By Susan Schoenfeld, JD, Senior Legal Editor

    On August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a final rule that makes changes to the regulations implementing Section 503 of the Rehabilitation Act of 1973 (Section 503). Section 503 prohibits employment discrimination against 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 a written affirmative action program apply to those contractors that have a contract or subcontract of $50,000 or more and 50 or more employees.

    New regulations governing Section 503 were issued because, according to OFCCP, “the existing regulations implementing [S]ection 503 do not provide contractors with adequate tools to assess whether they are complying with their nondiscrimination and affirmative action obligations to recruit and employ qualified individuals with disabilities.”According to the agency, “the revisions of the final rule will assist contractors in averting potentially expensive violation findings by OFCCP.”

    What changed?

    The final rule adopts several key revisions proposed in the OFCCP’s Notice of Proposed Rulemaking (NPRM). According to OFCCP, the final rule strengthens the affirmative action provisions by, among other things requiring data collection pertaining to applicants and hires with disabilities, and establishing a utilization goal for individuals with disabilities to assist in measuring the effectiveness of the contractor’s affirmative action efforts.

    Some of the proposals in OFCCP’s NPRM, particularly with regard to the creation and maintenance of certain records and the conduct of certain affirmative action obligations, have been eliminated or made more flexible in order to reduce the compliance burden on contractors. To implement changes necessitated by the passage of the ADA Amendments Act (ADAAA) of 2008, the final rule also adopts revisions to the definitions and to the nondiscrimination provisions of the implementing regulations.

    Major provisions of final rule

    The major provisions in the Final Rule include the following:

    • Establish, for the first time, a 7 percent workforce utilization goal for individuals with disabilities. According to OFCCP, this goal is not a quota or a ceiling that limits or restricts the employment of individuals with disabilities. Instead, the goal is “a management tool that informs decision-making and provides real accountability.”
      According to OFCCP, failing to meet the disability utilization goal, alone, is not a violation of the regulation and it will not lead to a fine, penalty, or sanction. OFCCP is mindful that smaller contractors may find it more difficult to attain the goal in each of their job groups. Therefore, the final rule permits contractors with a total workforce of 100 or fewer employees to apply the 7 percent goal to their entire workforce, rather than to each job group.
    • Require contractors to invite applicants to voluntarily self-identify as an individual with a disability at the pre-offer stage of the hiring process, in addition to the existing requirement that contractors invite applicants to voluntarily self-identify after receiving a job offer. The purpose of this data collection is to provide contractors with useful information about the extent to which their outreach and recruitment efforts are effectively reaching people with disabilities.
    • Require contractors to invite incumbent employees to voluntarily self-identify on a regular basis. The status of employees may change and a regular invitation to self-identify provides employees a way to self-identify for the first time, or to change their previously reported status. According to OFCCP, providing a regular invitation should contribute to increased self-identification rates. Improving data collection is important to assessing employment practices.
    • Require contractors to maintain several quantitative measurements and comparisons for the number of individuals with disabilities who apply for jobs and the number of individuals with disabilities they hire in order to create greater accountability for employment decisions and practices. According to OFCCP, having this data will enable contractors and OFCCP to evaluate the effectiveness of contractors’ outreach and recruitment efforts, and examine hiring and selection processes related to individuals with disabilities.
    • Require prime contractors to include specific, mandated language in their subcontracts in order to provide knowledge and increase compliance by alerting subcontractors to their responsibilities as Federal contractors.
    • Implement changes necessitated by the passage of the ADA Amendments Act (ADAAA) of 2008 by revising the definition of “disability” and certain nondiscrimination provisions of the implementing regulations.

    Effective dates

    The Final Rule becomes effective 180 days after its publication in the Federal Register. According to OFCCP, the agency expects Federal Register publication within two weeks. OFCCP has stated that contractors should expect to comply with the nondiscrimination provisions of the regulations as of this effective date. However, OFCCP is providing contractors with an extended compliance date for the Affirmative Action Program (AAP)  requirements in Subpart C (the written plan provisions). During this extended period, OFCCP will provide technical assistance to facilitate the transition for contractors.

    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 of Subpart C of the Final Rule until the start of their next AAP cycle.

    OFCCP encourages contractors to begin updating their employment practices and IT systems to come into compliance with the revised requirements of Subpart C of the Final Rule as soon as possible. In addition, contractors are reminded that they must comply with the other requirements of the Final Rule, in subparts A (EO clause), B (nondiscrimination), D (enforcement) and E (recordkeeping, etc.), by the effective date.

    For more information on the final 503 rule, see the DOL’s website

    Related news: Read Schoenfeld’s article about the OFCCP’s new VEVRAA regulations.

    sschoenfeldSusan Schoenfeld, J.D., is a Senior Legal Editor for BLR’s human resources and employment law publications. Ms. Schoenfeld has practiced in the area of employment litigation and counseling, covering topics such as disability discrimination, wrongful discharge, sexual harassment, and general employment discrimination. She has litigated numerous cases before the U.S. Court of Appeals, state court, and at the U.S. Department of Labor. In addition to litigating employment cases in state and federal court, she provided training and counseling to corporate clients regarding employment-related issues. Prior to entering private practice, Ms. Schoenfeld was an attorney with the Civil Rights Division at the U.S. Department of Labor in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for the Office of Federal Contract Compliance Programs, the Directorate of Civil Rights, and the Mine Safety and Health Administration. Ms. received her undergraduate degree, cum laude, with honors, from Union College, and her law degree from the National Law Center at George Washington University.

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