[Federal Register Volume 78, Number 185 (Tuesday, September 24, 2013)]
[Rules and Regulations]
[Pages 58614-58679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21227]
[[Page 58613]]
Vol. 78
Tuesday,
No. 185
September 24, 2013
Part II
Department of Labor
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Office of Federal Contract Compliance Programs
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41 CFR Parts 60-250 and 60-300
Affirmative Action and Nondiscrimination Obligations of Contractors and
Subcontractors Regarding Special Disabled Veterans, Veterans of the
Vietnam Era, Disabled Veterans, Recently Separated Veterans, Active
Duty Wartime or Campaign Badge Veterans, and Armed Forces Service Medal
Veterans; Final Rule
Federal Register / Vol. 78 , No. 185 / Tuesday, September 24, 2013 /
Rules and Regulations
[[Page 58614]]
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DEPARTMENT OF LABOR
Office of Federal Contract Compliance Programs
41 CFR Parts 60-250 and 60-300
RIN 1250-AA00
Affirmative Action and Nondiscrimination Obligations of
Contractors and Subcontractors Regarding Special Disabled Veterans,
Veterans of the Vietnam Era, Disabled Veterans, Recently Separated
Veterans, Active Duty Wartime or Campaign Badge Veterans, and Armed
Forces Service Medal Veterans
AGENCY: Office of Federal Contract Compliance Programs, Labor.
ACTION: Final rule.
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SUMMARY: The Office of Federal Contract Compliance Programs (OFCCP) is
publishing revisions to the current implementing regulations of the
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended
by the Jobs for Veterans Act of 2002, (VEVRAA). OFCCP is responsible
for enforcement of VEVRAA, which prohibits employment discrimination
against protected veterans by covered Federal contractors and
subcontractors. VEVRAA also requires each covered Federal contractor
and subcontractor to take affirmative action to employ and advance in
employment these veterans.
The final rule strengthens several provisions that are intended to
aid in recruitment and hiring efforts, such as clarifying the mandatory
job listing requirements, requiring data collection pertaining to
protected veteran applicants and hires, and establishing hiring
benchmarks to assist in measuring the effectiveness of their
affirmative action efforts. However, some of the proposals set forth in
the NPRM, particularly with regard to the creation and maintenance of
certain records and specific mandated affirmative action obligations,
have been eliminated or made more flexible in order to reduce the time
and cost burden on contractors. The specific revisions made, and the
rationale for making them, are set forth in the Section-by-Section
Analysis.
DATES: Effective Date: These regulations are effective March 24, 2014.
FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of
Policy, Planning and Program Development, Office of Federal Contract
Compliance Programs, at 200 Constitution Avenue NW., Room C-3325,
Washington, DC 20210, or by calling (202) 693-0104 (voice) or (202)
693-1337 (TTY). Copies of this rule in alternative formats may be
obtained by calling (202) 693-0103 (voice) or (202) 693-1337 (TTY). The
alternative formats available are large print and electronic file on
computer disk. The rule also is available on the Internet on the
Regulations.gov Web site at http://www.regulations.gov or on the OFCCP
Web site at http://www.dol.gov/ofccp.
Executive Summary
I. Purpose of the Regulatory Action
The Office of Federal Contract Compliance Programs (OFCCP) is a
civil rights, worker protection agency which enforces an Executive
Order and two laws that prohibit employment discrimination and require
affirmative action by companies doing business with the Federal
Government.\1\ Specifically, Federal contractors must engage in
affirmative action and provide equal employment opportunity without
regard to race, color, religion, sex, national origin, disability, or
status as a protected veteran. Executive Order 11246, as amended,
prohibits employment discrimination on the basis of race, religion,
color, national origin, and sex. Section 503 of the Rehabilitation Act
of 1973, as amended, prohibits employment discrimination against
individuals with disabilities. The Vietnam Era Veterans' Readjustment
Assistance Act of 1974, as amended, (VEVRAA) prohibits employment
discrimination against certain protected veterans. Contemporaneous with
these revisions, OFCCP is also publishing revisions to the implementing
regulations of Section 503 of the Rehabilitation Act of 1973 (section
503). OFCCP has historically viewed these regulations together,
maintaining identity between the two regulations where possible and
allowing contractors to prepare an Affirmative Action Plan that covers
both laws jointly. Accordingly, the vast majority of the revisions
announced here in the VEVRAA regulation are also present in the section
503 rule. The exceptions to this--mainly in the structure of the hiring
benchmark/goal for the two rules, are discussed in further detail
below.
