[Federal Register Volume 61, Number 186 (Tuesday, September 24, 1996)]
[Proposed Rules]
[Pages 50080-50112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23638]



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Part II





Department of Labor





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Office of Federal Contract Compliance Programs



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41 CFR Part 60-250



Affirmative Action and Nondiscrimination Obligations of Contractors and 
Subcontractors Regarding Special Disabled Veterans and Vietnam Era 
Veterans; Proposed Rule

  Federal Register / Vol. 61, No. 186 / Tuesday, September 24, 1996 / 
Proposed Rules  

[[Page 50080]]



DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs
41 CFR Part 60-250
RIN 1215-AA62


Affirmative Action and Nondiscrimination Obligations of 
Contractors and Subcontractors Regarding Special Disabled Veterans and 
Vietnam Era Veterans

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Proposed Rule.

-----------------------------------------------------------------------

SUMMARY: The proposal published today would revise the current 
regulations implementing the affirmative action provisions of the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended 
(VEVRAA). VEVRAA requires Government contractors and subcontractors to 
take affirmative action to employ and advance in employment qualified 
special disabled veterans and veterans of the Vietnam era. Today's 
proposal makes two general types of revisions to the VEVRAA 
regulations. First, it would generally conform the VEVRAA regulations 
to the Office of Federal Contract Compliance Programs' final rule 
revising the regulations implementing Section 503 of the Rehabilitation 
Act of 1973, as amended (Section 503). Second, it would withdraw 
portions of a final rule published by the Department of Labor on 
December 30, 1980 (which was subsequently suspended) concerning VEVRAA, 
Executive Order 11246, and Section 503. The withdrawal applies only to 
those provisions of the rule which pertain to VEVRAA.

DATES: Comments are invited from the public and other Federal agencies 
regarding both the proposal to revise the current VEVRAA regulations 
and the proposal to partially withdraw the final rule of 1980. To be 
assured of consideration, comments must be in writing and must be 
received on or before November 25, 1996.

ADDRESSES: Comments should be sent to Joe N. Kennedy, Deputy Director, 
Office of Federal Contract Compliance Programs, Room C3325, 200 
Constitution Avenue, N.W., Washington, D.C. 20210.
    As a convenience to commenters, the Office of Federal Contract 
Compliance Programs will accept public comments transmitted by 
facsimile (FAX) machine. The telephone number of the FAX receiver is 
(202) 219-6195. Only public comments of six or fewer pages will be 
accepted via FAX transmittal. This limitation is necessary in order to 
assure access to the equipment. Comments sent by FAX in excess of six 
pages will not be accepted. Receipt of FAX transmittals will not be 
acknowledged, except that the sender may request confirmation of 
receipt by calling the Office of Federal Contract Compliance Programs 
at (202) 219-9430.
    Comments received will be available for public inspection in Room 
C3325, from 9 a.m. to 5 p.m., Monday through Friday, except legal 
holidays, from October 8, 1996 until the Department publishes this rule 
in final form. Persons who need assistance to review the comments will 
be provided with appropriate aids such as readers or print magnifiers. 
To schedule an appointment, call (202) 219-9430 (voice), 1-800-326-2577 
(TDD).
    Copies of this notice of proposed rulemaking are available in the 
following alternative formats: large print, electronic file on computer 
disk, and audio-tape. Copies may be obtained from the Office of Federal 
Contract Compliance Programs by calling (202) 219-9430 (voice) or 1-
800-326-2577 (TDD).

FOR FURTHER INFORMATION CONTACT: Joe N. Kennedy, Deputy Director, 
Office of Federal Contract Compliance Programs, 200 Constitution 
Avenue, N.W., Room C3325, Washington, D.C. 20210. Telephone: (202) 219-
9475 (voice), 1-800-326-2577 (TDD).

SUPPLEMENTARY INFORMATION:

Overview of Proposed Rule

1. Revision of Current Regulations

    The affirmative action provisions of the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended, 38 U.S.C. 4212 
(Section 4212 or VEVRAA) require parties holding Government contracts 
and subcontracts of $10,000 or more, to ``take affirmative action to 
employ and advance in employment qualified special disabled veterans 
and veterans of the Vietnam era.'' (VEVRAA, which was originally 
codified at 38 U.S.C. 2012, was redesignated as 38 U.S.C. 4212 by 
Section 5(a) of the Department of Veterans Affairs Codification Act, 
Public Law 102-83, August 6, 1991; no substantive change to VEVRAA 
resulted from this legislation.) The Department of Labor's Office of 
Federal Contract Compliance Programs (OFCCP), which has exclusive 
authority to enforce Section 4212, has published regulations 
implementing the Act at 41 CFR Part 60-250. These regulations, 
consistent with the statute's mandate, establish various affirmative 
action obligations for contractors (e.g., contractors are required to 
use effective practices to recruit special disabled veterans and 
veterans of the Vietnam era). The regulations require that contractors 
refrain from discriminating against special disabled veterans and 
veterans of the Vietnam era in all aspects of employment inasmuch as 
this prohibition is an indispensable component of affirmative action. 
Another central requirement of the current regulations is that 
contractors make reasonable accommodation to the known physical or 
mental limitations of a qualified special disabled veteran applicant or 
employee, unless the contractor can demonstrate that the accommodation 
would impose an undue hardship on the operation of its business. An 
accommodation is, for example, any change in the work environment 
(e.g., the modification or acquisition of equipment) or in the way a 
job is customarily performed (e.g., changes in work assignments) that 
enables a qualified special disabled veteran to enjoy equal employment 
opportunities.
    Today's proposal is precipitated, in part, by OFCCP's publication 
of a final rule revising the regulations implementing Section 503 of 
the Rehabilitation Act of 1973. (61 FR 19336, May 1, 1996). Section 503 
requires Government contractors and subcontractors to take affirmative 
action to employ and advance in employment qualified individuals with 
disabilities. In turn, the revision to the Section 503 regulations was 
designed, in part, to conform those regulations to those published by 
the Equal Employment Opportunity Commission (EEOC) implementing Title I 
of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. 12101 
et seq. See 29 CFR Part 1630. Title I of the ADA, which is enforced by 
the EEOC, prohibits private and state and local governmental employers 
with 15 or more employees from discriminating against qualified 
individuals with disabilities in all aspects of employment. The ADA 
regulations establish comprehensive, detailed prohibitions regarding 
disability discrimination but do not require affirmative action. OFCCP 
has modeled its regulations implementing Section 4212 on those 
implementing Section 503. This reflects the close similarity between 
the statutes in terms of their substantive protections and 
jurisdictional requirements. For instance, Section 4212, like Section 
503, protects disabled individuals, albeit a more narrow class of 
disabled persons--that is, ``special disabled veterans'' (see the 
discussion regarding proposed Sec. 60-250.2(n) below). The current 
VEVRAA

[[Page 50081]]

regulations are identical to the former Section 503 regulations except 
where differences are necessary because of the nature of the protected 
class or differences in the statutes, to assure that covered 
contractors were subject to consistent requirements under both laws. In 
order to retain that consistency and avoid confusion and conflict, 
OFCCP believes that the Section 4212 regulations should continue to 
parallel the Section 503 regulations. Accordingly, OFCCP proposes to 
revise the Section 4212 regulations to conform them to the Section 503 
final rule. Thus, today's proposal, similar to the final Section 503 
regulations, adopts the standards contained in the regulations 
implementing the ADA regarding disability discrimination; but applies 
these standards with respect to special disabled veterans and veterans 
of the Vietnam era.
    Specific changes are discussed in the Section-by-Section Analysis 
below.

2. Partial Withdrawal of the 1980 Final Rule

    OFCCP also proposes to partially withdraw a final rule published by 
the Agency on December 30, 1980 (45 FR 86215; corrected at 46 FR 7332, 
January 23, 1981), and deferred indefinitely on August 21, 1981 (46 FR 
42865). That 1980 rule would have revised the regulations at 41 CFR 
Chapter 60 implementing Section 4212 as well as two other laws enforced 
by OFCCP--Executive Order 11246 (30 FR 12319, September 28, 1965), as 
amended, and Section 503. Executive Order 11246 requires Government 
contractors and subcontractors to assure equal employment opportunity 
without regard to race, color, religion, sex and national origin. As 
noted above, Section 503 mandates similar requirements with regard to 
the employment of individuals with disabilities.
    The December 30, 1980, rule was to take effect on January 29, 1981. 
On January 28, 1981, the Department of Labor published a notice (at 46 
FR 9084) delaying the effective date of the final rule until April 29, 
1981, to allow the Department time to review the regulation fully. The 
Department published three subsequent deferrals of the rule in 1981 in 
order to fully review the OFCCP regulations in accordance with 
Executive Order 12291, to permit consultation with interested groups, 
and to comply with new intergovernmental review and coordination 
procedures. The Department again postponed the rule's effective date on 
August 25, 1981, until action could be taken on a proposed rule 
published on the same date (46 FR 42968). The August 25, 1981, proposal 
would have revised a number of provisions contained in the December 30, 
1980, final rule as well as a number of provisions in 41 CFR Chapter 60 
which were not amended by that final rule. Final action has not been 
taken with respect to the proposed regulations issued on August 25, 
1981, or, consequently with respect to the 1980 final rule.
    The substance of a number of the provisions contained in the 1980 
final rule pertaining to the current Section 4212 regulations has been 
incorporated into today's proposal. However, OFCCP has determined not 
to go forward with some of the other revisions to the regulations. For 
instance, unlike today's proposal (and the current regulations), the 
1980 final rule would have consolidated a number of the provisions of 
the Section 4212 regulations with common provisions implementing 
Executive Order 11246 and Section 503 into 41 CFR Part 60-1, which 
currently sets out the general obligations under the Executive Order.
    Significant differences between this proposal, the current 
regulations and the 1980 final rule are discussed in detail in the 
Section-by-Section Analysis below. (Provisions contained in the 1980 
final rule which are substantially similar to the parallel provisions 
in the current regulations are not separately discussed.) In order to 
avoid conflict between today's proposal and the 1980 final rule, OFCCP 
proposes to withdraw all provisions of the 1980 rule that pertain to 
Section 4212.

Request for Comments

    Interested parties, including public and private veterans' 
organizations and employers, are invited to participate in this 
proposed rulemaking by submitting written views.

Section-by-Section Analysis

    This proposed rule consists of five subparts. Subpart A, 
``Preliminary Matters, Equal Opportunity Clause,'' explains the 
purpose, application and construction of the regulations in general and 
contains an extensive definitions section. The definitions section 
incorporates the definitions contained in the Section 503 final rule 
which are relevant to the enforcement of Section 4212 as well as a 
revision to the definition of ``special disabled veteran.'' Subpart A 
also contains provisions relating to coverage under Section 4212, and 
coverage exemptions and waivers, as well as the equal opportunity 
clause, which delineates a covered contractor's general duties under 
the Act. Subpart B is a new subpart, which specifies the employment 
actions that will be deemed to constitute prohibited discrimination 
under Section 4212. In general, this subpart is substantially identical 
to the parallel provisions in the Section 503 final rule. Where 
appropriate, references to special disabled veterans and veterans of 
the Vietnam era have been substituted for the references in the Section 
503 regulations to individuals with disabilities. Subpart C, which 
governs the applicability of the affirmative action program 
requirement, reorganizes, clarifies and strengthens the affirmative 
action provisions in the current regulations. These revisions parallel 
those found in the Section 503 final rule. As stated in proposed 
Sec. 60-250.40(a), the requirements of Subpart C apply only to 
Government contractors with 50 or more employees and a contract of 
$50,000 or more. All other subparts of the regulation are applicable to 
all contractors covered by Section 4212. Subpart D covers general 
enforcement and complaint procedures. In order to help ensure that 
OFCCP uses a consistent enforcement approach with that used under 
Executive Order 11246 (which OFCCP also enforces), this subpart, again 
paralleling the changes in the Section 503 final rule, incorporates a 
number of provisions from the regulations implementing the Executive 
Order. Further, Subpart D's provisions regarding complaint procedures, 
like the counterpart provisions in the Section 503 final rule, are in 
part based on the procedural regulations applicable to the ADA. These 
procedures are also revised to reflect an amendment to Section 4212. 
Subpart E, Ancillary Matters, incorporates revised provisions on 
recordkeeping (e.g., it extends the current one-year record retention 
period to two years for larger contractors and conforms the scope of 
the retention obligation to that applied by the EEOC under the ADA and 
by OFCCP under Section 503), adds a mandatory notice posting 
requirement, and makes other revisions. Finally, the proposal contains 
a new appendix which sets out guidance on the duty to provide 
reasonable accommodation under the Act. The appendix is substantially 
identical to the counterpart appendix contained in the Section 503 
final rule. In turn, that appendix is consistent with the discussion of 
the issue of reasonable accommodation contained in the Interpretative 
Guidance on Title I of the Americans with Disabilities Act, which is 
set out as an appendix to the EEOC's ADA regulations. Accordingly, the 
EEOC appendix may be relied on for

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guidance with respect to parallel provisions of this proposal.
    The following analysis focuses on a comparison of today's proposal 
with the current Section 4212 regulation and the 1980 final rule. The 
analysis discusses the parallel changes in the Section 503 final rule 
where necessary to place today's proposal in context. This proposal 
uses a long form amending procedure in which all sections of the 
regulations are republished (except for those deleted in their 
entirety), including sections for which no changes are proposed and 
sections for which the only proposed change would be the section 
number. Use of the long form procedure ensures maximum clarity.

Subpart A--Preliminary Matters, Equal Opportunity Clause

Section 60-250.1  Purpose, Applicability and Construction

    This section is derived from current Sec. 60-250.1 (``Purpose and 
application'') and is generally consistent with that section. A number 
of clarifying revisions are proposed. As reflected in its Purpose and 
application section (Sec. 60-1.1), the 1980 final rule would have 
consolidated provisions (e.g., its definitions provisions) which are 
applicable to both Section 4212 and Executive Order 11246 into 41 CFR 
Part 60-1. Further, Sec. 60-1.1 of the 1980 final rule would have 
established some common enforcement procedures under all of the laws 
enforced by OFCCP by making certain procedures (e.g., the show cause 
notice), which were previously applicable only to the Executive Order, 
applicable to Section 4212. Today's proposal does not consolidate any 
of the Section 4212 regulations with those implementing the Executive 
Order. OFCCP believes that consolidation of provisions in this way is 
not practical at this time. However, like the 1980 final rule, today's 
proposal incorporates some of the Executive Order enforcement 
procedures, including the show cause notice procedure.
    Proposed paragraph (a) states in part that Section 4212 requires 
contractors to take affirmative action with respect to the employment 
of qualified ``special disabled veterans.'' Section 60-250.1 of the 
current regulations makes reference instead to ``disabled veterans.'' 
This proposed change in terminology is based on amendments to VEVRAA 
which have not been previously incorporated into the Section 4212 
regulations (see Sec. 60-250.2(n) defining ``special disabled 
veteran'').
    Paragraph (b) clarifies that contracts under which the Government 
is a purchaser as well as those under which it is a seller are covered 
by the Act. (See discussion regarding the definition of ``Government 
contract'' contained in Sec. 60-250.2(i).) Additionally, paragraph (b) 
provides that compliance by a covered contractor with Part 60-250 will 
not generally determine its compliance with other statutes, and that 
the reverse is also true.
    The purpose and application section of the 1980 final rule 
(Sec. 60-250.1) states that Part 60-250 applies to all Government 
contracts, ``including Federal deposit and share insurance.'' The 
preamble to the 1980 final rule (45 FR 86218) states that OFCCP 
believes that Federal deposit and share insurance are contracts within 
the meaning of Section 4212. In the course of preparing its 1996 final 
rule implementing Section 503, OFCCP conducted a careful and detailed 
reevaluation of its position in light of changes in some of the 
statutes affecting the financial industry. Based upon that review, 
OFCCP continues to believe in the soundness of its position.
    However, today's proposal differs from the 1980 final rule in that 
it does not expressly state that the regulations cover Federal deposit 
and share insurance. The proposal does not otherwise make reference to 
the precise subject matter of particular types of covered contracts, 
and therefore OFCCP no longer considers it necessary to single out 
deposit and share insurance for express mention in the regulations.
    OFCCP wishes to reemphasize that it will continue to maintain its 
long-standing policy of imposing sanctions other than debarment of 
financial institutions from future deposit or share insurance, or 
cancellation, termination or suspension of a financial institution's 
deposit or share insurance for violations of Section 4212.
    Paragraph (c)(1) states that the interpretative guidance set out as 
an appendix to the EEOC's ADA regulations may be relied on in 
interpreting the parallel provisions of this part. This provision 
reflects the fact that Part 60-250, as revised, incorporates the large 
majority of the EEOC's nondiscrimination regulations without 
substantive change (i.e., it incorporates the standards contained in 
the Section 503 final rule, which, in turn, adopted the EEOC's 
standards).
    The first sentence of paragraph (c)(2), relationship to other laws, 
states that Part 60-250 does not invalidate or limit the protections or 
procedures of other laws that provide greater or equal protection for 
the rights of special disabled veterans or veterans of the Vietnam era. 
This parallels a provision of the Section 503 final rule (first 
sentence of Sec. 60-741.1(c)(2)), which, in turn, is based on an 
analogous provision in the EEOC regulations (Sec. 1630.1(c)(2)).
    The second sentence of paragraph (c)(2) is modeled on parallel 
provisions of the Section 503 regulation, which parallels 
Sec. 1630.15(e) of the EEOC regulations. Paragraph (c)(2) of today's 
proposal provides that the contractor may take an action which would 
violate Part 60-250 or refrain from taking an action required by that 
part where such action or omission is required or necessitated by 
another Federal law or regulation. This provision would permit, for 
example, the use of medical and safety standards or inquiries that are 
mandated or necessitated by other Federal laws or regulations. For 
instance, under this provision, contractors would be permitted to 
comply with requirements relating to the collection, analysis and 
disclosure of certain medical information which are imposed by the Mine 
Safety and Health Act (MSHA) and the Occupational Safety and Health Act 
(OSHA) (and related state laws which have been approved by the 
Occupational Safety and Health Administration). Some of these standards 
necessitate the review and analysis of workers' medical information by 
employers as well as by agency officials; such action by a contractor, 
absent this provision, might violate proposed Sec. 60-250.23 on Medical 
examinations and inquiries.

Section 60-250.2  Definitions

    The proposal substantially supplements the definitions section 
contained in the current Section 4212 regulations (Sec. 60-250.2) by 
incorporating a number of new terms and by modifying or deleting a 
number of existing terms. Most notably, the proposal incorporates into 
the definitions section relevant terms and definitions from the Section 
503 final rule at Sec. 60-741.2 without substantive change. This was 
done to foster consistency between the two sets of regulations. A 
number of these terms were adopted by the Section 503 final rule from 
the ADA's regulations (``essential functions,'' ``reasonable 
accommodation,'' ``undue hardship,'' ``qualification standards,'' and 
``direct threat''). Accordingly, the interpretative guidance contained 
in the EEOC's ADA regulations may be consulted regarding the 
application of these specific terms (with the exception of 
``qualification standards,'' which the guidance does not address). A 
number of existing definitions also would be deleted or revised in 
order to conform to the parallel provisions in the Section 503

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final rule. Similarly, several definitions that are not in the existing 
VEVRAA rule, but were included in the 1980 final rule, would not be 
carried forward here. Further, the proposal incorporates amendments 
that have been made to Section 4212 since the regulations were 
originally issued in 1976. Moreover, in contrast to the existing rule, 
which sets out the defined terms in alphabetical order, the proposal 
arranges the definitions by subject matter, and sets out each defined 
term as a letter-designated paragraph. This change in organization is 
intended to make the terms more easily understandable and to conform to 
the Section 503 final rule.

Section 60-250.2(a)  ``Act''

    This definition of ``Act'' is substantially identical to the 
current definition.

Section 60-250.2(b)  ``Equal Opportunity Clause''

    OFCCP proposes to substitute the term ``equal opportunity clause'' 
for the term ``affirmative action and nondiscrimination clause''--which 
is used in the current regulations and refers to a specific set of 
obligations imposed under Section 4212 that must be set out in all 
contracts and subcontracts covered by the Act (see proposed Sec. 60-
250.5). The purpose of this revision is to conform the terminology used 
in the Section 4212 regulations with that used in OFCCP's regulations 
implementing Executive Order 11246 (see 41 CFR Part 60-1) (which also 
is adopted by the Section 503 final rule).

Section 60-250.2(c)  ``Secretary''

    OFCCP proposes to revise the definition of ``Secretary''--which 
refers to the Secretary of Labor in the current regulations--to include 
a designee of the Secretary. This revision would permit the Secretary 
to delegate authority under Section 4212 to the Deputy Secretary and 
other subordinates. The definition of the term ``Assistant Secretary,'' 
which appears in the current regulations, is therefore no longer 
necessary, and thus is omitted in this proposal. Similarly, the 
definition of ``rules, regulations and relevant orders of the Secretary 
of Labor'' contained in the current regulations, which makes reference 
to the designee of the Secretary, also is omitted as it is unnecessary.

Section 60-250.2(d)  ``Deputy Assistant Secretary''

    OFCCP proposes to substitute a definition of ``Deputy Assistant 
Secretary'' for the definition of ``Director'' in the current 
regulations to reflect a corresponding redesignation of the position 
effective February 14, 1994. This substitution is made throughout the 
proposal.

Section 60-250.2(e)  ``Government''

    The proposed definition of this term is substantially identical to 
the current definition.

Section 60-250.2(f)  ``United States''

    OFCCP proposes to revise the current definition of ``United 
States'' by deleting the references contained therein to the Panama 
Canal Zone and the Trust Territory of the Pacific Islands, and by 
incorporating references to the Northern Mariana Islands and Wake 
Island.

Section 60-250.2(g)  ``Recruiting and Training Agency''

    The proposal incorporates the current definition of this term 
without change.

Section 60-250.2(h)  ``Contract''

    The proposed definition of ``contract'' revises the current 
regulatory definition--``any Government contract''--to subsume the term 
``subcontract.'' This approach is consistent with that used in the 1980 
final rule (Sec. 60-1.3), and is intended to obviate the need to make a 
separate reference to ``subcontract'' each time ``contract'' is 
referenced to demonstrate that a particular provision applies to both 
contracts and subcontracts. Accordingly, the proposal generally 
references the term ``subcontract'' only when necessary to the context.

Section 60-250.2(i)  ``Government Contract''

    The definition of ``Government contract'' is revised, consistent 
with the definition of the term contained in the Section 503 final 
rule, to clarify that covered contracts include those under which the 
Government is a seller of goods or services as well as those under 
which it is a purchaser. Hence, the proposal substitutes a reference to 
contracts for the ``purchase, sale or use'' of goods or services for 
the existing reference to the ``furnishing'' of goods or services. The 
proposal also revises the definition to make it clear, consistent with 
the language of the Act, that only contracts regarding personal 
property (including those for the use of real property where such use 
constitutes personal property) and ``nonpersonal'' services are 
covered. Further, the proposed revision consolidates within the 
definition of ``Government contract'' definitions for four terms 
referenced therein which are separately defined in the current 
regulations (``modification,'' ``contracting agency,'' ``person,'' and 
``construction''), and establishes a subdefinition for ``personal 
property,'' which is not contained in the current regulations. (The 
definition of the term ``agency'' in the current regulations--``any 
contracting agency of the government''--has been deleted as 
unnecessary; references to ``contracting agency'' have been substituted 
in this proposal for references to ``agency'' wherever appropriate to 
the context.) The relevant subdefinitions are made applicable to the 
definition of ``subcontract'' at Sec. 60-250.2(l) as well. Under the 
1980 final rule, the definition of ``Government contract'' contains a 
clarification with regard to the coverage of personal property, which 
is similar to, but less precise than, the clarification contained in 
today's proposal.

Section 60-250.2(j)  ``Contractor''

    Currently, the term is defined as a prime contractor or 
subcontractor; the proposal revises the definition to refer to a prime 
contractor or subcontractor ``having a contract of $10,000 or more.'' 
Because the term ``contractor'' encompasses the term ``subcontractor,'' 
references to the latter term generally have been deleted from the 
regulations by the proposal.

Section 60-250.2(k)  ``Prime Contractor''

    The proposal revises the definition of ``prime contractor'' to 
incorporate a reference to persons holding a contract ``of $10,000 or 
more.''

Section 60-250.2(l)  ``Subcontract''

    The proposal incorporates changes which conform the current 
definition of ``subcontract'' to the proposed definition of 
``Government contract'' (Sec. 60-250.2(i)); that is, as revised, the 
definition references agreements for the ``purchase, sale or use of 
personal property or nonpersonal services (including construction).''

Section 60-250.2(m)  ``Subcontractor''

    The proposed definition is substantially identical to the current 
regulatory definition. The 1980 final rule's definition contains a 
subdefinition of ``First-tier subcontractor.'' OFCCP no longer believes 
that such a subdefinition is necessary.

