Deciphering the New 503 Rule Presented By: Robert “Bobby” Silverstein, JD Powers Pyles Sutter & Verville, PC bobby.silverstein@ppsv.com

INTRODUCTION Advance Notice of Proposed Rulemaking (July 23, 2010) Notice of Proposed Rulemaking—(December 9, 2011) Final Rulemaking (September 24, 2013) INTRODUCTION   Issuance of Advance Notice of Proposed Rulemaking [75 FR 43116 (July 23, 2010)] The Office of Federal Contract Compliance Programs (OFCCP), US Department of Labor, issued an Advance Notice of Proposed Rulemaking (NPRM) on July 23, 2010, requesting public comment on specific inquiries regarding potential ways to strengthen the affirmative action program requirements in the regulation implementing Section 503 of the Rehabilitation Act of 1973, as amended, (Section 503) pertaining to persons with disabilities. Issuance of Notice of Proposed Rulemaking [79 FR 77056-77105 (December 9, 2011)] OFCCP issued a Notice of Proposed Rulemaking (NPRM) on December 9, 2011, proposing significant substantive changes to the regulations implementing Section 503. Issuance of Final Rule [78 FR 58682-58752 (September 24, 2013)] On September 24, 2013 OFCCP published in the Federal Register a final rule implementing Section 503.

INTRODUCTION Statement by Secretary of Labor Statement by Director of OFCCP Statement by Assistant Secretary, ODEP Statement by Tom Perez, Secretary of Labor: “Being a Federal contractor is a privilege—one that comes with the reasonable responsibility to abide by the law and provide equal opportunity to all workers. Today’s new rules make those expectations clearer and more meaningful. We are providing specific metrics to help contractors measure their progress toward achieving equal opportunity for people with disabilities.”   Statement by Patricia A. Shiu, Director, Office of Federal Contract Compliance Programs (OFCCP): “Strengthening these regulations is an important step toward reducing barriers to real opportunities for individuals with disabilities.” Statement by Kathy Martinez, Assistant Secretary, Office of Disability Employment Policy (ODEP): “ODEP has many resources that will be useful for contractors—and in fact all businesses– striving to recruit, hire, retain, and advance employees with disabilities. We will continue to work with stakeholders to promote opportunity and access for millions of workers across thousands of workplaces as the new rules are implemented.”

OFFICIAL INFORMATION OFCCP Sources Final rule in Federal Register Fact sheet Frequently asked questions Chart of changes OFFICIAL INFORMATION-LINKS Final rule in Federal Register: http://www.gpo.gov/fdsys/pkg/FR-2013-09-24/pdf/2013-21228.pdf Fact sheet: http://www.dol.gov/ofccp/regs/compliance/factsheets/Sec_503_508c.pdf Frequently asked questions: http://www.dol.gov/ofccp/regs/compliance/faqs/503_faq.htm Chart of changes: http://www.dol.gov/ofccp/regs/compliance/factsheets/Section503_Crosswalk_QA_508c.pdf

INTRODUCTION Need for the Revisions to Section 503 Regulation Policy framework in place since the 1970’s Still significantly higher unemployment rate for individuals with disabilities Still significantly lower labor force participation rate Strengthening the regulations important means of reducing disparities INTRODUCTION   Need for the revisions to the Section 503 Rule [78 FR 58682-58683 (September 24, 2013)]; Frequently Asked Questions (August 27, 2013)] The old Section 503 rule articulating a contractor's responsibilities with respect to affirmative action for individuals with disabilities had been in place since the 1970's. However, both the unemployment rate of working age individuals with disabilities and the percentage of working age individuals with disabilities that are not in the labor force remain significantly higher than for those without disabilities. These disparities continue to persist despite years of technological advancements that have made it possible to apply for and successfully perform a broad array of jobs. In addition, OFCCP is finding more Section 503 violations during compliance investigations. According to OFCCP, this seems to indicate that the current compliance framework is not as effective as hoped. Several factors limit the ability of individuals with disabilities to seek, find, keep, and thrive in jobs. The existence of an outdated framework that does not reflect the realities of today’s workplace or current disability rights law; the persistent unemployment and underutilization of individuals with disabilities; and certain institutional and process barriers are all limiting factors. It is these factors, and others, that highlight the need for new regulations. Strengthening the implementing regulations of Section 503, whose stated purpose “requires Government contractors and subcontractors to take affirmative action to employ and advance in employment qualified individuals with disabilities,'' is an important means by which the government can contribute to reducing the employment disparity between those with and without disabilities.

