Section 503/VEVRAA Final Rules: Your Questions Answered?

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With approximately three weeks left until the Section 503/VEVRAA final rules become effective, federal contractors and subcontractors still have many questions regarding the new obligations imposed by the rules and how best to comply with them. As March 24, 2014 approaches, the OFCCP continues to provide guidance regarding implementation of the final rules and to clarify the agency's expectations and plans for enforcement. Answers to several of the most frequently asked questions are provided below.

Coverage and Implementation
  1. Do I even have to comply with the final rules? What are the requirements for coverage?

    With respect to Section 503, federal contractors and subcontractors that have a single federal contract or subcontract of $10,000 or more must comply with Subparts A, B, D, and E (i.e., the nondiscrimination, enforcement and recordkeeping provisions) of the Section 503 rules. Federal contractors and subcontractors with 50 or more employees total in the company and a single contract of $50,000 or more must also comply with Subpart C (i.e., the affirmative action program provisions) of the Section 503 rules.

    Regarding VEVRAA, federal contractors and subcontractors that have a single federal contract or subcontract of $100,000 or more must comply with Subparts A, B, D, and E (i.e., the nondiscrimination, enforcement and recordkeeping provisions) of the VEVRAA rules. Federal contractors and subcontractors with 50 or more employees total in the company and a single contract of $100,000 or more must also comply with Subpart C (i.e., the affirmative action program provisions) of the VEVRAA rules.

  2. If I have a contract with a state or local government agency, do I have to comply with the final rules?

    Maybe. State and local governments are subject to the final rules if they otherwise meet the coverage thresholds discussed above and if the state or local government agency at issue participates "in work on or under the [federal] contract or subcontract." If the state or local government agency with whom you have a contract is a covered federal contractor, then you may be a covered federal subcontractor subject to compliance with the final rules (assuming that you, likewise, meet the coverage thresholds discussed above).

  3. The final rules become effective March 24, 2014. Do I have to comply with all of the new requirements by that date?

    Federal contractors and subcontractors must comply with any new requirements set forth in Subparts A, B, D, and E of the final rules by March 24, 2014. Among other things, these Subparts include the following new requirements: updated listing requirements for job openings, updated advertising tag lines that specifically references veterans and individuals with disabilities, inclusion of specific bolded language in all subcontractors and purchase orders, reasonable accommodations for applicants using online applications systems, and notices to unions regarding the contractor's or subcontractor's affirmative action obligations relating to veterans and individuals with disabilities.

    In contrast, federal contractors and subcontractors must comply with any new requirements set forth in Subpart C of the final rules at the time that they begin their first post-March 24, 2014 AAP cycle. Therefore, contractors and subcontractors with an affirmative action plan date of January 1, must begin complying with all new Subpart C requirements on January 1, 2015. These new requirements include all new affirmative action plan requirements (e.g., updated affirmative action policy statement, veterans benchmark, utilization goal for individuals with disabilities, additional data collection obligations, and various self-assessment requirements), use of new self-identification forms and processes, and required notices to subcontractors and vendors. With respect to the new affirmative action plan requirements, the OFCCP has indicated that it will view a contractor/subcontractor's first post-March 24, 2014 affirmative action plan as a "transition AAP" and will not deem the AAP non-compliant so long as the contractor/subcontractor includes the following information in the AAP: (1) information about which compliance obligations it has not yet complied with; and (2) information about what efforts it is making to meet those obligations going forward.

  4. Where can I get a copy of the final rules?

    Copies of the final rules can be accessed here: https://federalregister.gov/a/2013-21227 and https://federalregister.gov/a/2013-21228.
Veterans/Disabled Affirmative Action Plan Requirements
  1. What are the new required target percentages for veterans and individuals with disabilities and what happens if my company does not meet those targets?

    The final rules establish two different aspirational targets for veterans and individuals with disabilities. First, the new VEVRAA regulations require covered federal contractors and subcontractors to establish a hiring benchmark for veterans which is equal to the national percentage of veterans in the civilian labor force (currently approximately 8%) or a benchmark that the contractor establishes on its own by taking into account five factors listed in the regulations. Second, the new Section 503 regulations include a "utilization goal" of 7% for individuals with disabilities, which covered federal contractors and subcontractors must apply per job group (for contractors and subcontractors with more than 100 employees) or to the workforce as a whole (for contractors and subcontractors with 100 or less employees). It is important to note that the target benchmark and utilization goal are not quotas and failure to reach the veterans benchmark or utilization goal for individuals with disabilities will not result in a finding of violation or sanction. Instead, as with other goals, the contractor or subcontractor will be expected to evaluate its personnel processes to determine whether barriers to equal employment exist and/or to implement (or modify) good faith efforts as necessary to ensure equal employment opportunities for veterans and individuals with disabilities.

  2. I've heard that there are new data collection requirements. What are those requirements?

    Effective as of the start date of the contractor/subcontractor's first post-March 24, 2014 affirmative action plan cycle, the final rules require federal contractors and subcontractors to collect the following data and retain it for three years:

    • Number of applicants who self-identified as protected veterans pre-offer or who are otherwise known as protected veterans;
    • Number of applicants who self-identified as individuals with disabilities pre-offer or who are otherwise known as individuals with disabilities;
    • Total number of job openings;
    • Total number of jobs filled;
    • Total number of applicants for all jobs;
    • Number of protected veteran applicants hired;
    • Number of disabled applicants hired; and
    • Total number of applicants hired.
Other Requirements
  1. My company already lists all of its job openings with the applicable state employment service delivery system ("ESDS"). What changes do the final rules make to this process?

