[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Rules and Regulations]
[Pages 59630-59657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29043]


      

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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; Final Rule

41 CFR Part 60-741



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

  Federal Register / Vol. 63, No. 213 / Wednesday, November 4, 1998 / 
Rules and Regulations  

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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: Final rule.

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SUMMARY: This final rule revises the 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 rule generally conforms the VEVRAA 
regulations to the Office of Federal Contract Compliance Programs' 
regulations implementing Section 503 of the Rehabilitation Act of 1973, 
as amended (Section 503). The rule also withdraws 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 
1980 rule which pertain to VEVRAA.

DATES: The regulations are effective January 4, 1999. However, affected 
parties do not have to comply with the new recordkeeping requirements 
contained in the final rule until the Office of Management and Budget 
(OMB) completes its review under the Paperwork Reduction Act of 1995 
and OFCCP publishes in the Federal Register valid OMB control numbers.

FOR FURTHER INFORMATION CONTACT: James I. Melvin, Director, Division of 
Policy, Planning and Program Development, Office of Federal Contract 
Compliance Programs, 200 Constitution Avenue, N.W., Room C3325, 
Washington, D.C. 20210. Telephone: (202) 693-0102 (voice), 1-800-326-
2577 (TDD). Copies of this final rule, including copies in alternate 
formats, may be obtained by calling (202) 693-0102 (voice), 1-800-326-
2577 (TDD). The alternate formats available are large print, an 
electronic file on computer disk and audiotape. The rule also is 
available on the Internet at http://www.dol.gov/dol/esa.

SUPPLEMENTARY INFORMATION:

Recent Legislative Developments

    When OFCCP sent this final rule to the Federal Register for 
publication, both houses of Congress had passed S. 1021, the ``Veterans 
Employment Opportunities Act of 1998,'' but the bill had not yet been 
signed into law. If the bill becomes law it will require additional 
changes to the VEVRAA regulations, to increase the coverage threshold 
from a contract of $10,000 or more to a contract of $25,000 or more, 
and to add to the class of individuals protected under the law 
``veterans who served on active duty during a war or in a campaign or 
expedition for which a campaign badge has been authorized.'' OFCCP 
considered delaying publication of this final rule until regulatory 
provisions addressing the new legislation could be drafted and included 
in the rule. We rejected that approach, however, because it would 
unduly delay the implementation of the many important provisions 
contained in this final rule, without increasing the speed with which 
the revisions mandated by the new legislation could be published. OFCCP 
has already begun work on an additional regulatory document that would 
address the new legislation, and expects to publish that document in 
the near future.

Current Regulations and Rulemaking History

    This final rule revises the current regulations (41 CFR Part 60-
250) implementing the affirmative action provisions of the Vietnam Era 
Veterans' Readjustment Assistance Act, as amended, 38 U.S.C. 4212 
(Section 4212 or VEVRAA). VEVRAA requires parties holding a Government 
contract or subcontract 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, 
Pub. L. 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 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 customarily is performed (e.g., changes in work 
assignments) that enables a qualified special disabled veteran to enjoy 
equal employment opportunities.
    On May 1, 1996, OFCCP published an interim rule revising 41 CFR 60-
250.5(d), Invitation to self-identify, and Appendix A to Part 60-250, 
Sample Invitation to Self-Identify (61 FR 19366). The revision was 
published to be consistent with an analogous requirement in the Section 
503 final rule, also published 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 VEVRAA. A correction notice and extension of the comment 
period was published on October 28, 1996 (61 FR 55613). The comment 
period ended December 27, 1996. Two comments were submitted in response 
to the May 1, 1996, interim rule, and another seven comments were 
submitted in response to the September 24, 1996, NPRM, as corrected. In 
addition, five organizations expressed views on the proposal in a 
meeting with OFCCP held during the comment period. The comments 
represented the views of contractor advocacy organizations, veterans 
advocacy organizations, an employer, an attorney who advises employers, 
a state governmental agency, and two Federal agencies. All comments 
have been analyzed and considered in the development of this final 
rule.

Regulatory Revisions

    Today's final rule is precipitated, in part, by OFCCP's publication 
of a final rule revising the regulations

[[Page 59631]]

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 regulations 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 38 U.S.C. 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.'' The VEVRAA 
regulations being revised today were identical to the former Section 
503 regulations, except where differences were 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 has revised the Section 4212 regulations to 
conform them to the Section 503 final rule published in 1996. Thus, 
today's final rule, 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, to a more limited extent, to 
veterans of the Vietnam era.
    Specific changes are discussed in the Section-by-Section Analysis 
below.

Partial Withdrawal of 1980 Final Rule

    OFCCP also proposed to withdraw portions of 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, 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 document (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 final rule. However, OFCCP has determined not 
to go forward with some of the other revisions to the regulations. For 
instance, unlike today's final rule (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.
    The one comment received on the proposed withdrawal of the 1980 
final rule is discussed in the Section-by-Section Analysis below. In 
order to avoid conflict between today's final rule and the 1980 final 
rule, OFCCP hereby withdraws all provisions of the 1980 rule that 
pertain to Section 4212.

Section-by-Section Analysis

    This final 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 statutorily required 
revisions to the definitions of ``special disabled veteran'' and 
``veteran of the Vietnam era.'' 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. 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 written 
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 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 consistent enforcement approaches 
under VEVRAA and Executive Order 11246, 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 also are revised to reflect an amendment to Section 4212.

[[Page 59632]]

    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, this rule 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 
guidance with respect to parallel provisions of this final rule.
    This rule uses a long form amending procedure in which all sections 
of the regulations are republished, including sections for which no 
changes were proposed and sections for which the only proposed change 
was the section number. Use of the long form procedure ensures maximum 
clarity. The discussion which follows identifies the comments received 
in response to the NPRM, provides OFCCP's responses to those comments, 
and explains any resulting changes to the proposed revisions.

Subpart A--Preliminary Matters, Equal Opportunity Clause

Section 60-250.1  Purpose, Applicability and Construction

    The preamble to the NPRM pointed out that the 1980 final rule would 
have consolidated provisions (e.g., definitions) which are applicable 
to both Section 4212 and Executive Order 11246 into 41 CFR Part 60-1, 
and 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. The VEVRAA NPRM proposed 
withdrawal of the 1980 final rule, and did not propose similar 
consolidations because OFCCP now believes that consolidation of 
provisions in this way is not practical.
    One commenter objected to OFCCP's stated inclination not to 
consolidate common provisions. The commenter felt that OFCCP applies a 
low priority to veterans' employment rights, and suggested that 
consolidating common provisions would strengthen enforcement of VEVRAA 
and place it on a par with enforcement of Executive Order 11246.
    OFCCP disagrees with the commenter's assessment that the agency 
applies low priority to enforcement of VEVRAA. Traditionally, whenever 
OFCCP has conducted a compliance review it has examined compliance with 
VEVRAA (and Section 503) as well as compliance with Executive Order 
11246. OFCCP also investigates all complaints of discrimination filed 
under VEVRAA; by contrast, most complaints of discrimination under the 
Executive Order are not investigated by OFCCP but are referred to the 
EEOC for processing under Title VII of the Civil Rights Act of 1964.
    Further, OFCCP does not agree with the commenter's premise that 
consolidating provisions would alter enforcement of VEVRAA. The vast 
majority of the consolidations made in the 1980 rule simply moved 
various provisions from Parts 60-250 and 60-741 into Part 60-1, without 
substantive change. The thinking at that time was that the regulations 
would be easier to use if fundamental elements (such as definitions) 
appeared in one place at the beginning of Chapter 60. Also, OFCCP hoped 
to shorten the regulations by reducing instances in which similar 
material (e.g., provisions on coverage and waivers) was repeated three 
times in three different Parts of Chapter 60. Upon reexamination in 
light of the comment, OFCCP concludes that consolidating provisions is 
not justified or necessary at this time. In OFCCP's view, consolidation 
would not strengthen enforcement of VEVRAA and could be confusing to 
readers of the regulations.
    Paragraph (c)(2) of the proposal, and of the final rule, 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. OFCCP stated in the preamble to the NPRM, as examples of 
this principle, that ``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).'' (Emphasis added.)
    The EEOC commented that they agree that contractors may rely on an 
OSHA-approved state law that is identical to its Federal counterpart, 
as a defense. However, they stated that they have not yet taken a 
position on the use of a conflicting OSHA-approved state safety and 
health law that is not identical to the Occupational Safety and Health 
Act, as a defense to a violation of the ADA. We agree that our NPRM 
preamble statement relating to reliance on a state law may be overly 
broad. At this time we will not permit a contractor to rely upon a 
state law which is not identical to the Occupational Safety and Health 
Act, as a defense to a violation of VEVRAA. Accordingly, we have 
deleted the parenthetical statement which appeared in the NPRM.

Section 60-250.2  Definitions

Section 60-250.2(h)  Contract

    OFCCP proposed that ``contract'' be defined to include ``any 
Government contract or subcontract.'' (Emphasis added.) One commenter 
suggested that it is inappropriate to include subcontracts within the 
definition of contract, because doing so would impede OFCCP's ability 
to identify subcontractors and therefore to enforce VEVRAA against 
subcontractors. OFCCP disagrees. The regulations continue to define the 
terms ``subcontract'' and ``subcontractor.'' See Secs. 250.2(l) and 
(m). The purpose of including ``subcontract'' within the definition of 
``contract'' is simply to eliminate the need to mention subcontracts in 
the regulatory text each time the regulation seeks to address both 
contracts and subcontracts. This change will not in any way affect 
OFCCP's ability to identify subcontractors or to enforce the law 
against subcontractors.