INTRODUCTION PURPOSE OF FINAL RULE Provide contractors with tools to evaluate compliance Proactively identify and correct deficiencies Assist contractors in averting potentially expensive violation findings by OFCCP PURPOSE OF THE FINAL RULE [78 FR 58683 (September 24, 2013)] The final rule is intended to provide contractors with the tools needed to evaluate their own compliance and proactively identify and correct any deficiencies in their employment practices. Because the existing regulations implementing Section 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, the revisions of the final rule will assist contractors in averting potentially expensive violation findings by OFCCP. The final rule has the potential to reduce the employment gap experienced by individuals with disabilities in a number of ways. It adds and strengthens affirmative action requirements designed to improve outreach and recruitment of qualified individuals with disabilities; establishes an aspirational goal for the employment of qualified individuals with disabilities that will allow contractors to measure and improve (where appropriate) the effectiveness of those affirmative efforts; provides for greater accountability regarding employment of individuals with disabilities through collection of several quantitative measures; and provides stronger dissemination of contractor obligations to subcontractors and unions. These measures, taken together, are designed to bring more qualified individuals with disabilities into the Federal contractor workforce and provide them with an equal opportunity to advance in employment.

INTRODUCTION Highlights Strengthens the affirmative action provisions Establishes a utilization goal to assist in measuring effectiveness Requires invitations to self-identify Requires data collection pertaining to applicants and hires with disabilities to create greater accountability Conforms to ADAAA INTRODUCTION   Highlights [78 FR 58683 (September 24, 2013); OFCCP Frequently Asked Questions] OFCCP's final rule strengthens the affirmative action requirements established in Section 503 of the Rehabilitation Act of 1973.   The final rule establishes, for the first time, a 7 percent workforce utilization goal for individuals with disabilities. This goal is not a quota or a ceiling that limits or restricts the employment of people with disabilities. Instead, the goal is a management tool that informs decision-making and provides real accountability. Failing to meet the goal alone, is not a violation of the regulation and will not lead to a fine, penalty, or sanction. The final rule requires contractors to invite applicants to voluntarily self-identify as an individual with a disability at the pre-offer stage of the hiring process as well as the post-offer stage (current policy). 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. Also the final rule requires contractors to invite incumbent employees to self-identify on a regular basis. The final rule requires 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. The final rule requires prime contractors to include specific mandated language in their subcontracts to provide knowledge and increase compliance by alerting subcontractors to their responsibilities as Federal contractors. The final rule revises the definition of disability to conform to changes included in the ADAAA.

INTRODUCTION Effective Date March 24, 2014 Phase-in of full compliance New contractors submit AAP within 120 days of commencement of contract EFFECTIVE DATE AND PHASE-IN OF FULL COMPLIANCE [60-741.40; 78 FR 58682 (September 24, 2013); 78 FR 58685 (September 24, 2013)] The final rule is effective March 24, 2014 after publication in the Federal Register. However, full compliance with the requirements of the final rule will be phased in as follows. [78 FR 58685 (September 24, 2013)] Current contractors that have an affirmative action program (AAP) in place on March 24, 2014 may maintain that program for the duration of the AAP year. Such contractors are required to update their affirmative action programs to come into compliance with the requirements of subpart C of this final rule (AAP) at the start of their next standard 12-month AAP review and updating cycle. For new contractors, the final rule specifies that contractors shall, within 120 days of the commencement of a contract prepare and maintain an affirmative action program at each establishment.

ORGANIZATION OF PRESENTATION Specifically, the following topics will be discussed: ADAAA Updates Prohibitions Against Discrimination Purpose; Applicability Invitation to Self-Identify Workforce Utilization Goals and Annual Evaluation Data Collection Outreach and Recruitment Auditing and Reporting Systems and Recordkeeping Policy Statement

ORGANIZATION OF PRESENTATION Specifically, the following topics will be discussed (cont): Review of Personnel Processes Physical and Mental Qualifications Reasonable Accommodation Policy and Procedures Internal Communication Responsibility for Implementation Training Equal Opportunity Clause Availability of Affirmative Action Program Voluntary Affirmative Action

ADAAA-DEFINITION OF DISABILITY Definition of disability used in Section 503 regulation modified to reflect definition of disability used in ADA, as amended Term “disability” replaces the term “individual with disability” Retains 3-prongs of definition Definition construed in favor of broad coverage DEFINITION OF DISABILITY, AS AMENDED BY ADAAA [60-741.2;78 FR 58687 (September 24,2013)] Section 503 of the Rehabilitation Act of 1973, as amended, incorporates by reference the definition of “disability” included in the Americans with Disabilities Act (ADA). The ADA definition of the term “disability” was the subject of amendments included in the ADA Amendments Act of 2008, which was signed into law on September 25, 2008 (ADAAA). On March 25, 2011, the EEOC published in the Federal Register Final Regulations Implementing the ADAAA. [76 FR 16978] An Appendix to the Final Regulations includes EEOC’s Interpretative Guidance. The final regulations became effective on May 24, 2011.   The ADA, as amended by the ADAAA, retains without amendment the existing definition of the term “disability.” The term “disability” means, with respect to an individual— A physical or mental impairment that substantially limits one or more major life activities of such individual (Prong 1); A record of such an impairment (Prong 2); or Being regarded as having such an impairment (Prong 3). However, the ADAAA makes changes in several significant ways regarding how key words and phrases in the definition are construed. The purposes of the ADAAA are to: Make it easier for an individual to establish he or she has a disability, thereby obtaining protection against discrimination under the ADA. No extensive documentation is required to show that an individual is protected by the law. Move the focus of the law from the threshold issue of whether an individual has a disability to the primary issue of whether the individual has been subjected to discrimination on the basis of disability. Reaffirm that although the definition of disability is broad, only those individuals who are qualified and can prove discrimination are entitled to relief.

