OFCCP’s New Focus on Section 503 Compliance: What Contractors Need to Know

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In August 2018, the Office of Federal Contract Compliance Programs (OFCCP) issued Directive 2018-04, identifying OFCCP’s plan to conduct compliance reviews focused on one of the three authorities that OFCCP is charged to enforce: Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). A “focused” review is touted as being smaller in scale compared to OFCCP’s standard compliance review, which evaluates compliance with Executive Order 11246, Section 503 of the Rehabilitation Act, and VEVRAA.

On March 25, 2019, OFCCP published its Corporate Scheduling Announcement Letter (CSAL) list on its Freedom of Information Act (FOIA) Library, and included 500 contractors’ corporate headquarter locations that were identified for reviews focused on Section 503 compliance. Earlier this spring, OFCCP published a new scheduling letter that will notify contractors that they have been selected for focused compliance reviews pursuant to Section 503 of the Rehabilitation Act and its implementing regulations. The Section 503-focused scheduling letter does not seek any new information that is not already requested by OFCCP; it just appears to focus the requests on information relevant to Section 503 obligations and recordkeeping requirements, such as:
 
  • contractors’ current Section 503 Affirmative Action Program (AAP);
  • documentation of compliance with audits, assessments (e.g., physical/mental requirements, personnel processes, and outreach and recruitment), and other reporting requirements pursuant to 41 C.F.R. § 60-741.44, including annual data collection for applicants and hires for three years;
  • reasonable accommodation policies and documentation of requests granted and denied per the policies; and
  • an evaluation of utilization goals for individuals with disabilities in the workforce and by job group, as required by 41 C.F.R. § 60-741.45.
Although OFCCP claims to seek less information in the Section 503-focused review, it still requests comprehensive data not limited to compliance with Section 503 and its implementing regulations. For example, the Section 503-focused scheduling letter requests submission of the current Executive Order 11246 AAP, EEO-1 forms for three years, a copy of the current collective bargaining agreement (CBA), and any policy statements, employee notices, or handbooks that implement, explain, or elaborate the provisions of the CBA. These materials may contain information necessary to OFCCP’s evaluation of Section 503 compliance, such as job group information, total employment, and job descriptions/seniority/compensation dictated by the current CBA. However, this data provides enough information for OFCCP to expand its investigation if an evaluation of the non-Section 503 information identifies potential problems.

Director Leen’s Eight Best Practices

During a town hall hosted by OFCCP in Seattle, Washington, OFCCP Director Craig Leen announced the following eight best practices for Section 503 compliance:

1. Maintain a Centralized Reasonable Accommodation System

OFCCP stated a centralized process for reasonable accommodations would ensure fairness across an organization and would leave decisions to those that were properly trained to make them, instead of a decentralized approach that organizations might apply inconsistently. OFCCP stated that most reasonable accommodations were “free” and the median cost of a reasonable accommodation was $500. By centralizing the decision-making for reasonable accommodations, an organization could make more informed decisions regarding the financial costs associated with requests instead of leaving these decisions to managers who are not trained to make legal judgements.

2. Ensure Top Leadership Endorses and Supports Disability Inclusion Through Video and Correspondence

Leen cited to the agency’s own video on OFCCP’s website discussing the importance of disability inclusion and compliance. OFCCP recommends that CEOs and other company leadership take similar actions to create an inclusive workplace.

3. Coordinate with State and Local Rehabilitation Agencies

Leen noted that partnering with these local and state agencies is one excellent way to demonstrate good faith, and he touted the ease involved in coordinating with these agencies.

4. Provide Accessible Online Recruiting Tools

Leen noted that these were required by the regulations, but that many contractors are not aware of these requirements and do not invest in these tools.

5. Provide a Comprehensive and Welcoming Self-Identification Program

6. Sponsor Disability Inclusion Programs in the Workplace

Leen gave examples of an Autism at Work program, and the effect of an organization communicating the importance of having individuals with disabilities in the workplace, by citing the value provided and contributions made.

7. Employee Resources Groups

OFCCP noted that having employee resource groups allowed more support for individuals with disabilities.

8. Chief Diversity/Accessibility Officer (or perhaps an ADA Coordinator)

Section 503 Resource Page

On March 8, 2019, OFCCP announced that it has published a landing page containing information about Section 503 focused reviews. OFCCP touts the new landing page as a resource for contractors to help them institute best practices, with a goal of increasing the employment of individuals with disabilities. Among the resources on the landing page are “disability inclusion best practices, documents explaining what to expect during a Focused Review, and important OFCCP contact information.”

The landing page includes links to a number of resources, including:
 
  • Directive 2018-04;
  • the Section 503 regulations;
  • the Section 503 focused review scheduling letter;
  • a list of answers to frequently asked questions on Section 503;
  • a disability inclusion video;
  • a disability rights factsheet;
  • disability-related best practices;
  • resources that the Office of Disability Employment Policy offers; and
  • guidance on how to file a complaint.
On its Focused Review Frequently Asked Questions (FAQ) page, OFCCP confirms that the first round of Section 503 focused reviews will take place at a contractor’s corporate headquarters and will include:
 
  • “a comprehensive review of the contractor policies and procedures as they relate solely to Section 503”;
  • “an onsite visit” and “investigations with managers responsible for equal employment opportunity and Section 503 compliance . . . as well as employees affected by those policies”;
  • an evaluation of “the handling of accommodation requests, to ensure that individuals with disabilities are not being discriminated against in employment”; and
  • an examination and assessment of a contractor’s compliance with Section 503 regulations, noting specifically “whether the contractor conducted the required assessments of its employment policies and tracked appropriate data concerning individuals with disabilities.”
In addition, OFCCP will provide compliance assistance so “contractors can go above and beyond the minimum requirements by implementing best practices intended to increase the utilization of qualified individuals with disabilities within their workforce.” OFCCP appears ready to recognize contractors “that demonstrate innovative and successful diversity and inclusion efforts for individuals with disabilities . . . consistent with its Directive 2018-06: Contractor Recognition Program.”

OFCCP also published recommended best practices for “Creating an Inclusive Workforce,” which it first announced at its Seattle town hall meeting on February 28, 2019. The best practices provides stakeholders with a number of disability resources and links to sample disability inclusion programs.

Preparing for a Focused Review

To get ready for a focused review of Section 503 compliance, you may want to carefully prepare all of your AAPs. If OFCCP is focusing on Section 503 compliance, you will need to provide a great deal of information regarding recruitment, hiring, promotion, training, compensation, and retention efforts that the company has undertaken to comply with the affirmative action regulations applicable to individuals with disabilities. Here are some other steps that contractors may wish to consider:
 
  • Review the company’s policies on leaves of absence and reasonable accommodation requests, and be sure that compliance is consistent while adequate records are maintained for the appropriate time frames.
  • Review the company’s Section 503 AAP and support data. 
  • By location, maintain a comprehensive list of all disability accommodation requests, including the employer’s response to each request. If an accommodation request is denied, the list should include an explanation of the reason for the employer’s decision.
  • Train decision-makers on the company’s policies and the importance of engaging in an interactive process to evaluate a reasonable accommodation request. Maintain appropriate training logs and other documentation.
  • Ensure compliance with OFCCP self-identification requirements for applicants, hires, and employees.
  • Step up efforts to connect with organizations that service individuals with disabilities.
  • Evaluate recruitment sources targeted to source-qualified individuals with disabilities to determine if they are providing qualified candidates; if they are not, reach out to others.
  • Ensure that the company’s career website contains the appropriate accommodation language and provides contact information for those seeking accommodations.
  • Pay special attention to the self-audit obligations of Section 503.