Section 60-250.2(n)  ``Special Disabled Veteran''

    The current regulations (at Sec. 60-250.2) make reference to the 
term ``disabled veteran'' rather than the term ``special disabled 
veteran,'' which is employed by the proposal. ``Disabled

[[Page 50084]]

veteran'' is defined under current Sec. 60-250.2 as a person entitled 
to disability compensation under laws administered by the Veterans 
Administration for disability rated at 30 percent or more, or a person 
whose discharge or release from active duty was for a disability 
incurred or aggravated in the line of duty. The proposed definition 
incorporates amendments to Section 4212 and the Act's definitional 
section (42 U.S.C. 4211) which resulted in a change in terminology and 
an expansion of the class of veterans protected under the Act. See the 
Veterans' Rehabilitation and Education Amendments of 1980 (Pub. L. 96-
466, 94 Stat. 2207); the Veterans' Compensation, Education, and 
Employment Amendments of 1982 (Pub. L. 97-306, 96 Stat 441); the 
Veterans' Compensation and Program Improvements Amendments of 1984 
(Pub. L. 98-223, 98 Stat. 43); and the Department of Veterans Affairs 
Codification Act (Pub. L. 102-83, 95 Stat. 403).
    The 1980 amendments substituted the term ``special disabled 
veteran'' for ``disabled veteran'' and a reference to a service-
connected disability for the reference to a disability incurred or 
aggravated in the line of duty. The 1982 amendments revised the 
definition of ``special disabled veteran'' so as to include veterans 
who are not in receipt of compensation from the Veterans Administration 
because they have elected to receive military retirement pay in lieu 
thereof. The 1984 amendments expanded the term to include veterans with 
disability ratings of 10 or 20 percent. Finally, in order to reflect 
the redesignation of the name of the Veterans' Administration, the 1991 
amendments substituted a reference to laws administered by the 
Secretary of the Department of Veterans Affairs--for the reference to 
laws administered by the Veterans Administration. For the sake of 
clarity, the proposal incorporates a subdefinition (at subparagraph 
(2)) for the term ``serious employment handicap,'' which is derived 
from the definition of the term contained in 38 U.S.C. 3101).

Section 60-250.2(o)  ``Qualified Special Disabled Veteran''

    Currently, the regulations define the term as one who is capable of 
performing a particular job with reasonable accommodation. The proposal 
parallels the counterpart definition (``qualified individual with a 
disability'') contained in the Section 503 final rule, which was 
modeled on the counterpart ADA definition. The proposal specifies that 
one is ``qualified'' if he or she satisfies the job-related 
requirements of the position held or sought, and can perform the 
essential functions of the position with or without reasonable 
accommodation. It should be noted that, with respect to the application 
process, an applicant will be deemed qualified if he or she meets 
eligibility requirements applicable to that process with or without 
reasonable accommodation.

Section 60-250.2(q)  ``Essential Functions''

    The proposal incorporates the Section 503 definition of ``essential 
functions,'' which states that the term refers to the fundamental job 
duties, but not marginal functions, of the position in question. The 
current regulations do not contain an analogous definition.

Section 60-250.2(r)  ``Reasonable Accommodation''

    The proposal incorporates a definition which parallels the Section 
503 final rule definition. The current Section 4212 regulations do not 
contain a definition of the term. However, the adoption of the 
definition does not represent a change in OFCCP policy. Appendix A 
should be consulted for general guidance on a contractor's duty to 
provide reasonable accommodation.

Section 60-250.2(s)  ``Undue Hardship''

    The proposal adopts the Section 503 final rule definition, which 
provides that ``undue hardship'' means a significant difficulty or 
expense related to the provision of an accommodation, as determined in 
light of specific enumerated factors, including the net cost of the 
accommodation (after deducting available outside funding) and the 
overall financial resources of the facility providing the accommodation 
and of the contractor. Although ``undue hardship'' is not defined in 
the current regulations, there is a reference to the concept in current 
Sec. 60-250.6(d). That section, similar to the proposal, states that a 
contractor must make a reasonable accommodation for a special disabled 
veteran, unless such accommodation would impose an undue hardship, and 
that the extent of the accommodation duty is determined based on such 
factors as business necessity and financial cost. Thus, the proposed 
definition is consistent with current OFCCP requirements.

Section 60-250.2(t)  ``Qualification Standards''

    The proposal adopts the definition set forth in the Section 503 
final rule. The current regulations do not contain an analogous 
definition, but the proposed definition does not represent a change in 
current OFCCP policy.

Section 60-250.2(u)  ``Direct Threat''

    The definition found in the Section 503 final rule has been 
incorporated. The definition states that a ``direct threat'' is a 
significant safety or health risk--as determined based on an 
individualized assessment in light of specified factors--that cannot be 
eliminated or reduced by reasonable accommodation. The factors 
considered include the duration of the risk, the nature and severity of 
the potential harm, the likelihood that the potential harm will occur 
and the imminence of the potential harm. OFCCP's current regulations do 
not contain a parallel definition. However, OFCCP has relied on 
essentially the same concept when applying its current regulations. 
Section 60-250.6(c)(2) of the current regulations requires that when a 
contractor uses a job qualification requirement which tends to screen 
out special disabled veterans, the contractor shall demonstrate that 
such requirement is consistent with business necessity and safe 
performance of the job in question. In determining whether a particular 
health or safety risk is sufficient to justify, consistent with the 
requirements of that section, the exclusion of a special disabled 
veteran from an employment opportunity, OFCCP currently considers 
essentially the same factors (the likelihood, seriousness and imminence 
of potential injury associated with the disability) as are set out by 
the proposal.

Section 60-250.3  Exceptions to the Definitions of ``Special Disabled 
Veteran'' and ``Qualified Special Disabled Veteran''

    Paragraph (a)(1) establishes an exclusion from the Act's protection 
with respect to alcoholics whose current use of alcohol prevents 
performance of the essential functions of the job in question or which 
would pose a direct threat to property or to health or safety. A 
parallel exclusionary proviso is contained in the Section 503 final 
rule at Sec. 60-741.3(a). This Section 503 provision was derived from 
an amendment to the Rehabilitation Act by Section 512(a) of the ADA 
providing that the terms ``individual with a disability'' and 
``qualified individual with a disability'' do not include alcoholics 
whose current alcohol use poses such a threat. The revision does not 
represent a substantive change in the scope of protection for special 
disabled veterans under Section 4212 or a change in OFCCP policy. 
Rather, the proposal merely clarifies that when a special disabled 
veteran's current

[[Page 50085]]

alcohol use would prevent performance of the essential functions of the 
job in question or would pose a direct threat to property or to health 
or safety, he or she is not protected under the statute. It is 
axiomatic that such individuals would not be otherwise protected under 
this proposal (and under the current regulations) because their alcohol 
use either prevents performance of essential job functions, and thus 
renders them ``unqualified'' (see definition of ``Qualified special 
disabled veteran'' at Sec. 60-250.2(o)), or constitutes a direct threat 
(see definition of ``Direct threat'' at Sec. 60-250.2(u) and Direct 
threat defense at Sec. 60-250.22). Paragraph (a)(2) clarifies that the 
contractor has the same obligation to provide a reasonable 
accommodation for the mental and physical limitations of an alcoholic--
in an effort to enable the individual to perform the essential 
functions of the job in question or to eliminate or reduce the direct 
threat posed by an alcoholic's current use of alcohol--as the 
contractor has with respect to any other disabling condition. OFCCP 
believes that this provision is necessary to clarify that paragraph 
(a)(1) does not create a blanket exclusion for all alcoholics whose 
condition presents a direct threat.
    Paragraph (b) establishes an exclusion from the Act's protection 
with respect to currently contagious diseases or infections that is 
analogous to the exclusion regarding alcoholics set forth in paragraph 
(a)(1). The provision is patterned after a proviso set out in the 
Section 503 final rule at Sec. 60-741.3(c) (which was derived from a 
1988 amendment to the Rehabilitation Act by the Civil Rights 
Restoration Act, Public Law 100-259, 29 U.S.C.A. 706(8)(D) (West Supp. 
1992)). The proviso does not represent a substantive change in the 
scope of protection under Section 4212 or a change in OFCCP policy.
    Rather, it merely provides a clarification regarding the scope of 
protection under the Act similar to that set out in paragraph (a)(1).
    Paragraph (c)(2) sets out a clarification regarding a contractor's 
duty to provide reasonable accommodation for a covered veteran with a 
currently contagious disease or infection which is analogous to 
paragraph (a)(2) above.
    Today's proposal does not adopt the Section 503 final rule's 
exclusion regarding illegal drug use (see Sec. 60-741.3(a) of those 
regulations). That provision states that the terms ``individual with a 
disability'' and ``qualified individual with a disability'' do not 
include a person who is currently engaging in the illegal use of drugs, 
when the contractor acts on the basis of such use. The language was 
derived from an amendment to the definition section of the 
Rehabilitation Act by Section 512(a) of the ADA (29 U.S.C.A. 
706(8)(C)(i) (West Supp. 1992)) which significantly altered the 
existing coverage provisions for drug users under Section 503. The 
statutory amendment did not affect Section 4212, and OFCCP declines to 
adopt an analogous regulatory exclusion with respect to Section 4212.

Section 60-250.4  Coverage and Waivers

    Proposed paragraph (a)(1), which sets out the general monetary 
jurisdiction requirement, is derived from existing Sec. 60-250.3(a)(1), 
and is substantially identical to that section.
    Proposed paragraph (a)(2), which relates to contracts for 
indefinite quantities, is derived from existing Sec. 60-250.3(a)(2), 
and is substantially identical to that section.
    Proposed paragraph (a)(3) narrows the existing provision regarding 
the applicability of Part 60-250 to work performed outside the United 
States. The proposal is consistent with the Section 503 final rule. It 
makes VEVRAA applicable only to employment activities within the United 
States, which includes actual employment within the United States and, 
in limited circumstances, decisions made within the United States 
regarding employment abroad. Proposed paragraph (a)(4) is identical to 
current Sec. 60-250.3(a)(4), and proposed paragraph (a)(5) is identical 
to current Sec. 60-250.3(a)(5).
    For the sake of clarity, proposed paragraph (b) consolidates 
current Secs. 60-250.3(b)(1) and (3), which relate to waivers and 
withdrawal of waivers, respectively. The portion of the paragraph 
relating to the grant of waivers has been revised to permit the Deputy 
Assistant Secretary for Federal Contract Compliance Programs to 
unilaterally grant waivers in the national interest. Currently, 
Sec. 60-250.3(b)(1) permits the head of an agency to grant such a 
waiver with the concurrence of the Deputy Assistant Secretary. When 
this provision was issued, enforcement responsibilities under the Act 
were carried out by individual Federal compliance agencies as well as 
by OFCCP. During this period, the granting of waivers was coordinated 
between these compliance agencies and OFCCP. All compliance 
responsibility was consolidated into OFCCP in 1978; accordingly, such a 
requirement is no longer appropriate.
    Proposed paragraph (b)(2), which relates to national security 
waivers, is substantially identical to current Sec. 60-250.3(b)(2). 
Paragraph (5) of the current rule, `` Facilities not connected with 
contracts,'' has been integrated as subparagraph (b)(3) to provide 
clarity and be consistent with Section 503.

Section 60-250.5  Equal Opportunity Clause

    This section is derived from current Sec. 60-250.4. The current 
heading for the section, ``Affirmative action clause,'' has been 
revised to read ``Equal opportunity clause,'' in order to conform it 
with the analogous provision contained in the Section 503 final rule 
(Sec. 60-741.5) and the regulations implementing Executive Order 11246 
(41 CFR 60-1.4). The heading for the clause itself has been revised to 
reference ``Equal Opportunity'' rather than ``Affirmative Action.'' 
With respect to paragraph (a)1 (current paragraph (a)), the proposal 
expands and reorganizes the listing of the prohibited types of 
disability discrimination to conform to the parallel provisions in the 
Section 503 final rule, which in turn, were derived from analogous 
provisions in the EEOC ADA regulations (Sec. 1630.4). Further, in 
contrast to the current paragraph (a), the proposal states that the 
discrimination prohibition applies also to apprenticeship and on-the-
job training under 38 U.S.C. 3687. This provision, which is set out in 
current Sec. 60-250.6(a) Affirmative action policy, practice and 
procedures, is more properly included in the equal opportunity clause. 
(The statutory citation has been revised to reflect an amendment which 
resulted in its redesignation.)
    Proposed paragraph (a)2, which is based on current paragraph (b), 
provides that the contractor shall immediately list its employment 
openings with the local office of the state employment service system. 
In contrast to the proposal, current paragraph (b) states that the 
contractor shall also provide other reports to such local office as may 
be required. It is not possible to ascertain burden reduction since the 
requirement was suspended by OMB on January 29, 1982 (47 FR 4258). 
OFCCP has found that this additional reporting requirement is 
unnecessary, and therefore, declines to carry the provision forward. 
Further, current paragraph (b) exempts state and local government 
agencies covered by Section 4212 from the reporting requirements set 
out in paragraphs (d) and (e). As discussed below, the reporting 
requirement in current paragraph (d) is not carried forward by this 
proposal, and therefore, the reference to that requirement is omitted 
from the proposed equal opportunity clause.

[[Page 50086]]

    Proposed paragraph 3 is identical to current paragraph (c). Current 
paragraph (d) is not carried forward by today's proposal. That 
paragraph requires that the contractor file, on a quarterly basis, 
reports with the state employment service system regarding the number 
of disabled veterans and veterans of the Vietnam era that the 
contractor hired during the reporting period. This provision was 
suspended on January 29, 1982 (47 FR 4258) because the reporting 
requirement had not been approved by OMB under the Paperwork Reduction 
Act. The suspension was to remain in effect pending final action on the 
Department's 1980 proposal to amend Part 60-250. A similar annual 
reporting requirement is currently imposed on contractors covered under 
Section 4212 pursuant to 41 CFR Part 61-250; that requirement is 
administered by the Department's Office of the Assistant Secretary for 
Veterans' Employment and Training. Accordingly, the requirements set 
out in current paragraph (d) are no longer necessary.
    Proposed paragraphs 4 and 5 are identical to current paragraphs (e) 
and (f), with the exception of a few minor editorial changes. The 
provisions of current paragraph (g) have been incorporated into 
proposed paragraph 6. Proposed paragraphs 6 (i), (ii) and (iv), which 
define terms used in connection with the mandatory listing requirement, 
are identical to the current paragraphs (h) (1), (2) and (3), with the 
exception of one minor editorial change. Proposed paragraph 6(iii), 
which defines the term ``executive and top management,'' is new. 
Section 702 of the Veterans' Benefits Improvements Act of 1994, Public 
Law 103-446, permits the exemption of the contractor's ``executive and 
top management'' positions from the mandatory job listing requirement. 
Our proposed definition of ``executive and top management'' is based 
upon the definition of ``executive'' found in the regulations 
implementing the Fair Labor Standards Act, 29 CFR 541.1, except that we 
do not propose to adopt the compensation levels specified in subsection 
(f) of that regulation. Proposed paragraphs 7, 8, 10 and 11, which set 
out additional contractor requirements, are substantially identical to 
current paragraphs (i) through (m), respectively, with the exception of 
a number of editorial changes. For instance, proposed paragraph 10 
(current paragraph (l)) makes reference to a ``labor organization'' 
rather than to a ``labor union.''
    Proposed paragraph 9, regarding contractor posting of notices, is 
similar to current paragraph (k). In conformance with the final Section 
503 rule, the posting requirement specifically commits the contractor 
to ensure that the notices are accessible to applicants and employees 
who are special disabled veterans. A contractor may make these notices 
accessible, for example, by having the notice read to a visually 
disabled individual or by lowering the posted notice so that it may be 
read by a person in a wheelchair.
    Further, current Secs. 60-250.20 to 60-250.24 have been 
consolidated (without substantive change) into this section as 
paragraphs (b)-(f), respectively. These provisions, which relate to the 
equal opportunity clause, are more logically included here than as 
separate sections. Proposed paragraph (d) provides that the contractor 
may make the equal opportunity clause a part of the contract by simply 
citing to Sec. 60-250.5. In contrast, current Sec. 60-250.22 states 
that the equal opportunity clause may be incorporated into the contract 
by reference. The intent of the proposal is to clarify the current 
requirement. The proposal does not use the term ``incorporation by 
reference,'' inasmuch as the regulations of the Office of Federal 
Register at 1 CFR Part 51 preclude the use of the term in this context.

Subpart B--Discrimination Prohibited

Section 60-250.20  Covered Employment Activities

    This section, which lists various types of employment practices to 
which Part 60-250 applies, is substantially identical to Sec. 60-741.20 
of the Section 503 final rule. In turn, the Section 503 regulation is 
patterned after Sec. 1630.4 of the EEOC regulations. The current 
Section 4212 regulations contain a similar, but less detailed, listing 
in the affirmative action clause (Sec. 60-250.4(a)).

Section 60-250.21  Prohibitions

    This section, which sets out in detail the various types of 
prohibited discriminatory practices, parallels the Section 503 final 
rule (Sec. 60-741.21), which, in turn, generally adopts and 
consolidates the EEOC regulations at Sec. 1630.5 through 1630.11. A 
number of the prohibitions set out in this section are paralleled in 
the current Section 4212 regulations or are implicit from those 
regulations. However, the analogous existing provisions are organized 
under the rubric of ``affirmative action policy, practices, and 
procedures'' (Sec. 60-250.6). As noted above, today's proposal 
reorganizes the regulations so as to clearly define which obligations 
are components of the affirmative action program requirement, and thus 
applicable only to contractors that employ 50 or more persons and hold 
a contract valued at $50,000 or more (see discussion of Subpart C 
below).
    The introductory sentence of this section, which states that 
``discrimination'' includes the acts described in proposed Secs. 60 
250.21 and 60-250.23, is patterned after the final sentence of 
Sec. 1630.4 of the EEOC regulations. Paragraph (a), which sets out a 
general prohibition regarding disparate treatment discrimination, is 
patterned after Sec. 60-741.21(a) of the Section 503 regulations. The 
Section 503 final rule has no direct counterpart in the EEOC 
regulations, but rather was proposed to clarify that disparate 
treatment is one form of prohibited discrimination under those 
regulations. Paragraphs (b) through (h), which specify other types of 
prohibited discrimination, are new to the Section 4212 regulations and 
parallel their EEOC and Section 503 final rule counterparts, except as 
discussed below.
    Proposed paragraph (f)(1), which provides that it is unlawful to 
fail to make reasonable accommodation, unless the contractor can 
demonstrate an undue hardship, is substantially similar to current 
Sec. 60-250.6(d). As stated in the discussion in the EEOC's 
interpretative guidance appendix, the contractor is not required to 
provide a reasonable accommodation unless the special disabled veteran 
informs the contractor that an accommodation is needed. However, if an 
employee who is a known special disabled veteran is having difficulty 
performing his or her job, the contractor may inquire whether the 
employee is in need of a reasonable accommodation. (This contrasts with 
the duty of a contractor covered by the written affirmative action 
program requirement; such a contractor must inquire about the need for 
an accommodation in that circumstance. See proposed Sec. 60-250.44(d).) 
Further, although proposed paragraph (f)(2), which states that it is 
unlawful to deny employment opportunities based on the need to make a 
reasonable accommodation, is not paralleled in the current regulations, 
that obligation is implicit in current Sec. 60-250.6(d).
    The first sentence of proposed paragraph (g)(1)--which prohibits 
the use of selection criteria that screen out special disabled veterans 
or veterans of the Vietnam era, unless the selection criteria are shown 
to be job-related and consistent with business necessity--is 
essentially the same as the requirements contained in parallel 
provisions of the Section 503 final rule (Sec. 60-741.21(g)(1)) and the 
EEOC regulation (Sec. 1630.10), as well as the current VEVRAA 
regulation

[[Page 50087]]

(Sec. 60-250.6(c)(2)). The last sentence in that paragraph, which 
limits the purposes for which a contractor may rely on a covered 
veteran's military record, is substantially similar to language 
contained in current Sec. 60-250.6(b). Paragraph (g)(2) provides that 
the Uniform Guidelines on Employee Selection Procedures (which, among 
other things, set out certain requirements for validating employee 
selection procedures which adversely affect particular race, sex or 
ethnic groups) do not apply to Part 60-250. An analogous statement is 
made by EEOC in its appendix discussion of the parallel EEOC regulation 
(Sec. 1630.10).
    Paragraph (h) requires that the contractor administer employment 
tests to eligible applicants or employees with impaired sensory, 
manual, or speaking skills in a format that does not require the use of 
the impaired skills, unless such skills are the factors that the test 
purports to measure. This provision is substantially identical to the 
counterpart provision in the Section 503 final rule, which, in turn, is 
derived from Sec. 1630.11 of the EEOC regulations.
    Paragraph (i), compensation, is derived from current Sec. 60-
250.6(e), and (with the exception of some editorial changes) is 
substantially similar to that section.

Section 60-250.22  Direct Threat Defense

    This section clarifies that a contractor may exclude from 
employment opportunities persons who cannot perform essential functions 
without posing a direct health or safety threat to themselves or 
others. This provision is substantially identical to the parallel 
provision in the Section 503 final rule (Sec. 60-741.22), which is 
derived from, and substantially similar to, Sec. 1630.15(b)(5) of the 
EEOC regulations.

Section 60-250.23  Medical Examinations and Inquiries

    This section incorporates the Section 503 final rules' provisions 
regarding prohibited and permitted medical examinations and inquiries 
(Sec. 60-741.23), which, in turn, are patterned after the counterpart 
provisions in the EEOC's regulations (Secs. 1630.13 and 1630.14).
    The provisions contained in this section generally have no 
counterpart in the current Section 4212 regulations. In some cases, the 
provisions in this section significantly contrast with the current 
regulations. In this regard, proposed paragraph (b)(2) permits the 
contractor to require an employment entrance medical examination or 
inquiry after making an offer of employment to a job applicant and to 
condition an offer of employment on the results of such an examination 
or inquiry if all similarly situated employees are subjected to such an 
examination or inquiry, and proposed paragraph (b)(3) permits a 
contractor to require a job-related medical examination or inquiry of 
an employee. Proposed paragraph (b)(5) specifies that examinations 
conducted pursuant to paragraph (b)(2) need not be job-related; 
however, if a special disabled veteran is screened out from an 
employment opportunity as a result of such examination or as the result 
of another examination, the contractor must demonstrate that the 
exclusionary criteria are job-related and consistent with business 
necessity. In contrast, the current Section 4212 regulations do not 
limit the use of medical examinations to the post-employment-offer 
context or require that examinations or inquiries of employees be job-
related. Rather, current Sec. 60-250.6(c)(3) states that a contractor 
may conduct a pre-employment medical examination, provided that the 
results of such examination are used consistently with other 
requirements in Sec. 60-250.6 (Affirmative action policy, practices, 
and procedures). However, similar to proposed paragraph (b)(5), current 
Sec. 60-250.6(c)(2) provides that the contractor may not use physical 
or mental qualification requirements to screen out qualified disabled 
veterans, unless such requirements are shown to be job-related and 
consistent with business necessity.
    Proposed paragraph (c), Invitation to self-identify, references 
Sec. 60-250.42, which specifies that a contractor shall invite 
applicants to self-identify as being covered by the Act and wishing to 
benefit under the affirmative action program. Proposed paragraph (d) 
specifies, with certain limited exceptions, that information obtained 
under this section shall be kept confidential.

Section 60-250.24  Drugs and Alcohol

    Proposed paragraph (a), which sets out permitted types of 
contractor practices relating to the regulation of workplace drug and 
alcohol use, and proposed paragraph (b), which governs the permissible 
use of drug testing, are identical to the revised Section 503 
regulation (60-741.24), which, in turn, is patterned after the EEOC 
regulations at Secs. 1630.16(b) and (c), respectively. As discussed 
below, paragraphs (a) and (b) contain minor technical changes (as well 
as a number of editorial changes) from the EEOC rule. This section is 
not paralleled by any provisions contained in the current Section 4212 
regulations. Sections 1630.16(b)(5) and (6) of the EEOC regulations 
state that employees may be required to comply with the regulations of 
the Departments of Defense and Transportation and of the Nuclear 
Regulatory Commission regarding alcohol and drugs. In contrast, 
proposed paragraphs (a)(5) and (a)(6) state that employees also may be 
required to comply with similar regulations of other Federal agencies.
    Paragraph (b)(3) states that any medical information obtained from 
a drug test, except information regarding the illegal use of drugs, is 
subject to the requirements of Secs. 60-250.23(b)(5) and (d). In turn, 
proposed Sec. 60-250.23(b)(5) states that the contractor must 
demonstrate that criteria which are used to screen out special disabled 
veteran applicants or employees are job-related and consistent with 
business necessity; and proposed Sec. 60-250.23(d) provides for certain 
confidentiality requirements with regard to medical information. The 
parallel EEOC regulation (Sec. 1630.16(c)(3)) fails to reference 
medical confidentiality requirements, but the EEOC appendix discussion 
regarding the section notes that the information in question should be 
treated as a confidential medical record.

Section 60-250.25  Health Insurance, Life Insurance and Other Benefit 
Plans

    Proposed paragraphs (a), (b), (c) and (e) of this section provide 
that the contractor may administer benefit plans in a manner which is 
not inconsistent with state law, or administer a benefit plan that is 
not subject to state laws that regulate insurance, provided that such 
activities are not used as a subterfuge to evade the purposes of Part 
60-250. These provisions are substantially identical to the Section 503 
final rule at Sec. 60-741.25. Paragraphs (a), (b), (c) and (e) of those 
regulations, in turn, are patterned after EEOC's regulations at 
Sec. 1630.16(f)(1)-(f)(4), respectively. Proposed paragraph (d), which 
provides that the contractor may not deny a qualified special disabled 
veteran equal access to insurance based on disability alone if the 
disability does not pose increased risks, is derived from the EEOC 
appendix discussion regarding Sec. 1630.16(f).