DISCRIMINATION Retains prohibitions against discrimination with minor modifications Clarifies reasonable accommodation obligation extends to use of electronic and online job application systems Clarifies that persons without disabilities cannot make claims of discrimination under Section 503 DISCRIMINATION PROHIBITED [60-741.20-.25; 78 FR 58689 (September 24,2013)] In general the final rule describes types of conduct that would violate the nondiscrimination requirements of Section 503. Substantive changes in the final rule include policies necessitated by the ADAAA e.g., contractors are not required to provide reasonable accommodation to individuals who satisfy only the “regarded as having such an impairment” prong of the definition of disability. The final rule also clarifies that nothing in the Section 503 regulation shall provide the basis for a claim that an individual without a disability is subject to discrimination because of the lack of disability or because an individual with a disability was granted an accommodation that was denied to an individual without a disability. The final rule also clarifies that the nondiscrimination obligation to make reasonable accommodation includes contractors’ use of electronic or online job application systems and requires that contractors ensure equal access to job opportunities. OFCCP notes that it is a best practice for contractors to make their online systems accessible and compatible with assistive technologies used by individuals with disabilities.

PURPOSE OF AFFIRMATIVE ACTION PROGRAM; APPLICABILITY Explains general expectations “Management tool” “Institutionalizes commitment to equality of opportunity” “More than a paperwork exercise” “Dynamic in nature” “Includes measurable objectives, quantitative analyses, and internal auditing and reporting systems” that measure progress Applicability  PURPOSE OF AFFIRMATIVE ACTION PROGRAM REQUIREMENT [60-741.40(a) and (b); 78 FR 58689-58690 (September 24, 2013)]   The final rule adds a new paragraph that sets forth a statement of purpose which articulates OFCCP's general expectation that contractors' affirmative action programs will result in progress toward effectuating equal employment opportunity objectives for individuals with disabilities.   An affirmative action program is a “management tool” designed to ensure equal employment opportunity and foster employment opportunities for individuals with disabilities.   An affirmative action program “institutionalizes the contractor’s commitment to equality in every aspect of employment and is more than a paperwork exercise.''   An affirmative action program is “dynamic in nature and includes measurable objectives, quantitative analyses, and internal auditing and reporting systems that measure the contractor's progress toward achieving equal employment opportunity for individuals with disabilities.” The final rule reaffirms that the requirement to develop a written affirmative action program applies to every Government contractor that has 50 or more employees and a contract of $50,000 or more. The program for people with disabilities under Section 503 may be integrated into or kept separate from other affirmative action programs.

INVITATION TO SELF-IDENTIFY Significant, substantive changes Pre-offer Invitation Rationale for new requirement Relationship to ADA EO 11246 Internet Applicant Rule SELF-IDENTIFICATION [60-741.23; 78 FR 58689 (September 24, 2013)] [60-741.42(a); 78 FR 58690-58694 (September 24, 2013)]   Significant, Substantive Changes. The final rule includes significant, substantive changes to the contractor's responsibilities and the process through which applicants and employees are invited to voluntarily self-identify as individuals with disabilities.   Pre-offer. The final rule specifies that the contractor shall invite applicants to inform the contractor whether the applicant believes that he or she is an individual with a disability. The invitation shall be provided to each applicant when the applicant applies or is considered for employment The invitation may be included with the application materials for a position, but must be separate from the application. The invitation to self-identify must use the language and manner prescribed by the Director of OFCCP and published on the OFCCP Web site. This will ensure consistency in all pre-offer invitations that are made, and will reassure applicants that the request is routine and executed pursuant to obligations created by OFCCP. It will also minimize any burden to contractors resulting from compliance with this responsibility, as they will not be required to develop suitable self-identification invitations individually. This, in turn will facilitate contractor compliance with this section.  The primary reason for this new requirement is to collect important data pertaining to the participation of individuals with disabilities in the contractor’s applicant pools and workforces. This data will enable the contractor and OFCCP to better monitor and evaluate the contractor’s hiring and selection practices. The data collected at the pre-offer stage will be particularly helpful as it will provide the contractor and OFCCP with valuable information regarding the number of individuals with disabilities who apply for jobs with contractors. In turn, this data will assist OFCCP and the contractor in assessing the effectiveness of the contractor’s recruitment efforts over time, and in refining and improving the contractor’s recruitment strategies where necessary. The Section-by-Section Analysis references a letter from EEOC stating that the pre-offer invitation to self-identify as an individual with a disability is permissible under the ADA. Although the ADA generally prohibits inquiries about disability prior to an offer of employment, it does not prohibit the collection of this information by a contractor in furtherance of its section 503 affirmative action obligation to employ and advance in employment qualified individuals with disabilities. The letter will be posted on OFCCP’s Web site. Also, the Section-by-Section Analysis provides guidance about how contractors may invite Internet applicants to self-identify as an individual with a disability in a manner consistent with demographic collection requirements under the Executive Order 11246 Internet Applicant Rule.

