on government construction contractors.”

Conclusion

Federal contractors should review their affirmative action plans and compliance procedures, and affected contractors should be ready to comply with the new regulations.  Incidentally, the OFCCP’s recently updated Federal Contract Compliance Manual is available online.


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