Subpart C--Affirmative Action Program

    Subpart C is derived from Secs. 60-250.5 (Applicability of the 
affirmative action program requirement) and 60-250.6 (Affirmative 
action policy, practice, and procedures) of the current Section 4212 
regulations. This subpart revises and reorganizes those sections to 
incorporate only obligations which are applicable to

[[Page 50088]]

contractors with a written affirmative action program requirement, 
i.e., those that employ 50 or more employees and hold a contract of 
$50,000 or more. See proposed Sec. 60-250.40(a). Provisions currently 
in Sec. 60-250.6 that are applicable to all covered contractors have 
been incorporated into proposed Subparts B (Discrimination Prohibited) 
or E (Ancillary Matters).

Section 60-250.40  Applicability of the Affirmative Action Program 
Requirement

    Paragraph (a), which has no parallel in the current Section 4212 
regulations, clarifies the application of the requirements of Subpart 
C. Paragraphs (b) and (c)--which specify the contractor's duties with 
regard to the preparation and maintenance of its affirmative action 
program (AAP), and the updating of its AAP, are derived from current 
Secs. 60-250.5(a) and (b), respectively. Minor clarifying changes or 
organizational changes have been made with respect to these provisions. 
For instance, current Sec. 60-250.5(a) states that the AAP shall set 
forth the contractor's policies, practices and procedures ``in 
accordance with Sec. 60-250.6 of this part.'' The reference to this 
particular section has been omitted to clarify that the contractor's 
AAP should address all relevant practices under Part 60-250, not only 
those that relate to this particular section. Current Sec. 60-250.5(a) 
also states that contractors presently holding contracts shall update 
their AAPs within 120 days of the effective date of Part 60-250. This 
provision has been incorporated into a separate effective date section 
(Sec. 60-250.86). Current Sec. 60-250.5(d), which sets out the ``self-
identification'' procedures, has been incorporated with revisions at 
proposed Sec. 60-250.42.
    Paragraph (d) states that the contractor shall generally submit its 
AAP within 30 days of a request by OFCCP and that it shall also make 
the document promptly available on-site upon such request. These 
provisions, which are not contained in the current regulations, have 
been included in order to help ensure that OFCCP has access to the 
contractor's AAP as soon as needed.

Section 60-250.41  Availability of Affirmative Action Program

    With the exception of some stylistic differences, this section, 
which provides that the AAP shall be available to any applicant or 
employee at a location and time which shall be posted at each 
establishment, is identical to current Sec. 60-250.5(c).

Section 60-250.42  Invitation to Self-identify

    On ____________, 1996, OFCCP published (______ F.R. ______) an 
interim rule amending Sec. 60-250.5(d) of the current regulations 
relating to invitations to self-identify. The purpose of the interim 
rule was to conform the invitation to self-identify requirement under 
VEVRAA with the requirement contained in the new Section 503 final rule 
(______ F.R. ______).
    This proposal mirrors the VEVRAA interim rule and the Section 503 
final rule. Paragraph (a) requires the contractor, after making an 
offer of employment and before the applicant begins his or her 
employment duties, to invite applicants to self-identify in order to 
benefit from the contractor's affirmative action program. In addition, 
under paragraphs (b) and (c) a pre-offer invitation is permitted only 
in two limited circumstances: if the invitation is made when the 
contractor actually is undertaking affirmative action at the pre-offer 
stage; and if the invitation is made pursuant to a Federal, state or 
local law requiring affirmative action for special disabled or Vietnam 
era veterans. This approach is consistent with Sec. 1630.14(b) of the 
EEOC's regulations, and the EEOC's October 10, 1995, ``ADA Enforcement 
Guidance: Preemployment Disability-Related Questions and Medical 
Examinations.''
    Paragraph (d) of the proposed rule requires that the invitation 
inform the individual that the request to benefit under the 
contractor's affirmative action program may be made immediately or at 
any time in the future. This is intended to help ensure that the 
individual is aware that he or she is not precluded from making the 
request at any time in the future merely because an initial request was 
made or because he or she failed to make the request immediately in 
response to the invitation. For example, a special disabled veteran 
simply may not choose to self-identify before beginning work, but may 
wish to do so later.
    The contractor may develop its own invitation for this purpose, 
although an acceptable form of such invitation is set forth in Appendix 
B.

Section 60-250.43  Affirmative Action Policy

    This section, which sets out the contractor's fundamental 
affirmative action obligations, clarifies that such obligations include 
a duty to refrain from discrimination; that the contractor is required 
to take affirmative action efforts with respect to all levels of 
employment, including the executive level; and that such requirements 
apply to all employment activities. This provision is substantially 
similar to current Sec. 60-250.6(a) (which does not contain the 
reference to the prohibition against discrimination). The remaining 
paragraphs of current Sec. 60-250.6 are comprised of the specific 
required affirmative action policy, practices and procedures. As 
discussed below, these provisions have been incorporated with 
modification into proposed Sec. 60-250.44.

Section 60-250.44  Required Contents of Affirmative Action Programs

    The provisions contained in this section were derived from existing 
Sec. 60-250.6, and have been organized, as stated in this section's 
introductory sentence, to set out the minimum required AAP ingredients. 
Although a number of the requirements are also applicable to 
contractors that do not have a written AAP obligation, i.e., those 
contractors that do not employ 50 or more employees and hold a contract 
of $50,000 or more, all requirements applicable to AAP contractors are 
included in this section for the sake of clarity. In addition, this 
section sets out suggested affirmative action activities that the 
contractor is encouraged to undertake in order to comply with the 
specified minimum affirmative action requirements. The contractor has 
discretion in undertaking these suggested activities or other 
activities in satisfying the mandatory requirements. In some cases, 
obligations that are not mandatory under the current regulations have 
been made mandatory in this proposal and vice versa.
    Paragraph (a) states that the contractor's AAP shall include an 
equal opportunity policy statement and specifies the contents--both 
suggested (relevant information about the contractor's policy) and 
required (notification that the contractor is obligated, as specified 
in proposed Sec. 60-250.69, to refrain from harassment or 
intimidation). The proposal is intended as a clarification of an 
existing regulatory provision. Current Sec. 60-250.6(g) states that the 
contractor should adopt, implement and disseminate an equal opportunity 
policy (through various enumerated methods), but does not expressly 
require that it be included in the contractor's AAP or indicate what 
should be contained in the statement.
    With the exception of its third sentence, paragraph (b), which 
specifies that the contractor must ensure that its personnel processes 
provide for careful consideration of the job qualifications of known 
special disabled veterans or veterans of the Vietnam era, is 
substantially similar to existing Sec. 60-

[[Page 50089]]

250.6(b). The third sentence of the paragraph, which states that the 
contractor shall ensure that its personnel processes are free from 
stereotyping, is derived from current Sec. 60-250.6(i)(2), except that 
the requirement is made mandatory in the proposal, and is a suggested 
method of compliance in the current regulation. OFCCP believes that 
this requirement is central to the Act's affirmative action obligation, 
and therefore should be mandatory.
    Paragraphs (c)(1) and (2) are substantially similar to current 
Secs. 60-250.6(c)(1) and (2), respectively. Like current Sec. 60-
250.6(c)(1), proposed paragraph (c)(1) requires that the contractor 
periodically review all physical and mental job qualification standards 
to ensure that qualification standards that tend to screen out special 
disabled veterans are job-related for the position in question and 
consistent with business necessity. In contrast to the proposal, the 
current regulation also states that such standards must be consistent 
with safe performance of the job. It is unnecessary to incorporate the 
reference to ``safe performance'' in the proposal because that concept 
is subsumed by the concept of business necessity. Proposed paragraph 
(c)(1), also in contrast with the current regulation, clarifies that 
the contractor must ensure that such exclusionary job standards concern 
essential functions of the job in issue. This clarification is based on 
the counterpart provision in the Section 503 final rule (Sec. 60-
741.44(c)(1)), which, in turn, is based on the EEOC's interpretation of 
analogous requirements under the ADA. (See the discussion regarding 
Sec. 1630.10 in the appendix to the ADA's regulations.) Proposed 
paragraph (c)(2) requires that the contractor demonstrate that its use 
of physical or mental selection standards which tend to screen out 
qualified special disabled veterans is job-related and consistent with 
business necessity. This paragraph contains the same type of 
modifications that have been incorporated into proposed paragraph 
(c)(1).
    Paragraph (c)(3) incorporates, for the sake of clarity, a statement 
similar to the statement in proposed Sec. 60-250.22 that the contractor 
may exclude from employment opportunities persons who pose a direct 
threat to health or safety.
    Paragraph (d) requires the contractor to make reasonable 
accommodation for a known otherwise qualified special disabled veteran, 
unless it can demonstrate an undue hardship on the operation of its 
business. The proposal is similar to current Sec. 60-250.6(d) (first 
sentence), except that it clarifies that the accommodation duty is owed 
only to an ``otherwise qualified'' special disabled veteran. As stated 
in proposed Appendix B, a special disabled veteran is ``otherwise 
qualified'' if he or she is qualified for a job, except that, because 
of a disability, he or she needs a reasonable accommodation to be able 
to perform the job's essential functions. The second sentence of the 
current regulation, which sets out factors that are relevant to the 
determination of the extent of the contractor's accommodation 
obligation, is not incorporated in proposed paragraph (d). A similar 
more detailed listing of factors is included in the proposed definition 
of ``undue hardship'' (Sec. 60-250.2(s)(2)). Proposed paragraph (d) 
also requires that where an employee who is a known special disabled 
veteran is having difficulty performing his or her job and it is 
reasonable to conclude that the performance problem may be related to 
the known disability, the contractor shall confidentially inquire 
whether the employee is in need of a reasonable accommodation. The 
current regulations do not contain a parallel provision. This 
requirement is an essential component of the contractor's affirmative 
action duty. Absent such a requirement, the contractor would be free to 
take adverse action against a known special disabled veteran (who might 
be otherwise qualified) merely because the veteran failed to request an 
accommodation. A special disabled veteran who is in need of an 
accommodation may fail to seek out an accommodation for any number of 
reasons; for instance, he or she may not perceive the need for an 
accommodation or may be unaware of his or her right to obtain an 
accommodation. Because the provision applies only to an employee the 
contractor knows to be a special disabled veteran (that is, in the 
situation where it is reasonable to conclude that a performance problem 
may be related to a veteran's disability) and does not require the 
contractor to speculate about the need for accommodation in equivocal 
situations, OFCCP believes that it fairly balances the rights of both 
the veteran and employer.
    Paragraph (e) provides that the contractor must develop procedures 
to ensure that its employees are not harassed because of their 
disability or Vietnam era veteran status. The current regulations, at 
Sec. 60-250.6(h)(1)(ii), contain a similar provision which is not 
mandatory (supervisors ``should'' be advised that the contractor is 
obligated to prevent harassment). Upon reconsideration, OFCCP believes 
that harassment is a sufficiently important issue to warrant mandatory 
affirmative steps to ensure that it does not occur.
    Paragraph (f) provides that the contractor has a duty to take 
actions such as outreach and recruitment activities to effectively 
recruit special disabled veterans and veterans of the Vietnam era as 
are appropriate in light of the circumstances, including the 
contractor's size and resources and the extent to which existing 
practices are adequate. The paragraph also sets out a listing of 
appropriate activities that contractors should take in this regard, and 
specifies that the contractor has discretion in undertaking these or 
other activities. This section is generally consistent with current 
Sec. 60-250.6(f), but incorporates a number of clarifying 
modifications. Some of the suggested outreach and recruitment 
activities listed in the current regulations concern policies regarding 
the internal dissemination of the contractor's policy, and therefore 
have been incorporated into proposed Sec. 60-250.44(g), which addresses 
that subject.
    Also, the proposal consolidates into paragraph (f) (without 
substantive change) some portions of current Sec. 60-250.6(f) (positive 
recruitment and external dissemination of policy), and Sec. 60-250.6(i) 
(development and execution of AAPs). Proposed paragraph (f)(1), which 
states that the contractor should obtain assistance from specified 
types of recruitment sources, is derived from current Sec. 60-
250.6(f)(4). That provision has been edited for clarity and references 
to recruitment sources have been updated. Proposed paragraph (f)(2), 
which states that the contractor should conduct formal briefing 
sessions with recruitment source representatives, is derived from 
current Sec. 60-250.6(i)(4). Proposed paragraph (f)(3), which relates 
to recruitment efforts at educational institutions, consolidates 
current Secs. 60-250.6(i)(7) and (8). Proposed paragraph (f)(5), which 
specifies that special disabled veterans and veterans of the Vietnam 
era should participate in outreach and recruitment activities, is based 
on current Secs. 60-250.6(i)(6).
    Proposed paragraph (f)(8) establishes a new suggested recruitment 
activity (which parallels Sec. 60-741.44(f)(7) of the Section 503 final 
rule) that has no counterpart in the current regulations. That 
paragraph states that the contractor, in making hiring decisions, 
should consider applicants who are known special disabled veterans or 
veterans of the Vietnam era for other positions for which they may be 
qualified when the position applied for is unavailable. OFCCP believes 
that such a practice will be effective in helping to maximize the 
employment

[[Page 50090]]

opportunities of special disabled veterans and veterans of the Vietnam 
era. In many cases, the consideration of applicants for such 
alternative jobs will not place any added burdens on the contractor's 
personnel system (because, for instance, that practice is already 
standard for applicants in general). Indeed, this practice may 
frequently benefit a business inasmuch as it can obviate the need to 
seek additional qualified candidates.
    Proposed paragraph (g)(1), which sets out requirements which are 
complementary to proposed paragraph (f), states that the contractor 
must develop internal procedures to assure supervisory, management and 
other employee cooperation and participation in the contractor's 
efforts to implement its affirmative action obligation. Like paragraph 
(f), paragraph (g)(2) lists suggested procedures that the contractor 
should undertake to communicate its affirmative action obligation 
internally. For the most part, the provisions in these paragraphs are 
derived from existing Sec. 60-250.6(g). However, in contrast to the 
proposal, that section provides that the contractor's duty to engage in 
internal dissemination activities is not mandatory. Upon 
reconsideration, OFCCP concludes, as stated in proposed paragraph 
(g)(1) itself, that the contractor's outreach program will not be 
effective without internal support, which, in turn, requires that the 
contractor engage in reasonable efforts to disseminate its affirmative 
action policy to all employees. Accordingly, OFCCP believes that the 
internal communication duty should be mandatory. Further, paragraph 
(g)(1) incorporates a clarification (like that contained in proposed 
paragraph (f)) that the scope of the contractor's efforts shall depend 
on all the relevant circumstances.
    Moreover, as noted above, relevant provisions from current Sec. 60-
250.6(f) are consolidated (without substantive change) into this 
paragraph as well: proposed paragraph (g)(1) combines provisions from 
current Secs. 60-250.6(f)(1) and (g) (introductory sentence). Proposed 
paragraph (g)(2)(ii), which states that the contractor should inform 
all employees and prospective employees of its affirmative action 
policy and schedule employee meetings to discuss the policy, is derived 
from current Secs. 60-250.6(f)(3) and (g)(4). Current Sec. 60-
250.6(g)(9) states that the contractor, as a suggested internal 
dissemination procedure, should post its affirmative action policy, 
including a statement that employees and applicants who are special 
disabled veterans are protected from disability-related harassment, on 
company bulletin boards. Today's proposal incorporates this provision 
as a mandatory requirement at Sec. 60-250.44(a).
    Paragraph (h), which requires the contractor to implement an audit 
system to measure the effectiveness of its AAP and to undertake 
necessary action to bring its program into compliance, is derived 
(without substantive modification) from current Sec. 60-250.6(h)(3) 
(where the provision is set out as one of several specified 
responsibilities of the contractor's affirmative action manager). In 
contrast to the current regulation, today's proposal sets out the 
provision as a separate subsection in order to emphasize its 
importance. Further, the proposal clarifies that the requirement is 
mandatory.
    Paragraph (i) provides that the contractor shall designate an 
official of the company as an affirmative action manager and provide 
that individual with necessary top management support and staff. This 
provision is derived from current Sec. 60-250.6(h). In view of the 
importance of designating an official as responsible for the 
implementation of the contractor's AAP, the proposal, in contrast to 
the current regulation, provides that the contractor's duty in this 
regard is mandatory. Additionally today's proposal does not incorporate 
the current regulation's listing of activities in which the affirmative 
action manager should engage, inasmuch as such a listing would 
unnecessarily duplicate other provisions contained in the proposal.
    Paragraph (j), which is based on current Sec. 60-250.6(i)(3), 
requires the contractor to train all employees involved in the 
personnel process to ensure that the contractor's AAP commitments are 
implemented. Because of the importance of this requirement, the 
proposal, in contrast to the current regulations, specifies that it is 
mandatory and sets it out as a separate subsection.

Subpart D--General Enforcement and Complaint Procedures

    As stated above, this subpart expands the current provisions 
contained in Subpart B of the current regulations and conforms many of 
those provisions to the parallel provisions contained in the 
regulations implementing Executive Order 11246 (41 CFR Part 60-1, 
Subpart B), which have been incorporated in the Section 503 final rule. 
Upon careful consideration, OFCCP has concluded that in the specific 
instances where the regulations are conformed there is no reason to 
apply different procedures under the Act, the Executive Order or 
Section 503. Further, this subpart incorporates one stylistic change 
throughout. The current regulations in some instances make reference to 
violations of (or compliance with) the affirmative action clause (i.e., 
equal opportunity clause) and/or to violations of (or compliance with) 
the Act or this part. For the sake of consistency, the proposal 
generally makes reference to violations (or compliance with) ``the Act 
or this part.''
    OFCCP recognizes that differences and disputes about the 
requirements of the Act and the regulations may arise between 
contractors and special disabled veterans and veterans of the Vietnam 
era as a result of misunderstandings. Such disputes frequently can be 
resolved more effectively through informal negotiation or mediation 
procedures, rather than through the formal enforcement process set out 
in the regulations. Accordingly, OFCCP will encourage efforts to settle 
such differences through alternative dispute resolution, provided that 
such efforts do not deprive any individual of legal rights under the 
Act or the regulations. (See the Department of Labor's policy on the 
use of alternative dispute resolution. 40 FR 7292, Feb. 28, 1992.)

Section 60-250.60  Compliance Reviews

    Paragraph (a) of this section clarifies existing regulatory 
authority for OFCCP to conduct compliance reviews with regard to 
contractors' implementation of their affirmative action obligations, 
and provides that the review shall consist of a comprehensive analysis 
of all relevant practices, and that recommendations for appropriate 
sanctions shall be made. Paragraph (b) specifies that where 
deficiencies are found, reasonable conciliation efforts shall be made 
pursuant to Sec. 60-250.62. Paragraph (c) provides that, during a 
compliance review, OFCCP will verify whether the contractor has 
properly filed its annual Veterans' Employment Report (VETS-100) with 
the Assistant Secretary for Veterans' Employment and Training (OASVET) 
(as required under 41 CFR Part 61-250), and that OFCCP will notify 
OASVET if the contractor has not done so.
    Paragraphs (a) and (b) have no parallel in the current section 4212 
regulations, but are generally patterned after selected portions of the 
compliance review provisions of the regulations implementing Executive 
Order 11246 (41 CFR 60-1.20(a) and (b), respectively). However, the 
statement

[[Page 50091]]

authorizing OFCCP to conduct compliance reviews in proposed paragraph 
(a), which is included for the sake of clarity, is a new provision and 
is not contained in the Executive Order regulations. Proposed 
paragraphs (a) and (b) are consistent with OFCCP's existing authority 
under Section 4212 and Sec. 60-250.25 of the current regulations, and 
with current OFCCP practice.
    Proposed paragraphs (a) and (b) are generally consistent with the 
relevant provisions of the 1980 final rule at Sec. 60-1.20. The final 
rule, however, does not contain an express statement regarding OFCCP's 
authority. Further, in contrast to the proposal, the 1980 final rule, 
in Secs. 60-1.20(a) and (b), discusses various technical internal 
agency procedures regarding the conduct of compliance reviews (e.g., 
noting in paragraph (a) that compliance reviews normally are conducted 
in three stages). Upon further consideration, OFCCP has determined that 
it is unnecessary to incorporate these procedural statements into 
today's proposal.
    Moreover, today's proposal does not adopt the 1980 final rule's 
preaward compliance reviews provision (Sec. 60-1.21), which is 
essentially a modified version of the preaward procedures contained in 
the Executive Order regulations (Sec. 60-1.21(d)). The current Section 
4212 regulations do not contain a similar provision. In substance, the 
1980 final rule would have required that all prospective 
nonconstruction contractors and subcontractors seeking contracts 
exceeding $1 million be subject to a compliance review under the Act 
before the award of the contract. The 1980 final rule also would have 
specified criteria that OFCCP should apply in establishing priorities 
for the conduct of preaward reviews, and would have established 
requirements regarding the clearance of the contract. OFCCP has 
determined not to adopt a preaward compliance review procedure in 
today's proposal because it believes, upon reconsideration, that the 
diversion of necessary resources to support such a compliance 
initiative would unduly impair its ability to effectively conduct other 
compliance activities.
    Paragraph (c) has no parallel in the current regulations. The 
proposal, however, reflects current OFCCP practice.

Section 60-250.61  Complaint Procedures

    Paragraph (a), a provision not paralleled in the current 
regulations, cross-references OFCCP's and EEOC's procedural regulations 
at 41 CFR Part 60-742 which govern the processing of complaints 
cognizable under both Section 503 and the ADA, and specifies that 
complaints filed under Part 60-250 that are cognizable under Section 
503 and the ADA will be processed in accordance with those regulations. 
All other procedural provisions contained in paragraphs (b) through (f) 
of this proposed section shall be applicable with regard to the 
processing of such complaints as well. The procedural regulations 
require, among other things, that OFCCP (acting as EEOC's agent) 
process and resolve complaints of employment discrimination based on 
disability for purposes of the ADA (as well as for Section 503) when 
there is jurisdiction under both statutes. In doing so, OFCCP is 
required to apply legal standards which are consistent with the 
substantive legal standards applied under the ADA. (It should be 
understood that OFCCP has no enforcement authority under the ADA beyond 
that specified in the procedural regulations.) The purpose of the 
proposal is to ensure that an aggrieved individual's rights under the 
ADA are preserved, including the right to file a private lawsuit. 
(Section 4212 does not provide for a private right of action. The 
complaint procedures provide the only means by which an individual may 
seek redress for a violation of the Act.)
    The proposal drops the provision in current Sec. 60-250.25 that the 
Director of OFCCP shall be primarily responsible for the investigation 
of complaints and other matters as necessary to ensure the effective 
enforcement of the Act. The intent of this provision, which was 
included in the regulations prior to the delegation of all compliance 
authority under Section 4212 to OFCCP, was to ensure that OFCCP had 
primary control with regard to the administration of the Act. The 
provision is no longer necessary. The 1980 final rule would have 
established similar provisions in Sec. 60-1.27 to state that the 
Director may assume jurisdiction over any matter when necessary to the 
enforcement of Section 4212, and that the Director may reconsider any 
pending matter under the Act. OFCCP concludes that these provisions are 
unnecessary, and thus declines to incorporate them in today's proposal. 
Further, the provision from the 1980 final rule (Sec. 60-1.48) that 
states that a contractor which has complied with the recommendations or 
orders of OFCCP which it believes to be erroneous may request a hearing 
and review of the alleged erroneous action, is unnecessary and is not 
carried forward. That provision relates to preaward compliance reviews 
(specifically, it is a means by which a contractor can avoid a contract 
``pass over'' while still contesting OFCCP's review findings) and is 
not needed because, as stated above, OFCCP will not be conducting 
preaward reviews under the Act.
    Paragraph (b), which is derived from current Sec. 60-250.26(a), 
specifies that a person may, personally or by an authorized 
representative, file a written complaint alleging an individual or 
class-wide violation of the Act or the regulations within 300 days of 
the alleged violation with OFCCP (at a specified location) or with the 
Veterans' Employment and Training Service (VETS) directly or through 
the Local Veteran's Employment Representative (LVER) or his or her 
designee at the local state employment service office. The provision 
also specifies that such parties will assist veterans in preparing 
complaints and will promptly refer them to the OFCCP. In contrast to 
the proposal, current Sec. 60-250.26(a) provides that an individual may 
file a complaint only with VETS (current Sec. 60-250.26(a) is otherwise 
identical in substance to the proposal with regard to the 
responsibilities of LVERs and the state employment service). OFCCP's 
proposal is based on an amendment to the complaint procedure set out in 
Section 4212(b) by section 509 of the Veterans' Rehabilitation and 
Education Amendments of 1980. Public Law 96-466, 94 Stat. 2207. The 
amendment deleted from Section 4212(b) a provision that specified that 
complaints may be filed with the Veterans' Employment Service and 
promptly referred to the Secretary of Labor, and substituted a 
provision that specifies that complaints may be filed with the 
Secretary, who shall promptly investigate such complaints and take 
appropriate action. The intent of this amendment was to permit the 
Secretary of Labor the flexibility to designate a representative, in 
addition to VETS, to receive complaints directly from aggrieved 
individuals. See H.R. Rep. No. 1154, 96th Cong., 2d Sess. 77 (1980). 
The Department has determined, in view of OFCCP's current role in 
processing complaints, that the agency should act in that capacity. 
(The Secretary previously delegated authority for enforcement of 
Section 4212 to the Department's Employment Standards Administration, 
the parent agency of OFCCP. 52 FR 48466, December 22, 1987.)
    The current regulation requires that the complaint be filed within 
180 days of the alleged violation, and does not indicate the location 
where the complaint should be filed. The proposal adopts a 300-day 
filing deadline, which

