OFCCP Proposes New 7% Hiring Goal for Individuals with Disabilities
On December 9, 2011, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published a proposed new rule that would require federal contractors and subcontractors to set a hiring goal of having seven percent (7%) of their workforces be comprised of individuals with disabilities. The proposed rule incorporates the expanded definition of “disability” under the final regulations to the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) and imposes major new requirements for applicant self-identification, data collection and recordkeeping, written reasonable accommodation request procedures, and increased recruitment efforts.
Background and Coverage
This “Notice of Proposed Rulemaking” (NPRM) significantly revises and updates the non-discrimination and affirmative action regulations implementing Section 503 of the Rehabilitation Act of 1973, as amended. Section 503 prohibits employment discrimination based on disabilities by companies doing business with the federal government. Section 503 also requires that federal contractors and subcontractors take affirmative action to recruit, employ, train, and promote qualified individuals with disabilities. The nondiscrimination and general affirmative action requirements of Section 503 apply to all government contractors with contracts or subcontracts in excess of $10,000 for the purchase, sale, or use of personal property or nonpersonal services (including construction). The requirement to prepare and maintain an affirmative action program applies to those contractors that have a contract or subcontract of $50,000 or more and 50 or more employees.
“This proposed rule represents one of the most significant advances in protecting the civil rights of workers with disabilities since the passage of the Americans with Disabilities Act,” Secretary of Labor Hilda Solis said. For almost 40 years, Section 503 has only required that federal contractors make a “good faith effort” to recruit and hire persons with a disability.
Highlights of the Proposed Rule
A. Expanded Definition of Disability
Under Section 503, covered contractors must take affirmative action to employ and advance the employment of qualified individuals with disabilities. The proposed rule incorporates the expanded definition of “disability” under the final regulations to the ADAAA as well as additional requirements regarding the assessment of when an impairment constitutes a “disability.” The new definition is to be construed in favor of broad coverage of individuals with disabilities. Ogletree shareholder Leigh M. Nason comments that “as with the ADA and Section 503 in general, key challenges include actually identifying who is a person with a disability and obtaining any meaningful statistical data for setting goals. In light of the broad definition of disability, it remains to be seen if these proposals would result in any meaningful, measurable result.”
B. Goals for Each Job Group in Contractor’s Workforce
The NPRM would establish, for the first time, a single, national utilization goal for individuals with disabilities. Federal contractors and subcontractors would be required to set a hiring goal of having seven (7%) percent of their employees be workers with disabilities in each job group of the contractors’ workforce(1). According to OFCCP, the goal is neither a quota, nor a restrictive hiring ceiling, and a failure to attain the goal does not necessarily constitute a violation of Section 503 or OFCCP’s regulations. Rather, the goal is intended to serve as an important tool for employers to measure their progress toward achieving equal employment opportunity and to assess where in their workforce barriers to such opportunity remain.
OFCCP also is considering a “sub-goal” of two percent (2%) for individuals with severe or “targeted” disabilities, such as total deafness, blindness, and missing extremities. OFCCP seeks comment on both the concept of using a sub-goal, and on the disabilities that should be included in such a sub-goal. OFCCP also seeks input on the use of a utilization range rather than the fixed seven percent (7%) national goal the NPRM proposes. OFCCP seeks comment on a range of values between 4 percent and 10 percent.
C. New Voluntary Self- Identification Process for Applicants
For the first time covered contractors must give applicants the opportunity to voluntarily self-identify as individuals with disabilities and must do so with specific language published by OFCCP on its website. Employers may not use their own language. Under the proposal, contractors would give the invitation to applicants and employees:
- When applying for a position;
- After an offer is received, but before employment begins; and
- Annually, for all employees.
The covered contractor and OFCCP will use this data to further evaluate hiring practices relating to individuals with disabilities.
The NPRM also seeks public comment on the proposed text of the voluntary self-identification invitations that contractors would use when asking an applicant or employee to identify as an individual with a disability.
D. Additional Data Collection Responsibilities, Five-Year Retention Period, and Annual Report to OFCCP
The NPRM significantly increases a contractor’s data collecting and retention obligations. These new data collection requirements are intended to assist in determining the availability of individuals with a disability, as well as the effectiveness of the contractor’s outreach efforts. The additional data must be retained for five years and includes:
- Number of individuals with disabilities referred to them by One-Stop Career Centers or other appropriate employment delivery systems;
- Number of individuals with disabilities referred to them by other entities, groups, or organizations with which the contractor has a linkage agreement;
- Number of applicants who self-identified as an individual with a disability or who are otherwise known to be an individual with a disability;
- Total number of job openings and total number of jobs filled;
- Ratio of jobs filled to job openings;
- Total number of applicants for all jobs;
- Ratio of applicants with a disability to all applicants;
- Number of applicants with a disability hired;
- Total number of applicants hired; and
- Ratio of individuals with a disability hired to all individuals hired.