Section 60-250.2(o)  Qualified Special Disabled Veteran

    In the proposed rule the definition of qualified special disabled 
veteran cross-referenced Sec. 60-250.3, which in the proposal contained 
exceptions to the definition of special disabled veteran and qualified 
special disabled veteran. As discussed below, we have not included the 
exceptions in the final rule. Accordingly, we have dropped the cross 
reference from this definition.

Section 60-250.2(p)  Veteran of the Vietnam Era

    One commenter pointed out that on October 9, 1996, the Veterans' 
Benefits Improvement Act of 1996 (Public Law 104-275, Sec. 505) amended 
VEVRAA by, among others things, changing the

[[Page 59633]]

definition of ``Vietnam era.'' Under the revised definition, the 
Vietnam era now extends from February 28, 1961, through May 7, 1975, 
for veterans who served in the Republic of Vietnam during that period, 
and from August 5, 1964, through May 7, 1975, in all other cases.
    Revision of the statutory definition requires a corresponding 
revision of OFCCP's regulatory definition of ``Veteran of the Vietnam 
era.'' This revision is a nondiscretionary, ministerial action which 
merely incorporates, without change, the statutory amendment into a 
pre-existing regulation. Publication in proposed form would serve no 
useful purpose, and therefore is unnecessary under the Administrative 
Procedure Act (5 U.S.C. 553(b)(B)). Accordingly, we find good cause to 
waive notice of proposed rulemaking and to include the revision in this 
final rule.

Section 60-250.3  Exceptions to the Definitions of ``special disabled 
veteran'' and ``qualified special disabled veteran''

    As proposed, this section would have excluded from the Act's 
protection of special disabled veterans and qualified special disabled 
veterans: (a) an alcoholic whose current use of alcohol prevents 
performance of the essential functions of the employment position in 
question or which would pose a direct threat to property or to health 
or safety; and (b) an individual with a currently contagious disease or 
infection who, by reason of the disease or infection, would constitute 
a direct threat to the health or safety of the individual or others or 
who, by reason of the disease or infection, is unable to perform the 
essential functions of the employment position in question. The two 
exclusions would have been carried over from the Section 503 rule.
    A commenter objected to the proposal's exclusion of certain 
alcoholics from protection. The commenter was concerned that the 
provision might encourage stereotyping of disabled veterans.
    Upon consideration of the proposed rule in light of the comment, 
OFCCP has decided to remove from the final rule both proposed 
exclusions. The exclusions must appear in the Section 503 rules, 
because Section 503 itself requires them. However, none of Section 
503's exclusions from protection have been legislated into VEVRAA. 
Accordingly, in this final rule we do not adopt the exclusions which 
are found at 41 CFR 60-741.3 in the Section 503 rule. In order to 
preserve parallel section numbering between the VEVRAA and Section 503 
rules, we have designated Sec. 60-250.3 as ``Reserved.''

Section 60-250.5  Equal Opportunity Clause

    Paragraph (a)2 of the proposal required that contractors 
immediately list their employment openings at an appropriate office of 
the state employment service system wherein the opening occurs. One 
commenter suggested that listing job openings with the Department of 
Labor's America's Job Bank should be deemed to satisfy the job listing 
requirement. America's Job Bank is a computerized, nationwide listing 
of job openings. The computerized network links the 1800 state 
employment service offices. Job seekers may access the Job Bank via the 
Internet at http://www.ajb.dni.us/, and on computer systems in public 
libraries, colleges and universities, high schools, shopping malls and 
other public places.
    OFCCP agrees, along with the Veterans' Employment and Training 
Service, that listing jobs in America's Job Bank will satisfy a 
contractor's listing obligation. Therefore, we have supplemented 
paragraph (a)2 of the equal opportunity clause to reflect this 
additional method for listing jobs.
    The same commenter also felt that the regulations ``are unclear as 
to whether an employer is required to list with a state employment 
agency positions normally filled through outside temporary employment 
agencies.'' The commenter apparently disagrees with the interpretation 
some OFCCP staff have given the corresponding provision of the existing 
regulation. OFCCP believes that the answer to this question depends 
upon the facts of each particular situation, and therefore is too 
detailed to be included in a regulation.
    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. OFCCP proposed a definition of ``executive and top 
management'' that was based upon the definition of ``executive'' found 
in the Department of Labor's regulations implementing the Fair Labor 
Standards Act (FLSA), 29 CFR 541.1. One commenter objected to the 
proposed definition, claiming that it ``would serve to exempt all but 
the very lowest positions.''
    As proposed, the full definition stated that in order to be 
considered ``executive and top management,'' and thus exempt from the 
mandatory listing requirement, a job must satisfy five factors: (a) the 
incumbent employee's primary duty must consist of the management of the 
enterprise or of a customarily recognized department or subdivision of 
the enterprise; (b) the employee must customarily and regularly direct 
the work of two or more other employees; (c) the employee must have the 
authority to hire or fire other employees, or his or her suggestions 
and recommendations as to the hiring or firing and as to the 
advancement and promotion or other change of status will be given 
particular weight; (d) the employee must customarily and regularly 
exercise discretionary powers; and (e) with certain limited exceptions, 
the employee must not devote more than 20 percent (40 percent in retail 
and service establishments) of his or her hours of work to activities 
which are not closely related to the work described in (a) through (d).
    The commenter took a portion of the test out of context, citing 
only one clause from factor (c) relating to the employee's authority to 
make recommendations and suggestions about personnel actions. In fact, 
the standard is quite stringent in that all five factors must be 
satisfied. Thus, for example, in a case under the FLSA, Assistant 
Managers in a fast-food restaurant were determined not to be executives 
because, despite many management responsibilities, they spent more than 
40 percent of their time on production duties. Donovan v. Burger King, 
675 F.2d 516 (2nd Cir., 1982). Similarly, a Warehouse Manager for a 
retail shoe chain was found to fall outside the ``executive'' exemption 
of the FLSA because he did not regularly exercise discretionary powers, 
and because the employer was unable to demonstrate that the Manager did 
not devote more than 20 percent of his working hours to activities not 
related to the performance of the work described in factors (a) through 
(d). Wirtz v. C&P Shoe Corp., 336 F.2d (5th Cir., 1964). Accordingly, 
OFCCP has decided to adopt the definition of ``executive and top 
management'' as proposed.
    Throughout the equal opportunity clause, and elsewhere in the 
regulation, we have used the term ``local employment service office'' 
to refer to the office with which jobs must be listed. This is the same 
term used in the statute. A proposed definition of the term 
``appropriate local office of the state employment service system'' has 
been dropped as unnecessary, and the remaining definitions in section 6 
of the equal opportunity clause have been renumbered accordingly.

[[Page 59634]]

Subpart C--Affirmative Action Program

Section 60-250.40  Applicability of the Affirmative Action Program 
Requirement

    One commenter objected to the proposed standard (which is also the 
standard under the current rule) that the written affirmative action 
program requirement applies only to contractors with 50 or more 
employees and a contract of $50,000 or more. The commenter felt that 
this was at odds with the statutory requirement that ``[a]ny contract 
in the amount of $10,000 or more'' contain a provision requiring that 
the contractor take affirmative action to employ and advance in 
employment qualified special disabled and Vietnam era veterans.
    OFCCP does not agree that the two provisions are at odds. All 
nonexempt contractors, that is, all contractors with a contract of 
$10,000 or more, are subject to the basic nondiscrimination and 
affirmative action requirements of VEVRAA. These requirements include 
the duty to list job vacancies with a local employment service office. 
In addition, those contractors who meet the stated 50 employee/$50,000 
contract threshold must prepare a written affirmative action program. 
The written AAP contains additional affirmative action obligations for 
larger contractors with larger contracts, such as undertaking specified 
outreach and positive recruitment activities. See, for example, 
Sec. 60-250.44(f). Accordingly, the rule is adopted as proposed.