INVITATION TO SELF-IDENTIFY Post-Offer Invitation Invitation to Employees SELF-IDENTIFICATION [60-741.42(b) and (c); 78 FR 58694-58695 (September 24, 2013)] Post-offer. The final rule requires that any time after the offer of employment, but before the applicant begins his or her job duties, the contractor shall invite the applicant to inform the contractor whether the applicant believes that he or she is an individual with a disability. The invitation to self-identify must use the language and manner prescribed by the Director of OFCCP and published on the OFCCP Web site. This provision is retained so that individuals with hidden disabilities who fear potential discrimination if their disability is revealed prior to receiving a job offer will, nevertheless, have the opportunity to provide this valuable data. Employees. The final rule requires contractors to invite employee self-identification during the first year it becomes subject to the Section 503 requirements and at five years intervals thereafter. At least once during the years between each invitation, the contractor must remind their employees that they may voluntarily update their disability status at any time. The final rule does not require the contractor to survey or canvass their employees.

INVITATION TO SELF-IDENTIFY Contractors may not compel or coerce individuals to self-identify Contractors may identify applicants and employees with known or obvious disabilities. Information on self-identification must be kept confidential and maintained in a data analysis file, not in the individual’s medical files SELF-IDENTIFICATION [60-741.42(d) and (e); 78 FR 58695 (September 24, 2013)] [60-741.23; 78 FR 58689 (September 24, 2013)] The final rule specifies that the contractor is prohibited from compelling or coercing individuals to self-identify. It should be noted that OFCCP will permit contractors to identify as individuals with disabilities applicants and employees with known or obvious disabilities who decline to voluntarily self-identify consistent with rules under Executive Order 11246 when (1) the disability is obvious (e.g., someone is blind or missing a limb) or (2) the disability is known to the contractor (e.g., an individual says that he or she has a disability or requests reasonable accommodation for a disability). Contractors may not guess or speculate when identifying an individual as having a disability. Nor may they assume that an individual has a disability because he or she “looks sickly” or behaves in an unusual manner. The final rule specifies that all information regarding self-identification as an individual with a disability shall be kept confidential and maintained in a data analysis file. OFCCP rejected the suggestion that contractors be permitted to maintain self-identification information in employees’ individual confidential medical files. This would impede contractor’s ability to use the data for the collective analysis for which the data are collected and to provide the self-identification information to OFCCP when requested to do so.

UTILIZATION GOALS AND ANNUAL EVALUATION National utilization goal of 7 percent Purpose of utilization goal—benchmark to measure progress Not a rigid and inflexible quota Not a ceiling or a floor American Community Survey Despite limitations, still best source of nationwide disability data available today UTILIZATION GOALS AND ANNUAL EVALUATION [60-741.45(a), (b), and (d); 78 FR 58703-58710 (September 24, 2013)] This section of the final rule is new and establishes a single, national utilization goal of 7 percent for employment of qualified individuals with disabilities for each job group in the contractor’s workforce used for utilization analyses under Executive Order 11246 or for the contractor’s entire workforce if a contractor has a total workforce of 100 or fewer employees. A utilization goal “is not a rigid and inflexible quota which must be met, nor is it to be considered either a ceiling or a floor for the employment of particular groups. Quotas are expressly forbidden.” The purpose of the utilization goal is to establish a benchmark against which the contractor must measure the representation of individuals within each job group in its workforce or within the contractor’s entire workforce if a contractor has a total workforce of 100 or fewer employees. The utilization goal serves as an equal employment opportunity objective that should be attainable by complying with all aspects of the affirmative action requirements. In short, the establishment of a utilization goals will create more accountability and provide a much-needed tool to help ensure that progress toward equal employment opportunity is achieved. American Community Survey. The utilization goal established in this section is derived, in part, from the disability data collected as part of the American Community Survey. The definition of disability used by the ACS, however, is clearly not as broad as that of the Rehabilitation Act and the ADA. Despite its limitations, the ACS is the best source of nationwide disability data available today, and thus, an appropriate starting place for developing a utilization goal.  

UTILIZATION GOALS AND ANNUAL EVALUATION Consideration of Alternative Approaches Mirror precisely the goals framework for minorities and women under EO 11246 National goal for all jobs in all geographic areas more viable approach UTILIZATION GOALS AND ANNUAL EVALUATION [60-741.45; 78 FR 58703-58705 (September 24, 2013)] Consideration of Alternative Approaches. In developing the utilization goal, OFCCP considered two general approaches. One approach OFCCP considered aimed to mirror precisely the goals framework for minorities and women that is used by supply and service (non-construction) contractors subject to Executive Order (EO) 11246. Accordingly, it would require individual contractor establishments to set their own goals for each of their job groups based on the percentage of individuals with disabilities available in the particular recruitment area from which the contractor sought to fill the jobs in the job group. Where there are fewer than expected incumbent disabled employees in a job group given their availability percentage, a contractor would be required to establish a goal for the specific job group that is at least equal to the availability percentage in the job group's recruitment area. See 41 CFR 60-2.12--60-2.16 for a more detailed description of the EO 11246 goals provisions for supply and service contractors. After careful consideration of the available data and consultation with the U.S. Census Bureau regarding the level of geographic aggregation at which the data could be analyzed, OFCCP became convinced that replicating the supply and service goals framework would not be the most effective approach for the establishment of goals for individuals with disabilities. In light of the difficulties replicating the supply and service goals approach in the context of disability, OFCCP believes that the establishment of a single, national goal for all jobs in all geographic areas is a more viable approach to the establishment of a goal for individuals with disabilities. This approach allows for the continued use of the contractor's EO 11246 job groups, and requires that those job groups be used to measure the representation of individuals with disabilities in the contractor's workforce, except in cases of contractors with fewer than 100 employees, where contractors have the option to apply the goal to their entire workforce as a whole.

