OFCCP Proposes New Section 503 Disabled Regulations

Office of Federal Contractor Compliance Programs (OFCCP) recently published a Notice of Proposed Rulemaking (NPRM) to notify contractors of modifications to the affirmative action regulations under Section 503 of the Rehabilitation Act. These proposed changes will significantly impact contractor’s data collection responsibilities as well as establish a utilization goal for individuals with disabilities.

 

OFCCP explains the revisions are necessary for several reasons. First, the existing regulations have been in place since the 1970s. Second, suggested or voluntary efforts that appear in the current regulations have not had a demonstrable effect on the employment of individuals with disabilities. According to the U.S. Department of Labor’s Bureau of Labor Statistics, the employment rate for working age individuals with disabilities is significantly lower (21.8%) when compared to the rate for working age individuals without disabilities (70.1%).

The NPRM includes a detailed section-by-section analysis of the proposed changes. To access OFCCP’s press release, and a copy of the entire NPRM, please click here.

 

Below you will find Berkshire Associates’ interpretation of the NPRM’s main highlights:

 

The NPRM provides a section-by-section analysis of the proposed changes starting with the establishment of a utilization goal for employment of individuals with disabilities at seven percent for each job group in the contractor’s workforce. The job groups must coincide with the groups established for use in the existing minorities and women affirmative action plans (AAPs). Contractors will be required to evaluate its utilization of individuals with disabilities on an annual basis. If the percentage of employees is less than the proposed utilization benchmark, the contactor will be required to establish “action-oriented programs” to assist in the attainment of the goal(s). The agency is also considering a sub-goal of two percent for individuals with certain severe disabilities and will provide the forms that contractors will use to invite applicants and employees to self-identify. The form might resemble Standard Form 256, currently in use for federal government employment.

 

One section of the new regulations, “Providing Priority Consideration in Employment,” will serve to “…ensure the contractor’s awareness of, and encourage the use of, voluntary strategies that may be used in their efforts to take affirmative action and increase employment opportunities for individuals with disabilities.” Contractors will be asked to develop and implement priority consideration in their affirmative action objectives. Contractors who utilize the priority program are required to outline the program in their affirmative action program and may also use the information gathered from applicants and employees self-identification to determine eligibility to participate in the priority consideration program.

 

The NPRM also outlines changes in the scope of the compliance evaluations of the contractor’s AAP conducted by OFCCP. The major change in this section focuses on the current option of the contractor to provide requested data during a compliance check (not the standard audit) either on- or off-site at the contractor’s option. The proposed regulation would eliminate this clause and leave it to OFCCP to decide the location of the review. The second change deals with the limitation of the focused reviews to require the review to occur on-site. This change would allow the OFCCP to request documentation to be sent to any appropriate location. The proposed rule will also clarify the requirement of contractors to notify OFCCP of all formats in which data is kept, and to provide the data to OFCCP in the format they request to “…facilitate a more efficient investigation process.” These changes “include a greater emphasis on identifying electronic data that OFCCP can review, greater flexibility in where reviews take place, and a new procedure allowing for a pre-award compliance review.”

 

Changes to parts of the rule would mandate activities which in the past were merely suggested. The appendix will require the contractor to provide applicants the opportunity to voluntarily identify as an individual with a disability at the pre- and post-offer stages, and to request reasonable accommodations. Contractors are required to develop and implement written procedures for processing requests for reasonable accommodations, and offer the individual the opportunity to partially pay for the accommodation if the cost constitutes an undue hardship for the contractor. The contractor will be required to seek advice of the individual requesting the accommodation.

 

The NPRM outlines four major categories of benefits for both contractors and job seekers. The first benefit focuses on the connection of job seekers with disabilities with contractors with open positions. The NPRM creates a mandatory job listing requirement to be part of the contractor’s outreach. Contractors will be required to regularly update information to the employment delivery systems to in order to be sure job openings are listed accurately. Contractors will also be required to enter into “linkage agreements” with at least three disability-focused employment sources, and OFCCP has listed several options in the NPRM.

 

The proposed changes also contain information on the contractor’s communication of affirmative action obligations to their workforce and other organizations. The document outlines several ways for contractors to clearly communicate the protection and benefits of section 503 including:

·        The requirement to disseminate the contractor’s affirmative action policy in its internal policy manual, and the review of the policy during orientation and training programs.

·        Providing notice of rights under section 503 for those working offsite in accessible formats.

·        Annual review of personnel processes, including the documentation of personnel actions with regard to individuals with disabilities and reasons for the personnel decisions.

·        Requirement of the contractor to notify third parties such as union officials and subcontractors of its AAP obligations.

 

The proposed rule also provides periodic monitoring of affirmative action efforts to determine how time and money are most effectively spent. Contractors are required to collect data on referrals and applicants in order to measure the number of individuals with disabilities they are reaching, and to determine which sources are most effective in attracting these individuals. The proposed regulations will require contractors to document and update annually the following calculations: (1) for referral data, the total number of referrals from applicable employment service delivery systems, and from groups and organizations with which the contractor has a linkage agreement; (2) for applicant data, the total number of applicants for employment, the number of applicants who are known to be individuals with disabilities, and the “applicant ratio” of known applicants with disabilities to total applicants; (3) for hiring data, the total number of job openings, the number of jobs filled, the number of known individuals with disabilities hired, and the “hiring ratio” of hires with known disabilities to total hires; and (4) the total number of job openings, the number of jobs that are filled, and the “job fill ratio” of job openings to job openings filled.

 

Contractors will also be required to track training programs and promotional opportunities for which applicants and employees with disabilities were considered, and will be required to review their selection procedures annually. For those employees or applicants with disabilities, contractors will be required to provide the vacancy and training program for which they were considered. Additionally, if the individual is rejected for employment, promotion, or training, a statement of the reason and description of any accommodation considered is required. Reasonable accommodations will be treated confidentially and will be recorded when applicants or employees are selected for hire, promotion, or training. Annually, contractors will be required to anonymously survey all employees in order to record changes in their disability status. OFCCP is also considering adding an annual reporting mechanism in an effort to document these considerations and decisions.

 

As part of the affirmative action program, the proposal will include an annual review of all physical and mental job qualifications to ensure these standards do not screen out individuals on the basis of disability, and that they are job-related for the position and are consistent with business necessity. The contractor will be required to document the methods used to complete the annual review, the results of the annual review, and any actions taken in response. These documents shall be treated as employment records and are subject to the recordkeeping requirements—which are increased to five years under the proposed rule.

 

Berkshire Associates’ experts will continue to monitor developments with this and other agency movement. We recommend contractors review their practices to begin to capture this information to prepare for the final rule, which is expected in the fall of 2012.

 

For more information on this NPRM, please contact one of Berkshire Associates’ compliance experts at 800.882.8904 or email bai@berkshireassociates.com.