[[Page 50092]]

is consistent with the complaint-filing deadline in the Section 503 
final rule. The current provision, unlike the proposal, does not 
specify the office at which the complaint may be filed. The location 
for filing is included to assist the complainant.
    Further, the proposal does not incorporate the internal review 
procedure contained in current Sec. 60-250.26(b) or in the 1980 final 
rule (Sec. 60-250.23(f)). The current regulation provides that, when an 
employee of a contractor files a complaint, and the contractor has an 
internal review procedure, the contractor will be permitted 60 days to 
process the complaint under that procedure. If there is no resolution 
of the matter which is satisfactory to the complainant within 60 days, 
the complaint then is processed by OFCCP. The 1980 final rule would 
have provided that the complaint may be referred to the contractor for 
internal review with the employee's consent. OFCCP has found that the 
current procedure has not been particularly effective in providing 
expeditious and satisfactory complaint resolutions. Therefore, OFCCP 
has decided not to carry forward either a mandatory or voluntary 
complaint referral procedure. Although there is no regulatory 
requirement regarding informal resolution of complaints, OFCCP 
nevertheless strongly encourages parties to attempt to do so whenever 
possible.
    Paragraph (c)(1) specifies the required contents of complaints, and 
generally is consistent with current Sec. 60-250.26(c). In contrast to 
the current regulation, the proposal specifies that the complainant 
must state the pertinent dates concerning the alleged violation (the 
information need only be provided to the best of the complainant's 
recollection). Also, the description of the documentation that the 
individual must submit to show that he or she is a special disabled 
veteran or a veteran of the Vietnam era has been updated (see proposed 
paragraph (b)(1)(iii)). The proposal drops current Sec. 60-250.7, which 
specifies the type of documentation that a complainant must submit 
regarding his or her special disabled status, because it is 
unnecessarily duplicative of proposed paragraph (b)(1)(iii).
    Paragraph (c)(2) establishes new Section 4212 procedures regarding 
third party complaints. The procedures are patterned after the 
analogous provisions of the Section 503 final rule (Sec. 60-
741.61(c)(2)), and the EEOC's procedural regulations applicable to the 
ADA (29 CFR 1601.7(a)). This paragraph specifies that a third party 
complaint need not identify by name the person on whose behalf it is 
filed, although the person filing the complaint shall provide 
identifying information to OFCCP and other information required under 
paragraph (c)(1); and that OFCCP shall verify the authorization of the 
complaint by the person on whose behalf it is made, who may request 
that his or her identity remain confidential. The purpose of these 
provisions is to help prevent retaliation against persons seeking to 
exercise rights protected under the Act by preserving the 
confidentiality of the complaint process while also ensuring both that 
OFCCP has sufficient information to properly investigate the complaint 
and that the complaint is properly authorized. The 1980 final rule 
would have provided (at Sec. 60-250.23(c)) that signed third party 
complaints will be accepted whether or not the third party signing the 
complaint is the authorized representative. Upon reconsideration, OFCCP 
believes that authorization to file a complaint is an appropriate 
requirement.
    Paragraph (d), which establishes procedures for handling a 
complaint which contains insufficient information, is substantially 
identical to current Sec. 60-250.26(d).
    Paragraph (e), which is based on the first sentence of current 
Sec. 60-250.26(e), provides that the Department of Labor shall promptly 
investigate complaints. OFCCP has determined not to incorporate the 
statement contained in the second sentence of the current regulation 
regarding the contents of a complete case record, inasmuch as this is 
primarily an internal procedural matter, and thus need not be a part of 
the regulations.
    Paragraph (f)(1), which states that the complainant and the 
contractor shall be notified where the complaint investigation finds no 
violation or the Deputy Assistant Secretary decides not to refer the 
matter to the Solicitor of Labor for enforcement proceedings against 
the contractor, is consistent with the first sentence of current 
Sec. 60-250.26(g). However, the proposal does not incorporate the final 
sentence of that provision, which states that the complainant may 
request that the Deputy Assistant Secretary review the finding or 
decision. Instead, the paragraph incorporates a provision which 
specifies that the Deputy Assistant Secretary, on his or her own 
initiative, may reconsider the finding or decision. OFCCP has found 
that the existing review procedure has not been productive and has 
therefore determined to drop the procedure.
    Paragraph (f)(2) provides that the Deputy Assistant Secretary will 
review all determinations of no violation that involve complaints that 
are not also cognizable under the ADA. This will help ensure accuracy 
of determinations regarding claims raised by persons who would not have 
an opportunity to seek relief in Federal court. OFCCP believes that the 
proposed review procedure will provide an adequate check on its no 
violation findings and decisions not to initiate proceedings.
    Paragraph (f)(3) sets out notification procedures regarding the 
Deputy Assistant Secretary's reconsideration of investigative findings.
    Paragraph (f)(4), which states that the contractor shall be invited 
to participate in conciliation pursuant to Sec. 60-250.62 where there 
is a finding of violation, is substantially similar to the first 
sentence of current Sec. 60-250.26(g)(2). As discussed immediately 
below, the proposal incorporates (with modification) other portions of 
that section into a separate section on conciliation agreements.

Section 60-250.62  Conciliation Agreements and Letters of Commitment

    The purpose of this section is to conform the Section 4212 
regulatory procedures regarding conciliation agreements and letters of 
commitment to the substance of the parallel procedures contained in the 
Executive Order regulations (41 CFR 60-1.33). Proposed paragraph (a), 
which incorporates without substantive change paragraph (a) of the 
Executive Order regulation, requires OFCCP, where it finds a material 
violation of the Act, to enter into a written agreement with the 
contractor which provides for appropriate remedial action, provided 
that the contractor is willing to do so and OFCCP determines that 
settlement on that basis (rather than referral for potential 
enforcement) is appropriate. The proposal is conceptually similar to 
the corresponding current Section 4212 regulation (Sec. 60-
250.26(g)(2)), but incorporates a number of clarifying changes which 
reflect current OFCCP practice under Section 4212. For instance, 
although the current regulation, like the proposal, provides for the 
use of written settlement agreements under which the contractor shall 
commit to take corrective action, it does not: use the term 
``conciliation agreement''; expressly state that ``make whole 
remedies'' shall be addressed by the agreement; or expressly require 
that OFCCP determine that settlement through such an agreement (rather 
than referral for potential enforcement) is appropriate. The last 
sentence of the proposal, which is derived from the current Section 
4212 regulation,

[[Page 50093]]

provides that the agreement shall specify the date for the completion 
of the needed remedial action, which shall be the earliest date 
possible.
    However, the proposal does not incorporate the provision from the 
current regulation which states that the contractor may be considered 
in compliance on condition that the commitments contained in the 
agreement are kept. Further, the proposal does not incorporate a 
related provision from the 1980 final rule. The 1980 rule, at Sec. 60-
1.20(c), states the taking of corrective actions by the contractor 
pursuant to a conciliation agreement does not preclude OFCCP from 
making future determinations of noncompliance where OFCCP either finds 
that the contractor's actions are not sufficient to achieve compliance, 
or it uncovers violations not previously revealed in an investigation. 
Upon reconsideration, OFCCP concludes that these provisions are 
unnecessary and should not be incorporated into the regulations, 
because the concerns they reflect are addressed by general legal 
principles.
    Paragraph (b), which clarifies the distinction between conciliation 
agreements and letters of commitment, is incorporated without 
substantive change from paragraph (b) of the Executive Order regulation 
(41 CFR 60-1.33(b)).
    The 1980 final rule (at Sec. 60-1.26(a)) is substantially similar 
to proposed paragraph (a), but would have made a number of technical 
revisions that are not reflected in the proposal (e.g., paragraph (c) 
of the final rule clarified when a conciliation agreement becomes 
effective). OFCCP has determined not to incorporate these technical 
revisions, inasmuch as relevant guidance is already provided in OFCCP's 
Federal Contract Compliance Manual.

Section 60-250.63  Violation of Conciliation Agreements and Letters of 
Commitment

    This section, which specifies the required notification and 
enforcement procedures relating to the contractor's violation of a 
conciliation agreement or letter of commitment, is derived from the 
Executive Order regulations (41 CFR 60-1.34), and contains a number of 
clarifying modifications. Most notably, paragraph (a)(4) of the 
proposal contains a clarification that in enforcement proceedings 
related to violation of a conciliation agreement, OFCCP is not required 
to present proof of the underlying violations resolved by the 
agreement. The intent of this provision is to remove any doubt that 
OFCCP need not litigate claims that have already been resolved through 
the agreement. Although the current Section 4212 regulations do not 
contain provisions parallel to the proposal, the proposal reflects 
OFCCP's current practice under the Act.

Section 60-250.64  Show Cause Notices

    This section is substantially identical to Sec. 60-1.28 of the 
Executive Order regulations. It provides that when the Deputy Assistant 
Secretary finds a violation he or she may issue to the contractor a 
notice requiring it to show cause, within 30 days, why enforcement 
proceedings should not be instituted; the provision also states that 
such a notice is not a prerequisite to enforcement proceedings. The 
current Section 4212 regulations do not contain a comparable provision. 
The 1980 final rule (at Sec. 60-1.25) would have incorporated 
considerably more detailed procedures regarding show cause notices than 
are contained in the proposal; for instance, that rule would have 
incorporated specific rules on the issuance of the notice and its 
contents. OFCCP believes that it is more appropriate to incorporate 
such procedures into its Compliance Manual, and has done so.

Section 60-250.65  Enforcement Proceedings

    This section generally conforms the provisions governing Section 
4212 enforcement proceedings to those under the Executive Order 
regulations (Sec. 60-1.26(a)(2)), and reflects OFCCP's long-standing 
practice under the Act. Similar to the Executive Order regulation, 
proposed paragraph (a)(1) provides, in part, that where a violation has 
not been corrected in accordance with applicable conciliation 
procedures, an administrative enforcement proceeding may be instituted 
to enjoin the violations, to seek appropriate make whole relief and to 
impose appropriate sanctions. The current Section 4212 regulations are 
consistent with this part of proposed paragraph (a)(1), but do not 
expressly state what relief will be sought in the proceedings. See 
Secs. 60-250.26(g)(3) and 60-250.28(a) (the contractor shall be 
provided a formal hearing where a violation has not been resolved by 
informal means) and 60-250.29(a) (an opportunity for a formal hearing 
shall be provided where a violation is not resolved informally and a 
hearing is requested or the Director proposes to impose a sanction). 
The above-referenced provisions from the current regulations are 
subsumed within proposed paragraph (a)(1), and therefore are not 
separately adopted by the proposal. The proposal at paragraph (a)(1) 
also differs from the current Section 4212 regulations as well as the 
Executive Order regulation in the following respects: It provides that 
enforcement proceedings also may be instituted where OFCCP determines 
that referral for formal enforcement (rather than settlement) is 
appropriate; and it specifies that the enforcement referral will be 
made to the Solicitor of Labor. Further, paragraph (a)(1) of the 
proposal clarifies that OFCCP may seek relief for aggrieved individuals 
identified either during a compliance review or a complaint 
investigation whether or not such individuals have filed a complaint 
with OFCCP. This clarification responds to an argument that has 
sometimes been raised by contractors that relief under the Act is 
available only to persons who have filed a complaint with OFCCP. OFCCP 
concludes that such a limitation on available relief is clearly 
inconsistent with the Act.
    Finally, paragraph (a)(1) (paralleling the counterpart provision in 
the Section 503 final rule at Sec. 60-741.65(a)(1)), again contrasting 
with both the current Section 4212 regulations and the Executive Order 
regulations, states that interest on back pay shall be compounded 
quarterly at the percentage rate established by the Internal Revenue 
Service for the underpayment of taxes. This provision responds to the 
ruling of the Department of Labor's Assistant Secretary for Employment 
Standards in OFCCP v. Washington Metropolitan Area Transit Authority, 
84-OFC-8 (orders dated August 23 and November 17, 1989) that simple 
interest, rather than compounded interest, should be used in the 
calculation of back pay awards under Section 503. The rationale of that 
ruling is equally applicable to Section 4212. OFCCP had a longstanding 
policy of requiring that interest on back pay awards under Section 4212 
be compounded; such policy is consistent with the case law under Title 
VII of the Civil Rights Act of 1964. OFCCP believes that it must 
reinstate this policy in order to ensure that aggrieved individuals 
obtain ``make whole'' relief.
    Proposed paragraph (a)(2) provides that the Deputy Assistant 
Secretary, in addition to the use of administrative enforcement 
proceedings, may seek appropriate judicial action, including injunctive 
relief, to enforce the contractual provisions set forth in the 
regulations' equal opportunity clause. This provision is substantially 
identical to current Sec. 60-250.28(b).
    The proposal differs substantively from the 1980 final rule's 
enforcement procedures, which appear at Sec. 60-1.29, in that it does 
not incorporate the

[[Page 50094]]

procedures contained in paragraphs (i) and (j) of that section. 
Paragraph (i) of that section provides that the Department may refer 
alleged violations of the Act by financial institutions to an 
appropriate financial regulatory agency, and states that such agency 
may take whatever action it deems appropriate. OFCCP considers this 
provision unnecessary at this time, and therefore does not propose to 
carry it forward. Paragraph (j) states an enforcement policy under 
which the Department will not debar financial institutions from future 
Federal deposit or share insurance, or cancel, terminate or suspend 
existing Federal deposit or share insurance. OFCCP wishes to reassure 
the public that it does not intend to debar or cancel a financial 
institution's deposit or share insurance. This has been OFCCP's long-
standing policy, even in the absence of a regulation mandating that 
result. Indeed, OFCCP has repeatedly stated on the record in litigation 
regarding financial institutions that it does not seek debarment or 
cancellation of deposit and share insurance. OFCCP will maintain that 
policy. Upon reconsideration, however, OFCCP believes that it is 
unnecessary to specify this policy in the regulations. The regulations 
do not generally specify the precise manner in which the agency will 
exercise its enforcement powers with regard to particular types of 
contractors.
    Proposed paragraph (b), which pertains to hearing practice and 
procedure under the Act, is derived from Sec. 60-250.29(b) of the 
current Section 4212 regulations. Proposed paragraph (b)(1), like 
current paragraph (b)(1), provides that hearings conducted under the 
Act shall be governed by the hearing rules applicable to enforcement of 
Executive Order 11246 (41 CFR Part 60-30). Proposed paragraph (b)(1), 
revising current paragraph (b)(1), states that the Rules of Evidence 
set out in the hearing rules applicable to the Department's 
Administrative Law Judges shall also apply to such hearings. These 
rules, which were issued in 1990, are generally applicable to the 
Department's formal adversarial adjudications. In contrast to the 
current regulation, proposed paragraph (b)(1) requires that the 
Department's final administrative order under a Section 4212 case be 
issued within one year from the date of the issuance of the 
Administrative Law Judge's recommended decision, or the submission of 
the parties' exceptions and responses to exceptions to such decision 
(if any), whichever is later. OFCCP believes that this time limit is 
needed in order to ensure that aggrieved individuals obtain expeditious 
relief.
    Proposed paragraph (b)(2), which designates the specific officials 
in the Office of the Solicitor who may file administrative complaints, 
corresponds to the last sentence of current paragraph (b)(1). This 
proposed paragraph incorporates some changes in nomenclature.
    Proposed paragraph (b)(3), which incorporates conforming changes to 
the terminology in the hearing rules for purposes of Part 60-250, is 
substantially identical to current paragraph (b)(2).

Section 60-250.66  Sanctions and Penalties

    Paragraphs (a) and (b), which respectively specify that OFCCP may 
seek to withhold progress payments on a contract or terminate a 
contract to enforce compliance with the Act, are substantially 
identical to current Secs. 60-250.28 (c) and (d). Similarly, proposed 
paragraph (d), which provides that the contractor shall be provided an 
opportunity for a formal hearing before the imposition of sanctions or 
penalties, is substantially similar to current Sec. 60-250.29(a).
    Proposed paragraph (c) authorizes OFCCP to impose fixed-term 
debarments. However, proposed paragraph (c)--which provides that a 
contractor may be debarred from future contracts for either a fixed 
period of not less than six months but no more than three years--
contrasts with the current regulations, which expressly permit only 
indefinite-period debarments. In this regard, the current regulations 
(at Sec. 60-250.28(e)) simply establish authority for the imposition of 
debarments, and (at Sec. 60-250.50) provide that a debarred contractor 
may be reinstated as an eligible contractor by demonstrating that it 
has established and will continue to carry out employment practices in 
compliance with the Act. Explicit regulatory authority to impose 
debarment for a minimum fixed-term is necessary to ensure the continued 
future compliance of some contractors. OFCCP wishes to ensure the 
regulated community that it does not intend to seek a fixed term 
debarment for minor, technical violations of the law. (This change is 
consistent with Sec. 60-741.66(c) of the Section 503 final rule.)
    OFCCP believes the fixed-term debarment sanction will be 
particularly effective in encouraging compliance among the limited 
class of recalcitrant contractors who repeatedly break their promises 
of future compliance with respect to affirmative action and 
recordkeeping requirements. Fixed-period debarments will serve as a 
more effective deterrent in these cases than the current practice of 
reinstating the contractor upon its demonstration of compliance. Under 
the current procedure the contractor may be reinstated without 
incurring any economic loss for some violations (e.g., a contractor 
which has failed to develop an AAP can simply do so to be eligible for 
reinstatement, provided that it can demonstrate that it will remain in 
compliance). As discussed below, pursuant to proposed Sec. 60-250.68, a 
contractor debarred for a fixed term will not be automatically 
reinstated upon such a showing. In making his or her determination as 
to whether reinstatement of such a contractor is appropriate under 
proposed Sec. 60-250.68, the Deputy Assistant Secretary shall 
additionally consider, among other factors, the severity of the 
violation which resulted in the debarment and whether the contractor's 
reinstatement would impede the effective enforcement of the Act or this 
part.
    The proposal drops the provision contained in current Sec. 60-
250.27 that noncompliance with the contractor's affirmative action 
clause obligations is a ground for taking appropriate action for 
noncompliance. This issue is already addressed in proposed Sec. 60-
250.66.

Section 60-250.67  Notification of Agencies

    This proposed section, which provides that OFCCP shall ensure that 
the heads of all agencies are notified of debarments, is substantially 
similar to current Sec. 60-250.30, which requires the Director to 
notify agencies ``of any action for noncompliance taken against a 
contractor.'' However, in contrast to the proposal, current Sec. 60-
250.30 also addresses the granting by a contracting agency of waivers 
in the national interest. This provision is not carried forward, 
because, as discussed above (see discussion regarding proposed Sec. 60-
250.4(b)(1)), OFCCP unilaterally grants such waivers, and no longer 
shares enforcement under Section 4212 with other agencies.
    Moreover, the proposal drops current Sec. 60-250.31, which requires 
the Director to distribute a list of debarred contractors to all 
executive departments and agencies. This function is currently 
performed by the General Services Administration. The 1980 final rule 
would have required (at Sec. 60-1.30) that OFCCP promptly notify the 
Comptroller General of the United States regarding contract 
cancellations and debarments. OFCCP, which currently follows this 
practice, does not believe it necessary to

[[Page 50095]]

incorporate this provision into the regulations. Further, that section 
of the final rule would have required that OFCCP take appropriate steps 
to notify prime contractors of the debarred contractor's ineligibility 
for subcontracts. Upon reconsideration, OFCCP concludes that the 
incidence of prime contractors contracting with debarred firms is not 
significant enough to justify the administrative burdens this provision 
would place on the agency.

Section 60-250.68  Reinstatement of Ineligible Contractors

    This section provides that a contractor that is debarred for an 
indefinite period may request reinstatement at any time, and that a 
contractor debarred for a fixed period may request reinstatement after 
six months. In the case of either type of debarment the contractor is 
required to show that it has established and will carry out employment 
practices in compliance with the Act. Additionally, in determining 
whether reinstatement is appropriate for a contractor that has been 
debarred for a fixed period, the Deputy Assistant Secretary also shall 
consider such factors as the severity of the violation which resulted 
in the debarment, the contractor's attitude towards compliance, the 
contractor's past compliance history and whether the contractor's 
reinstatement would impede the effective enforcement of the Act or this 
part. The section is derived from current Sec. 60-250.50. The current 
regulation, in contrast to the proposal, does not address fixed-period 
debarments and does not provide the contractor an opportunity to appeal 
a denial of its request for reinstatement.
    As discussed above, OFCCP believes that the use of fixed-term 
debarments is necessary to provide an effective deterrent with regard 
to aggravated or willful violations, including failure to make or 
maintain records (see discussion regarding proposed Sec. 60-250.66(c)). 
Thus, contractors that have committed such violations should not be 
reinstated based merely upon a showing that they are and will remain in 
compliance, as in the case of indefinite-term debarments. Rather, in 
addition to this showing, the Deputy Assistant Secretary's 
determination should be made on a case-by-case basis after 
consideration of the additional specified factors. OFCCP believes that 
imposing a mandatory six-month waiting period during which the 
reinstatement request may not be submitted will help deter such 
violations. The proposed appeal procedure in paragraph (b) for 
contractors whose reinstatement requests are denied is intended to 
ensure that contractors' requests receive full and fair consideration. 
The proposal adopts some of the 1980 final rule's reinstatement 
procedures (Sec. 60-1.31). For instance, like the final rule, the 
proposal specifies that the contractor may be subject to a compliance 
review before it is reinstated, and that the matter may be referred to 
an Administrative Law Judge before a final determination is made on the 
reinstatement request. In contrast to the final rule, the proposal 
permits the contractor to submit a petition to the Secretary appealing 
a denial of a reinstatement request. The final rule would have provided 
for a review by the Secretary (pursuant to the post-hearing procedures 
set out in 41 CFR Part 60-30) of the Director's denial of a request 
only where the Director decided to remand the matter to an 
Administrative Law Judge. The final rule would have established some 
additional detailed procedures that OFCCP, upon reconsideration, does 
not believe need be incorporated into the regulations.

Section 60-250.69  Intimidation and Interference

    Currently, the regulations provide (at Sec. 60-250.51) that the 
sanctions and penalties contained therein may be exercised against any 
contractor which fails to ensure that no person intimidates, threatens, 
coerces or discriminates against any individual because he or she files 
a complaint or otherwise participates in compliance activity under the 
Act. The proposal contains a similar prohibition but specifies that the 
contractor itself shall not engage in such activities and that the 
contractor shall ensure that all persons under its control do not do 
so, that the prohibition applies with respect to participation in 
compliance activities under a Federal, state or local law which 
requires equal opportunity for special disabled veterans and Vietnam 
era veterans and that harassment is also prohibited. Moreover, the 
proposal states that the prohibition applies with respect to an 
individual's opposition to any practice that is unlawful under the Act 
or similar Federal, state or local laws, and to the exercise of any 
other right protected by the Act. The proposal is substantially similar 
to the counterpart provision in the 1980 final rule (Sec. 60-1.28). The 
intent of the proposal is to incorporate strengthened provisions that 
ensure that individuals fully enjoy all rights protected under the Act, 
the regulations and comparable Federal, state and local laws without 
the threat of harassment or intimidation. OFCCP may seek the same range 
of sanctions for a violation of this provision (such as debarment and/
or back pay) as it does for other violations of the Act.

Section 60-250.70  Disputed Matters Related to Compliance With the Act

    This section clarifies that the regulations govern disputes 
relative to the compliance under the Act but not other incidental 
disputes such as those relating to contract costs connected with the 
contractor's efforts to comply with the Act. The proposal is 
substantially identical to current Sec. 60-250.32.

Subpart E--Ancillary Matters

Section 60-250.80  Responsibilities of State Employment Service Offices

    This section is substantially identical to current Sec. 60-250.33 
(with the addition of a few editorial changes).