Section 60-250.42  Invitation to Self-identify

    On May 1, 1996, OFCCP published an interim rule amending Sec. 60-
250.5(d) of the then-current regulations relating to invitations to 
self-identify. The interim rule was intended to conform the invitation 
to self-identify requirement under VEVRAA with the requirement 
contained in the Section 503 final rule. The rule was published in 
response to concerns raised by representatives of Government 
contractors that if contractors were faced with a self-identification 
requirement under VEVRAA that was different than the requirement under 
Section 503, each contractor would have to revise its forms, notices 
and posters when the Section 503 final regulations took effect, and 
then change those same forms, notices and posters again when OFCCP 
promulgated its revisions to the VEVRAA regulations.
    The NPRM published on September 24, 1996, mirrored the VEVRAA 
interim rule and the Section 503 final rule. It required the 
contractor, after making an offer of employment and before the 
applicant began his or her employment duties, to invite applicants to 
identify themselves as special disabled or Vietnam era veterans in 
order to benefit from the contractor's affirmative action program. As 
an exception to the general requirement that the invitation be extended 
after an offer of employment, the proposal permitted a pre-offer 
invitation in two limited circumstances: if the invitation was made 
when the contractor actually was undertaking affirmative action at the 
pre-offer stage; or if the invitation was made pursuant to a Federal, 
state or local law requiring affirmative action for special disabled or 
Vietnam era veterans. This approach was intended to be 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.''
    The proposal also required that the contractor maintain a separate 
file on applicants and employees who identified themselves as covered 
disabled veterans or Vietnam era veterans, and provide that file to 
OFCCP upon request. Finally, the proposal provided that if an applicant 
identified himself or herself as a special disabled or Vietnam era 
veteran, the contractor should seek the advice of the applicant 
regarding proper placement and appropriate accommodation, after a job 
offer had been extended.
    Two comments were submitted in response to the May 1, 1996, interim 
rule. One of the interim rule commenters also commented on the NPRM, 
and two additional comments were submitted in response to the NPRM. 
Finally, five organizations expressed views on the proposal in a 
meeting with OFCCP held during the comment period.
    The five organizations felt that the proposed limitations on pre-
offer invitations to Vietnam era veterans were unduly restrictive. They 
asserted that in most instances a contractor would be aware of an 
applicant's veteran status at the pre-offer stage, because the 
applicant would include this information in his or her employment 
history, or because of priority referral from the job listing program. 
The organizations advocated that, with respect to Vietnam era veterans, 
the invitation to self identify should be mandatory at the pre-offer 
stage so that contractors could take affirmative action specific to 
Vietnam era veterans in the employment process. Upon consideration, we 
agree that limiting the invitation to Vietnam era veterans to the post-
offer stage is unduly restrictive. The disability discrimination 
concerns embodied in the ADA (which justify restrictions on the timing 
of invitations extended to special disabled veterans) do not apply to 
Vietnam era veterans.
    On the other hand, we are reluctant to require that the invitation 
be extended pre-offer, because to do so would mandate that contractors 
extend invitations at two different times--a pre-offer invitation to 
Vietnam era veterans and a post-offer invitation to special disabled 
veterans. This would potentially be confusing and seemingly over-
technical, particularly for smaller employers.
    Accordingly, the final rule contains separate invitation to self-
identify provisions for special disabled veterans and for Vietnam era 
veterans. Paragraph (a) covers the invitation that is to be extended to 
special disabled veterans. It requires, with two limited exceptions, 
that the invitation be extended after a job offer has been made and 
before the individual begins his or her employment duties. The 
exceptions are that the invitation may be extended pre-offer when: the 
invitation is made when the contractor actually is undertaking 
affirmative action for special disabled veterans at the pre-offer 
stage; or the invitation is made pursuant to a Federal, state or local 
law requiring affirmative action for special disabled veterans. In this 
context, the reference to Federal law means a law other than one 
enforced by OFCCP (i.e., Section 503 and VEVRAA). Following are 
examples which illustrate the application of each exception:
    Special disabled veteran example: A contractor establishes a job 
training program to train disabled veterans for high paying technical 
jobs like those at the contractor's establishment. The initial phase of 
the training program is a six-month classroom component. The contractor 
pays all costs for the classroom training, and pays the participants 
the minimum wage during this period. After completion of classroom 
training, all trainees participate in a six-month work-study phase of 
the program. During the work-study phase, participants are regarded as 
temporary trainee-employees of the contractor. The contractor hires 
graduates of the program as permanent employees, if openings exist when 
the training is complete. Program participants whom the contractor is 
unable to hire have acquired education and job experience that will 
assist them in obtaining skilled employment as technicians elsewhere.
    The contractor's initial decision to accept an individual into the 
program is also a decision to employ that person as

[[Page 59635]]

a temporary employee during the classroom and work-study phases of the 
program. Under the general rule stated at Sec. 60-250.42(a), the 
contractor could not ask program applicants to disclose whether they 
are disabled veterans because the question would be a pre-offer 
disability-related inquiry. However, the contractor's program is a 
voluntary affirmative action program that satisfies the exception at 
Sec. 60-250.42(a)(1). The contractor's program is a specific and fully 
implemented affirmative action effort, which is not required by any 
Federal, state or local law. The affirmative action program requires 
the identification of disabled veterans prior to extending an offer to 
participate in the program, because the information is necessary for 
determining whether the applicant is eligible to participate in the 
program.
    Federal, state or local law example: A state statute requires that 
state government jobs be filled in the following fashion. Applicants 
who meet basic eligibility requirements take a competitive examination. 
The names of applicants who pass the examination are placed on a list 
of eligible applicants in the following order: (1) disabled veterans; 
(2) veterans; (3) widows of veterans who were killed in action; (4) all 
others in order of their test scores. When job openings occur the 
selecting official is provided the names of the top five applicants 
from the list to interview for employment. All five applicants are 
interviewed before a job offer is extended.
    The state statute expressly requires affirmative action in the form 
of according top priority to disabled veterans for placement on a list 
of eligibles. In order to implement the priority accorded disabled 
veterans, state officials must be able to determine whether an 
applicant is a disabled veteran prior to extending a job offer. The 
state's program fits within the exception at Sec. 60-250.42(a)(2). 
Therefore, it is not a violation of VEVRAA (or of Section 503 or the 
ADA) for state hiring officials to invite applicants to self-identify 
as a special disabled veteran prior to extending an offer of 
employment.
    Paragraph (b) covers invitations to veterans of the Vietnam era. It 
specifies that the invitation may be made at any time before the 
applicant begins his or her employment.
    This approach necessitated some modification of Appendix B, which 
contains a sample invitation to self-identify. We have amended the 
Appendix to make it adaptable to situations in which a contractor 
extends an invitation to Vietnam era veterans separately from its 
invitation to special disabled veterans, as well as when the contractor 
extends a single invitation to both categories of veterans.
    One comment on the interim rule expressed concerns about the 
separate file requirement contained in subsection (d)(4). The 
commenter, an agency of a state government, felt that the requirement 
that contractors maintain a separate file on persons who have self-
identified and provide the file to OFCCP upon request, ``creates an 
undue burden on covered contractors, without any appreciable benefit to 
the class Sec. 60-250 was intended to protect.'' OFCCP disagrees that 
the requirement to maintain separate files results in an increased 
recordkeeping burden for contractors. As explained in the preamble to 
the interim rule:

    OFCCP believes that a number of contractors may already have 
maintained separate files on such applicants and employees in order 
to implement the VEVRAA confidentiality requirements. In addition, 
the ADA presently requires employers with 15 or more employees to 
maintain on separate forms and in separate medical files information 
obtained regarding the medical condition or history of applicants 
and to treat this information as confidential medical records (42 
U.S.C. 12112(d)(3)(B); 29 CFR 1630.14(b)(1)). Furthermore, because 
the invitation to self-identify is only required by the interim rule 
to occur after a job offer has been made, and not to all applicants, 
there will be fewer records of self-identification being generated 
than in the past.

Moreover, because the ADA requires that information regarding the 
medical condition or history of applicants be kept in separate files, 
OFCCP cannot impose a different standard with regard to disabled 
veterans under VEVRAA.
    The second commenter on the interim rule addressed the portion of 
proposed subsection (d)(4) that provided that if an applicant 
identifies himself or herself as an individual with a disability, the 
contractor should seek the advice of the applicant regarding proper 
placement and appropriate accommodation, after a job offer has been 
extended. The commenter asserted that if an applicant self-identified 
at the pre-offer stage, the contractor apparently cannot discuss 
accommodation at that stage unless the applicant first raises the 
issue. The commenter then opined that this imposed an additional burden 
as well as a more stringent restriction on Federal contractors under 
VEVRAA than the EEOC imposes under the ADA. Specifically, the commenter 
asserted that the EEOC's enforcement guidance permits an employer to 
ask an applicant questions regarding possible reasonable 
accommodations: (1) If the employer believes the applicant will need 
accommodation because of an obvious disability; (2) if the employer 
believes the applicant will need accommodation because of a hidden 
disability that the applicant has voluntarily disclosed; or (3) if the 
applicant has voluntarily disclosed to the employer that he or she 
needs accommodation. In the commenter's view OFCCP's interim rule 
permitted pre-offer discussion of accommodations only in the third 
instance mentioned above.
    We disagree with the commenter's interpretation of the rule. The 
rule recommends that contractors make certain inquiries after tendering 
an offer of employment, but the rule does not prohibit inquiries before 
a job offer when the contractor becomes aware of the need for 
accommodation at the pre-offer stage. OFCCP intends that its 
regulations under Section 503 and VEVRAA be interpreted in a manner 
which is consistent with the EEOC's interpretations of the ADA. 
Accordingly, pre-offer discussion of accommodations would be 
permissible under VEVRAA in the same circumstances as those in which it 
would be permissible under the ADA.
    The same commenter also submitted comments in response to the NPRM. 
Those comments requested that OFCCP provide ``clear guidance'' as to 
what is meant by ``actually taking affirmative action at the pre-offer 
stage.'' Consistent with interpretations made by the EEOC under the 
ADA, ``actually taking affirmative action at the pre-offer stage'' 
refers to an employer voluntarily using the information obtained in 
response to an invitation to self-identify, to benefit special disabled 
veterans. If an employer wishes to invoke this exception, it must 
provide affirmative action at the pre-offer stage that necessitates the 
identification of special disabled veterans. The example provided 
earlier in this discussion should help to illustrate the point.
    The commenter also requested ``clear guidance'' as to what is meant 
by ``before the applicant begins his or her job [employment] duties.'' 
By this we mean that the invitation to self identify must be made 
before the applicant is placed on the contractor's payroll.
    Another commenter pointed out that, as proposed, the rule would 
require contractors to discuss reasonable accommodation with all who 
self identify as either special disabled veterans or veterans of the 
Vietnam era. The commenter asserted, ``by encompassing Vietnam-era 
veterans, this provision presupposes that all Vietnam-era veterans are 
likely to require some form of accommodation to

