[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Rules and Regulations]
[Pages 59657-59659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29042]


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DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs
41 CFR Part 60-741
RIN 1215-AB19


Affirmative Action and Nondiscrimination Obligations of 
Contractors and Subcontractors Regarding Individuals With Disabilities

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Final rule.

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SUMMARY: This final rule amends Appendix C to the regulations 
implementing Section 503 of the Rehabilitation Act of 1973, as amended 
(Section 503). Appendix C contains procedures that Government 
contractors may use to review their personnel processes to ensure that 
the processes are fair to disabled applicants and employees. The 
existing Appendix recommends that contractors attach or include a 
description of accommodations considered or used for special disabled 
veterans to application forms or personnel records. As amended, the 
Appendix recommends that the description of accommodations be 
maintained in separate confidential medical files. The amendments make 
Appendix C to the Rehabilitation Act rules consistent with Appendix C 
to OFCCP's rules implementing the Vietnam Era Veterans' Readjustment 
Assistance Act, which also are published elsewhere in this issue of the 
Federal Register.


[[Page 59658]]


EFFECTIVE DATE: These regulations are effective January 4, 1999.

FOR FURTHER INFORMATION CONTACT: James I. Melvin, Director, Division of 
Policy, Planning and Program Development, 202-693-0102 (voice), 1-800-
326-2577 (TDD). Copies of this final rule, including copies in 
alternative formats, may be obtained by calling OFCCP at 202-693-0102 
(voice) or 1-800-326-2577 (TDD). The alternative formats available are: 
Large print, electronic file on computer disk, and audio-tape. The rule 
also is available on the Internet at http://www.dol.gov/dol/esa.

SUPPLEMENTARY INFORMATION:

Rulemaking History

    This final rule amends the regulations implementing Section 503. 
The Act, and OFCCP's implementing regulations, 41 CFR Part 60-741, 
require parties holding a Federal Government contract or subcontract in 
excess of $10,000 to ``take affirmative action to employ and advance in 
employment qualified individuals with disabilities.'' The Section 503 
Rules last were revised on May 1, 1996, 61 FR 19336.
    On September 24, 1996, OFCCP published a notice of proposed 
rulemaking (NPRM), 61 FR 50080, proposing to revise the regulations 
implementing the Vietnam Era Veterans' Readjustment Assistance Act of 
1974, as amended (VEVRAA). VEVRAA, and OFCCP's regulations at 41 CFR 
Part 60-250, require Government contractors and subcontractors to take 
affirmative action to employ and advance in employment qualified 
special disabled veterans and veterans of the Vietnam era.
    OFCCP has modeled its regulations implementing VEVRAA on those 
implementing Section 503. This reflects the close similarity between 
the statutes in terms of their substantive protections and 
jurisdictional requirements. The September 24, 1996, VEVRAA NPRM was 
modeled after the May 1, 1996, Section 503 final rule.
    Appendix C, Review of Personnel Processes, in the VEVRAA NPRM 
proposed a set of procedures that contractors could use to facilitate a 
review by the contractor and the Government of the contractor's 
personnel processes. The review is required by Sec. 60-250.44(b), and 
is intended to ensure that the contractor's 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 all employment and training opportunities. 
Paragraphs 3 and 4 of Appendix C proposed to recommend that contractors 
attach or include a description of accommodations considered or used 
for special disabled veterans to application forms or personnel 
records. Appendix C to the VEVRAA NPRM repeated the substance of 
Appendix C to the May 1, 1996, Section 503 final rule.
    The Equal Employment Opportunity Commission (EEOC) submitted a 
comment in which it asserted that in most instances descriptions of 
accommodations considered or used for special disabled veterans 
constitute medical information that must be maintained in separate 
files and treated as confidential medical records. Accordingly, the 
EEOC recommended that Appendix C be revised by changing paragraphs 3 
and 4 to indicate that contractors should maintain descriptions of 
accommodations considered or used in separate confidential medical 
files. OFCCP agreed with the EEOC's recommendation and, in its VEVRAA 
final rule published elsewhere in this issue of the Federal Register, 
revised paragraphs 3 and 4 of Appendix C.
    The EEOC's comment applies equally to Appendix C to the Section 503 
rules. Just as descriptions of accommodations considered or used for 
special disabled veterans often constitute medical information, so, 
too, do descriptions of accommodations considered or used for 
individuals with disabilities often constitute medical information. 
Accordingly, OFCCP has decided to revise paragraphs 3 and 4 of the 
corresponding Appendix C to 41 CFR Part 60-741.