Section 60-250.81  Recordkeeping

    Under the current regulations (Sec. 60-250.52(a)), contractors are 
required to maintain for one year records relating to complaints and 
actions taken by the contractor in connection with such complaints. 
Paragraph (a) of the proposal revises this obligation in several ways: 
first it makes the record retention obligation applicable to any 
personnel or employment record made or kept by the contractor, and sets 
out a listing of examples of the types of records that must be 
retained. This provision conforms to the analogous recordkeeping 
requirement under the Section 503 (Sec. 60-741.81(a)), which, in turn, 
is consistent with the requirements under Title VII of the Civil Rights 
Act of 1964. (Thus, most contractors are already required to comply 
with this requirement.) OFCCP proposes this change because it believes 
that to monitor and enforce the Act effectively it must be assured that 
it can obtain all of the contractor's personnel records (not only those 
involving complaints). Access to these records will better enable OFCCP 
to effectively investigate compliance with the Act by, for instance, 
allowing it to evaluate the contractor's employment policies and 
practices with respect to applicants and employees who are special 
disabled veterans or veterans of the Vietnam era in comparison to 
policies and practices that have been applied to similarly situated 
applicants and employees who are not covered veterans.
    Second, proposed paragraph (a) extends the required record 
retention period from one to two years for larger contractors. In this 
context, larger contractors are those that have 150 or more employees 
and a Government

[[Page 50096]]

contract of $150,000 or more. This approach is consistent with the 
Section 503 final rule. OFCCP believes that a two-year period provides 
greater assurance that relevant records will be available during 
compliance reviews (during which the agency generally reviews 
employment practices and activity going back two years).
    Third, proposed paragraph (a) requires that when a contractor has 
been notified that a complaint has been filed, that a compliance review 
has been initiated or that an enforcement action has been commenced, 
the contractor shall preserve all relevant personnel records until the 
final disposition of the action. This provision conforms to the 
corresponding recordkeeping requirement applicable to the Section 503 
final rule, which, in turn, is based on the requirement applicable to 
the ADA and Title VII. The purpose of this requirement is obvious--to 
ensure that OFCCP can obtain all relevant documents during a compliance 
investigation or enforcement action.
    Proposed paragraph (b), which is generally consistent with current 
Sec. 60-250.52(b), provides that the failure to preserve the records 
required by proposed paragraph (a) constitutes noncompliance with the 
Act. Additionally, proposed paragraph (b), in a provision that is not 
paralleled in the current regulations, states that where a contractor 
has destroyed or failed to preserve required records, there may be a 
presumption that such records would have been unfavorable to the 
contractor. Paragraph (b) further specifies, however, that the 
presumption shall not apply where the contractor shows that the 
destruction or failure to preserve records results from circumstances 
that are outside of its control. This provision is consistent with the 
corresponding provision in the Section 503 final rule (Sec. 60-
741.81(b)), which is consistent with Sec. 632.3(b)(2)(ii) of EEOC's 
Compliance Manual. The intent of this provision is to deter contractors 
from deliberate attempts to frustrate OFCCP's compliance monitoring and 
enforcement efforts by destroying or failing to preserve records. The 
adverse inference established by paragraph (b) would be used by OFCCP 
in both investigations of compliance and in enforcement litigation.
    Proposed paragraph (c), which has no parallel in the current 
regulations, clarifies that the contractor is obligated to preserve 
only those records which are created or kept on or after the effective 
date of the regulations. The record retention requirements under the 
current regulations remain in effect until this proposal becomes 
effective in final form.

Section 60-250.82  Access to Records

    This section provides that the contractor shall permit OFCCP access 
to its place of business in order to conduct investigations and to 
inspect and copy relevant records, and that the information obtained in 
this manner shall be used only in connection with the administration of 
the Act. The proposal is generally consistent with the current 
corresponding Section 4212 regulation (Sec. 60-250.53). For the sake of 
consistency and clarity, this section tracks the language in the 
parallel Executive Order regulation (41 CFR 60-1.43).

Section 60-250.83  Labor Organizations and Recruiting and Training 
Agencies

    The proposal provides at paragraph (a) that when a revision of a 
collective bargaining agreement may be required to conform it to the 
requirements of the Section 4212 regulations, labor organizations which 
are parties to such an agreement shall be given adequate opportunity to 
present their views to OFCCP. Paragraph (b) states that OFCCP shall 
make efforts to cause labor organizations involved with work performed 
by a contractor to cooperate in the implementation of the Act. The 
proposal is substantially identical to the current regulations at 
Sec. 60-250.9. Similarly, proposed paragraphs (a) and (b) are 
substantially identical to Secs. 60-1.9(c)(2) and (a), respectively, of 
the 1980 final rule. However, the 1980 final rule would have 
implemented some additional provisions: Sec. 60-1.9(b) of that rule 
states that the Director of OFCCP may hold hearings with regard to the 
practices and policies of labor organizations to ensure compliance with 
Section 4212; Sec. 60-1.9(c)(1) provides that collective bargaining 
representatives shall be given written notice of any on-site compliance 
investigations; and Sec. 60-1.9(d) states that the Director may notify 
any Federal, state or local agency of his or her conclusions with 
respect to any labor organization's failure to cooperate with the 
implementation of the Act, and that he or she may notify appropriate 
Federal agencies regarding violations of Federal law. Upon further 
consideration, OFCCP does not believe these additional provisions need 
be incorporated into the regulations.

Section 60-250.84  Rulings and Interpretations

    The proposal, which provides that rulings and interpretations of 
the Act and the regulations shall be made by the Deputy Assistant 
Secretary, contrasts with the corresponding current regulation 
(Sec. 60-250.54), which provides that the Secretary or his or her 
designee shall perform this function. The proposal designates the 
Deputy Assistant Secretary as the responsible official in order to 
reflect current OFCCP practice.

Section 60-250.85  Effective Date

    The first sentence of this provision specifies when the regulations 
take effect, and that they do not apply retroactively. The second 
sentence is substantially identical to the last sentence of current 
Sec. 60-250.5(a) (Applicability of the affirmative action program 
requirement), but it clarifies that contractors presently holding 
Government contracts are required to update their affirmative action 
programs within 120 days of the effective date of these regulations 
only to the extent necessary to comply with the changes made by the 
final rule.

Appendix A--Guidelines on a Contractor's Duty to Provide Reasonable 
Accommodation

    It has been OFCCP's experience that one of the most difficult 
issues that contractors encounter in attempting to comply with Section 
4212 relates to the duty to provide reasonable accommodation for 
special disabled veterans, and that the absence of readily accessible 
clear and concise guidance on the subject has contributed to this 
difficulty. The intent of proposed Appendix A, which parallels a 
corresponding appendix contained in the Section 503 final rule, is to 
provide such guidance. The current regulations contain no comparable 
guidance. As stated at the end of the appendix, it is largely derived 
from and is consistent with the discussion on the duty to provide 
reasonable accommodation contained in the appendix to the EEOC 
regulations. (The second paragraph of the proposed appendix, however, 
contains a discussion regarding the contractor's affirmative action 
duties pursuant to proposed Secs. 60-250.42 and 60-250.44(d), which is 
not paralleled in the EEOC appendix.)
    For the sake of brevity, proposed Appendix A condenses and 
summarizes the most significant portions of the EEOC appendix regarding 
the reasonable accommodation duty. The relevant portions of the EEOC 
appendix are those that relate to the failure to make reasonable 
accommodation (Sec. 1630.9) and to the definitions for ``reasonable 
accommodation'' (Sec. 1630.2(o)) and ``undue hardship''

[[Page 50097]]

(Sec. 1630.2(p)). Additionally, some guidance in the proposed appendix 
is based on a discussion from the ADA's legislative history that is not 
incorporated into the EEOC's appendix. The discussion provides some 
practical examples of methods that may be used to carry out the 
reasonable accommodation duty (e.g., resources to consult to obtain 
assistance and specific types of accommodations for particular 
disabilities). Moreover, the proposed appendix (in the next to last 
paragraph) provides specific guidance on the issue of providing 
reasonable accommodation with respect to the employment application 
process; this discussion is drawn from Appendix C of OFCCP's December 
30, 1980, proposed rule (45 FR 86214).

Appendix B--Sample Invitation to Self-Identify

    On May 1, 1996, OFCCP published (61 FR 19366) an interim rule 
amending Appendix A of the current regulations relating to invitations 
to self-identify. The purpose of the interim rule was to conform the 
invitation to self-identify requirement under VEVRAA with the 
requirement contained in the new Section 503 final rule (61 FR 19336).
    This appendix is patterned after the VEVRAA interim rule and the 
Section 503 final rule. However, this proposal also includes in the 
sample invitation definitions for the terms ``special disabled 
veteran'' and ``veteran of the Vietnam era.''

Appendix C--Review of Personnel Processes

    Proposed Appendix C sets out an example of an appropriate set of 
procedures that contractors may use to facilitate a review by the 
contractor and the Government of the contractor's implementation of its 
duty to evaluate its personnel processes pursuant to proposed Sec. 60-
250.44(b). (Section 60-250.44(b) requires the contractor to ensure that 
its personnel processes provide for careful consideration of the 
qualifications of applicants and employees who are known to be special 
disabled veterans or veterans of the Vietnam era for employment 
opportunities.) This appendix is generally consistent with current 
Appendix B. However, the proposal drops a provision contained in the 
current appendix (paragraph 3) that requires, in cases where an 
applicant or employee who is a special disabled veteran or veteran of 
the Vietnam era is rejected for an employment opportunity, that the 
contractor append to the individual's application or personnel form a 
statement comparing the qualifications of the rejected individual with 
those of the person selected for the opportunity. OFCCP proposes to 
omit this requirement because it has not provided sufficient assistance 
to OFCCP in its enforcement and monitoring efforts under the Act to 
justify the continued imposition of this fairly significant burden on 
contractors.

Regulatory Procedures

Executive Order 12866

    The Department is issuing this proposed rule in conformance with 
Executive Order 12866. This proposal has been determined not to be 
significant for purposes of Executive Order 12866 and therefore need 
not be reviewed by OMB. This proposal does not meet the criteria of 
Section 3(f)(1) of Executive Order 12866 and therefore the information 
enumerated in Section 6(a)(3)(C) of that Order is not required.
    This conclusion is based on the fact that this proposed rule does 
not substantively change the existing obligation of Federal contractors 
to apply a policy of nondiscrimination and affirmative action in their 
employment of qualified special disabled veterans and veterans of the 
Vietnam era. For instance, although the rule generally conforms the 
existing Section 4212 regulations' nondiscrimination provisions to the 
Section 503 final rule published by the OFCCP, it does not 
significantly alter the substance of the existing nondiscrimination 
provisions.

Regulatory Flexibility Act

    The proposed rule, if promulgated in final, will clarify existing 
requirements for Federal contractors. In view of this fact and because 
the proposed rule does not substantively change existing obligations 
for Federal contractors, we certify that the rule will not have a 
significant economic impact on a substantial number of small business 
entities. Therefore, a regulatory flexibility analysis under the 
Regulatory Flexibility Act is not required.

Unfunded Mandates Reform

    Executive Order 12875--This proposed rule, if promulgated in final, 
will not create an unfunded Federal mandate upon any State, local or 
tribal government.
    Unfunded Mandates Reform Act of 1995--This proposed rule, if 
promulgated in final, will not include any Federal mandate that may 
result in increased expenditures by State, local, and tribal 
governments, in the aggregate, of $100 million or more, or increased 
expenditures by the private sector of $100 million or more.

Paperwork Reduction Act

    The proposed rule: extends the current one-year record retention 
period to two years (for larger contractors) and makes the retention 
obligation applicable to a broader range of records; requires that, for 
purposes of confidentiality, medical information obtained regarding the 
medical condition or history of any applicant or employee be collected 
and maintained on separate forms and in separate medical files; and 
requires those contractors who, for affirmative action purposes, choose 
to invite applicants and employees to identify themselves as special 
disabled veterans or veterans of the Vietnam era to maintain a separate 
file on such applicants and employees. The recordkeeping provisions of 
this proposed rule are consistent with those contained in the Section 
503 final rule. Therefore, although the recordkeeping provisions are 
more expansive than those in the current VEVRAA regulations, they do 
not result in increased recordkeeping burdens. Information collection 
under the Section 503 regulations, and under the VEVRAA regulations, is 
covered by OMB control number 1215-0072.

List of Subjects in 41 CFR Part 60-250

    Administrative practice and procedure, Civil rights, Employment, 
Equal employment opportunity, Government contracts, Government 
procurement, Individuals with disabilities, Investigations, Reporting 
and recordkeeping requirements, and Veterans.

    Signed at Washington, D.C., this 23rd day of August, 1996.
Robert B. Reich,
Secretary of Labor.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.

    Accordingly, with respect to the rule amending 41 CFR Chapter 60 
published on December 30, 1980 (45 FR 86216), which was delayed 
indefinitely at 46 FR 42865, the revision of Part 60-250 is proposed to 
be withdrawn, and in Parts 60-1 and 60-30, all references to Section 
402 of the Vietnam Era Veterans' Readjustment Assistance Act are 
proposed to be withdrawn; and, under authority of 38 U.S.C. 4212, Title 
41 of the Code of Federal Regulations, Chapter 60 is proposed to be 
amended as follows:
    Part 60-250 is revised to read as follows:

[[Page 50098]]

PART 60-250--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS 
OF CONTRACTORS AND SUBCONTRACTORS REGARDING SPECIAL DISABLED 
VETERANS AND VETERANS OF THE VIETNAM ERA

Subpart A--Preliminary Matters, Equal Opportunity Clause

Sec.
60-250.1  Purpose, applicability and construction.
60-250.2  Definitions.
60-250.3  Exceptions to the definitions of ``special disabled 
veteran'' and ``qualified special disabled veteran.''
60-250.4  Coverage and waivers.
60-250.5  Equal opportunity clause.

Subpart B--Discrimination Prohibited

60-250.20  Covered employment activities.
60-250.21  Prohibitions.
60-250.22  Direct threat defense.
60-250.23  Medical examinations and inquiries.
60-250.24  Drugs and alcohol.
60-250.25  Health insurance, life insurance and other benefit plans.

Subpart C--Affirmative Action Program

60-250.40  Applicability of the affirmative action program 
requirement.
60-250.41  Availability of affirmative action program.
60-250.42  Invitation to self-identify.
60-250.43  Affirmative action policy.
60-250.44  Required contents of affirmative action programs.

Subpart D--General Enforcement and Complaint Procedures

60-250.60  Compliance reviews.
60-250.61  Complaint procedures.
60-250.62  Conciliation agreements and letters of commitment.
60-250.63  Violation of conciliation agreements and letters of 
commitment.
60-250.64  Show cause notices.
60-250.65  Enforcement proceedings.
60-250.66  Sanctions and penalties.
60-250.67  Notification of agencies.
60-250.68  Reinstatement of ineligible contractors.
60-250.69  Intimidation and interference.
60-250.70  Disputed matters related to compliance with the Act.

Subpart E--Ancillary Matters

60-250.80  Responsibilities of state employment service offices.
60-250.81  Recordkeeping.
60-250.82  Access to records.
60-250.83  Labor organizations and recruiting and training agencies.
60-250.84  Rulings and interpretations.
60-250.85  Effective date.
Appendix A to Part 60-250--Guidelines on a Contractor's Duty To 
Provide Reasonable Accommodation
Appendix B to Part 60-250--Sample Invitation To Self-Identify
Appendix C to Part 60-250--Review of Personnel Processes

    Authority: 29 U.S.C 793; 38 U.S.C. 4211 and 4212; E.O. 11758 (3 
CFR, 1971-1975 Comp., p. 841).

Subpart A--Preliminary Matters, Equal Opportunity Clause


Sec. 60-250.1   Purpose, applicability and construction.

    (a) Purpose. The purpose of the regulations in this part is to set 
forth the standards for compliance with the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended (38 U.S.C. 4212, or 
VEVRAA), which requires Government contractors and subcontractors to 
take affirmative action to employ and advance in employment qualified 
special disabled veterans and veterans of the Vietnam era.
    (b) Applicability. This part applies to all Government contracts 
and subcontracts of $10,000 or more for the purchase, sale or use of 
personal property or nonpersonal services (including construction): 
Provided, That subpart C of this part applies only as described in 
Sec. 60-250.40(a). Compliance by the contractor with the provisions of 
this part will not necessarily determine its compliance with other 
statutes, and compliance with other statutes will not necessarily 
determine its compliance with this part.
    (c) Construction.--(1) In general. The Interpretive Guidance on 
Title I of the Americans with Disabilities Act (ADA) (42 U.S.C. 12101 
et seq.) set out as an appendix to 29 CFR Part 1630 issued pursuant to 
Title I may be relied upon for guidance in interpreting the parallel 
provisions of this part.
    (2) Relationship to other laws. This part does not invalidate or 
limit the remedies, rights, and procedures under any Federal law or the 
law of any state or political subdivision that provides greater or 
equal protection for the rights of special disabled veterans or 
veterans of the Vietnam era as compared to the protection afforded by 
this part. It may be a defense to a charge of violation of this part 
that a challenged action is required or necessitated by another Federal 
law or regulation, or that another Federal law or regulation prohibits 
an action (including the provision of a particular reasonable 
accommodation) that would otherwise be required by this part.


Sec. 60-250.2   Definitions.

    (a) Act means the Vietnam Era Veterans' Readjustment Assistance Act 
of 1974, as amended, 38 U.S.C. 4212.
    (b) Equal opportunity clause means the contract provisions set 
forth in Sec. 60-250.5, ``Equal opportunity clause.''
    (c) Secretary means the Secretary of Labor, United States 
Department of Labor, or his or her designee.
    (d) Deputy Assistant Secretary means the Deputy Assistant Secretary 
for Federal Contract Compliance of the United States Department of 
Labor, or his or her designee.
    (e) Government means the Government of the United States of 
America.
    (f) United States, as used herein, shall include the several 
States, the District of Columbia, the Virgin Islands, the Commonwealth 
of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern 
Mariana Islands, and Wake Island.
    (g) Recruiting and training agency means any person who refers 
workers to any contractor, or who provides or supervises apprenticeship 
or training for employment by any contractor.
    (h) Contract means any Government contract or subcontract.
    (i) Government contract means any agreement or modification thereof 
between any contracting agency and any person for the purchase, sale or 
use of personal property or nonpersonal services (including 
construction). The term Government contract does not include agreements 
in which the parties stand in the relationship of employer and 
employee, and federally assisted contracts.
    (1) Modification means any alteration in the terms and conditions 
of a contract, including supplemental agreements, amendments and 
extensions.
    (2) Contracting agency means any department, agency, establishment 
or instrumentality of the United States, including any wholly owned 
Government corporation, which enters into contracts.
    (3) Person, as used in paragraphs (i) and (l) of this section, 
means any natural person, corporation, partnership or joint venture, 
unincorporated association, state or local government, and any agency, 
instrumentality, or subdivision of such a government.
    (4) Nonpersonal services, as used in paragraphs (i) and (l) of this 
section, includes, but is not limited to, the following: Utility, 
construction, transportation, research, insurance, and fund depository.
    (5) Construction, as used in paragraphs (i) and (l) of this 
section, means the construction, rehabilitation, alteration, 
conversion, extension, demolition, or repair of buildings, highways, or 
other changes or improvements to real property, including facilities 
providing utility services. The term also includes the

[[Page 50099]]

supervision, inspection, and other on-site functions incidental to the 
actual construction.
    (6) Personal property, as used in paragraphs (i) and (l) of this 
section, includes supplies and contracts for the use of real property 
(such as lease arrangements), unless the contract for the use of real 
property itself constitutes real property (such as easements).
    (j) Contractor means, unless otherwise indicated, a prime 
contractor or subcontractor holding a contract of $10,000 or more.
    (k) Prime contractor means any person holding a contract of $10,000 
or more, and, for the purposes of subpart D of this part, ``General 
Enforcement and Complaint Procedures,'' includes any person who has 
held a contract subject to the Act.
    (l) Subcontract means any agreement or arrangement between a 
contractor and any person (in which the parties do not stand in the 
relationship of an employer and an employee):
    (1) For the purchase, sale or use of personal property or 
nonpersonal services (including construction) which, in whole or in 
part, is necessary to the performance of any one or more contracts; or
    (2) Under which any portion of the contractor's obligation under 
any one or more contracts is performed, undertaken, or assumed.
    (m) Subcontractor means any person holding a subcontract of $10,000 
or more and, for the purposes of subpart D of this part, ``General 
Enforcement and Complaint Procedures,'' any person who has held a 
subcontract subject to the Act.
    (n)(1) Special Disabled Veteran means:
    (i) A veteran who is entitled to compensation (or who but for the 
receipt of military retired pay would be entitled to compensation) 
under laws administered by the Department of Veterans Affairs for a 
disability:
    (A) Rated at 30 percent or more; or
    (B) Rated at 10 or 20 percent in the case of a veteran who has been 
determined under 38 U.S.C. 3106 to have a serious employment handicap; 
or
    (ii) A person who was discharged or released from active duty 
because of a service-connected disability.
    (2) Serious employment handicap, as used in paragraph (n)(1) of 
this section, means a significant impairment of a veteran's ability to 
prepare for, obtain, or retain employment consistent with such 
veteran's abilities, aptitudes and interests.
    (o)(1) Qualified special disabled veteran means a special disabled 
veteran who satisfies the requisite skill, experience, education and 
other job-related requirements of the employment position such veteran 
holds or desires, and who, with or without reasonable accommodation, 
can perform the essential functions of such position.
    (2) See Sec. 60-250.3 for exceptions to the definition in paragraph 
(o)(1) of this section.
    (p) Veteran of the Vietnam era means a person who:
    (1) Served on active duty for a period of more than 180 days, any 
part of which occurred between August 5, 1964, and May 7, 1975, and was 
discharged or released therefrom with other than a dishonorable 
discharge; or
    (2) Was discharged or released from active duty for a service-
connected disability if any part of such active duty was performed 
between August 5, 1964, and May 7, 1975.
    (q) Essential functions--(1) In general. The term essential 
functions means fundamental job duties of the employment position the 
special disabled veteran holds or desires. The term essential functions 
does not include the marginal functions of the position.
    (2) A job function may be considered essential for any of several 
reasons, including but not limited to the following:
    (i) The function may be essential because the reason the position 
exists is to perform that function;
    (ii) The function may be essential because of the limited number of 
employees available among whom the performance of that job function can 
be distributed; and/or
    (iii) The function may be highly specialized so that the incumbent 
in the position is hired for his or her expertise or ability to perform 
the particular function.
    (3) Evidence of whether a particular function is essential 
includes, but is not limited to:
    (i) The contractor's judgment as to which functions are essential;
    (ii) Written job descriptions prepared before advertising or 
interviewing applicants for the job;
    (iii) The amount of time spent on the job performing the function;
    (iv) The consequences of not requiring the incumbent to perform the 
function;
    (v) The terms of a collective bargaining agreement;
    (vi) The work experience of past incumbents in the job; and/or
    (vii) The current work experience of incumbents in similar jobs.
    (r) Reasonable accommodation. (1) The term reasonable accommodation 
means:
    (i) Modifications or adjustments to a job application process that 
enable a qualified applicant who is a special disabled veteran to be 
considered for the position such applicant desires; 1 or
---------------------------------------------------------------------------

    \1\ A contractor's duty to provide a reasonable accommodation 
with respect to applicants who are special disabled veterans is not 
limited to those who ultimately demonstrate that they are qualified 
to perform the job in issue. Special disabled veteran applicants 
must be provided a reasonable accommodation with respect to the 
application process if they are qualified with respect to that 
process (e.g., if they present themselves at the correct location 
and time to fill out an application).
---------------------------------------------------------------------------

    (ii) Modifications or adjustments to the work environment, or to 
the manner or circumstances under which the position held or desired is 
customarily performed, that enable a qualified special disabled veteran 
to perform the essential functions of that position; or
    (iii) Modifications or adjustments that enable the contractor's 
employee who is a special disabled veteran to enjoy equal benefits and 
privileges of employment as are enjoyed by the contractor's other 
similarly situated employees who are not special disabled veterans.
    (2) Reasonable accommodation may include but is not limited to:
    (i) Making existing facilities used by employees readily accessible 
to and usable by special disabled veterans; and
    (ii) Job restructuring; part-time or modified work schedules; 
reassignment to a vacant position; acquisition or modifications of 
equipment or devices; appropriate adjustment or modifications of 
examinations, training materials, or policies; the provision of 
qualified readers or interpreters; and other similar accommodations for 
special disabled veterans.
    (3) To determine the appropriate reasonable accommodation it may be 
necessary for the contractor to initiate an informal, interactive 
process with the qualified special disabled veteran in need of the 
accommodation.2 This process should identify the precise 
limitations resulting from the disability and potential reasonable 
accommodations that could overcome those limitations. (Appendix A of 
this part provides guidance on a contractor's duty to provide 
reasonable accommodation.)
---------------------------------------------------------------------------

    \2\ Contractors must engage in such an interactive process with 
a special disabled veteran, whether or not a reasonable 
accommodation ultimately is identified that will make the person a 
qualified individual. Contractors must engage in the interactive 
process because, until they have done so, they may be unable to 
determine whether a reasonable accommodation exists that will result 
in the person being qualified.
---------------------------------------------------------------------------

    (s) Undue hardship.--(1) In general. Undue hardship means, with 
respect to the provision of an accommodation, significant difficulty or 
expense incurred by the contractor, when considered in light of the 
factors set forth in paragraph (s)(2) of this section.