    Federal contractors and subcontractors are still required to list their job openings (subject to a few exceptions) with the state ESDS. The final rules clarify that the listing must be provided in a format that is permitted by the ESDS. Additionally, the final rules require the contractor or subcontractor to notify the ESDS of its desire for priority referrals of protected veterans for its job openings and to provide contact information for the individual responsible for hiring at each hiring location within the state, as well as contact information for any external recruiter or organization used to assist the contractor/subcontractor with hiring. This additional request and information must be made/provided with the contractor/subcontractor's first job listing occurring on or after March 24, 2014 and, if the contact information changes, with the next job listing after the change.

  2. How did the final rules change the self-identification process?

    The final rules now require contractors and subcontractors to invite applicants to self-identify as protected veterans or individuals with disabilities during the pre-offer stage in addition to the invitation to self-identify that is already required at the post-offer stage. The VEVRAA final rules also require that different self-identification forms be used at the pre- and post-offer stages. During the pre-offer stage, applicants must be invited to self-identify as a "protected veteran" only. During the post-offer stage, individuals must be invited to self-identify as one of the specific categories of protected veterans (e.g., recently separated veteran, disabled veteran, etc.). Finally, the Section 503 final rules require federal contractors and subcontractors to invite their employees to self-identify as individual with disabilities during the first year that the new rules apply and every five years thereafter. In addition, at least once between each five-year invitation, federal contractors and subcontractors must remind their employees that they may voluntarily update their disability status at any time.

  3. Are new self-identification forms required?

    Yes, three new self-identification forms are required: pre-offer invitation to self-identify as a protected veteran, post-offer invitation to self-identify as a protected veteran, and invitation to self-identify as an individual with a disability.

  4. Do I have to use the new self-identification form(s) published by the OFCCP?

    Federal contractors and subcontractors must use the OFCCP's approved self-identification form for individuals with disabilities (found at http://www.dol.gov/ofccp/regs/compliance/sec503/Voluntary_Self-Identification_of_Disability_CC-305_SD_Edit1.24.14.pdf). While contractors may convert the form to an electronic format, the text, OMB number and expiration date, font type and size must be kept the same. The OFCCP-approved form should be used for all four required purposes: pre-offer self-identification, post-offer self-identification, first year survey of employees, and five-year resurvey of employees.

    Federal contractors and subcontractors are not required to use the OFCCP's recommended self-identification form(s) for veterans (found in Appendix B of the new VEVRAA regulations). However, contractors and subcontractors creating their own forms must be certain that their forms include all of the required content including the following: (1) submission of all information is voluntary and will not adversely affect any employment decision; (2) the information provided is confidential and will not be used in a manner that is inconsistent with VEVRAA; (3) the contractor is a federal contractor required to take affirmative action on behalf of protected veterans; and (4) a summary of the relevant portions of VEVRAA (including definitions) and the contractor/subcontractor's affirmative action program. Additionally, contractors/subcontractors creating their own form must be sure to create both pre-offer and post-offer forms that seek the permissible information at each stage.

  5. Did the required EEO clause language for subcontracts and purchase orders change and may I still incorporate it in my subcontracts and purchase orders by reference?

    Yes, under the final rules, the full EEO clause language may still be incorporated by reference into all subcontracts and purchase orders. However, the incorporating reference must now explicitly cite to the Section 503 and VEVRAA regulations (41 CFR 60-300.5(a) and 41 CFR 60-741.5(a)) and must include specific language in bold text in all subcontracts and purchase orders. According to the OFCCP, contractors/subcontractors are permitted to combine all of their required EEO clauses into a single "incorporation by reference" clause so long as the entire clause is bolded and the required language (related to both veterans and individuals with disabilities) is included in the clause. The OFCCP's FAQs provide specific examples of language that may be used to satisfy the EEO clause incorporation requirement.

  6. What changes to advertising tag lines are required by the final rules?

    The final rules require federal contractors and subcontractors to specifically reference veterans and individuals with disabilities in job postings, application materials, and other advertisements. While the final rules do not specify any particular format for this reference, the OFCCP takes the position that, although contractors and subcontractors may use abbreviations in their advertising tag lines, the use of "D" for "disabled" and "V" for "veterans" is insufficient. The OFCCP recommends that, at minimum, contractors use "vet" and "disabled" if using abbreviations. Thus, one option for a short, OFCCP accepted tagline might be "EEO/AA Employer/Vet/Disabled." Longer advertising statements, without abbreviations, are also permissible so long as veterans and individuals with disabilities are specifically referenced.
Additional information regarding the OFCCP's responses to frequently asked questions can be found at http://www.dol.gov/ofccp/regs/compliance/faqs/503_faq.htm (for Section 503) and Ahttp://www.dol.gov/ofccp/regs/compliance/faqs/VEVRAA_faq.htm (for VEVRAA). However, be sure to check back regularly for updates as new questions and answers continue to be added and existing responses are modified.