Published on Wednesday, October 2, 2013

Attention Federal Contractors: New 503 and 4212 OFCCP Regs are out: What’s Next?

Author: Anonym

The final rules were promulgated on September 24, 2013 and become effective as of March 24, 2014.  These new rules establish a 7% utilization goal for individuals with disabilities (IWDs) (analyzed by job group except for facilities under 100 which can be done by facility) and an 8% hiring benchmark for veterans. 

Contractors with an AAP in place on the Final Rule’s effective date may maintain that AAP until the end of their AAP year and delay their compliance with the AAP requirements for data collection (Subpart C) until the start of their next AAP cycle. Contractors are nevertheless encouraged to begin updating their employment practices and IT systems to come into compliance with the revised requirements for data collection as soon as possible.

Therefore, for example, an organization with a January 1, 2014 plan date must begin with data collection on January 1, 2015, and the analysis is included in the January 2016 AAP.  If a company has an April 1, 2014 plan, data collection begins on April 1, 2014, and the analysis is included in the April 2015 AAP.   Hence, organizations with a plan year beginning after April 1 must decide whether for business reasons to have a plan year before April 1, or to continue on the same plan year.  By having an earlier plan year, the contractor has an additional year to collect and to conduct analysis on data. 

Contractors must collect data from both applicants and its current workforce.   The invitation to employees must be issued to all employees the first year that the contractor is subject to the self-identification requirement under Section 503.  Then employees must be invited to self-identify every five years after the initial invitation.  A contractor must also provide at least one reminder to employees within each five-year period that they may self-identify as IWDs.  Before data collection can begin, though, OFCCP stated it will provide an approved form for the collection of data.  Currently OFCCP has submitted an approved collection form to the Office of Management and Budget (OMB).  Once approved (it will be within six months), contractors can use those forms for data collection purposes. 

OFCCP has deliberately stated that the 8% hiring benchmark is not a goal and that “Contractors will not be subject to an enforcement action or found to be in violation of the VEVRAA regulations for failing to meet the benchmark.”  A hiring benchmark is for analyzing the effectiveness of hiring programs only.  It is not a workforce utilization goal.   

Contractors can also establish their own hiring benchmarks if they follow the requirements in the rules.   According to OFCCP, a contractor may establish a benchmark equal to the national percentage of veterans in the civilian labor force, as posted in the Benchmark Database on the OFCCP Web site; or a contractor may establish its own benchmark by taking into account all of the following five factors:

  1. The average percentage of veterans in the civilian labor force in the state where the contractor is located over the preceding three years, as posted in the Benchmark Database on the OFCCP Web site
  2. The number of veterans , over the previous four quarters, who participated in the employment service delivery system in the state where the contractor is located, as posted in the Benchmark Database on the OFCCP Web site
  3. The applicant and hiring ratios for the previous year
  4. The contractor’s recent assessments of the effectiveness of its outreach and recruitment efforts
  5. Any other factors, such as the nature of the job or its location, that would affect the availability of qualified protected veterans

Contractors must maintain records related to their benchmark for three years (current and past three years is recommended), allowing them to assess the success of their outreach and recruitment efforts for veterans over time.

With respect to data analysis, the final regulations require that contractors document and update all of the following annually:

• Number of IWD/protected veteran applicants

• Total number of applicants for all jobs

• Total number of job openings and jobs filled

• Number of total IWDs/protected veterans hired  

• Total number of applicants hired

Although there is no discussion of adverse impact analysis being used on the data, it may be assumed that OFCCP will likely use the tried and true methodology for determining if there are any indicators in hiring with these protected classes. Contractors must also maintain these records for three years (current plus last three is recommendation).

Finally, the veteran and disabled AAP must still be available for review by employees, but OFCCP clarifies in the final regulations that “[t]he full affirmative action program, absent the data metrics required by § 60-300.44(k), shall be made available.”  So these analyses must be separated out from the usual narrative that is prepared.

Click here for a grid that lays out how and when contractors must comply with the new requirements.

Source: OFCCP, DCI, Seyfarth Shaw

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