[[Page 50100]]

    (2) Factors to be considered. In determining whether an 
accommodation would impose an undue hardship on the contractor, factors 
to be considered include:
    (i) The nature and net cost of the accommodation needed, taking 
into consideration the availability of tax credits and deductions, and/
or outside funding;
    (ii) The overall financial resources of the facility or facilities 
involved in the provision of the reasonable accommodation, the number 
of persons employed at such facility, and the effect on expenses and 
resources;
    (iii) The overall financial resources of the contractor, the 
overall size of the business of the contractor with respect to the 
number of its employees, and the number, type and location of its 
facilities;
    (iv) The type of operation or operations of the contractor, 
including the composition, structure and functions of the work force of 
such contractor, and the geographic separateness and administrative or 
fiscal relationship of the facility or facilities in question to the 
contractor; and
    (v) The impact of the accommodation upon the operation of the 
facility, including the impact on the ability of other employees to 
perform their duties and the impact on the facility's ability to 
conduct business.
    (t) Qualification standards means the personal and professional 
attributes including the skill, experience, education, physical, 
medical, safety and other requirements established by the contractor as 
requirements which an individual must meet in order to be eligible for 
the position held or desired.
    (u) Direct threat means a significant risk of substantial harm to 
the health or safety of the individual or others that cannot be 
eliminated or reduced by reasonable accommodation. The determination 
that a special disabled veteran poses a direct threat shall be based on 
an individualized assessment of the individual's present ability to 
perform safely the essential functions of the job. This assessment 
shall be based on a reasonable medical judgment that relies on the most 
current medical knowledge and/or on the best available objective 
evidence. In determining whether an individual would pose a direct 
threat, the factors to be considered include:
    (1) The duration of the risk;
    (2) The nature and severity of the potential harm;
    (3) The likelihood that the potential harm will occur; and
    (4) The imminence of the potential harm.


Sec. 60-250.3  Exceptions to the definition of ``special disabled 
veteran'' and ``qualified special disabled veteran.''

    (a) Alcoholics--(1) In general. As used in this part, the terms 
special disabled veteran and qualified special disabled veteran do not 
include an individual who is an alcoholic whose current use of alcohol 
prevents such individual from performing the essential functions of the 
employment position such individual holds or desires or whose 
employment, by reason of such current alcohol abuse, would constitute a 
direct threat to property or to the health or safety of the individual 
or others.
    (2) Duty to provide reasonable accommodation. Nothing in paragraph 
(a)(1) of this section shall relieve the contractor of its obligation 
to provide a reasonable accommodation for an individual described in 
paragraph (a)(1) of this section when such an accommodation will enable 
the individual to perform the essential functions of the employment 
position such individual holds or desires, or when the accommodation 
will eliminate or reduce the direct threat to property or the health or 
safety of the individual or others posed by such individual, provided 
that such individual satisfies the requisite skill, experience, 
education and other job-related requirements of such position.
    (b) Contagious disease or infection--(1) In general. The terms 
special disabled veteran and qualified special disabled veteran do not 
include an individual who has a currently contagious disease or 
infection and who, by reason of such disease or infection, would 
constitute a direct threat to the health or safety of the individual or 
others or who, by reason of the currently contagious disease or 
infection, is unable to perform the essential functions of the 
employment position such individual holds or desires.
    (2) Duty to provide reasonable accommodation. Nothing in paragraph 
(b)(1) of this section shall relieve the contractor of its obligation 
to provide a reasonable accommodation for an individual described in 
paragraph (b)(1) of this section when such an accommodation will enable 
the individual to perform the essential functions of the employment 
position such individual holds or desires, or when the accommodation 
will eliminate or reduce the direct threat to the health or safety of 
the individual or others posed by such individual, provided that such 
individual satisfies the requisite skill, experience, education and 
other job-related requirements of such position.


Sec. 60-250.4  Coverage and waivers.

    (a) General--(1) Contracts and subcontracts of $10,000 or more. 
Contracts and subcontracts of $10,000 or more, are covered by this 
part. No contracting agency or contractor shall procure supplies or 
services in less than usual quantities to avoid the applicability of 
the equal opportunity clause.
    (2) Contracts for indefinite quantities. With respect to indefinite 
delivery-type contracts (including, but not limited to, open end 
contracts, requirement-type contracts, Federal Supply Schedule 
contracts, ``call-type'' contracts, and purchase notice agreements), 
the equal opportunity clause shall be included unless the contracting 
agency has reason to believe that the amount to be ordered in any year 
under such contract will be less than $10,000. The applicability of the 
equal opportunity clause shall be determined at the time of award for 
the first year, and annually thereafter for succeeding years, if any. 
Notwithstanding the above, the equal opportunity clause shall be 
applied to such contract whenever the amount of a single order is 
$10,000 or more. Once the equal opportunity clause is determined to be 
applicable, the contract shall continue to be subject to such clause 
for its duration, regardless of the amounts ordered, or reasonably 
expected to be ordered in any year.
    (3) Employment activities within the United States. This part 
applies only to employment activities within the United States and not 
to employment activities abroad. The term employment activities within 
the United States includes actual employment within the United States, 
and decisions of the contractor made within the United States 
pertaining to the contractor's applicants and employees who are within 
the United States, regarding employment opportunities abroad (such as 
recruiting and hiring within the United States for employment abroad, 
or transfer of persons employed in the United States to contractor 
establishments abroad).
    (4) Contracts with state or local governments. The requirements of 
the equal opportunity clause in any contract or subcontract with a 
state or local government (or any agency, instrumentality or 
subdivision thereof) shall not be applicable to any agency, 
instrumentality or subdivision of such government which does not 
participate in work on or under the contract or subcontract.
    (b) Waivers--(1) Specific contracts and classes of contracts. The 
Deputy Assistant Secretary may waive the application to any contract of 
the equal

[[Page 50101]]

opportunity clause in whole or part when he or she deems that special 
circumstances in the national interest so require. The Deputy Assistant 
Secretary may also grant such waivers to groups or categories of 
contracts: where it is in the national interest; where it is found 
impracticable to act upon each request individually; and where such 
waiver will substantially contribute to convenience in administration 
of the Act. When a waiver has been granted for any class of contracts, 
the Deputy Assistant Secretary may withdraw the waiver for a specific 
contract or group of contracts to be awarded, when in his or her 
judgment such action is necessary or appropriate to achieve the 
purposes of the Act. The withdrawal shall not apply to contracts 
awarded prior to the withdrawal, except that in procurements entered 
into by formal advertising, or the various forms of restricted formal 
advertising, such withdrawal shall not apply unless the withdrawal is 
made more than 10 calendar days before the date set for the opening of 
the bids.
    (2) National security. Any requirement set forth in the regulations 
of this part shall not apply to any contract whenever the head of the 
contracting agency determines that such contract is essential to the 
national security and that its award without complying with such 
requirements is necessary to the national security. Upon making such a 
determination, the head of the contracting agency will notify the 
Deputy Assistant Secretary in writing within 30 days.
    (3) Facilities not connected with contracts. The Deputy Assistant 
Secretary may waive the requirements of the equal opportunity clause 
with respect to any of a contractor's facilities which he or she finds 
to be in all respects separate and distinct from activities of the 
contractor related to the performance of the contract, provided that he 
or she also finds that such a waiver will not interfere with or impede 
the effectuation of the Act. Such waivers shall be considered only upon 
the request of the contractor.


Sec. 60-250.5  Equal opportunity clause.

    (a) Government contracts. Each contracting agency and each 
contractor shall include the following equal opportunity clause in each 
of its covered Government contracts or subcontracts (and modifications, 
renewals, or extensions thereof if not included in the original 
contract):

Equal Opportunity for Special Disabled Veterans and Veterans of the 
Vietnam Era

    1. The contractor will not discriminate against any employee or 
applicant for employment because he or she is a special disabled 
veteran or veteran of the Vietnam era in regard to any position for 
which the employee or applicant for employment is qualified. The 
contractor agrees to take affirmative action to employ, advance in 
employment and otherwise treat qualified individuals without 
discrimination based on their status as a special disabled veteran 
or veteran of the Vietnam era in all employment practices, including 
the following:
    i. recruitment, advertising, and job application procedures;
    ii. hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff and 
rehiring;
    iii. rates of pay or any other form of compensation and changes 
in compensation;
    iv. job assignments, job classifications, organizational 
structures, position descriptions, lines of progression, and 
seniority lists;
    v. leaves of absence, sick leave, or any other leave;
    vi. fringe benefits available by virtue of employment, whether 
or not administered by the contractor;
    vii. selection and financial support for training, including 
apprenticeship, and on the job training under 38 U.S.C 3687, 
professional meetings, conferences, and other related activities, 
and selection for leaves of absence to pursue training;
    viii. activities sponsored by the contractor including social or 
recreational programs; and
    ix. any other term, condition, or privilege of employment.
    2. The contractor agrees to immediately list all employment 
openings which exist at the time of the execution of this contract 
and those which occur during the performance of this contract, 
including those not generated by this contract and including those 
occurring at an establishment of the contractor other than the one 
wherein the contract is being performed, but excluding those of 
independently operated corporate affiliates, at an appropriate local 
office of the state employment service system wherein the opening 
occurs.
    3. Listing of employment openings with the employment service 
system pursuant to this clause shall be made at least concurrently 
with the use of any other recruitment source or effort and shall 
involve the normal obligations which attach to the placing of a bona 
fide job order, including the acceptance of referrals of veterans 
and nonveterans. The listing of employment openings does not require 
the hiring of any particular job applicants or from any particular 
group of job applicants, and nothing herein is intended to relieve 
the contractor from any requirements in Executive orders or 
regulations regarding nondiscrimination in employment.
    4. Whenever the contractor becomes contractually bound to the 
listing provisions in paragraphs 2 and 3 of this clause, it shall 
advise the employment service system in each state where it has 
establishments of the name and location of each hiring location in 
the state: Provided, That this requirement shall not apply to state 
and local governmental contractors. As long as the contractor is 
contractually bound to these provisions and has so advised the state 
system, there is no need to advise the state system of subsequent 
contracts. The contractor may advise the state system when it is no 
longer bound by this contract clause.
    5. The provisions of paragraphs 2 and 3 of this clause do not 
apply to the listing of employment openings which occur and are 
filled outside of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, and the Virgin Islands.
    6. As used in this clause: (i) All employment openings includes 
all positions except executive and top management, those positions 
that will be filled from within the contractor's organization, and 
positions lasting three days or less. This term includes full-time 
employment, temporary employment of more than three days' duration, 
and part-time employment.
    (ii) Appropriate local office of the state employment service 
system means the local office of the Federal-state national system 
of public employment offices with assigned responsibility for 
serving the area where the employment opening is to be filled, 
including the District of Columbia, Guam, the Commonwealth of Puerto 
Rico, and the Virgin Islands.
    (iii) Executive and top management means any employee: (a) Whose 
primary duty consists of the management of the enterprise in which 
he or she is employed or of a customarily recognized department or 
subdivision thereof; and (b) who customarily and regularly directs 
the work of two or more other employees therein; and (c) who has the 
authority to hire or fire other employees or whose suggestions and 
recommendations as to the hiring or firing and as to the advancement 
and promotion or any other change of status of other employees will 
be given particular weight; and (d) who customarily and regularly 
exercises discretionary powers; and (e) who does not devote more 
than 20 percent, or, in the case of an employee of a retail or 
service establishment who does not devote as much as 40 percent, of 
his or her hours of work in the workweek to activities which are not 
directly and closely related to the performance of the work 
described in (a) through (d) of this paragraph 6.(iii); Provided, 
that (e) of this paragraph 6.(iii) shall not apply in the case of an 
employee who is in sole charge of an independent establishment or a 
physically separated branch establishment, or who owns at least a 
20-percent interest in the enterprise in which he or she is 
employed.
    (iv) Positions that will be filled from within the contractor's 
organization means employment openings for which no consideration 
will be given to persons outside the contractor's organization 
(including any affiliates, subsidiaries, and parent companies) and 
includes any openings which the contractor proposes to fill from 
regularly established ``recall'' lists. The exception does not apply 
to a particular

[[Page 50102]]

opening once an employer decides to consider applicants outside of 
his or her own organization.
    7. The contractor agrees to comply with the rules, regulations, 
and relevant orders of the Secretary of Labor issued pursuant to the 
Act.
    8. In the event of the contractor's noncompliance with the 
requirements of this clause, actions for noncompliance may be taken 
in accordance with the rules, regulations, and relevant orders of 
the Secretary of Labor issued pursuant to the Act.
    9. The contractor agrees to post in conspicuous places, 
available to employees and applicants for employment, notices in a 
form to be prescribed by the Deputy Assistant Secretary for Federal 
Contract Compliance Programs, provided by or through the contracting 
officer. Such notices shall state the rights of applicants and 
employees as well as the contractor's obligation under the law to 
take affirmative action to employ and advance in employment 
qualified employees and applicants who are special disabled veterans 
or veterans of the Vietnam era. The contractor must ensure that 
applicants or employees who are special disabled veterans are 
informed of the contents of the notice (e.g., the contractor may 
have the notice read to a visually disabled individual, or may lower 
the posted notice so that it might be read by a person in a 
wheelchair).
    10. The contractor will notify each labor organization or 
representative of workers with which it has a collective bargaining 
agreement or other contract understanding, that the contractor is 
bound by the terms of the Vietnam Era Veterans' Readjustment 
Assistance Act of 1974, as amended and is committed to take 
affirmative action to employ and advance in employment qualified 
special disabled veterans and veterans of the Vietnam era.
    11. The contractor will include the provisions of this clause in 
every subcontract or purchase order of $10,000 or more, unless 
exempted by the rules, regulations, or orders of the Secretary 
issued pursuant to the Vietnam Era Veterans' Readjustment Assistance 
Act of 1974, as amended, so that such provisions will be binding 
upon each subcontractor or vendor. The contractor will take such 
action with respect to any subcontract or purchase order as the 
Deputy Assistant Secretary for Federal Contract Compliance Programs 
may direct to enforce such provisions, including action for 
noncompliance.

[End of Clause]

    (b) Subcontracts. Each contractor shall include the equal 
opportunity clause in each of its subcontracts subject to this part.
    (c) Adaption of language. Such necessary changes in language may be 
made to the equal opportunity clause as shall be appropriate to 
identify properly the parties and their undertakings.
    (d) Inclusion of the equal opportunity clause in the contract. It 
is not necessary that the equal opportunity clause be quoted verbatim 
in the contract. The clause may be made a part of the contract by 
citation to 41 CFR 60-250.5(a).
    (e) Incorporation by operation of the Act. By operation of the Act, 
the equal opportunity clause shall be considered to be a part of every 
contract and subcontract required by the Act and the regulations in 
this part to include such a clause, whether or not it is physically 
incorporated in such contract and whether or not there is a written 
contract between the agency and the contractor.
    (f) Duties of contracting agencies. Each contracting agency shall 
cooperate with the Deputy Assistant Secretary and the Secretary in the 
performance of their responsibilities under the Act. Such cooperation 
shall include insuring that the equal opportunity clause is included in 
all covered Government contracts and that contractors are fully 
informed of their obligations under the Act and this part, providing 
the Deputy Assistant Secretary with any information which comes to the 
agency's attention that a contractor is not in compliance with the Act 
or this part, responding to requests for information from the Deputy 
Assistant Secretary, and taking such actions for noncompliance as are 
set forth in Sec. 60-250.66 as may be ordered by the Secretary or the 
Deputy Assistant Secretary.

Subpart B--Discrimination Prohibited


Sec. 60-250.20  Covered employment activities.

    The prohibition against discrimination in this part applies to the 
following employment activities:
    (a) Recruitment, advertising, and job application procedures;
    (b) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff, and 
rehiring;
    (c) Rates of pay or any other form of compensation and changes in 
compensation;
    (d) Job assignments, job classifications, organizational 
structures, position descriptions, lines of progression, and seniority 
lists;
    (e) Leaves of absence, sick leave, or any other leave;
    (f) Fringe benefits available by virtue of employment, whether or 
not administered by the contractor;
    (g) Selection and financial support for training, including, 
apprenticeships, professional meetings, conferences and other related 
activities, and selection for leaves of absence to pursue training;
    (h) Activities sponsored by the contractor including social and 
recreational programs; and
    (i) Any other term, condition, or privilege of employment.


Sec. 60-250.21  Prohibitions.

    The term discrimination includes, but is not limited to, the acts 
described in this section and Sec. 60-250.23.
    (a) Disparate treatment. It is unlawful for the contractor to deny 
an employment opportunity or benefit or otherwise to discriminate 
against a qualified individual because of that individual's status as a 
special disabled veteran or veteran of the Vietnam era.
    (b) Limiting, segregating and classifying. Unless otherwise 
permitted by this part, it is unlawful for the contractor to limit, 
segregate, or classify a job applicant or employee in a way that 
adversely affects his or her employment opportunities or status on the 
basis of that individual's status as a special disabled veteran or 
veteran of the Vietnam era. For example, the contractor may not 
segregate qualified special disabled veterans or veterans of the 
Vietnam era into separate work areas or into separate lines of 
advancement.
    (c) Contractual or other arrangements--(1) In general. It is 
unlawful for the contractor to participate in a contractual or other 
arrangement or relationship that has the effect of subjecting the 
contractor's own qualified applicant or employee who is a special 
disabled veteran or veteran of the Vietnam era to the discrimination 
prohibited by this part.
    (2) Contractual or other arrangement defined. The phrase 
contractual or other arrangement or relationship includes, but is not 
limited to, a relationship with: an employment or referral agency; a 
labor organization, including a collective bargaining agreement; an 
organization providing fringe benefits to an employee of the 
contractor; or an organization providing training and apprenticeship 
programs.
    (3) Application. This paragraph (c) applies to the contractor, with 
respect to its own applicants or employees, whether the contractor 
offered the contract or initiated the relationship, or whether the 
contractor accepted the contract or acceded to the relationship. The 
contractor is not liable for the actions of the other party or parties 
to the contract which only affect that other party's employees or 
applicants.
    (d) Standards, criteria or methods of administration. It is 
unlawful for the contractor to use standards, criteria, or methods of 
administration, that are not job-related and consistent with business 
necessity, and that:
    (1) Have the effect of discriminating on the basis of status as a 
special disabled veteran or veteran of the Vietnam era; or

[[Page 50103]]

    (2) Perpetuate the discrimination of others who are subject to 
common administrative control.
    (e) Relationship or association with a special disabled veteran or 
a veteran of the Vietnam era. It is unlawful for the contractor to 
exclude or deny equal jobs or benefits to, or otherwise discriminate 
against, a qualified individual because of the known special disabled 
veteran or Vietnam era veteran status of an individual with whom the 
qualified individual is known to have a family, business, social or 
other relationship or association.
    (f) Not making reasonable accommodation. (1) It is unlawful for the 
contractor to fail to make reasonable accommodation to the known 
physical or mental limitations of an otherwise qualified applicant or 
employee who is a special disabled veteran, unless such contractor can 
demonstrate that the accommodation would impose an undue hardship on 
the operation of its business.
    (2) It is unlawful for the contractor to deny employment 
opportunities to an otherwise qualified job applicant or employee who 
is a special disabled veteran based on the need of such contractor to 
make reasonable accommodation to such an individual's physical or 
mental impairments.
    (3) A qualified special disabled veteran is not required to accept 
an accommodation, aid, service, opportunity or benefit which such 
qualified individual chooses not to accept. However, if such individual 
rejects a reasonable accommodation, aid, service, opportunity or 
benefit that is necessary to enable the individual to perform the 
essential functions of the position held or desired, and cannot, as a 
result of that rejection, perform the essential functions of the 
position, the individual will not be considered a qualified special 
disabled veteran.
    (g) Qualification standards, tests and other selection criteria--
(1) In general. It is unlawful for the contractor to use qualification 
standards, employment tests or other selection criteria that screen out 
or tend to screen out individuals on the basis of their status as 
special disabled veterans or veterans of the Vietnam era, unless the 
standard, test or other selection criterion, as used by the contractor, 
is shown to be job-related for the position in question and is 
consistent with business necessity. Selection criteria that concern an 
essential function may not be used to exclude a special disabled 
veteran if that individual could satisfy the criteria with provision of 
a reasonable accommodation. Selection criteria that exclude or tend to 
exclude individuals on the basis of their status as special disabled 
veterans or veterans of the Vietnam era but concern only marginal 
functions of the job would not be consistent with business necessity. 
The contractor may not refuse to hire an applicant who is a special 
disabled veteran because the applicant's disability prevents him or her 
from performing marginal functions. When considering a special disabled 
veteran or a veteran of the Vietnam era for an employment opportunity, 
the contractor may not rely on portions of such veteran's military 
record, including his or her discharge papers, which are not relevant 
to the qualification requirements of the opportunity in issue.
    (2) The Uniform Guidelines on Employee Selection Procedures, 41 CFR 
Part 60-3, do not apply to 38 U.S.C. 4212 and are similarly 
inapplicable to this part.
    (h) Administration of tests. It is unlawful for the contractor to 
fail to select and administer tests concerning employment in the most 
effective manner to ensure that, when a test is administered to a job 
applicant or employee who is a special disabled veteran with a 
disability that impairs sensory, manual, or speaking skills, the test 
results accurately reflect the skills, aptitude, or whatever other 
factor of the applicant or employee that the test purports to measure, 
rather than reflecting the impaired sensory, manual, or speaking skills 
of such employee or applicant, except where such skills are the factors 
that the test purports to measure.
    (i) Compensation. In offering employment or promotions to special 
disabled veterans or veterans of the Vietnam era, it is unlawful for 
the contractor to reduce the amount of compensation offered because of 
any income based upon a disability-related and/or military-service-
related pension or other disability-related and/or military-service-
related benefit the applicant or employee receives from another source.


Sec. 60-250.22  Direct threat defense.

    The contractor may use as a qualification standard the requirement 
that an individual be able to perform the essential functions of the 
position held or desired without posing a direct threat to the health 
or safety of the individual or others in the workplace. (See Sec. 60-
250.2(u) defining direct threat.)


Sec. 60-250.23  Medical examinations and inquiries.

    (a) Prohibited medical examinations or inquiries. Except as stated 
in paragraphs (b) and (c) of this section, it is unlawful for the 
contractor to require a medical examination of an applicant or employee 
or to make inquiries as to whether an applicant or employee is a 
special disabled veteran or as to the nature or severity of such a 
veteran's disability.
    (b) Permitted medical examinations and inquiries--(1) Acceptable 
pre-employment inquiry. The contractor may make pre-employment 
inquiries into the ability of an applicant to perform job-related 
functions, and/or may ask an applicant to describe or to demonstrate 
how, with or without reasonable accommodation, the applicant will be 
able to perform job-related functions.
    (2) Employment entrance examination. The contractor may require a 
medical examination (and/or inquiry) after making an offer of 
employment to a job applicant and before the applicant begins his or 
her employment duties, and may condition an offer of employment on the 
results of such examination (and/or inquiry), if all entering employees 
in the same job category are subjected to such an examination (and/or 
inquiry) regardless of their status as a special disabled veteran.
    (3) Examination of employees. The contractor may require a medical 
examination (and/or inquiry) of an employee that is job-related and 
consistent with business necessity. The contractor may make inquiries 
into the ability of an employee to perform job-related functions.
    (4) Other acceptable examinations and inquiries. The contractor may 
conduct voluntary medical examinations and activities, including 
voluntary medical histories, which are part of an employee health 
program available to employees at the work site.
    (5) Medical examinations conducted in accordance with paragraphs 
(b)(2) and (b)(4) of this section do not have to be job-related and 
consistent with business necessity. However, if certain criteria are 
used to screen out an applicant or applicants or an employee or 
employees who are special disabled veterans as a result of such 
examinations or inquiries, the contractor must demonstrate that the 
exclusionary criteria are job-related and consistent with business 
necessity, and that performance of the essential job functions cannot 
be accomplished with reasonable accommodations as required in this 
part.
    (c) Invitation to self-identify. The contractor shall invite 
applicants to self-identify as being covered by the Act, as specified 
in Sec. 60-250.42.

[[Page 50104]]

    (d) Confidentiality and use of medical information. (1) Information 
obtained under this section regarding the medical condition or history 
of any applicant or employee shall be collected and maintained on 
separate forms and in separate medical files and treated as a 
confidential medical record, except that:
    (i) Supervisors and managers may be informed regarding necessary 
restrictions on the work or duties of the applicant or employee and 
necessary accommodations;
    (ii) First aid and safety personnel may be informed, when 
appropriate, if the disability might require emergency treatment; and
    (iii) Government officials engaged in enforcing the laws 
administered by OFCCP, including this part, or enforcing the Americans 
with Disabilities Act, shall be provided relevant information on 
request.
    (2) Information obtained under this section regarding the medical 
condition or history of any applicant or employee shall not be used for 
any purpose inconsistent with this part.


Sec. 60-250.24  Drugs and alcohol.

    (a) Specific activities permitted. The contractor:
    (1) May prohibit the illegal use of drugs and the use of alcohol at 
the workplace by all employees;
    (2) May require that employees not be under the influence of 
alcohol or be engaging in the illegal use of drugs at the workplace;
    (3) May require that all employees behave in conformance with the 
requirements established under the Drug-Free Workplace Act of 1988 (41 
U.S.C. 701 et seq.);
    (4) May hold an employee who engages in the illegal use of drugs or 
who is an alcoholic to the same qualification standards for employment 
or job performance and behavior to which the contractor holds its other 
employees, even if any unsatisfactory performance or behavior is 
related to the employee's drug use or alcoholism;
    (5) May require that its employees employed in an industry subject 
to such regulations comply with the standards established in the 
regulations (if any) of the Departments of Defense and Transportation, 
and of the Nuclear Regulatory Commission, and other Federal agencies 
regarding alcohol and the illegal use of drugs; and
    (6) May require that employees employed in sensitive positions 
comply with the regulations (if any) of the Departments of Defense and 
Transportation, and of the Nuclear Regulatory Commission, and other 
Federal agencies that apply to employment in sensitive positions 
subject to such regulations.
    (b) Drug testing--(1) General policy. For purposes of this part, a 
test to determine the illegal use of drugs is not considered a medical 
examination. Thus, the administration of such drug tests by the 
contractor to its job applicants or employees is not a violation of 
Sec. 60-250.23. Nothing in this part shall be construed to encourage, 
prohibit, or authorize the contractor to conduct drug tests of job 
applicants or employees to determine the illegal use of drugs or to 
make employment decisions based on such test results.
    (2) Transportation employees. Nothing in this part shall be 
construed to encourage, prohibit, or authorize the otherwise lawful 
exercise by contractors subject to the jurisdiction of the Department 
of Transportation of authority to test employees in, and applicants 
for, positions involving safety-sensitive duties for the illegal use of 
drugs or for on-duty impairment by alcohol; and remove from safety-
sensitive positions persons who test positive for illegal use of drugs 
or on-duty impairment by alcohol pursuant to paragraph (b)(1) of this 
section.
    (3) Any information regarding the medical condition or history of 
any employee or applicant obtained from a test to determine the illegal 
use of drugs, except information regarding the illegal use of drugs, is 
subject to the requirements of Secs. 60-250.23(b)(5) and (c).