OFCCP is also considering requiring contractors to provide the agency with a report containing the measurements and computations listed above for each EEO-1 category. The report would be provided to OFCCP on an annual basis regardless of whether the contractor has been selected for a compliance evaluation. Public comment is invited on this option.
E. New Written Procedures for Reasonable Accommodation
Under the proposed rule, covered contractors must develop specified written procedures for processing requests for reasonable accommodation. These procedures, which would be included in the affirmative action program (AAP), must be disseminated to all employees, including those who work off-site. The contractor also must inform all applicants of its reasonable accommodation procedures for the application process.
These procedures must, among other things:
- Include contact information for the official responsible for the procedures;
- Include a description of the reasonable accommodation process;
- Inform employees that requests may be made orally or in writing by an applicant, employee, or a third party on behalf of another;
- Limit the processing time to 5 to 10 business days if no medical documents are needed;
- Explain when medical certification may be requested;
- Require any denial of a request for reasonable accommodation to be dated, provided in writing, and signed by the decision-maker. The denial must include a statement of the requester’s right to file a discrimination complaint with OFCCP; and
- Indicate that all requests for accommodation and related documentation shall be treated confidentially.
Under the proposed rule, covered contractors must train their supervisors and management on these procedures annually and when any significant changes are made.
F. New Required Recruitment Efforts, Documentation, and Affirmative Action Program Dissemination
In addition to a list of suggested outreach efforts, the proposed rule requires contactors to engage in a minimum of three specific types of outreach and recruitment efforts to attract individuals with disabilities, which include the following:
- List all job openings with the nearest Employment One-Stop Career Center;
- Enter into a linkage agreement with the nearest State Vocational Rehabilitation Agency or local organization listed in the Social Security Administration’s Ticket to Work Employment Network Directory and enter into a linkage agreement with at least one other agency, such as local disability groups, Employer Assistance and Resource Network (EARN), etc., for recruiting and developing training opportunities; and
- Consult the Employer Resources section of the National Resource Directory, a partnership and online collaboration among the Departments of Labor, Defense, and Veterans Affairs, and establish an additional linkage agreement with at least one of the disabled veterans’ service organizations listed.
Contractors would be required to document all linkage agreements and other outreach efforts and retain these documents for five years. Contractors also must evaluate the effectiveness of their outreach efforts on an annual basis. This evaluation would consider, at a minimum, the number of disabled individuals who were referrals, applicants, and hires for the current year and the previous two years. OFCCP would determine whether the contractor’s assessment of its efforts is reasonable; the primary indicator of effectiveness would be whether disabled individuals were hired.
The proposed rule requires covered contractors to document and take certain steps to internally disseminate information, including:
- Incorporating their AAP into the policy manuals and discussing the program in orientation and management training programs; and
- Developing internal procedures to further inform employees about the AAP.
G. Recordkeeping, Training, and Annual Review Obligations
In addition to the required annual self-assessment, under the proposed rule covered contractors also must annually evaluate physical and mental qualification standards and compliance with utilization goals. Personnel involved in recruitment, hiring, promotion, disciplinary and related processes must be trained annually and the contractor must create and retain contemporaneous records documenting the subject matter of the training, when the training was held, who attended, and who conducted the training.
H. Additional NPRM Topics
1. Priority Hiring
A new section 60-741.47 encourages contractors to voluntarily develop and implement programs that provide priority consideration to individuals with disabilities in recruitment and hiring.
2. Compliance Evaluations
OFCCP proposes to clarify the temporal scope of compliance audits by expressly authorizing it to examine information created after the date of the scheduling letter to determine, for instance, if violations are continuing or have been remedied. OFCCP also seeks to clarify compliance check and focused review provisions by deleting the contractor’s option of determining if requested documents are to be provided on-site or off-site and by allowing OFCCP to conduct focused reviews of relevant contractor materials “at any appropriate location” rather than the current practice of conducting focus reviews at the contractor’s place of business.
To read the notice of proposed rulemaking or submit a comment, visit the federal e-rulemaking portal at http://www.regulations.gov. Comments will be accepted until February 7, 2012.
Ogletree Deakins has an OFCCP practice group, which includes several attorneys throughout the United States who are available to answer your questions on this subject, or you may contact the Ogletree Deakins attorney with whom you normally work for additional information.
(1) OFCCP derived the goal in part from disability data included in the American Community Survey (ACS), a survey launched by the Census Bureau in 2005 that collects detailed social and demographic data from a sample of 3 million residents on a continuing basis. Based on ACS data, OFCCP estimated the percentage of individuals with a disability in the civilian workforce at 5.7% averaged across EEO-1 job categories. OFCCP noted that the function-based definition of disability used in the ACS survey (and most other major surveys administered by the Federal Statistical System) is clearly not as broad as that of Section 503 and the ADAAA. OFCCP expressed further concern that such an availability figure does not take into account discouraged workers or the effects of historical discrimination. OFCCP estimated the size of the discouraged workforce at 1.7%, which when added to the ACS disability data results in 7.4%. OFCCP rounded to 7% “to avoid implying a false level of precision” as its initial approximation of availability for employment of individuals with disabilities.