UTILIZATION GOALS AND ANNUAL EVALUATION Rationale for setting the National Goal at 7% Estimate of the percentage of the civilian labor force that has disability Takes into account “discouraged worker effect” UTILIZATION GOALS AND ANNUAL EVALUATION [60-741.45; 78 FR 58703-58705 (September 24, 2013)] Setting the National Goal. OFCCP set a goal for individuals with disabilities, based on the most recent 2009 ACS disability data for the “civilian labor force'' and the “civilian population,'' first averaged by EEO-1 job category, and then averaged across EEO-1 category totals. Specifically, OFCCP uses the mean across these EEO-1 groups (5.7%) as a starting point for deriving a range of values. 5.7% is OFCCP's estimate of the percentage of the civilian labor force that has a disability as defined by the ACS.   However, OFCCP acknowledges that this number does not encompass all individuals with disabilities as defined under the broader definition in section 503 and the ADAAA; therefore, 5.7% is an insufficient figure to use as an affirmative action goal for individuals with disabilities. Even if the 5.7% represented a complete availability figure for all individuals with disabilities as defined under Section 503, such an availability figure does not take into account discouraged workers, or the effects of historical discrimination against individuals with disabilities that has suppressed the representation of such individuals in the workforce. Discouraged workers are those individuals who are not now seeking employment, but who might do so in the absence of discrimination or other employment barriers. There are undoubtedly some individuals with disabilities who, for a variety of reasons, would not seek employment even in the absence of employment barriers. However, given the acute disparity in the workforce participation rates of those with and without disabilities, it is reasonable to assume that at least a portion of that gap is due to a lack of equal employment opportunity.  To estimate the size of the discouraged worker effect, OFCCP compared the percent of the civilian population with a disability (per the ACS definition) who identified as having an occupation to the percent of the civilian labor force with a disability who identified as having an occupation. Though not currently seeking employment, it might be reasonable to believe that those in the civilian population who identify as having an occupation, but who are currently not in the labor force, remained interested in working should job opportunities become available. Using the 2009 ACS EEO-1 category data, the result of this comparison is 1.7%.  Adding this figure to the 5.7% availability figure above, results in 7.4%. The national utilization goal is derived from this total, rounded to 7 percent to avoid implying a false level of precision.  

UTILIZATION GOALS AND ANNUAL EVALUATION Conduct annual evaluation Identify problem areas Develop and execute action-oriented programs UTILIZATION GOALS AND ANNUAL EVALUATION [60-741.45 (d), (e) and (f); 78 FR 58709-58710 (September 24, 2013)] Annual Evaluation. The contractor is required to annually evaluate its utilization of individuals with disabilities in each job group or in its entire workforce if a contractor has a total workforce of 100 or fewer employees. Identification of problem areas. When the percentage of individuals with disabilities in one or more job groups (or in a contractor’s entire workforce if a contractor has a total workforce of 100 or fewer employees) is less than the utilization goal, the contractor must assess its personnel processes, the effectiveness of its outreach and recruitment efforts, the result of its audit, and any other areas that might affect the success of the affirmative action program. Action-oriented programs. The contractor must develop and execute action-oriented programs designed to correct any identified problem areas. These action-oriented programs may include the modifications of personnel processes, alternative or additional outreach and recruitment efforts from among those listed under outreach and recruitment efforts and/or other actions designed to correct the identified problem areas and attain the established goal.

UTILIZATION GOALS AND ANNUAL EVALUATION Failure to attain goal not a finding or admission of discrimination Goals not used as “quota” or “ceiling” UTILIZATION GOALS AND ANNUAL EVALUATION [60-741.45(g) and (h); 78 FR 58710 (September 24, 2013)] Failure to attain goal. The contractor’s determination that it has not attained the utilization goal in one or more job groups does not constitute either a finding or admission of discrimination. So, if the contractor does not meet the goal, but has developed and implemented an affirmative action program, including conducting outreach and positive recruitment of individuals with disabilities and has evaluated whether barriers exist and, if they do, implemented action-oriented programs to correct and remove them, the contractor would not be found to be in violation of Section 503, simply because it did not meet the goal. On the other hand, if a contractor meets the goal, but fails to develop an affirmative action program, the contractor could be cited for failure to develop an affirmative action program. Goal achievement does not guarantee compliance with Section 503, just as failure to meet the goal does not result in a violation of Section 503. The utilization goal shall not be used as a quota or ceiling that limits or restricts the employment of individuals with disabilities.   