[[Page 59636]]

be employable.'' The point is well taken. Reasonable accommodation is 
relevant in the context of special disabled veterans, but generally not 
in the context of Vietnam era veterans. We have modified the rule 
accordingly, and have made corresponding modifications to the sample 
invitation to self-identify found at Appendix B.
    The same commenter also was concerned that self-identification, 
coupled with the provision that permits an employer to ask an applicant 
to demonstrate how the applicant will be able to perform job-related 
functions, could result in an employer ``withdraw[ing] the job offer on 
the pretense that the veteran couldn't perform some aspect of the job 
when asked to ``demonstrate.'''' The commenter than asked, ``[w]ho 
couldn't be deemed to fail some task they'd never done before?'
    As proposed, the literal wording of the rule was ambiguous as to 
whether a contractor would be permitted to require a demonstration from 
both Vietnam era and special disabled veterans, or only from the 
latter. The context of the proposal, specifically the reference to 
inquiries that are consistent with the ADA, makes clear, however, that 
our intent was to apply this standard with respect to special disabled 
veterans only. We have revised the rule to clarify the point.
    Turning more directly to the commenter's concern, the concept of 
requiring an applicant with a known disability to demonstrate his or 
her ability to perform the job is drawn directly from the ADA, and 
OFCCP intends to apply it consistent with its application under the 
ADA. The EEOC Guidance on this subject explains that an employer may 
require a disabled applicant to demonstrate how he or she will perform 
the job only when: (1) the employer could reasonably believe that the 
applicant would not be able to perform a job function due to a known 
disability; or (2) all applicants in the job category (i.e., including 
those who are not disabled) are asked to demonstrate how they would 
perform the job. Thus, an employer need not hire someone who, even with 
accommodation, cannot perform the essential functions of the job. On 
the other hand, an employer may not use the demonstration requirement 
to discriminatorily deny an individual employment simply because that 
individual is disabled.
    Another commenter was concerned that the proposed restrictions on 
pre-offer self-identification could preclude contractors from asking 
questions about military service on employment applications or in 
employment interviews. As the commenter pointed out, a normal 
employment application asks about military service and the reason for 
leaving or the type of discharge, and military service also is a common 
topic in employment interviews. However, such questions may elicit 
information that identifies an applicant as a special disabled or a 
Vietnam era veteran. The commenter asserted restricting such inquiries 
would require radical revision in the application process among United 
States employers.
    The ADA prohibits employers from asking about the existence, 
nature, or severity of a disability at the pre-offer stage. The EEOC's 
October 10, 1995, Enforcement Guidance on Preemployment Disability-
Related Inquiries and Medical Examinations defines such an inquiry as 
one that is likely to elicit information about a disability. On the 
other hand, according to the EEOC Guidance, if there are many possible 
answers to a question and only some of those answers would contain 
disability-related information, the question is not disability-related. 
It is our intent that the VEVRAA rule be applied consistent with this 
standard. Under this interpretation, it would be permissible for an 
employer to inquire about an applicant's military service, including 
the reason for leaving or the type of discharge. This is because the 
large majority of those discharged from the military are discharged for 
reasons other than medical, and even among those discharged for medical 
reasons not all would qualify as special disabled veterans under VEVRAA 
or as individuals with disabilities under the ADA and Section 503. If 
the applicant's response indicated a discharge for medical reasons, the 
employer would not be permitted to ask follow-up questions relating to 
the nature or extent of the medical condition. However, if the response 
caused the employer to reasonably believe that the applicant may need 
an accommodation, the employer may inquire about that need.
    The same commenter also expressed concern that a contractor 
electing to invite individuals to self-identify at the pre-offer stage 
might violate the ADA, which generally prohibits pre-offer inquiries as 
to whether an individual has a disability. The commenter sought further 
guidance on this issue.
    As we have stated above, our intent is that this rule be applied 
consistently with the ADA. The limited instances of pre-offer self-
identification permitted by the regulation should not result in 
violation of the ADA. The ADA expressly does not preempt other Federal, 
state or local laws that provide greater or equal protection for the 
rights of individuals with disabilities than are provided in the ADA. 
42 USC 12201(b). Therefore, the provision permitting pre-offer 
invitations to self-identify directed to special disabled veterans, 
when required by a Federal, state or local law requiring affirmative 
action, would not violate the ADA. Similarly, a contractor actually 
undertaking affirmative action for special disabled veterans pursuant 
to VEVRAA at the pre-offer stage would not violate this provision of 
the ADA.
    Finally, staff from the Department's Office of the Assistant 
Secretary of Labor for Veterans' Employment and Training (OASVET) have 
asked that we clarify one additional point. The restrictions on the 
timing of the invitation to self-identify that appear in the 
regulation, are completely unrelated to pre-application recruitment 
activities. Accordingly, it would not violate VEVRAA, Section 503 or 
the ADA, for an employer to advertise that it encourages applicants who 
are special disabled or Vietnam era veterans, or to otherwise direct 
its recruitment efforts at members of those two groups.

Section 60-250.44  Required Contents of Affirmative Action Programs

    The regulations being replaced today, at Sec. 60-250.6(b), specify 
that ``[c]ontractors shall review their personnel processes to 
determine whether their present procedures assure careful, thorough and 
systematic consideration of the job qualifications' of special disabled 
and Vietnam era veterans. Section 60-250.44(b) of the NPRM stated the 
obligation as follows: ``[t]he contractor shall ensure that its 
personnel processes provide for careful, thorough, and systematic 
consideration of the job qualifications'' of special disabled and 
Vietnam era veterans. One commenter felt that the duty to ``ensure'' as 
stated in the NPRM required a ``different mandate'' than the duty to 
``review'' as stated in the rule that was current at that time. We 
disagree. When read in full context, the regulation being replaced 
today requires that contractors do more than simply examine their 
processes. If affirmative action is to have any meaning, it surely 
requires that contractors take steps to reform those processes that, 
upon review, are found not to meet the stated standard of assuring 
careful, thorough and systematic consideration.
    Two commenters addressed the obligation in proposed Sec. 60-
250.44(d), that contractors inquire whether an employee with a known 
disability who is having difficulty performing a job is in need of 
accommodation. One commenter characterized the obligation

[[Page 59637]]

as: (1) conflicting with the EEOC's guidance under the ADA which 
``gives the employee primary responsibility for requesting an 
accommodation''; (2) conflicting with the spirit of the ADA which 
``empowers individuals with disabilities to choose to--or choose not 
to--ask for help''; and (3) ``paternalistic,'' ``potentially insulting 
and embarrassing to the individual,'' and liable to ``be perceived by 
special disabled veterans as prejudicial, because the employer has 
distinguished employees with disabilities from employees who do not'' 
have disabilities.
    The other commenter read the provision as potentially requiring 
identification of special disabled veterans prior to the job offer, 
accommodation in the application process, and post-offer disability-
related questions directed to only some entering employees, all of 
which the commenter thought were problematic under the ADA.
    We do not share the commenters' views on this issue. Affirmative 
action, of which this provision is an example, is unique to VEVRAA and 
Section 503, and includes actions above and beyond those required as a 
matter of nondiscrimination. Also, by specifying ``employee,'' the 
provision does not conflict with the ADA restrictions relating to pre-
offer, and post-offer but pre-employment, inquiries. Moreover, the rule 
does not undermine the concept of individuals with disabilities being 
able to choose not to ask for help. That is, the rule requires that the 
employer make inquiry, but it does not require a particular response 
from the employee. Additionally, contrary to this type of employer 
inquiry being prohibited by the ADA, it is permitted by the EEOC's 
interpretive materials. See 29 CFR Part 1630, Appendix, Section 1630.9.
    Finally, we are sensitive to the concern that employers not be 
required to take actions which might be offensive to their employees 
with disabilities. However, we disagree with the commenter that the 
provision in question here crosses that line. It is instructive to note 
that OFCCP did not receive a single objection to this provision from a 
commenter that might be characterized as a veteran or an individual 
with disabilities, nor from a group representing veterans or 
individuals with disabilities. Similarly, OFCCP did not receive a 
single objection from any of these categories of commenters when it 
proposed the corresponding provision in its Section 503 NPRM. See 57 FR 
48084 (October 21, 1992), corrected at 57 FR 49160 (October 30, 1992).
    OFCCP has made one minor alteration to the text of Sec. 60-
250.44(d) for clarification. Language has been inserted to specify that 
the obligation to provide reasonable accommodation is an element of 
nondiscrimination, whereas the obligation to notify the employee of a 
performance problem and inquire whether the problem is related to 
disability is an element of affirmative action.
    One commenter objected to the requirement in proposed Sec. 60-
250.44(e) that contractors ``develop and implement procedures to 
ensure'' that employees are not harassed because of their status as 
special disabled and Vietnam era veterans. The commenter felt that the 
requirement was unnecessary and impractical, adding that it is almost 
impossible for an employer to guarantee that an employee will not act 
inappropriately. But that is not what the regulation requires. The rule 
simply requires that contractors develop and implement procedures that 
are designed to ensure that disabled and Vietnam era veteran employees 
will not be harassed.
    Proposed Sec. 60-250.44(f) required that contractors undertake 
appropriate outreach and recruitment activities, and enumerated eight 
suggested activities. The proposed section's introductory provision 
stated that the scope of the contractor's efforts ``shall depend upon 
all the circumstances,'' and that ``[i]t is not contemplated that the 
contractor will necessarily undertake all the activities listed . . . 
or that its activities will be limited to those listed.''
    One commenter objected to proposed subsection (f)(8), which would 
have provided that contractors, in making hiring decisions, should 
consider special disabled and Vietnam era veterans for all available 
positions for which they may be qualified, when the position(s) applied 
for is unavailable. The commenter felt that ``the requirement'' is 
onerous, in that it would require contractors to set up two application 
processes--one for covered veterans and one for all other applicants--
and it would force contractors to review applicants' files numerous 
times in an effort to consider applicants for other jobs. Paragraph 
(f)(8) does not establish a ``requirement.'' As is outlined above it is 
a suggested measure, which contractors may take, or not take, as 
appropriate under the circumstances. Accordingly, we do not share the 
commenter's concerns about the provision.
    Section 60-250.44(j) of the proposal would have required that all 
personnel involved in the recruitment, screening, selection, promotion, 
disciplinary, and related processes be trained to ensure that the 
commitments in the contractor's affirmative action program are 
implemented. One commenter objected to the provision, declaring that 
``[t]he proposed mandatory training requirement suggests that OFCCP 
desires training above and beyond'' the current requirement. The 
commenter described the requirement in effect at that time as 
``employees of federal contractors are instructed on the requirements 
of VEVRAA.'' However, the wording of proposed Sec. 60-250.44(j) is 
virtually identical to the wording of Sec. 60-250.6(i)(3) in the 
regulations being replaced today. Accordingly, no substantial change 
was intended and the rule is adopted as proposed.