Regulatory Revision

    Pursuant to this revision, paragraphs 3 and 4 to Appendix C 
specify:
    3. Where the contractor prepares a statement of the reason why an 
individual with a disability was rejected and a description of 
accommodations considered, those materials should be treated as 
confidential medical records.
    4. Where the contractor makes a record of accommodations undertaken 
in order to place an individual with a disability on the job, the 
record should be treated as a confidential medical record.

Regulatory Procedures

Executive Order 12866

    The Department is issuing this rule in conformance with Executive 
Order 12866. This rule has been determined not to be significant for 
purposes of Executive Order 12866 and therefore need not be reviewed by 
OMB. This rule 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 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 individuals with disabilities. As discussed in 
more detail below, the rule is interpretive in nature and does not 
require particular actions by contractors.

Regulatory Flexibility Act

    The rule is interpretive and does not substantively change existing 
obligations for Federal contractors. Accordingly, 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, 5 U.S.C. 605(b), is not 
required.

Unfunded Mandates Reform

Executive Order 12875
    This rule will not create an unfunded Federal mandate upon any 
State, local or tribal government.
Unfunded Mandates Reform Act of 1995
    This rule 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

    We have reviewed this rule and we have not identified any changes 
in paperwork under the Paperwork Reduction Act.

Notice and Comment Rulemaking

    The Department believes that notice and comment rulemaking are not 
required under the Administrative Procedure Act, 5 U.S.C. 553(b)(A), 
because this rule is interpretive rather than substantive in nature. 
The Section 503 regulations specifically provide as follows:

    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. 41 CFR 60-741.44(b) (emphasis added).

    Because contractors are not required to follow Appendix C, no 
penalty can attach for failure to follow the

[[Page 59659]]

Appendix. Accordingly, the rule is not substantive in nature and notice 
and comment rulemaking is not required. See, e.g., American President 
Lines, Ltd. v. FMC, 316 F.2d 419 (DC Cir. 1963).

List of Subjects in 41 CFR Part 60-741

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

    Signed at Washington, D.C., this 26th day of October, 1998.
Alexis M. Herman,
Secretary of Labor.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.
Shirley J. Wilcher,
Deputy Assistant Secretary for Federal Contract Compliance.

    For the reasons set forth above, 41 CFR Part 60-741 is amended as 
follows:

PART 60-741--[AMENDED]

    1. The authority citation for part 60-741 continues to read as 
follows:

    Authority: 29 U.S.C. 706 and 793; E.O. 11758 (3 CFR, 1971-1975 
Comp., p. 841).

    2. In Appendix C to part 60-741, the introductory text is 
republished and paragraphs 3 and 4 are revised to read as follows:

Appendix C to Part 60-741--Review of Personnel Processes

    The following is a set of procedures which contractors may use 
to meet the requirements of Sec. 60-741.44(b):
* * * * *
    3. In each case where an employee or applicant who is an 
individual with a disability is rejected for employment, promotion, 
or training, the contractor should prepare a statement of the reason 
as well as a description of the accommodations considered. The 
statement of the reason for rejection (if the reason is medically 
related), and the description of the accommodations considered, 
should be treated as confidential medical records in accordance with 
Sec. 60-741.23(d). These materials should be available to the 
applicant or employee concerned upon request.
    4. Where applicants or employees are selected for hire, 
promotion, or training and the contractor undertakes any 
accommodation which makes it possible for him or her to place an 
individual with a disability on the job, the contractor should make 
a record containing a description of the accommodation. The record 
should be treated as a confidential medical record in accordance 
with Sec. 60-741.23(d).

[FR Doc. 98-29042 Filed 11-3-98; 8:45 am]
BILLING CODE 4510-27-P