DATA COLLECTION Requires contractor to document several computations or comparisons pertaining to applicants and hires Data collected on an annual basis and documents maintained for a period of three years Data includes information regarding applicants and applicants hired (with and without disabilities) DATA COLLECTION [60-741.44(k); 78 FR 58700-58702 (September 24, 2013)]   The final rule specifies that the contractor shall document the following computations or comparisons pertaining to applicants and hires on an annual basis and maintain them for a period of three years: 1. The number of applicants who self-identified as individuals with disabilities or who are otherwise known to be individuals with disabilities. 2. The total number of job openings and total number of jobs filled. 3. The total number of applicants for all jobs. 4. The number of applicants with disabilities hired. 5. The total number of applicants hired. OFCCP explains in the section-by-section analysis that contractors are free to use any other reasonable criteria in addition to the applicant and hiring data they feel is relevant to evaluate the effectiveness of their efforts. Further, the ratios in this paragraph will be calculated by establishment, and not by job groups or titles within a given established unless OFCCP has approved the contractor’s development and use of a functional affirmative action program in accordance with 41 CFR 60-2.1(d)(4). OFCCP also clarifies that it will not be using the applicant and hiring data to conduct underutilization or impact ratio analyses, as is the case under EO 11246, and enforcement actions will not be brought solely on the basis of statistical disparities between individuals with and without disabilities in this data. Rather, OFCCP will look to see whether the contractor has fulfilled its various obligations under the affirmative action program, including its obligation to critically analyze and assess the effectiveness of its recruitment efforts, using the above data and any other reasonable criteria the contractor believes is relevant, and has pursued different or additional recruitment efforts if the contractor concludes that its efforts were not effective.

OUTREACH AND POSITIVE RECRUITMENT Required outreach and positive recruitment efforts Examples of outreach and recruitment activities Notice to subcontractors  EXTERNAL DISSEMINATION OF POLICY, OUTREACH AND POSITIVE RECRUITMENT [60-741.44(f); 78 FR 58697-58699 (September 24, 2013)]   The final rule specifies that the contractor shall undertake appropriate outreach and positive recruitment activities. The scope of the contractor’s efforts shall depend upon all the circumstances, including the contractor’s size and resources and the extent to which existing practices are adequate. The final rule includes examples of persons and organizations who may provide assistance in recruiting and developing on-the-job training opportunities. The final rule also includes examples of actions that the contractor may want to take to fulfill its commitment. Examples include participation in work-study programs, career days, youth motivation programs; taking positive steps to attract individuals with disabilities currently not in the workforce; and considering applicants who are known to have disabilities for all available positions for which they may be qualified when the position applied for is unavailable. The final rule also specifies that the contractor must send written notification of company policy related to its affirmative action efforts to all subcontractors, including subcontracting vendors and suppliers, requesting appropriate action on their part.

OUTREACH AND RECRUITMENT Self-assessment of external outreach and recruitment efforts Annual assessment Documentation required Conclusions reached Implementation of alternative efforts if initial efforts ineffective Recordkeeping obligation  EXTERNAL DISSEMINATION OF POLICY, OUTREACH AND POSITIVE RECRUITMENT [60-741.44(f); 78 FR 58698-58699 (September 24, 2013)] Self-assessment. The final rule includes a mandatory self-assessment to ensure that the contractor thinks critically about its recruitment and outreach efforts, and modifies its efforts as needed to ensure that its obligations are being met. The final rule specifies that the contractor shall, on an annual basis, review the outreach and recruitment efforts it has taken over the previous 12 months to evaluate the effectiveness in identifying and recruiting qualified individuals with disabilities. The contractor shall document each evaluation, including at a minimum the criteria it used to evaluate the effectiveness of each effort and the contractor’s conclusions as to whether each effort was effective. Among these criteria shall be the data collected (under the data collection requirement of the affirmative action program) for the current year and the two most recent previous years. The contractor’s conclusions must be reasonable in light of the regulations. If the contractor concludes that the totality of its efforts were not effective in identifying and recruiting qualified individuals with disabilities, the contractor shall identify and implement alternative efforts from among the examples listed in the regulations in order to fulfill its obligations. Recordkeeping. The contractor shall document all activities it undertakes and retain these documents for a period of three (3) years.