Subpart D--General Enforcement and Complaint Procedures

Section 60-250.60  Compliance Evaluations

    As proposed, paragraph (a) of this section would have clarified 
existing regulatory authority for OFCCP to conduct compliance reviews 
with regard to contractors' implementation of their affirmative action 
obligations, and would have provided that the review consist of ``a 
comprehensive analysis and evaluation'' of all relevant practices. The 
proposal was intended to make the VEVRAA provision consistent with the 
corresponding provision in the Section 503 regulations. One commenter 
noted that the proposal did not track a proposed revision to the 
regulations implementing Executive Order 11246, under which OFCCP 
proposed to supplement the ``comprehensive analysis'' approach with a 
variety of alternative means of assessing a contractor's compliance 
status. See proposed Sec. 60-1.20(a) at 61 FR 25516, 25523 (May 21, 
1996). The commenter recommended that ``[t]he proposed Sec. 60-250.60 * 
* * be modified to clarify that OFCCP is not required to conduct a 
full, on-site compliance review of any contractor it selects for 
review.''
    Since the publication of the VEVRAA proposal, OFCCP has promulgated 
a final version of its Executive Order 11246 ``compliance evaluation'' 
procedure. See 41 CFR 60-1.20(a) at 62 FR 44174, 44189 (August 19, 
1997). As recommended by the commenter, OFCCP has decided to adopt the 
compliance evaluation approach for VEVRAA as well, in lieu of the 
proposed ``comprehensive analysis'' compliance review approach. 
(Corresponding wording changes have been made, as appropriate, 
throughout the regulations.) The new VEVRAA

[[Page 59638]]

regulatory text is virtually identical to the text of the Executive 
Order regulation, except for changes necessary to reflect differences 
between the two laws and their implementing regulations. This approach 
will improve the efficiency of OFCCP and permit the agency to target 
resources better. It will also further procedural consistency among the 
laws enforced by OFCCP.
    The same commenter also recommended that the regulations be changed 
``to insure that OFCCP may not arbitrarily demand that a federal 
contractor produce anything the agency wants, at any time it wants, at 
any location it wants.'' The commenter asserted that many contractors 
have faced ``seemingly endless requests for information under current 
regulations,'' and that ``[c]ontractors now have no recourse when 
confronted with endless requests for information.'' The commenter also 
asserted that OFCCP should establish in the regulation a definite time 
period within which the compliance evaluation should be completed. Such 
a time limit, the commenter argued, would help both OFCCP and the 
contractor to focus their efforts on supplying and reviewing definite 
records, and reduce piecemeal requests.
    OFCCP does not agree that the regulations should contain additional 
assurances of the type requested. Under the proposed rule access is 
limited to records that may be relevant to the matter under 
investigation and pertinent to compliance with VEVRAA. Moreover, the 
suggestion that OFCCP should be limited to one or a small number of 
data requests ignores the reality of conducting a law enforcement 
investigation. The initial data request often is intentionally 
restricted in scope, to minimize the burden on the responding party. 
However, if the materials provided in response to the initial request 
indicate potential problem areas, it is perfectly reasonable and 
appropriate for the agency to follow up with supplementary requests. 
Several rounds of supplementary requests may be necessary before the 
agency can definitively conclude that a violation did, or did not, 
occur. Contractors may expect that the currently prescribed time frames 
for completing compliance evaluations and reviews will continue. 
However, in OFCCP's view such time frames are more appropriately 
included in a compliance manual than in implementing regulations.
    In addition, we have revised subsection (c) to reflect the terms of 
a Memorandum of Understanding entered into on May 29, 1997, between 
OFCCP and OASVET. The proposal provided that during a compliance review 
OFCCP would verify whether the contractor has filed its annual 
Veterans' Employment Report (VETS-100 Report) with OASVET and that 
OFCCP would notify OASVET if the contractor has not filed. We have 
added to the regulation a provision under which, if the contractor has 
not filed its report, OFCCP will request a copy from the contractor. If 
the contractor fails to provide a copy of the report to OFCCP, OFCCP 
will notify OASVET.

Section 60-250.61  Complaint procedures

    Two commenters opposed our proposal under Sec. 60-250.61(a) that 
the time for filing a complaint with OFCCP be expanded from 180 to 300 
days after the alleged violation. Both felt that the current 180-day 
rule is more in keeping with the standard under Title VII and the ADA, 
both of which require filing within 180 days in non-deferral 
jurisdictions and 300 days in deferral jurisdictions. Additionally, one 
of the commenters argued that the 300-day filing period in deferral 
jurisdictions was developed for the convenience of the states, not the 
Federal enforcement agencies.
    OFCCP recently considered this question in detail in conjunction 
with the preparation of the Section 503 final rule. In that rule we 
adopted a 300-day standard, based upon a desire to establish a uniform 
national standard that would be at least as long as the complaint 
filing period under the ADA. We elected not to adopt the split 180/300-
day limit applied under the ADA because we are not statutorily bound to 
do so (as is the EEOC under Title VII and the ADA), and because the 
lack of a frequently updated and readily available list of deferral 
jurisdictions could make it difficult for complainants and contractors 
to know whether the 180 or the 300-day limit applies in any particular 
case. In line with OFCCP's approach of applying consistent procedures 
under Section 503 and VEVRAA wherever possible, we hereby adopt the 
proposed rule's standard that complaints must be filed within 300 days.

Section 60-250.61(b)(2)  Contents of Complaints--Third Party Complaints

    One commenter objected to this paragraph of the proposal, which 
provided in part that a complaint filed by an authorized representative 
need not identify by name the person on whose behalf the complaint was 
filed. The purpose of this provision is to help prevent retaliation 
against persons seeking to exercise their rights under VEVRAA. The 
commenter asserted that in some cases contractors would have difficulty 
responding to the allegations of a complaint without knowing the 
identity of the person on whose behalf it is filed.
    In many cases it will not be necessary to disclose the individual's 
identity to enable the contractor to respond effectively. For example, 
as the commenter acknowledged, where the complaint alleges a broad 
contractor policy or practice, the contractor will be able to respond 
fully without knowing the name(s) of the person(s) on whose behalf the 
complaint was filed. However, we agree that where the complaint 
involves a practice with limited applicability or an isolated act of 
discrimination, it may not be possible to protect the individual's 
confidentiality. Therefore, the rule reflects that confidentiality will 
be protected where possible, given the facts and circumstances in the 
complaint.

Section 60-250.66  Sanctions and Penalties

Section 60-250.66(c)  Debarment

    The proposed paragraph would have authorized OFCCP to impose fixed-
term debarments. One commenter objected to the fixed-term debarment 
concept. The commenter was concerned that fixed-term debarment is too 
harsh a measure, especially if it is used in response to what the 
commenter termed ``paper'' violations, which the commenter 
characterized as violations of recordkeeping or affirmative action 
requirements which do not involve discrimination. OFCCP does not view 
fixed-term debarments as too harsh a measure, and OFCCP does not intend 
to seek a fixed term debarment for minor, technical violations of the 
law. Explicit regulatory authority to impose debarment for a minimum 
fixed-term is necessary to ensure the continued future compliance of 
some contractors.
    OFCCP believes the fixed-term debarment sanction will be 
particularly effective in encouraging compliance among the recalcitrant 
contractors who repeatedly break their promises of future compliance 
with respect to affirmative action and recordkeeping requirements. 
OFCCP views affirmative action and recordkeeping requirements as 
fundamental to VEVRAA compliance. These requirements provide the 
foundation for the contractor's affirmative action efforts and provide 
the basis for monitoring the contractor's compliance by both the 
contractor and OFCCP.

[[Page 59639]]

    The regulation being replaced today (at Sec. 60-250.50) requires a 
showing that a debarred contractor will carry out employment policies 
and practices in compliance with VEVRAA and its regulations as one of 
the conditions of reinstatement. OFCCP traditionally has accepted a 
contractor's promise of future compliance as sufficient to meet this 
requirement. Unfortunately, OFCCP has found that, for some contractors, 
a promise is not enough. The sanction of debarment for a fixed-term of 
not less than six months but no more than three years establishes a 
minimum trial period during which a contractor can demonstrate its 
commitment and ability to establish personnel practices that will 
ensure continuing compliance with the contractor's VEVRAA obligations. 
See, e.g., OFCCP v. Disposable Safety Wear, 92-OFC-11 (Decision and 
Final Administrative Order of the Secretary of Labor, September 29, 
1992). The express recognition of fixed-term debarment in the 
regulations is designed to put contractors on notice that an empty 
promise of future compliance will not be a sufficient premise for 
continued contracting with the Federal Government. Express regulatory 
recognition of the sanction of fixed-term debarment will strengthen the 
VEVRAA enforcement scheme by deterring contractors from engaging in 
violations ``based on a cold weighing of the costs and benefits of 
noncompliance.'' Janik Paving & Construction v. Brock, 828 F.2d 84 (2d 
Cir. 1987). Accordingly, OFCCP has determined to retain in this final 
rule the authority to impose fixed-term debarments.