Sec. 60-250.25  Health insurance, life insurance and other benefit 
plans.

    (a) An insurer, hospital, or medical service company, health 
maintenance organization, or any agent or entity that administers 
benefit plans, or similar organizations may underwrite risks, classify 
risks, or administer such risks that are based on or not inconsistent 
with state law.
    (b) The contractor may establish, sponsor, observe or administer 
the terms of a bona fide benefit plan that are based on underwriting 
risks, classifying risks, or administering such risks that are based on 
or not inconsistent with state law.
    (c) The contractor may establish, sponsor, observe, or administer 
the terms of a bona fide benefit plan that is not subject to state laws 
that regulate insurance.
    (d) The contractor may not deny a qualified special disabled 
veteran equal access to insurance or subject a qualified special 
disabled veteran to different terms or conditions of insurance based on 
disability alone, if the disability does not pose increased risks.
    (e) The activities described in paragraphs (a), (b) and (c) of this 
section are permitted unless these activities are used as a subterfuge 
to evade the purposes of this part.

Subpart C--Affirmative Action Program


Sec. 60-250.40  Applicability of the affirmative action program 
requirement.

    (a) The requirements of this subpart apply to every Government 
contractor that has 50 or more employees and a contract of $50,000 or 
more.
    (b) Contractors described in paragraph (a) of this section shall, 
within 120 days of the commencement of a contract, prepare and maintain 
an affirmative action program at each establishment. The affirmative 
action program shall set forth the contractor's policies and procedures 
in accordance with this part. This program may be integrated into or 
kept separate from other affirmative action programs.
    (c) The affirmative action program shall be reviewed and updated 
annually.
    (d) The contractor shall submit the affirmative action program 
within 30 days of a request from OFCCP, unless the request provides for 
a different time. The contractor also shall make the affirmative action 
program promptly available on-site upon OFCCP's request.


Sec. 60-250.41  Availability of affirmative action program.

    The full affirmative action program 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.


Sec. 60-250.42  Invitation to self-identify.

    (a) Except as provided in paragraphs (b) and (c) of this section, 
the contractor shall, after making an offer of employment to a job 
applicant and before the applicant begins his or her employment duties, 
invite the applicant to inform the contractor whether the applicant 
believes that he or she may be covered by the Act and wishes to benefit 
under the affirmative action program.
    (b) The contractor may invite special disabled veterans to self-
identify prior to making a job offer only when:
    (1) The invitation is made when the contractor actually is 
undertaking affirmative action for special disabled veterans at the 
pre-offer stage; or
    (2) The invitation is made pursuant to a Federal, state or local 
law requiring

[[Page 50105]]

affirmative action for special disabled veterans.
    (c) The contractor may invite veterans of the Vietnam era to self-
identify prior to making a job offer only when:
    (1) The invitation is made when the contractor actually is 
undertaking affirmative action for veterans of the Vietnam era at the 
pre-offer stage; or
    (2) The invitation is made pursuant to a Federal, state or local 
law requiring affirmative action for veterans of the Vietnam era.
    (d) The invitation referenced in paragraphs (a) through (c) of this 
section shall state that a request to benefit under the affirmative 
action program may be made immediately and/or at any time in the 
future. The invitation also shall summarize the relevant portions of 
the Act and the contractor's affirmative action program. Furthermore, 
the invitation shall state that the information is being requested on a 
voluntary basis, that it will be kept confidential, that refusal to 
provide it will not subject the applicant to any adverse treatment, and 
that it will not be used in a manner inconsistent with the Act. If an 
applicant so identifies himself or herself, the contractor should also 
seek the advice of the applicant regarding proper placement and 
appropriate accommodation, after a job offer has been extended. The 
contractor also may make such inquiries to the extent they are 
consistent with the Americans with Disabilities Act of 1990 (ADA), 42 
U.S.C. 12101 (e.g., in the context of asking applicants to describe or 
demonstrate how they would perform the job). The contractor shall 
maintain a separate file on persons who have self-identified and 
provide that file to OFCCP upon request. This information may be used 
only in accordance with this part. (An acceptable form for such an 
invitation is set forth in Appendix B of this part. Because a 
contractor usually may not seek advice from an applicant regarding 
placement and accommodation until after a job offer has been extended, 
the invitation set forth in Appendix B of this part contains 
instructions regarding modifications to be made if it is used at the 
pre-offer stage.)
    (e) Nothing in this section shall relieve the contractor of its 
obligation to take affirmative action with respect to those applicants 
or employees who are known to the contractor to be special disabled 
veterans or veterans of the Vietnam era.
    (f) Nothing in this section shall relieve the contractor from 
liability for discrimination under the Act.


Sec. 60-250.43  Affirmative action policy.

    Under the affirmative action obligations imposed by the Act, 
contractors shall not discriminate because of status as a special 
disabled veteran or veteran of the Vietnam era and shall take 
affirmative action to employ and advance in employment qualified 
special disabled veterans and veterans of the Vietnam era at all levels 
of employment, including the executive level. Such action shall apply 
to all employment activities set forth in Sec. 60-250.20.


Sec. 60-250.44  Required contents of affirmative action programs.

    Acceptable affirmative action programs shall contain, but not 
necessarily be limited to, the following ingredients:
    (a) Policy statement. The contractor shall include an equal 
opportunity policy statement in its affirmative action program, and 
shall post the policy statement on company bulletin boards. The 
contractor must ensure that applicants and employees who are special 
disabled veterans are informed of the contents of the policy statement 
(for example, the contractor may have the statement read to a visually 
disabled individual, or may lower the posted notice so that it may be 
read by a person in a wheelchair). The policy statement should indicate 
the chief executive officer's attitude on the subject matter, provide 
for an audit and reporting system (see paragraph (h) of this section) 
and assign overall responsibility for the implementation of affirmative 
action activities required under this part (see paragraph (i) of this 
section). Additionally, the policy should state, among other things, 
that the contractor will: recruit, hire, train and promote persons in 
all job titles, and ensure that all other personnel actions are 
administered, without regard to special disabled veteran or Vietnam era 
veteran status; and ensure that all employment decisions are based only 
on valid job requirements. The policy shall state that employees and 
applicants shall not be subjected to harassment, intimidation, threats, 
coercion or discrimination because they have engaged in or may engage 
in any of the following activities:
    (1) Filing a complaint;
    (2) Assisting or participating in an investigation, compliance 
review, hearing, or any other activity related to the administration of 
the affirmative action provisions of the Vietnam Era Veterans' 
Readjustment Assistance Act of 1974, as amended (VEVRAA) or any other 
Federal, state or local law requiring equal opportunity for special 
disabled veterans or veterans of the Vietnam era;
    (3) Opposing any act or practice made unlawful by VEVRAA or its 
implementing regulations in this part or any other Federal, state or 
local law requiring equal opportunity for special disabled veterans or 
veterans of the Vietnam era; or
    (4) Exercising any other right protected by VEVRAA or its 
implementing regulations in this part.
    (b) Review of personnel processes. The contractor shall ensure that 
its personnel processes provide for careful, thorough, and systematic 
consideration of the job qualifications of applicants and employees who 
are known special disabled veterans or veterans of the Vietnam era for 
job vacancies filled either by hiring or promotion, and for all 
training opportunities offered or available. The contractor shall 
ensure that when a special disabled veteran or a veteran of the Vietnam 
era is considered for employment opportunities, the contractor relies 
only on that portion of the individual's military record, including his 
or her discharge papers, that is relevant to the requirements of the 
opportunity in issue. The contractor shall ensure that its personnel 
processes do not stereotype special disabled veterans and veterans of 
the Vietnam era in a manner which limits their access to all jobs for 
which they are qualified. The contractor shall periodically review such 
processes and make any necessary modifications to ensure that these 
obligations are carried out. A description of the review and any 
necessary modifications to personnel processes or development of new 
processes shall be included in any affirmative action programs required 
under this part. The contractor must design procedures that facilitate 
a review of the implementation of this requirement by the contractor 
and the Government. (Appendix C of this part is an example of an 
appropriate set of procedures. The procedures in Appendix C of this 
part are not required and contractors may develop other procedures 
appropriate to their circumstances.)
    (c) Physical and mental qualifications. (1) The contractor shall 
provide in its affirmative action program, and shall adhere to, a 
schedule for the periodic review of all physical and mental job 
qualification standards to ensure that, to the extent qualification 
standards tend to screen out qualified special disabled veterans, they 
are job-related for the position in question and are consistent with 
business necessity.
    (2) Whenever the contractor applies physical or mental 
qualification

[[Page 50106]]

standards in the selection of applicants or employees for employment or 
other change in employment status such as promotion, demotion or 
training, to the extent that qualification standards tend to screen out 
qualified special disabled veterans, the standards shall be related to 
the specific job or jobs for which the individual is being considered 
and consistent with business necessity. The contractor shall have the 
burden to demonstrate that it has complied with the requirements of 
this paragraph (c)(2).
    (3) The contractor may use as a defense to an allegation of a 
violation of paragraph (c)(2) of this section that an individual poses 
a direct threat to the health or safety of the individual or others in 
the workplace. (See Sec. 60-250.2(u) defining direct threat.)
    (d) Reasonable accommodation to physical and mental limitations. 
The contractor shall make reasonable accommodation to the known 
physical or mental limitations of an otherwise qualified special 
disabled veteran unless it can demonstrate that the accommodation would 
impose an undue hardship on the operation of its business. If an 
employee who is known to be a special disabled veteran is having 
significant difficulty performing his or her job and it is reasonable 
to conclude that the performance problem may be related to the known 
disability, the contractor shall confidentially notify the employee of 
the performance problem and inquire whether the problem is related to 
the employee's disability; if the employee responds affirmatively, the 
contractor shall confidentially inquire whether the employee is in need 
of a reasonable accommodation.
    (e) Harassment. The contractor must develop and implement 
procedures to ensure that its employees are not harassed because of 
their status as a special disabled veteran or veteran of Vietnam era.
    (f) External dissemination of policy, outreach and positive 
recruitment. The contractor shall undertake appropriate outreach and 
positive recruitment activities such as those listed in paragraphs 
(f)(1) through (f)(8) of this section that are reasonably designed to 
effectively recruit qualified special disabled veterans and veterans of 
the Vietnam era. It is not contemplated that the contractor will 
necessarily undertake all the activities listed in paragraphs (f)(1) 
through (f)(8) of this section or that its activities will be limited 
to those listed. 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 employment practices are 
adequate.
    (1) The contractor should enlist the assistance and support of the 
following persons and organizations in recruiting, and developing on-
the-job training opportunities for, qualified special disabled veterans 
and veterans of the Vietnam era, to fulfill its commitment to provide 
meaningful employment opportunities to such veterans:
    (i) The local Veterans Employment Representative or his or her 
designee in the state employment service office nearest the 
contractor's establishment;
    (ii) The Department of Veterans Affairs Regional Office nearest the 
contractor's establishment;
    (iii) The veterans' counselors and coordinators (``Vet-Reps'') on 
college campuses;
    (iv) The service officers of the national veterans groups active in 
the area of the contractor's establishment; and
    (v) Local veterans' groups and veterans' service centers near the 
contractor's establishment.
    (2) Formal briefing sessions should be held, preferably on company 
premises, with representatives from recruiting sources. Plant tours, 
clear and concise explanations of current and future job openings, 
position descriptions, worker specifications, explanations of the 
company's selection process, and recruiting literature should be an 
integral part of the briefing. Formal arrangements should be made for 
referral of applicants, follow up with sources, and feedback on 
disposition of applicants.
    (3) The contractor's recruitment efforts at all educational 
institutions should incorporate special efforts to reach students who 
are special disabled veterans or veterans of the Vietnam era. An effort 
should be made to participate in work-study programs with Department of 
Veterans Affairs rehabilitation facilities which specialize in training 
or educating disabled veterans.
    (4) The contractor should establish meaningful contacts with 
appropriate veterans' service organizations which serve special 
disabled veterans or veterans of the Vietnam era for such purposes as 
advice, technical assistance, and referral of potential employees. 
Technical assistance from the resources described in this paragraph may 
consist of advice on proper placement, recruitment, training and 
accommodations contractors may undertake, but no such resource 
providing technical assistance shall have authority to approve or 
disapprove the acceptability of affirmative action programs.
    (5) Special disabled veterans and veterans of the Vietnam era 
should be made available for participation in career days, youth 
motivation programs, and related activities in their communities.
    (6) The contractor should send written notification of company 
policy to all subcontractors, vendors and suppliers, requesting 
appropriate action on their part.
    (7) The contractor should take positive steps to attract qualified 
special disabled veterans and veterans of the Vietnam era not currently 
in the work force who have requisite skills and can be recruited 
through affirmative action measures. These persons may be located 
through the local chapters of organizations of and for Vietnam era 
veterans and veterans with disabilities.
    (8) The contractor, in making hiring decisions, should consider 
applicants who are known special disabled veterans or veterans of the 
Vietnam era for all available positions for which they may be qualified 
when the position(s) applied for is unavailable.
    (g) Internal dissemination of policy. (1) A strong outreach program 
will be ineffective without adequate internal support from supervisory 
and management personnel and other employees. In order to assure 
greater employee cooperation and participation in the contractor's 
efforts, the contractor shall develop internal procedures such as those 
listed in paragraph (g)(2) of this section for communication of its 
obligation to engage in affirmative action efforts to employ and 
advance in employment qualified special disabled veterans and veterans 
of the Vietnam era. It is not contemplated that the contractor will 
necessarily undertake all the activities listed in paragraph (g)(2) of 
this section or that its activities will be limited to those listed. 
These procedures shall be designed 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 this obligation. 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.
    (2) The contractor should implement and disseminate this policy 
internally as follows:
    (i) Include it in the contractor's policy manual;

[[Page 50107]]

    (ii) Inform all employees and prospective employees of its 
commitment to engage in affirmative action to increase employment 
opportunities for qualified special disabled veterans and veterans of 
the Vietnam era. The contractor should periodically schedule special 
meetings with all employees to discuss policy and explain individual 
employee responsibilities;
    (iii) Publicize it in the company newspaper, magazine, annual 
report and other media;
    (iv) Conduct special meetings with executive, management, and 
supervisory personnel to explain the intent of the policy and 
individual responsibility for effective implementation, making clear 
the chief executive officer's attitude;
    (v) Discuss the policy thoroughly in both employee orientation and 
management training programs;
    (vi) Meet with union officials and/or employee representatives to 
inform them of the contractor's policy, and request their cooperation;
    (vii) Include articles on accomplishments of special disabled 
veterans and veterans of the Vietnam era in company publications; and
    (viii) When employees are featured in employee handbooks or similar 
publications for employees, include special disabled veterans.
    (h) Audit and reporting system. (1) The contractor shall design and 
implement an audit and reporting system that will:
    (i) Measure the effectiveness of the contractor's affirmative 
action program;
    (ii) Indicate any need for remedial action;
    (iii) Determine the degree to which the contractor's objectives 
have been attained;
    (iv) Determine whether known special disabled veterans and veterans 
of the Vietnam era have had the opportunity to participate in all 
company sponsored educational, training, recreational and social 
activities; and
    (v) Measure the contractor's compliance with the affirmative action 
program's specific obligations.
    (2) Where the affirmative action program is found to be deficient, 
the contractor shall undertake necessary action to bring the program 
into compliance.
    (i) Responsibility for implementation. An official of the 
contractor shall be assigned responsibility for implementation of the 
contractor's affirmative action activities under this part. His or her 
identity should appear on all internal and external communications 
regarding the company's affirmative action program. This official shall 
be given necessary top management support and staff to manage the 
implementation of this program.
    (j) Training. 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.

Subpart D--General Enforcement and Complaint Procedures


Sec. 60-250.60  Compliance reviews.

    (a) OFCCP may conduct compliance reviews to determine if the 
contractor maintains nondiscriminatory hiring and employment practices 
and is taking affirmative action to ensure that applicants are employed 
and that employees are placed, trained, upgraded, promoted, and 
otherwise treated in accordance with this part during employment. The 
compliance review shall consist of a comprehensive analysis and 
evaluation of each aspect of the aforementioned practices, policies, 
and conditions resulting therefrom. Where necessary, recommendations 
for appropriate sanctions shall be made.
    (b) Where deficiencies are found to exist, reasonable efforts shall 
be made to secure compliance through conciliation and persuasion 
pursuant to Sec. 60-250.62.
    (c) VETS-100 Report. During a compliance review, OFCCP will verify 
whether the contractor has complied with its obligation, pursuant to 41 
CFR Part 61-250, to file its annual Veterans' Employment Report (VETS-
100 Report) with the Office of the Assistant Secretary for Veterans' 
Employment and Training (OASVET). If the contractor has failed to file 
a timely VETS-100 Report, OFCCP will notify OASVET.


Sec. 60-250.61  Complaint procedures.

    (a) Place and time of filing. Any applicant for employment with a 
contractor or any employee of a contractor may, personally, or by an 
authorized representative, file a written complaint alleging a 
violation of the Act or the regulations in this part. The complaint may 
allege individual or class-wide violation(s). Such complaint must be 
filed within 300 days of the date of the alleged violation, unless the 
time for filing is extended by OFCCP for good cause shown. Complaints 
may be submitted to the OFCCP, 200 Constitution Avenue, N.W., 
Washington, D.C. 20210, or to any OFCCP regional, district, or area 
office. Complaints may also be submitted to the Veterans' Employment 
and Training Service of the Department of Labor directly, or through 
the Local Veterans' Employment Representative (LVER) or his or her 
designee at the local state employment service office. Such parties 
will assist veterans in preparing complaints, promptly refer such 
complaints to OFCCP, and maintain a record of all complaints which they 
receive and forward. OFCCP shall inform the party forwarding the 
complaint of the progress and results of its complaint investigation. 
The state employment service shall cooperate with the Deputy Assistant 
Secretary in the investigation of any complaint.
    (b) Contents of complaints--(1) In general. A complaint must be 
signed by the complainant or his or her authorized representative and 
must contain the following information:
    (i) Name and address (including telephone number) of the 
complainant;
    (ii) Name and address of the contractor who committed the alleged 
violation;
    (iii) Documentation showing that the individual is a special 
disabled veteran or veteran of the Vietnam era. Such documentation must 
include a copy of the veteran's form DD-214, and, where applicable, a 
copy of the veteran's Benefits Award Letter, or similar Department of 
Veterans Affairs certification, updated within one year prior to the 
date the complaint is filed, indicating the veteran's level (by 
percentage) of disability, and whether the veteran has been determined 
by the Department of Veterans Affairs to have a serious employment 
handicap under 38 U.S.C. 3106;
    (iv) A description of the act or acts considered to be a violation, 
including the pertinent dates (in the case of an alleged continuing 
violation, the earliest and most recent date that the alleged violation 
occurred should be stated); and
    (v) Other pertinent information available which will assist in the 
investigation and resolution of the complaint, including the name of 
any known Federal agency with which the employer has contracted.
    (2) Third party complaints. A complaint filed by an authorized 
representative need not identify by name the person on whose behalf it 
is filed. The person filing the complaint, however, shall provide OFCCP 
with the name, address and telephone number of the person on whose 
behalf it is made, and the other information specified in paragraph 
(b)(1) of this section. OFCCP shall verify the authorization of such a 
complaint by the person on whose behalf the complaint is made. Any such

[[Page 50108]]

person may request that OFCCP keep his or her identity confidential, 
and OFCCP will protect the individual's confidentiality wherever that 
is possible given the facts and circumstances in the complaint.
    (c) Incomplete information. Where a complaint contains incomplete 
information, OFCCP shall seek the needed information from the 
complainant. If the information is not furnished to OFCCP within 60 
days of the date of such request, the case may be closed.
    (d) Investigations. The Department of Labor shall institute a 
prompt investigation of each complaint.
    (e) Resolution of matters. (1) If the complaint investigation finds 
no violation of the Act or this part, or if the Deputy Assistant 
Secretary decides not to refer the matter to the Solicitor of Labor for 
enforcement proceedings against the contractor pursuant to Sec. 60-
250.65(a)(1), the complainant and contractor shall be so notified. The 
Deputy Assistant Secretary, on his or her own initiative, may 
reconsider his or her determination or the determination of any of his 
or her designated officers who have authority to issue Notifications of 
Results of Investigation.
    (2) The Deputy Assistant Secretary will review all determinations 
of no violation that involve complaints that are not also cognizable 
under Title I of the Americans with Disabilities Act.
    (3) In cases where the Deputy Assistant Secretary decides to 
reconsider the determination of a Notification of Results of 
Investigation, the Deputy Assistant Secretary shall provide prompt 
notification of his or her intent to reconsider, which is effective 
upon issuance, and his or her final determination after 
reconsideration, to the person claiming to be aggrieved, the person 
making the complaint on behalf of such person, if any, and the 
contractor.
    (4) If the investigation finds a violation of the Act or this part, 
OFCCP shall invite the contractor to participate in conciliation 
discussions pursuant to Sec. 60-250.62.


Sec. 60-250.62   Conciliation agreements and letters of commitment.

    (a) If a compliance review, complaint investigation or other review 
by OFCCP finds a material violation of the Act or this part, and if the 
contractor is willing to correct the violations and/or deficiencies, 
and if OFCCP determines that settlement on that basis (rather than 
referral for consideration of formal enforcement) is appropriate, a 
written conciliation agreement shall be required. The agreement shall 
provide for such remedial action as may be necessary to correct the 
violations and/or deficiencies noted, including, where appropriate (but 
not necessarily limited to) such make whole remedies as back pay and 
retroactive seniority. The agreement shall also specify the time period 
for completion of the remedial action; the period shall be no longer 
than the minimum period necessary to complete the action.
    (b) The term conciliation agreement does not include letters of 
commitment, which are appropriate for resolving minor technical 
deficiencies.


Sec. 60-250.63   Violation of conciliation agreements and letters of 
commitment.

    (a) When OFCCP believes that a conciliation agreement has been 
violated, the following procedures are applicable:
    (1) A written notice shall be sent to the contractor setting forth 
the violation alleged and summarizing the supporting evidence. The 
contractor shall have 15 days from receipt of the notice to respond, 
except in those cases in which OFCCP asserts that such a delay would 
result in irreparable injury to the employment rights of affected 
employees or applicants.
    (2) During the 15-day period the contractor may demonstrate in 
writing that it has not violated its commitments.
    (b) In those cases in which OFCCP asserts that a delay would result 
in irreparable injury to the employment rights of affected employees or 
applicants, enforcement proceedings may be initiated immediately 
without proceeding through any other requirement contained in this 
chapter.
    (c) In any proceedings involving an alleged violation of a 
conciliation agreement OFCCP may seek enforcement of the agreement 
itself and shall not be required to present proof of the underlying 
violations resolved by the agreement.
    (d) When OFCCP believes that a letter of commitment has been 
violated, the matter shall be handled, where appropriate, pursuant to 
Sec. 60-250.64. The violation may be corrected through a conciliation 
agreement, or an enforcement proceeding may be initiated.


Sec. 60-250.64   Show cause notices.

    When the Deputy Assistant Secretary has reasonable cause to believe 
that the contractor has violated the Act or this part, he or she may 
issue a notice requiring the contractor to show cause, within 30 days, 
why monitoring, enforcement proceedings or other appropriate action to 
ensure compliance should not be instituted. The issuance of such a 
notice is not a prerequisite to instituting enforcement proceedings 
(see Sec. 60-250.65).


Sec. 60-250.65   Enforcement proceedings.