AUDITING AND REPORTING SYSTEM AND RECORDKEEPING Adds provision clarifying that the new recordkeeping requirements must be maintained for three years Recordkeeping also applies to the new provision requiring the contractor to document actions to comply with audit and reporting system AUDIT AND REPORTING SYSTEM AND RECORDKEEPING [60-741.44(h); 60-741.80; 78 FR 58700 (September 24, 2013)]   The final rule adds a provision clarifying that the new recordkeeping requirements applicable to outreach and recruiting efforts and collection of applicant and hiring data must be maintained for three years. [60-741.80(b)] This recordkeeping requirement also applies to the new provision [60-741.44(h)(1)(vi)] requiring the contractor to document the actions taken to comply with the following components of its audit and reporting system: Measures of the effectiveness of its affirmative action program; Indications of any need for remedial action; Determinations of the degree to which its objectives have been attained; Determinations of whether individuals with known disabilities have had the opportunity to participate in all company sponsored educational, training, recreational, and social activities; and Measures of its compliance with affirmative action program’s specific obligations. Where the affirmative action program is found to be deficient, the contractor shall undertake necessary action to bring the program into compliance.

POLICY STATEMENT Replaces the provision that the policy statement “SHOULD indicate the chief executive officer’s attitude on the subject matter” with the requirement that “the policy statement SHALL…” Specifies topics to be addressed in the policy statement Requires accessible notice POLICY STATEMENT [60-741.44(a); 78 FR 58695-58696 (September 24, 2013)]   The final rule revises the provision regarding the content of the policy statement, replacing the provision that the policy statement “should indicate the chief executive officer's attitude on the subject matter'' with the requirement that the policy statement “shall indicate the top United States executive’s… support for the contractor’s affirmative action program.” The final rule also specifies that the policy statement shall provide for an audit and reporting system; assign overall responsibility for implementation; and include other specified topics. The final rule also specifies the contractor must ensure that applicants and employees are provided notice in a form that is accessible and understandable to the individual with a disability. The final rule also provides examples of accessible notices e.g., provide Braille or large print versions of the notice or posting a copy of the notice at a lower height for easy viewing by a person using a wheelchair.

REVIEW OF PERSONNEL PROCESSES Prescribes careful, thorough, and systemic review of personnel processes Provide for periodic review Ensures equal access to information and communication technology through reasonable accommodation Contractors encouraged to make ICT accessible REVIEW OF PERSONNEL PROCESSES [60-741.44(b); 78 FR 58696 (September 24, 2013)] Review of Personnel Processes. The final rule specifies that the contractor shall ensure that its personnel processes provide for careful, thorough, and systematic consideration of the job qualifications of applicants and employees with known disabilities for job vacancies filled either by hiring or promotion, and for all training opportunities offered or available. In addition, the contractor shall ensure that its personnel processes do not stereotype individuals with disabilities in a manner which limits their access to all jobs for which they are qualified. Periodic review. The contractor shall periodically review its personnel processes and include a description of the review and any necessary modifications or development of new processes shall be included in any affirmative action program. The contractor must design procedures that facilitate a review. Access to Information and Communication Technology. The contractor shall also ensure that applicants and employees with disabilities have equal access to its personnel processes, including those implemented through information and communication technologies. The contractor is required to provide necessary reasonable accommodations to ensure applicants and employees with disabilities receive equal opportunity in the operation of personnel processes. The contractor is encouraged to make its information and communication technologies accessible, even absent a specific request for reasonable accommodation. To assist contractors in making their systems accessible, the final rule includes a footnote highlighting the Web Content Accessibility Guidelines (WCAG 2.0) and the regulations implementing the Federal sector accessibility requirements of Section 508 of the Rehabilitation Act as examples of readily available accessibility resources.

PHYSICAL OR MENTAL QUALIFICATIONS Schedule review of physical and mental job standards Use of direct threat defense PHYSICAL AND MENTAL QUALIFICATIONS [60-741.44 (c); 78 FR 58686-58697 (September 24, 2013)]   Physical and Mental Job Standards. The final rule specifies that the contractor shall adhere to a schedule for the review of all physical and mental job qualification standards to ensure that, to the extent such standards tend to screen out qualified individuals with disabilities, they are job-related for the position in question and consistent with business necessity. Direct threat defense. The contractor may use as a defense to an allegation of a violation of the policy described above that an individual poses a direct threat to the health or safety of the individual or others in the workplace.

REASONABLE ACCOMMODATION POLICY AND PROCEDURES Best practice–Develop and implement written procedures for processing requests. Reasonable accommodation obligation and use of electronic or online job application systems REASONABLE ACCOMMODATION POLICY AND PROCEDURES [60-741.44(d); 60-741.45; 78 FR 58697(September 24, 2013)] SEE ALSO: APPENDIX A   Written reasonable accommodation procedures as a best practice. The development and use of written procedures for processing requests for reasonable accommodation is a best practice that may assist the contractor in meeting its reasonable accommodation obligation. Thus, written procedures are not required and it is not a violation for a contractor not to have or use such procedures. However, Appendix B provides guidance to contractors that choose to develop and use written reasonable accommodation procedures. Electronic or online job application systems. As explained above, the final rule also clarifies that the nondiscrimination obligation to make reasonable accommodation includes contractors’ use of electronic or online job application systems and requires that contractors ensure equal access to job opportunities. OFCCP notes that it is a best practice for contractors to make their online systems accessible and compatible with assistive technologies used by individuals with disabilities.