Subpart E--Ancillary Matters

Section 60-250.80 Recordkeeping

    Under the regulation being replaced today (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 proposed Sec. 60-250.81 would have revised 
this obligation in two ways. First, it would have made the record 
retention obligation applicable to any personnel or employment record 
made or kept by the contractor, and set out a listing of examples of 
the types of records that must be retained. Second, it would have 
extended 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 contract of $150,000 or 
more. When a contractor has been notified that a complaint has been 
filed, a compliance evaluation has been initiated or an enforcement 
action has been commenced, the contractor would be required to preserve 
all relevant personnel records until the final disposition of the 
action. Three comments were received on proposed paragraph (a).
    Two commenters criticized the two-year record retention period 
proposed for larger contractors. The commenters questioned why OFCCP 
should need to review two years' worth of records, when complaints must 
be filed within 300 days and when a one-year retention period applies 
under the ADA and Title VII. As one commenter put it, ``[t]he 
responsibility and authority of OFCCP to investigate complaints under 
VEVRAA is no greater or more encompassing than EEOC's responsibility to 
investigate complaints under the ADA. Similarly, the data needed by 
OFCCP to accomplish this purpose is no greater than that of the EEOC.'' 
One of the commenters also said that OFCCP had ``significantly 
underestimate[d]'' the administrative and storage costs associated with 
maintaining an additional year of records.
    These comments incorrectly minimize the differences in the 
enforcement schemes of EEOC and OFCCP. EEOC's enforcement of Title VII 
and the ADA is triggered exclusively by charges, which must be filed 
within 180 days (or, in deferral jurisdictions, 300 days) of an alleged 
violation. EEOC's one-year retention period is designed to ensure that 
relevant records are not discarded before the expiration of the 
complaint filing period. In contrast, OFCCP's evaluations of 
contractors' compliance with VEVRAA cover a two-year period. The 
agency's policy and practice are to examine the contractor's personnel 
policies and activities for the two years preceding the initiation of 
the evaluation, and to assess liability for discriminatory practices 
dating back two years. The two-year record retention period provides 
greater assurance that relevant records will be available to OFCCP 
during its compliance evaluations.
    The commenter who asserted that OFCCP has underestimated the 
burdens on contractors provided no data or other support for its 
assertion. OFCCP continues to believe, as stated in the preamble to the 
NPRM, that the recordkeeping provisions of this proposed rule are 
consistent with those contained in the Section 503 final rule and 
therefore do not result in recordkeeping burdens beyond those under the 
Section 503 rule.
    One commenter raised questions regarding the record retention 
obligations of contractors who are at or near the thresholds that 
trigger the different retention periods. Specifically, the commenter 
asked what would happen if the employment levels or contract values 
change so that they exceed or fall below the 150 employees/$150,000 
thresholds during the course of the contract. A change in status 
relating to either threshold would affect the record retention 
obligation. If the number of employees should fall below 150 or if the 
contractor no longer has a contract of at least $150,000, the 
contractor would not be required to retain employment records for two 
years. The requirement to keep records for two years would become 
effective again on the date that the contractor met the thresholds of 
150 employees and a contract of $150,000. The record retention 
requirement, however, would not be applied retroactively, i.e., the 
change from one year to two years would be phased in day-by-day. See 
the discussion later in this section of the preamble regarding the 
obligation to maintain records once a compliance evaluation has 
commenced.
    One commenter contended that the proposed regulatory language was 
inadequate because it failed to answer contractors' recurrent questions 
regarding what records must be kept. The commenter urged that the 
regulations should include guidance on: (1) who is an ``applicant'' for 
the purposes of the record retention requirement; and (2) whether and 
to what extent the record retention requirement applied when a 
contractor used electronic bulletin boards and the Internet as 
recruitment sources.
    OFCCP has issued the following guidance on the meaning of the term 
``applicant'' under Executive Order 11246:

    The precise definition of the term ``applicant'' depends upon [a 
contractor's] recruitment and selection procedures. The concept of 
an applicant is that of a person who has indicated an interest in 
being considered for hiring, promotion, or other employment 
opportunities. This interest might be expressed by completing an 
application form, or might be expressed orally, depending upon the 
[contractor's] practice. Question and Answer No. 15, Adoption of 
Questions and Answers to Clarify and Provide a Common Interpretation 
of the Uniform Guidelines on Employee Selection Procedures (44 F.R. 
11996, 11998 (March 2, 1979)).

The Uniform Guidelines on Employee Selection Procedures do not apply to 
VEVRAA. See Sec. 60-250.21(g)(2) of this rule. Nevertheless, the 
statement quoted above represents a reasoned, balanced approach to the 
question of who is an

[[Page 59640]]

applicant under VEVRAA, and hereby is adopted for that purpose. 
Accordingly, whether an individual will be considered an applicant 
turns on the employee selection procedures designed and utilized by the 
contractor. OFCCP is studying the range of ways contractors are 
utilizing electronic media in their employee selection processes and 
intends to issue guidance responding to questions most frequently asked 
by contractors regarding this issue.
    One commenter expressed disapproval of the requirement that 
contractors retain all relevant records once a compliance review, 
complaint investigation or enforcement action has been initiated. This 
commenter contended that the requirement was burdensome and 
inequitable, particularly because the regulations lack a limitation on 
the period of time in which OFCCP must complete a compliance review.
    The purpose of this record retention requirement is to ensure that 
OFCCP can obtain all relevant documents during a compliance evaluation, 
complaint investigation or enforcement action. OFCCP appreciates the 
commenter's concerns about the timely completion of compliance 
evaluations but, as discussed earlier in this preamble, disagrees with 
the assertion that the schedule should be codified in the regulations.
    One commenter, a Federal agency, said that the recordkeeping 
requirements increase both the number of contractors and subcontractors 
that must maintain records, and the recordkeeping burden on each 
contractor and subcontractor. As a result, the commenter recommended 
that the increased burdens be submitted for approval to the Office of 
Management and Budget under the Paperwork Reduction Act, and that a 
Regulatory Flexibility Act analysis be conducted to address asserted 
increases in the burden on small businesses.
    The assertion that the rule increases the number of contractors and 
subcontractors that must maintain records simply is incorrect. Coverage 
thresholds are not being altered in any way. Moreover, as was stated in 
the preamble to the NPRM, the recordkeeping provisions of this rule are 
consistent with those already being applied under Section 503; 
accordingly, this rule will not impose new recordkeeping burdens. 
Nevertheless, we have submitted the requirements to the Office of 
Management and Budget as is required under the Paperwork Reduction Act.
    Subsection (c) of the rule states that the recordkeeping 
requirements shall apply only to records made or kept on or after the 
date on which OFCCP publishes in the Federal Register notice that the 
Office of Management and Budget has cleared the requirements. When 
OFCCP receives the clearance from OMB under the Paperwork Reduction Act 
of 1995, which it expects to occur approximately 60 days after 
publication of this final rule, we will revise subsection (c) to 
specify the actual date on which the recordkeeping requirements take 
effect.
    Finally, in order that the section numbers in the VEVRAA rule 
correspond to the numbers of counterpart regulatory provisions in the 
Section 503 rules, we have renumbered this section as Sec. 60-250.80. 
The section number in the NPRM was Sec. 60-250.81.
    Except as mentioned above, the final rule adopts the record 
retention provisions proposed in the NPRM without change.

Section 60-250.81  Access to Records

    Each contractor is required to permit OFCCP access during normal 
business hours to its places of business, books, records and accounts 
for the purpose of investigating compliance with VEVRAA. OFCCP proposed 
to add computerized records to the list of items which the contractor 
must make available for inspection by OFCCP.
    One commenter objected to the proposal regarding access to 
computerized records. The commenter contended that the proposal would 
allow unlimited access to sensitive information in a contractors' human 
resource files, regardless of its relevancy to the contractor's 
compliance with VEVRAA. The commenter requested that OFCCP modify the 
proposal to clarify that contractors need only provide ``reasonable'' 
access, that data requests would be limited in scope to information 
necessary to address specific compliance questions raised during the 
evaluation, and that contractors would not be required to reprogram 
their computers to comply with an OFCCP request. The commenter also 
recommended that contractors be afforded an appeal process for use when 
they believe a data request is unreasonable.
    OFCCP's primary interest is that it have access during an 
investigation to relevant data that already exists, whether in 
computerized or other form. Accordingly, OFCCP intends to apply the 
same standards for access to computerized records that it always has 
applied regarding paper records.
    The proposed rule would not have expanded the scope of records that 
must be made available to OFCCP. Contractors already must give OFCCP 
access to their ``books, records and accounts'' under the previous 
regulations. The proposed regulation simply would have clarified that 
``books, records and accounts'' includes those maintained in 
computerized form.
    The concern that the provision would permit, if not encourage, 
unfettered access to confidential commercial proprietary data or 
irrelevant information, is unjustified in OFCCP's view. Under the 
proposed rule, as under the current regulation, access is limited to 
records that may be relevant to the matter under investigation and 
pertinent to compliance with VEVRAA. A further safeguard against broad 
requests for irrelevant data is the provision that information obtained 
under this regulation may be used only in connection with the 
administration of VEVRAA and in furtherance of the purposes of the Act.
    Incorporating an appeal process for use by contractors when they 
disagree with a data request into the VEVRAA regulations at this time 
would result in procedural inconsistencies between VEVRAA and Section 
503, which in our view would not be in the best interest of either 
contractors or OFCCP. Accordingly, OFCCP is considering this issue for 
further action in the future.
    The regulation is adopted in the final rule as proposed in the 
NPRM, except that in order that the section numbers in the VEVRAA rule 
correspond to the numbers of counterpart regulatory provisions in the 
Section 503 rules, we have renumbered this section as Sec. 60-250.81. 
The section number in the NPRM was Sec. 60-250.82.