    (a) General. (1) If a compliance review, complaint investigation or 
other review by OFCCP finds a violation of the Act or this part, and 
the violation has not been corrected in accordance with the 
conciliation procedures in this part, or OFCCP determines that referral 
for consideration of formal enforcement (rather than settlement) is 
appropriate, OFCCP may refer the matter to the Solicitor of Labor with 
a recommendation for the institution of enforcement proceedings to 
enjoin the violations, to seek appropriate relief, and to impose 
appropriate sanctions, or any of the above in this sentence. OFCCP may 
seek back pay and other make whole relief for aggrieved individuals 
identified during a complaint investigation or compliance review. Such 
individuals need not have filed a complaint as a prerequisite to OFCCP 
seeking such relief on their behalf. Interest on back pay shall be 
calculated from the date of the loss and compounded quarterly at the 
percentage rate established by the Internal Revenue Service for the 
underpayment of taxes.
    (2) In addition to the administrative proceedings set forth in this 
section, the Deputy Assistant Secretary may, within the limitations of 
applicable law, seek appropriate judicial action to enforce the 
contractual provisions set forth in Sec. 60-250.5, including 
appropriate injunctive relief.
    (b) Hearing practice and procedure. (1) In administrative 
enforcement proceedings the contractor shall be provided an opportunity 
for a formal hearing. All hearings conducted under the Act and this 
part shall be governed by the Rules of Practice for Administrative 
Proceedings to Enforce Equal Opportunity Under Executive Order 11246 
contained in 41 CFR part 60-30 and the Rules of Evidence set out in the 
Rules of Practice and Procedure for Administrative Hearings Before the 
Office of Administrative Law Judges contained in 29 CFR part 18, 
subpart B: Provided, That a final administrative order shall be issued 
within one year from the date of the issuance of the recommended 
findings, conclusions and decision of the Administrative Law Judge, or 
the submission of exceptions and responses to exceptions to such 
decision (if any), whichever is later.
    (2) Complaints may be filed by the Solicitor, the Associate 
Solicitor for Civil Rights, Regional Solicitors and Associate Regional 
Solicitors.

[[Page 50109]]

    (3) For the purposes of hearings pursuant to this part, references 
in 41 CFR Part 60-30 to ``Executive Order 11246'' shall mean the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended; 
to ``equal opportunity clause'' shall mean the equal opportunity clause 
published at 41 CFR 60-250.5; and to ``regulations'' shall mean the 
regulations contained in this part.


Sec. 60-250.66   Sanctions and penalties.

    (a) Withholding progress payments. With the prior approval of the 
Deputy Assistant Secretary so much of the accrued payment due on the 
contract or any other contract between the Government contractor and 
the Federal Government may be withheld as necessary to correct any 
violations of the provisions of the Act or this part.
    (b) Termination. A contract may be canceled or terminated, in whole 
or in part, for failure to comply with the provisions of the Act or 
this part.
    (c) Debarment. A contractor may be debarred from receiving future 
contracts for failure to comply with the provisions of the Act or this 
part subject to reinstatement pursuant to Sec. 60-250.68. Debarment may 
be imposed for an indefinite period, or may be imposed for a fixed 
period of not less than six months but no more than three years.
    (d) Hearing opportunity. An opportunity for a formal hearing shall 
be afforded to a contractor before the imposition of any sanction or 
penalty.


Sec. 60-250.67   Notification of agencies.

    The Deputy Assistant Secretary shall ensure that the heads of all 
agencies are notified of any debarments taken against any contractor.


Sec. 60-250.68   Reinstatement of ineligible contractors.

    (a) Application for reinstatement. A contractor debarred from 
further contracts for an indefinite period under the Act may request 
reinstatement in a letter filed with the Deputy Assistant Secretary at 
any time after the effective date of the debarment; a contractor 
debarred for a fixed period may make such a request following the 
expiration of six months from the effective date of the debarment. In 
connection with the reinstatement proceedings, all debarred contractors 
shall be required to show that they have established and will carry out 
employment policies and practices in compliance with the Act and this 
part. Additionally, in determining whether reinstatement is appropriate 
for a contractor debarred for a fixed period, the Deputy Assistant 
Secretary also shall consider, among other factors, the severity of the 
violation which resulted in the debarment, the contractor's attitude 
towards compliance, the contractor's past compliance history, and 
whether the contractor's reinstatement would impede the effective 
enforcement of the Act or this part. Before reaching a decision, the 
Deputy Assistant Secretary may conduct a compliance review of the 
contractor and may require the contractor to supply additional 
information regarding the request for reinstatement. The Deputy 
Assistant Secretary shall issue a written decision on the request.
    (b) Petition for review. Within 30 days of its receipt of a 
decision denying a request for reinstatement, the contractor may file a 
petition for review of the decision with the Secretary. The petition 
shall set forth the grounds for the contractor's objections to the 
Deputy Assistant Secretary's decision. The petition shall be served on 
the Deputy Assistant Secretary and the Associate Solicitor for Civil 
Rights and shall include the decision as an appendix. The Deputy 
Assistant Secretary may file a response within 14 days to the petition. 
The Secretary shall issue the final agency decision denying or granting 
the request for reinstatement. Before reaching a final decision, the 
Secretary may issue such additional orders respecting procedure as he 
or she finds appropriate in the circumstances, including an order 
referring the matter to the Office of Administrative Law Judges for an 
evidentiary hearing where there is a material factual dispute that 
cannot be resolved on the record before the Secretary.


Sec. 60-250.69   Intimidation and interference.

    (a) The contractor shall not harass, intimidate, threaten, coerce, 
or discriminate against, any individual because the individual has 
engaged in or may engage in any of the following activities:
    (1) Filing a complaint;
    (2) Assisting or participating in any manner in an investigation, 
compliance review, hearing, or any other activity related to the 
administration of the Act or any other Federal, state or local law 
requiring equal opportunity for special disabled veterans or veterans 
of the Vietnam era;
    (3) Opposing any act or practice made unlawful by the Act or this 
part or any other Federal, state or local law requiring equal 
opportunity for special disabled veterans or veterans of the Vietnam 
era; or
    (4) Exercising any other right protected by the Act or this part.
    (b) The contractor shall ensure that all persons under its control 
do not engage in such harassment, intimidation, threats, coercion or 
discrimination. The sanctions and penalties contained in this part may 
be exercised by the Deputy Assistant Secretary against any contractor 
who violates this obligation.


Sec. 60-250.70  Disputed matters related to compliance with the Act.

    The procedures set forth in the regulations in this part govern all 
disputes relative to the contractor's compliance with the Act and this 
part. Any disputes relating to issues other than compliance, including 
contract costs arising out of the contractor's efforts to comply, shall 
be determined by the disputes clause of the contract.

Subpart E--Ancillary Matters


Sec. 60-250.80  Responsibilities of state employment service offices.

    (a) Local state employment service offices shall refer qualified 
special disabled veterans and veterans of the Vietnam era to fill 
employment openings listed by contractors with such local offices 
pursuant to the mandatory listing requirements of the equal opportunity 
clause, and shall give priority to special disabled veterans and 
veterans of the Vietnam era in making such referrals.
    (b) Local state employment service offices shall contact employers 
to solicit the job orders described in paragraph (a) of this section. 
The state employment service shall provide OFCCP upon request 
information pertinent to whether the contractor is in compliance with 
the mandatory listing requirements of the equal opportunity clause.


Sec. 60-250.81  Recordkeeping.

    (a) General requirements. Any personnel or employment record made 
or kept by the contractor shall be preserved by the contractor for a 
period of two years from the date of the making of the record or the 
personnel action involved, whichever occurs later. However, if the 
contractor has fewer than 150 employees or does not have a Government 
contract of at least $150,000, the minimum record retention period 
shall be one year from the date of the making of the record or the 
personnel action involved, whichever occurs later. Such records 
include, but are not necessarily limited to, records relating to 
requests for reasonable accommodation; the results of any physical 
examination; job advertisements and postings; applications and resumes; 
tests and test results; interview notes; and other records having to do 
with hiring, assignment, promotion, demotion, transfer, lay-off or 
termination, rates of

[[Page 50110]]

pay or other terms of compensation, and selection for training or 
apprenticeship. In the case of involuntary termination of an employee, 
the personnel records of the individual terminated shall be kept for a 
period of two years from the date of the termination, except that 
contractors that have fewer than 150 employees or that do not have a 
Government contract of at least $150,000 shall keep such records for a 
period of one year from the date of the termination. Where the 
contractor has received notice that a complaint of discrimination has 
been filed, that a compliance review has been initiated, or that an 
enforcement action has been commenced, the contractor shall preserve 
all personnel records relevant to the complaint, compliance review or 
action until final disposition of the complaint, compliance review or 
action. The term personnel records relevant to the complaint, 
compliance review or action would include, for example, personnel or 
employment records relating to the aggrieved person and to all other 
employees holding positions similar to that held or sought by the 
aggrieved person, and application forms or test papers completed by an 
unsuccessful applicant and by all other candidates for the same 
position as that for which the aggrieved person applied and was 
rejected.
    (b) Failure to preserve records. Failure to preserve complete and 
accurate records as required by paragraph (a) of this section 
constitutes noncompliance with the contractor's obligations under the 
Act and this part. Where the contractor has destroyed or failed to 
preserve records as required by this section, there may be a 
presumption that the information destroyed or not preserved would have 
been unfavorable to the contractor: Provided, That this presumption 
shall not apply where the contractor shows that the destruction or 
failure to preserve records results from circumstances that are outside 
of the contractor's control. (c) The requirements of this section shall 
apply only to records made or kept on or after [60 days after date of 
publication of final rule].


Sec. 60-250.82  Access to records.

    Each contractor shall permit access during normal business hours to 
its places of business for the purpose of conducting on-site compliance 
reviews and complaint investigations and inspecting and copying such 
books and accounts and records, including computerized records, and 
other material as may be relevant to the matter under investigation and 
pertinent to compliance with the Act or this part. Information obtained 
in this manner shall be used only in connection with the administration 
of the Act and in furtherance of the purposes of the Act.


Sec. 60-250.83  Labor organizations and recruiting and training 
agencies.

    (a) Whenever performance in accordance with the equal opportunity 
clause or any matter contained in the regulations in this part may 
necessitate a revision of a collective bargaining agreement, the labor 
organizations which are parties to such agreement shall be given an 
adequate opportunity to present their views to OFCCP.
    (b) OFCCP shall use its best efforts, directly or through 
contractors, subcontractors, local officials, the Department of 
Veterans Affairs, vocational rehabilitation facilities, and all other 
available instrumentalities, to cause any labor organization, 
recruiting and training agency or other representative of workers who 
are employed by a contractor to cooperate with, and to assist in, the 
implementation of the purposes of the Act.


Sec. 60-250.84  Rulings and interpretations.

    Rulings under or interpretations of the Act and this part shall be 
made by the Deputy Assistant Secretary.


Sec. 60-250.85  Effective date.

    This part shall become effective on [60 days after date of 
publication of final rule], and shall not apply retroactively. 
Contractors presently holding Government contracts shall update their 
affirmative action programs as required to comply with the regulations 
in this part within 120 days after [60 days after date of publication 
of final rule].

Appendix A to Part 60-250--Guidelines on a Contractor's Duty To Provide 
Reasonable Accommodation

    The guidelines in this appendix are in large part derived from, 
and are consistent with, the discussion regarding the duty to 
provide reasonable accommodation contained in the Interpretive 
Guidance on Title I of the Americans with Disabilities Act (ADA) set 
out as an appendix to the regulations issued by the Equal Employment 
Opportunity Commission (EEOC) implementing the ADA (29 CFR Part 
1630). Although the following discussion is intended to provide an 
independent ``free-standing'' source of guidance with respect to the 
duty to provide reasonable accommodation under this part, to the 
extent that the EEOC appendix provides additional guidance which is 
consistent with the following discussion, it may be relied upon for 
purposes of this part as well. See Sec. 60-250.1(c). Contractors are 
obligated to provide reasonable accommodation and to take 
affirmative action. Reasonable accommodation under VEVRAA, like 
reasonable accommodation required under Section 503 and the ADA, is 
a part of the nondiscrimination obligation. See EEOC appendix cited 
in this paragraph. Affirmative action is unique to VEVRAA and 
Section 503, and includes actions above and beyond those required as 
a matter of nondiscrimination. An example of this is the requirement 
discussed in paragraph 2 of this appendix that a contractor shall 
make an inquiry of a special disabled veteran who is having 
significant difficulty performing his or her job.
    1. A contractor is required to make reasonable accommodations to 
the known physical or mental limitations of an ``otherwise 
qualified'' special disabled veteran, unless the contractor can 
demonstrate that the accommodation would impose an undue hardship on 
the operation of its business. As stated in Sec. 60-250.2(o), a 
special disabled veteran is qualified if he or she satisfies all the 
skill, experience, education and other job-related selection 
criteria, and can perform the essential functions of the position 
with or without reasonable accommodation. A contractor is required 
to make a reasonable accommodation with respect to its application 
process if the special disabled veteran is qualified with respect to 
that process. One is ``otherwise qualified'' if he or she is 
qualified for a job, except that, because of a disability, he or she 
needs a reasonable accommodation to be able to perform the job's 
essential functions.
    2. Although the contractor would not be expected to accommodate 
disabilities of which it is unaware, the contractor has an 
affirmative obligation to provide a reasonable accommodation for 
applicants and employees who are known to be special disabled 
veterans. As stated in Sec. 60-250.42 (see also Appendix B of this 
part), the contractor is required to invite applicants who have been 
provided an offer of employment, before they begin their employment 
duties, to indicate whether they are covered by the Act and wish to 
benefit under the contractor's affirmative action program. That 
section further provides that the contractor should seek the advice 
of special disabled veterans who ``self-identify'' in this way as to 
proper placement and appropriate accommodation. Moreover, Sec. 60-
250.44(d) provides that if an employee who is a known special 
disabled veteran is having significant difficulty performing his or 
her job and it is reasonable to conclude that the performance 
problem may be related to the disability, the contractor is required 
to confidentially inquire whether the problem is disability related 
and if the employee is in need of a reasonable accommodation.
    3. An accommodation is any change in the work environment or in 
the way things are customarily done that enables a special disabled 
veteran to enjoy equal employment opportunities. Equal employment 
opportunity means an opportunity to attain the same level of 
performance, or to enjoy the same level of benefits and privileges 
of employment, as are available to the average similarly situated 
employee without a disability. Thus, for example, an accommodation 
made to assist an employee

[[Page 50111]]

who is a special disabled veteran in the performance of his or her 
job must be adequate to enable the individual to perform the 
essential functions of the position. The accommodation, however, 
does not have to be the ``best'' accommodation possible, so long as 
it is sufficient to meet the job-related needs of the individual 
being accommodated. There are three areas in which reasonable 
accommodations may be necessary: (1) accommodations in the 
application process; (2) accommodations that enable employees who 
are special disabled veterans to perform the essential functions of 
the position held or desired; and (3) accommodations that enable 
employees who are special disabled veterans to enjoy equal benefits 
and privileges of employment as are enjoyed by employees without 
disabilities.
    4. The term ``undue hardship'' refers to any accommodation that 
would be unduly costly, extensive, substantial, or disruptive, or 
that would fundamentally alter the nature or operation of the 
contractor's business. The contractor's claim that the cost of a 
particular accommodation will impose an undue hardship requires a 
determination of which financial resources should be considered--
those of the contractor in its entirety or only those of the 
facility that will be required to provide the accommodation. This 
inquiry requires an analysis of the financial relationship between 
the contractor and the facility in order to determine what resources 
will be available to the facility in providing the accommodation. If 
the contractor can show that the cost of the accommodation would 
impose an undue hardship, it would still be required to provide the 
accommodation if the funding is available from another source, e.g., 
the Department of Veterans Affairs or a state vocational 
rehabilitation agency, or if Federal, state or local tax deductions 
or tax credits are available to offset the cost of the 
accommodation. In the absence of such funding, the special disabled 
veteran should be given the option of providing the accommodation or 
of paying that portion of the cost which constitutes the undue 
hardship on the operation of the business.
    5. Section 60-250.2(r) lists a number of examples of the most 
common types of accommodations that the contractor may be required 
to provide. There are any number of specific accommodations that may 
be appropriate for particular situations. The discussion in this 
appendix is not intended to provide an exhaustive list of required 
accommodations (as no such list would be feasible); rather, it is 
intended to provide general guidance regarding the nature of the 
obligation. The decision as to whether a reasonable accommodation is 
appropriate must be made on a case-by-case basis. The contractor 
generally should consult with the special disabled veteran in 
deciding on the appropriate accommodation; frequently, the 
individual will know exactly what accommodation he or she will need 
to perform successfully in a particular job, and may suggest an 
accommodation which is simpler and less expensive than the 
accommodation the contractor might have devised. Other resources to 
consult include the appropriate state vocational rehabilitation 
services agency, the Equal Employment Opportunity Commission (1-800-
669-EEOC (voice), 1-800-800-3302 (TDD)), the Job Accommodation 
Network (JAN) operated by the President's Committee on Employment of 
People with Disabilities (1-800-JAN-7234), private disability 
organizations (including those that serve veterans), and other 
employers.
    6. With respect to accommodations that can permit an employee 
who is a special disabled veteran to perform essential functions 
successfully, a reasonable accommodation may require the contractor 
to, for instance, modify or acquire equipment. For the visually-
impaired such accommodations may include providing adaptive hardware 
and software for computers, electronic visual aids, braille devices, 
talking calculators, magnifiers, audio recordings and braille or 
large-print materials. For persons with hearing impairments, 
reasonable accommodations may include providing telephone handset 
amplifiers, telephones compatible with hearing aids and 
telecommunications devices for the deaf (TDDs). For persons with 
limited physical dexterity, the obligation may require the provision 
of goose neck telephone headsets, mechanical page turners and raised 
or lowered furniture.
    7. Other reasonable accommodations of this type may include 
providing personal assistants such as a reader, interpreter or 
travel attendant, permitting the use of accrued paid leave or 
providing additional unpaid leave for necessary treatment. The 
contractor may also be required to make existing facilities readily 
accessible to and usable by special disabled veterans--including 
areas used by employees for purposes other than the performance of 
essential job functions such as restrooms, break rooms, cafeterias, 
lounges, auditoriums, libraries, parking lots and credit unions. 
This type of accommodation will enable employees to enjoy equal 
benefits and privileges of employment as are enjoyed by employees 
who do not have disabilities.
    8. Another of the potential accommodations listed in Sec. 60-
250.2(r) is job restructuring. This may involve reallocating or 
redistributing those nonessential, marginal job functions which a 
qualified special disabled veteran cannot perform to another 
position. Accordingly, if a clerical employee who is a special 
disabled veteran is occasionally required to lift heavy boxes 
containing files, but cannot do so because of a disability, this 
task may be reassigned to another employee. The contractor, however, 
is not required to reallocate essential functions, i.e., those 
functions that the individual who holds the job would have to 
perform, with or without reasonable accommodation, in order to be 
considered qualified for the position. For instance, the contractor 
which has a security guard position which requires the incumbent to 
inspect identity cards would not have to provide a blind special 
disabled veteran with an assistant to perform that duty; in such a 
case, the assistant would be performing an essential function of the 
job for the special disabled veteran. Job restructuring may also 
involve allowing part-time or modified work schedules. For instance, 
flexible or adjusted work schedules could benefit special disabled 
veterans who cannot work a standard schedule because of the need to 
obtain medical treatment, or special disabled veterans with mobility 
impairments who depend on a public transportation system that is not 
accessible during the hours of a standard schedule.
    9. Reasonable accommodation may also include reassignment to a 
vacant position. In general, reassignment should be considered only 
when accommodation within the special disabled veteran's current 
position would pose an undue hardship. Reassignment is not required 
for applicants. However, in making hiring decisions, contractors are 
encouraged to consider applicants who are known special disabled 
veterans for all available positions for which they may be qualified 
when the position(s) applied for is unavailable. Reassignment may 
not be used to limit, segregate, or otherwise discriminate against 
employees who are special disabled veterans by forcing reassignments 
to undesirable positions or to designated offices or facilities. 
Employers should reassign the individual to an equivalent position 
in terms of pay, status, etc., if the individual is qualified, and 
if the position is vacant within a reasonable amount of time. A 
``reasonable amount of time'' should be determined in light of the 
totality of the circumstances.
    10. The contractor may reassign an individual to a lower graded 
position if there are no accommodations that would enable the 
employee to remain in the current position and there are no vacant 
equivalent positions for which the individual is qualified with or 
without reasonable accommodation. The contractor may maintain the 
reassigned special disabled veteran at the salary of the higher 
graded position, and must do so if it maintains the salary of 
reassigned employees who are not special disabled veterans. It 
should also be noted that the contractor is not required to promote 
a special disabled veteran as an accommodation.
    11. With respect to the application process, appropriate 
accommodations may include the following: (1) Providing information 
regarding job vacancies in a form accessible to special disabled 
veterans who are vision or hearing impaired, e.g., by making an 
announcement available in braille, in large print, or on audio tape, 
or by responding to job inquiries via TDDs; (2) providing readers, 
interpreters and other similar assistance during the application, 
testing and interview process; (3) appropriately adjusting or 
modifying employment-related examinations, e.g., extending regular 
time deadlines, allowing a special disabled veteran who is blind or 
has a learning disorder such as dyslexia to provide oral answers for 
a written test, and permitting an applicant, regardless of the 
nature of his or her ability, to demonstrate skills through 
alternative techniques and utilization of adapted tools, aids and 
devices; and (4) ensuring a special disabled veteran with a mobility 
impairment full access to testing locations such that the 
applicant's test scores accurately reflect the applicant's skills or 
aptitude rather than the applicant's mobility impairment.

[[Page 50112]]

Appendix B to Part 60-250--Sample Invitation To Self-Identify

    Note: When the invitation to self-identify is being extended 
prior to an offer of employment, as is permitted in limited 
circumstances under Secs. 60-250.42 (b) and (c), paragraph 2(ii) of 
this appendix, relating to identification of reasonable 
accommodations, should be omitted. This will avoid a conflict with 
the EEOC's ADA Guidance, which in most cases precludes asking a job 
applicant (prior to a job offer being made) about potential 
reasonable accommodations.

[Sample Invitation to Self-Identify]

    1.a. This employer is a Government contractor subject to the 
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as 
amended, which requires Government contractors to take affirmative 
action to employ and advance in employment qualified special 
disabled veterans and veterans of the Vietnam era. If you are a 
special disabled veteran or veteran of the Vietnam era and would 
like to be considered under the affirmative action program, please 
tell us. You may inform us of your desire to benefit under the 
program at this time and/or at any time in the future.
    b. The term ``special disabled veteran'' refers to a veteran who 
is entitled to compensation (or who, but for the receipt of military 
retired pay, would be entitled to compensation) under laws 
administered by the Department of Veterans Affairs for a disability 
rated at 30 percent or more, or rated at 10 or 20 percent in the 
case of a veteran who has been determined by the Department of 
Veterans Affairs to have a serious employment handicap. The term 
also refers to a person who was discharged or released from active 
duty because of a service-connected disability.
    c. The term ``veteran of the Vietnam era'' refers to a person 
who served on active duty for more than 180 days, any part of which 
occurred between August 5, 1964, and May 7, 1975, and was discharged 
or released with other than a dishonorable discharge. It also refers 
to a person who was discharged or released from active duty for a 
service-connected disability if any part of such active duty was 
performed between August 5, 1964, and May 7, 1975.
    d. If you are a special disabled veteran, this information will 
assist us in placing you in an appropriate position and in making 
accommodations for your disability. [The contractor should here 
insert a brief provision summarizing the relevant portion of its 
affirmative action program.]
    e. Submission of this information is voluntary and refusal to 
provide it will not subject you to any adverse treatment. 
Information you submit will be kept confidential, except that (i) 
supervisors and managers may be informed regarding restrictions on 
the work or duties of special disabled veterans, and regarding 
necessary accommodations; (ii) first aid and safety personnel may be 
informed, when and to the extent appropriate, if the condition might 
require emergency treatment; and (iii) Government officials engaged 
in enforcing laws administered by OFCCP or the Americans with 
Disabilities Act, may be informed. The information provided will be 
used only in ways that are not inconsistent with the Vietnam Era 
Veterans' Readjustment Assistance Act of 1974, as amended.
    2. If you are a special disabled veteran or a veteran of the 
Vietnam era, we would like to include you under the affirmative 
action program. If you are a special disabled veteran it would 
assist us if you tell us about (i) any special methods, skills, and 
procedures which qualify you for positions that you might not 
otherwise be able to do because of your disability so that you will 
be considered for any positions of that kind, and (ii) the 
accommodations which we could make which would enable you to perform 
the job properly and safely, including special equipment, changes in 
the physical layout of the job, elimination of certain duties 
relating to the job, provision of personal assistance services or 
other accommodations.

Appendix C to Part 60-250--Review of Personnel Processes

    The following is a set of procedures which contractors may use 
to meet the requirements of Sec. 60-250.44(b):
    1. The application or personnel form of each known applicant who 
is a special disabled veteran or veteran of the Vietnam era should 
be annotated to identify each vacancy for which the applicant was 
considered, and the form should be quickly retrievable for review by 
the Department of Labor and the contractor's personnel officials for 
use in investigations and internal compliance activities.
    2. The personnel or application records of each known special 
disabled veteran or veteran of the Vietnam era should include (i) 
the identification of each promotion for which the covered veteran 
was considered, and (ii) the identification of each training program 
for which the covered veteran was considered.
    3. In each case where an employee or applicant who is a special 
disabled veteran or a veteran of the Vietnam era is rejected for 
employment, promotion, or training, a statement of the reason should 
be appended to the personnel file or application form as well as a 
description of the accommodations considered (for a rejected special 
disabled veteran). This statement should be available to the 
applicant or employee concerned upon request.
    4. Where applicants or employees who are selected for hire, 
promotion, or training and the contractor undertakes any 
accommodation which makes it possible for him or her to place a 
special disabled veteran on the job, the application form or 
personnel record should contain a description of that accommodation.

[FR Doc. 96-23638 Filed 9-23-96; 8:45 am]
BILLING CODE 4510-27-P