EQUAL OPPORTUNITY CLAUSE Adds requirement to post notices in electronic format Adds affirmation in solicitations and advertisements that it is an EEO employer Prescribes reference to Section 503 regulation in contract EQUAL OPPORTUNITY CLAUSE [60-741.5; 78 FR 58687-58689 (September 24, 2013)]   Electronic format. The final rule adds the following sentences to the end of paragraph 4 of the EO clause: “With respect to employees who do not work at a physical location of the contractor, a contractor will satisfy its posting obligations by posting such notices in an electronic format, provided that the contractor provides computers that can access the electronic posting to such employees, or the contractor has actual knowledge that such employees otherwise are able to access the electronically posted notices. Electronic notices for employees must be posted in a conspicuous location and format on the company's intranet or sent by electronic mail to employees. An electronic posting must be used by the contractor to notify job applicants of their rights if the contractor utilizes an electronic application process. Such electronic applicant notice must be conspicuously stored with, or as part of, the electronic application.” Solicitations and advertisements. The final rule includes a new clause that would require the contractor to state and thereby affirm in solicitations and advertisements that it is an equal employment opportunity employer of individuals with disabilities. Reference to Section 503 in contracts. In order to draw greater attention to the contractors’ obligations under Section 503 without the burden of including the entire Section 503 EO Clause, the final rule requires the following text in each contract, following the reference to section 503 regulations: “This contractor and subcontractor shall abide by the requirements of 41 CFR 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.”

AVAILABILITY OF AFFIRMATIVE ACTION PROGRAM Availability of full affirmative action program to any employee or applicant Exception for required data metrics Post location and hours. AVAILABILITY OF AFFIRMATIVE ACTION PROGRAM [60-741.41; 78 FR 58690 (September 24, 2013)]   The final rule specifies that the full affirmative action program, absent the data metrics required by 60-741.44(k), shall be available to any employee or applicant for employment for inspection upon request. The location and hours during which the program may be obtained shall be posted at each establishment.

INTERNAL COMMUNICATIONS Include affirmative action policy in policy manual or otherwise make available If party to a collective bargaining agreement, notify union officials and/or employee representatives Document activities and retain records INTERNAL COMMUNICATIONS [60-741.44(g); 78 FR 58699-58700 (September 24, 2013)]   In order to foster understanding, acceptance, and support among the contractor’s executive, management, supervisory, and other employees and to encourage such persons to take the necessary actions to aid the contractor in meeting its obligations, the final rule mandates that the contractor include its affirmative action policy in its policy manual or otherwise make the policy available to employees (e.g., posting the policy on the company’s intranet if all employees have access to this intranet). In addition, if the contractor is party to a collective bargaining agreement, then the final rule requires the contractor to notify union officials and/or employee representatives about the policy and seek their cooperation. In addition, the contractor is encouraged to implement and disseminate this policy internally as follows: conduct special meetings, discuss policy during orientation and management training programs, use company newspapers, magazines, annual reports, handbooks, or other media to publicize its affirmative action obligations, and feature individuals with disabilities and their accomplishments.

RESPONSIBILITY FOR IMPLEMENTATION Official assigned responsibility for implementation Identity should appear on all internal and external communications Individual given necessary senior management support and staff to manage implementation.   RESPONSIBILITY FOR IMPLEMENTATION [60-741.44(i); 78 FR 58700 (September 24, 2013)] The final rule requires that an official of the contractor shall be assigned responsibility for implementation of the contractor’s affirmative action activities. His or her identify should appear on all internal and external communications regarding the contractor’s affirmative action program. This official shall be given necessary senior management and support and staff to manage the implementation of the affirmative action program.

TRAINING Personnel involved in the recruitment, screening, selection, promotion, disciplinary, and related processes shall be trained TRAINING [60-741.44(j ); 78 FR 58700 (September 24, 2013)]   All personnel involved in the recruitment, screening, selection, promotion, disciplinary, and related processes shall be trained to ensure that the commitments in the contractor’s affirmative action program are implemented.

VOLUNTARY AFFIRMATIVE ACTION PROGRAMS The contractor is permitted to develop and implement voluntary affirmative action programs for individuals with disabilities to increase training and employment opportunities VOLUNTARY AFFIRMATIVE ACTION PROGRAMS [60-741.47; 78 FR 58710-58711 (September 24, 2013)] The contractor is permitted to develop and implement voluntary affirmative action programs for individuals with disabilities to increase training and employment opportunities. The voluntary training and development programs should not result in discrimination against other groups and do not relieve a contractor from liability for discrimination under Section 503, Executive Order 11246, or VEVRAA.

Upcoming 503 Webinars DATE/TIME TOPIC October 16, 2013 3:00pm-4:30pm ET In-Depth Discussion of Section 503 Rules Related to Self-Identification, Workforce Utilization Goals, and Outreach November 5, 2013 1:00pm-2:30pm ET In-Depth Discussion of Section 503 Rules Related to Data Collection, Auditing and Recordkeeping, Definition of Disability, and other New Key Requirements November 18, 2013 Deciphering the New VEVRAA Rule December 12, 2013 Self-Evaluation Go to www.usbln.org for more information and registration. © 2013 US Business Leadership Network ®. All rights reserved.