Section 60-250.82  Labor Organizations and Recruiting and Training 
Agencies

    In order that the section numbers in the VEVRAA rule correspond to 
the numbers of counterpart regulatory provisions in the Section 503 
rules, we have renumbered this section as Sec. 60-250.82. The section 
number in the NPRM was Sec. 60-250.83.

Section 60-250.83  Rulings and interpretations

    In order that the section numbers in the VEVRAA rule correspond to 
the numbers of counterpart regulatory provisions in the Section 503 
rules, we have renumbered this section as Sec. 60-250.83. The section 
number in the NPRM was Sec. 60-250.84.

Section 60-250.84  Responsibilities of Local Employment Service Offices

    This section, which was numbered Sec. 60-250.80 in the NPRM, is

[[Page 59641]]

renumbered as Sec. 60-250.84. Also, the title of the section, and 
corresponding text within the section, have been amended to reflect the 
term ``local employment service office.''

Appendix B--Sample Invitation to Self-Identify

    Proposed Appendix B would have contained a sample format that 
contractors could use to satisfy their obligation under Sec. 60-250.42 
to invite applicants to identify themselves as being covered under the 
Act and wishing to benefit under the contractor's affirmative action 
program. Paragraph d of the proposed sample invitation would have 
informed the special disabled veteran applicant that self-
identification would assist the contractor in making accommodations to 
the individual's disability, and then would have suggested that the 
contractor insert a brief provision summarizing the relevant portion of 
its affirmative action program.
    A commenter suggested that it would be helpful to include in 
paragraph d of the Appendix a cross reference to the relevant 
subsection of Sec. 60-250.44. The implication of the comment is that 
Sec. 60-250.44 contains a particular provision which details what 
should be inserted in the invitation. That is not the case. Each 
contractor's approach to affirmative action for special disabled 
veterans, and each affirmative action program, is different; that is, 
each is tailored to the contractor's unique circumstances. The 
contractor should insert into its invitation information about its 
affirmative action efforts that might be of benefit to covered 
veterans.
    As noted above, we have modified Appendix B to reflect comments 
relating to Sec. 60-250.42. Specifically, consistent with the revision 
to the regulation that permits contractors to invite Vietnam era 
veterans and special disabled veterans to self identify at different 
stages in the employment process, we have modified the Appendix so that 
it can be used in a way that best fits the contractor's actual 
practices relating to the timing of invitations to the two categories 
of veterans. Further, we have modified the Appendix, in both content 
and format, to enhance the user's understanding of whether particular 
portions of the invitation apply to special disabled veterans, Vietnam 
era veterans, or both.

Appendix C--Review of Personnel Processes

    Proposed Appendix C would have set out an example of an appropriate 
set of procedures that contractors could 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.)
    Paragraphs 3 and 4 of proposed Appendix C would have instructed 
contractors to attach or include a description of accommodations 
considered or used for special disabled veterans to application forms 
or personnel records. The EEOC commented that in most instances 
descriptions of accommodations constitute medical information that must 
be maintained in separate files and treated as confidential medical 
records. Accordingly, the EEOC recommended that paragraphs 3 and 4 be 
changed to require contractors to maintain descriptions of 
accommodations considered or used in separate confidential medical 
files.
    We agree with the EEOC's recommendation and believe it is 
consistent with Sec. 60-250.23(d) of this rule. Accordingly, we have 
modified paragraphs 3 and 4 consistent with the comment. Moreover, in 
order to maintain consistency between the VEVRAA and Section 503 rules, 
in a companion document published today we also are modifying the 
corresponding Appendix C to 41 CFR Part 60-741.

General Comments

    Several comments addressed the regulatory proposal in general, 
rather than focusing on any particular section of the NPRM.
    One commenter questioned the continued need for VEVRAA, stating 
that he did not ``think that any employment laws or regulations are 
necessary any more pertaining to the Vietnam war'' and that the ADA 
``should be sufficient to cover disabled vets.'' The commenter also 
asserted that ``[c]omplying with the paper requirements of this Act are 
costly, time consuming, and difficult to administer'' and that laws 
like VEVRAA ``add an artificial cost to our products which puts U.S. 
business at a disadvantage when competing with foreign companies.''
    OFCCP believes that VEVRAA serves a valuable purpose in ensuring 
that those who served their country are given opportunity to 
participate in our economic system. Moreover, we note that at least 
four times within the past seven years the Congress has acted to 
reauthorize VEVRAA or expand its reach. See, e.g., Section 505 of P.L. 
104-275, Section 702 of P.L. 103-446, Section 502 of P.L. 102-568, and 
Section 1 of P.L. 102-16. OFCCP remains mindful, however, of concerns 
about compliance burdens. OFCCP seeks to minimize the burdens 
associated with compliance with VEVRAA by administering the statute, to 
the extent reasonable, in tandem with the agency's administration of 
Section 503.
    One commenter suggested that publication of a final rule by OFCCP 
would somehow violate ``due process'' because interested parties were 
not given sufficient notice of assertedly ``massive, substantive 
revisions'' and a ``total rewrite'' of the regulations. The commenter 
supports its point by referring to two semi-annual regulatory agendas 
in which OFCCP characterized the regulatory action under VEVRAA as 
``nonsignificant,'' and by claiming that the published agendas for two 
meetings of a Department of Labor Advisory Committee on Veterans' 
Employment and Training did not note anything about the alleged 
``extensive rewrite of 41 CFR 60-250.''
    OFCCP disagrees with the commenter and believes that it has 
followed all applicable rulemaking procedures. As is required under the 
Administrative Procedure Act, OFCCP published the proposed rule for 
public notice and comment. Despite an extended comment period of more 
than three months' duration, only a small number of comments were 
submitted on the proposal.
    Moreover, OFCCP's designation of the regulatory action as 
``nonsignificant'' is a term of art, referring to the categories used 
in Executive Order 12866, rather than an indication of the importance 
of the rule to OFCCP or to the regulated community. Under Executive 
Order 12866, a ``significant'' regulatory action is one that is likely 
to result in a rule that may: (1) Have an annual effect on the economy 
of $100 million or more or adversely affect in a material way the 
economy, a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the

[[Page 59642]]

President's priorities, or the principles set forth in Executive Order 
12866. OFCCP's VEVRAA proposal clearly did not meet any of the 
standards of a ``significant'' action. Accordingly, OFCCP's designation 
of the action as ``nonsignificant'' was entirely appropriate, and was 
entirely consistent with other agencies' entries in the semiannual 
regulatory agendas.
    Finally, OFCCP also does not agree with the commenter's 
characterization of this rule as containing extensive substantive 
revisions of the VEVRAA regulations. To be certain, we have changed the 
format of the rules. We also have codified in these regulations some 
concepts and procedures that heretofore existed only in judicial 
rulings and OFCCP practice. However, the fundamental principles--
concepts such as the equal opportunity/affirmative action clause to be 
inserted in all nonexempt contracts, the contents of written 
affirmative action programs, the coverage thresholds for the AAP 
requirement, and the complaint and enforcement procedures--remain 
largely unchanged in this rule.

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 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 rule clarifies existing requirements, 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 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

    The information collection requirements under the VEVRAA 
regulations being replaced today were covered by OMB control numbers 
1215-0072 and 1215-0163. The new recordkeeping requirements contained 
in this final rule have been submitted to the Office of Management and 
Budget (OMB) for clearance under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). These new recordkeeping requirements are not 
effective until OFCCP displays currently valid OMB control numbers. 
When OMB completes its review OFCCP will publish a notice in the 
Federal Register regarding the control numbers.
    In the Preamble to the NPRM OFCCP explained that the rule: would 
extend the current one-year record retention period to two years (for 
larger contractors) and make the retention obligation applicable to a 
broader range of records; require 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 require 
those contractors who, for affirmative action purposes, choose to 
invite applicants to identify themselves as special disabled veterans 
or veterans of the Vietnam era to maintain a separate file on such 
applicants and employees.
    OFCCP stated that the recordkeeping provisions of the rule were 
consistent with those contained in the Section 503 final rule. 
Therefore, OFCCP stated, although the recordkeeping provisions would be 
more expansive than those in the current VEVRAA regulations, they would 
not result in increased recordkeeping burdens.
    OFCCP invited the public to comment on the accuracy of the agency's 
estimates regarding the burdens posed by the proposed revisions to the 
information collection requirements, and to suggest ways of minimizing 
the burden and enhancing the quality and utility of the information 
collected. None of the commenters responded to this request for 
comments. Several commenters, however, expressed general opinions about 
the burdens associated with the record retention requirements in their 
comments directed toward particular regulatory provisions. We have 
addressed those comments in our discussion of those regulatory 
provisions. After careful consideration of the comments, OFCCP 
continues to believe that the recordkeeping provisions in this rule 
will not result in increased burdens.

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, Veterans.

    Signed at Washington, DC, 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.
    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 withdrawn, 
and in Part 60-30, all references to Section 402 of the Vietnam Era 
Veterans' Readjustment Assistance Act are withdrawn; and, under 
authority of 38 U.S.C. 4212, Title 41 of the Code of Federal 
Regulations, Chapter 60 is amended by revising part 60-250 to read as 
follows:

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  [Reserved]
60-250.4  Coverage and waivers.
60-250.5  Equal opportunity clause.

