The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued its long-awaited proposed rule (pdf) amending the nondiscrimination and affirmative action requirements regarding individuals with disabilities for federal contractors and subcontractors. Specifically, the rule revises the regulations that implement Section 503 of the Rehabilitation Act of 1973, as amended. Section 503 requires most federal contractors and subcontractors to take affirmative action to employ and advance in employment qualified individuals with disabilities, and prohibits discrimination against them. According to the notice to be published in the December 9 edition of the Federal Register, the proposed regulations would strengthen these affirmative action requirements, describe the specific actions a contractor must take to satisfy its obligations, increase the contractor’s data collection obligations, and establish specific utilization benchmarks to help measure the effectiveness of the contractor’s affirmative action efforts. In addition, the proposal revises the nondiscrimination provisions to conform to changes made by the ADA Amendments Act (ADAAA) of 2008.

Prior to issuance of the proposed rule, OFCCP had issued an advance notice of proposed rulemaking (ANPRM). The Agency noted that it had received 147 comments to the ANPRM.  According to the Agency, the significant changes proposed by the rule can be divided into four general categories. First, the proposal includes provisions aimed at connecting job-seeking individuals with disabilities to contractors. To that end, the proposal includes a mandatory job listing requirement and mandates that contractors provide additional information updated regularly to employment service delivery systems. The proposal also requires contractors to engage in recruitment efforts and enter into linkage agreements with several disability-focused employment sources, many of which are specifically listed by OFCCP.

Second, several proposed changes seek to regulate how contractors communicate their affirmative action requirements. Specifically, the proposal:

• Requires that contractors disseminate their affirmative action policies in their internal policy manuals and discuss their policies at employee orientation and training programs;
• Provides that contractors must issue notices of worker rights under section 503 in accessible formats for those working offsite (i.e., electronically-accessible postings) as well as for those with visual impairments;
• Mandates that contractors review their personnel processes on an annual basis (increased from the prior obligation that they do so “periodically”), and outlines certain specific steps that the contractor must take, at a minimum, in the review of its personnel processes. In addition, the proposal stipulates that contractors must document personnel actions taken with regard to individuals with disabilities “to provide greater transparency between the contractor, its applicants/employees, and OFCCP as to the reasons for their personnel actions”; and
• Requires the contractor to meet with and/or otherwise send notification of its AAP obligations to third parties with whom it does business, such as union officials and subcontractors.

Third, the proposal revises contractor data collection and reporting requirements, ostensibly to enable the contractor to better assess its affirmative action efforts. As stated in the proposal, “this includes collecting data on referrals and applicants so contractors know how many individuals with disabilities they are reaching.” Specifically, the proposed regulations require the contractor 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.

The proposal also would require employers to track training programs and promotional opportunities for which applicants and employees with a disability were considered. Contractors will be required to prepare a statement of the reason as well as a description of any accommodation considered when it rejects an individual with disability for employment, promotion, or training. Contractors likewise will need to make a record describing any accommodation that makes possible the selection of an individual with a disability for hire, promotion, or training.

The agency also is considering the inclusion of a reporting requirement, and invites public comment on this option. Under this proposal, contractors would be required to annually provide OFCCP with a report containing the measurements and computations described above, and include the percentage of applicants, new hires, and total workforce for each EEO-1 category.

Notably, the proposed rule requires that contractors invite all applicants to voluntarily self-identify as individuals with disabilities whenever the applicant applies for or is considered for employment, in addition to post-offer. The contractor must use “the language and manner prescribed by the Director and published on the OFCCP Web site” for this purpose, and the Agency has invited comment on proposed text. Under the proposal, the contractor also would be required to annually survey employees, in an anonymous manner, whether he or she believes themselves to be an individual with a disability.

Another new section requires the contractor to develop and implement written procedures for processing requests for reasonable accommodation to be included as part of its affirmative action program.

OFCCP also is proposing to set a hiring goal for individuals with disabilities, based on the most recent 2009 American Community Survey (ACS) disability data for the “civilian labor force” and the “civilian population.” Specifically, the proposed rule states that the utilization goal for employment of individuals with disabilities is 7% for each job group in the contractor’s workforce. OFCCP also is considering the option of including within the 7% goal for individuals with disabilities a sub-goal of 2% for individuals with certain particularly severe disabilities. The agency is seeking comment as to whether there are alternative approaches for setting a utilization goal, particularly approaches to setting ranges that recognize that in some geographic areas and some occupations, there may be fewer people with disabilities.

Finally, the proposal revises the manner in which OFCCP conducts its compliance reviews. 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.”

A more detailed analysis of this proposed rule will be forthcoming.

Comments on this proposal must be received within 60 days of the proposed rule’s publication in the Federal Register. All comments must contain the regulatory identification number (RIN) 1250-AA02, and may be submitted electronically through the federal eRulemaking portal, via facsimile to: (202) 693-1304 (for comments of six pages or less); or by mail to: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C-3325, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

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