[[Page 59643]]

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 evaluations.
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  Recordkeeping.
60-250.81  Access to records.
60-250.82  Labor organizations and recruiting and training agencies.
60-250.83  Rulings and interpretations.
60-250.84  Responsibilities of local employment service offices.
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 in this part, 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 this paragraph (i) and paragraph (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 this paragraph (i) and 
paragraph (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 this paragraph (i) and paragraph (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 supervision, 
inspection, and other on-site functions incidental to the actual 
construction.
    (6) Personal property, as used in this paragraph (i) and paragraph 
(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

[[Page 59644]]

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) 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.
    (p) Veteran of the Vietnam era means a person who:
    (1) Served on active duty for a period of more than 180 days, and 
was discharged or released therefrom with other than a dishonorable 
discharge, if any part of such active duty occurred:
    (i) In the Republic of Vietnam between February 28, 1961, and May 
7, 1975; or
    (ii) Between August 5, 1964, and May 7, 1975, in all other cases; 
or
    (2) Was discharged or released from active duty for a service-
connected disability if any part of such active duty was performed:
    (i) In the Republic of Vietnam between February 28, 1961, and May 
7, 1975; or
    (ii) Between August 5, 1964, and May 7, 1975, in all other cases.
    (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.
    (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

[[Page 59645]]

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  [Reserved]


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 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

[[Page 59646]]

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 
employment service office of the state employment security agency 
wherein the opening occurs. Listing employment openings with the 
U.S. Department of Labor's America's Job Bank shall satisfy the 
requirement to list jobs with the local employment service office.
    3. Listing of employment openings with the local employment 
service office 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 state employment security agency 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 agency, there is no need to advise the state agency of 
subsequent contracts. The contractor may advise the state agency 
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. 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 work week to activities which are 
not directly and closely related to the performance of the work 
described in (a) through (d) of this paragraph 6. ii.; Provided, 
that (e) of this paragraph 6.ii. 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.
    iii. 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 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.

[[Page 59647]]

    (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
    (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

[[Page 59648]]

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.
    (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

[[Page 59649]]

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) Special disabled veterans. The contractor shall invite 
applicants to inform the contractor whether the applicant believes that 
he or she is a special disabled veteran who may be covered by the Act 
and wishes to benefit under the affirmative action program. Such 
invitation shall be extended after making an offer of employment to a 
job applicant and before the applicant begins his or her employment 
duties, except that the contractor may invite special disabled veterans 
to self-identify prior to making a job offer 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 affirmative action for special disabled veterans.
    (b) Veterans of the Vietnam era. The contractor shall invite 
applicants to inform the contractor whether the applicant believes that 
he or she is a veteran of the Vietnam era who may be covered by the Act 
and wishes to benefit under the affirmative action program. Such 
invitation may be made at any time before the applicant begins his or 
her employment duties.
    (c) The invitations referenced in paragraphs (a) and (b) 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 invitations also shall summarize the relevant portions of 
the Act and the contractor's affirmative action program. Furthermore, 
the invitations 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. (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 a 
special disabled veteran 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.)
    (d) If an applicant so identifies himself or herself as a special 
disabled veteran, 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 in accordance 
with Sec. 60-250.23(d) on persons who have self-identified as special 
disabled veterans.
    (e) The contractor shall keep all information on self 
identification confidential. The contractor shall provide the 
information to OFCCP upon request. This information may be used only in 
accordance with this part.
    (f) 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.
    (g) 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

[[Page 59650]]

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 
evaluation, 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 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. As 
is provided in Sec. 60-250.21(f), as a matter of nondiscrimination the 
contractor must 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. As a matter of affirmative 
action, 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

[[Page 59651]]

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 local 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;
    (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

[[Page 59652]]

the commitments in the contractor's affirmative action program are 
implemented.

Subpart D--General Enforcement and Complaint Procedures


Sec. 60-250.60  Compliance evaluations.

    (a) OFCCP may conduct compliance evaluations to determine if the 
contractor is taking 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. A compliance 
evaluation may consist of any one or any combination of the following 
investigative procedures:
    (1) Compliance review. A comprehensive analysis and evaluation of 
the hiring and employment practices of the contractor, the written 
affirmative action program, and the results of the affirmative action 
efforts undertaken by the contractor. A compliance review may proceed 
in three stages:
    (i) A desk audit of the written affirmative action program and 
supporting documentation to determine whether all elements required by 
the regulations in this part are included, whether the affirmative 
action program meets agency standards of reasonableness, and whether 
the affirmative action program and supporting documentation satisfy 
agency standards of acceptability. The desk audit is conducted at OFCCP 
offices;
    (ii) An on-site review, conducted at the contractor's establishment 
to investigate unresolved problem areas identified in the affirmative 
action program and supporting documentation during the desk audit, to 
verify that the contractor has implemented the affirmative action 
program and has complied with those regulatory obligations not required 
to be included in the affirmative action program, and to examine 
potential instances or issues of discrimination. An on-site review 
normally will involve an examination of the contractor's personnel and 
employment policies, inspection and copying of documents related to 
employment actions, and interviews with employees, supervisors, 
managers, hiring officials; and
    (iii) Where necessary, an off-site analysis of information supplied 
by the contractor or otherwise gathered during or pursuant to the on-
site review;
    (2) Off-site review of records. An analysis and evaluation of the 
affirmative action program (or any part thereof) and supporting 
documentation, and other documents related to the contractor's 
personnel policies and employment actions that may be relevant to a 
determination of whether the contractor has complied with the 
requirements of the Executive Order and regulations;
    (3) Compliance check. A visit to the establishment to ascertain 
whether data and other information previously submitted by the 
contractor are complete and accurate; whether the contractor has 
maintained records consistent with Sec. 60-250.80; and/or whether the 
contractor has developed an affirmative action program consistent with 
Sec. 60-250.40; or
    (4) Focused review. An on-site review restricted to one or more 
components of the contractor's organization or one or more aspects of 
the contractor's employment practices.
    (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 evaluation, OFCCP may 
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 not 
filed its report, OFCCP will request a copy from the contractor. If the 
contractor fails to provide a copy of the report to OFCCP, 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 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 security agency 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 
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

[[Page 59653]]

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 evaluation, 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 evaluation, 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 
evaluation. 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.
    (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

[[Page 59654]]

Sec. 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 evaluation 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 evaluation, 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  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 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 evaluation has been 
initiated, or that an enforcement action has been commenced, the 
contractor shall preserve all personnel records relevant to the 
complaint, compliance evaluation or action until final disposition of 
the complaint, compliance evaluation or action. The term personnel 
records relevant to the complaint, compliance evaluation or action 
would include, for example, personnel or employment records relating to 
the aggrieved person and to all other employees holding positions

[[Page 59655]]

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 the date that the Office of Management and 
Budget has cleared the requirements.


Sec. 60-250.81  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 
evaluations 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. 60-250.82  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. 60-250.83  Rulings and interpretations.

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


Sec. 60-250.84  Responsibilities of local employment service offices.

    (a) Local 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 employment service offices shall contact employers to 
solicit the job orders described in paragraph (a) of this section. The 
state employment security agency 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. 60-250.85  Effective date.

    This part is effective on January 4, 1999, and does 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 January 4, 1999.

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 are placed on the 
contractor's payroll, 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 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

[[Page 59656]]

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.

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

    Note: When the invitation to self-identify is being extended to 
special disabled veterans

[[Page 59657]]

prior to an offer of employment, as is permitted in limited 
circumstances under Secs. 60-250.42(a)(1) and (2), paragraph 7(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. 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.
    2. [The following text should be used when extending an 
invitation to veterans of the Vietnam era only.] If you are a 
veteran of the Vietnam era, we would like to include you under our 
affirmative action program. If you would like to be included under 
the affirmative action program, please tell us. The term ``veteran 
of the Vietnam era'' refers to a person who served on active duty 
for a period of more than 180 days, and was discharged or released 
therefrom with other than a dishonorable discharge, if any part of 
such active duty occurred in the Republic of Vietnam between 
February 28, 1961, and May 7, 1975 or between August 5, 1964, and 
May 7, 1975, in all other cases. The term 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 
in the Republic of Vietnam between February 28, 1961, and May 7, 
1975, or between August 5, 1964, and May 7, 1975, in all other 
cases.
    [The following text should be used when extending an invitation 
to special disabled veterans only.] If you are a special disabled 
veteran, we would like to include you in our affirmative action 
program. If you would like to be included under the affirmative 
action program, please tell us. This information will assist us in 
placing you in an appropriate position and in making accommodations 
for your disability. 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.
    [The following text should be used when extending an invitation 
to both veterans of the Vietnam era and special disabled veterans.] 
If you are a veteran of the Vietnam era or a special disabled 
veteran, we would like to include you under our affirmative action 
program. If you would like to be included under the affirmative 
action program, please tell us. [The contractor should include here 
the definitions of ``veteran of the Vietnam era'' and ``special 
disabled veteran'' found in the two preceding paragraphs.]
    3. You may inform us of your desire to benefit under the program 
at this time and/or at any time in the future.
    4. Submission of this information is voluntary and refusal to 
provide it will not subject you to any adverse treatment. 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.
    5. The 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 
you have a condition that might require emergency treatment; and 
(iii) Government officials engaged in enforcing laws administered by 
OFCCP, or enforcing the Americans with Disabilities Act, may be 
informed.
    6. [The contractor should here insert a brief provision 
summarizing the relevant portion of its affirmative action program.]
    7. [The following text should be used only when extending an 
invitation to special disabled veterans, either by themselves or in 
combination with veterans of the Vietnam era. Paragraph 7(ii) should 
be omitted when the invitation to self-identify is being extended 
prior to an offer of employment.] 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. This information will assist us in 
placing you in an appropriate position and in making accommodations 
for your disability.

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, the contractor should prepare a 
statement of the reason as well as a description of the 
accommodations considered (for a rejected special disabled veteran). 
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. 60-250.23(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 a 
special disabled veteran 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. 60-250.23(d).

[FR Doc. 98-29043 Filed 11-3-98; 8:45 am]
BILLING CODE 4510-27-P