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\1\ Executive Order 11246, as amended; Section 503 of the
Rehabilitation Act of 1973, as amended, (Section 503); and the
Vietnam Era Veterans' Readjustment Assistance Act of 1974, as
amended, 38 U.S.C. 4212 (VEVRAA.).
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The existing implementing regulations for VEVRAA are split into two
separate parts: 41 CFR part 60-250 (part 60-250) and 41 CFR part 60-300
(part 60-300). Part 60-250 applies to any Government contract or
subcontract of $25,000 or more entered into before December 1, 2003,
while part 60-300 applies to any Government contract or subcontract of
$100,000 or more entered into on or after December 1, 2003. The final
rule rescinds the regulations at part 60-250, as discussed in full in
the Section-by-Section Analysis below. With regard to part 60-300,
however, the final rule retains many of the revisions set forth in the
notice of proposed rulemaking (NPRM).
OFCCP evaluates the employment practices of over 4,000 Federal
contractors and subcontractors annually, and investigates individual
complaints. OFCCP also engages in outreach to employees of Federal
contractors to educate them about their rights, and provides technical
assistance to contractors on their nondiscrimination and affirmative
action obligations. We estimate that our jurisdiction covers
approximately 200,000 Federal contractor establishments, and an
estimated 50,000 parent companies.\2\
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\2\ This establishment estimate is based on a review of FY 2009
EEO-1 contractor establishment data and other contractor databases,
including the Federal Procurement Data System (FPDS). Based on EEO-1
data, we determined that the ratio of parent companies to the number
of establishments is approximately four establishments per parent
company.
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Although progress has been made in the employment of veterans, the
number of unemployed veterans still remains too high, and substantial
disparities in unemployment and pay rates continue to persist,
especially for some categories of veterans. The annual unemployment
rate for post-September 2001 veterans, referred to as ``Gulf War-era II
veterans,'' is higher than the rates for all veterans and for
nonveterans. BLS data on the 2012 employment situation of veterans show
that about 2.6 million of the nation's veterans had served during Gulf
War-era II.\3\ In 2012, the unemployment rate for Gulf War-era II
veterans was 9.9 percent compared to nonveterans at 7.9 percent.\4\
However, the unemployment rate, in the same year, for male Gulf War-era
II veterans age 18 to 24 was 20.0 percent, higher than the rate for
nonveterans of the same age group (16.4 percent).\5\
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\3\ U.S. Bureau of Labor Statistics, Economic News Release,
``Employment Situation of Veterans Summary 2012,'' March 20, 2013,
http://www.bls.gov/news.release/vet.nr0.htm (last accessed Aug. 8,
2013).
\4\ Id., ``Table A: Employment situation of the civilian non-
institutionalized population 18 years and over by veteran status,
period of service, and sex, 2011-2012 annual averages.''
\5\ Id.
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OFCCP also found that, on average, wages of veterans (defined as
anyone who is employed and reported serving
[[Page 58615]]
in the military in the past) are higher than non-veterans. However,
there are different age groups represented in each era, and because
earnings generally increase with age, we controlled for age and race in
a regression analysis. Using America Community Survey (ACS) data and
conducting a regression analysis, OFCCP found that:
Male veterans earn 2.7 percent less than non-veterans.
Female veterans earn 6.3 percent than non-veterans.\6\
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\6\ OFCCP's labor economist conducted the regression analysis.
All models were run using the American Community Survey 2008-2010
Public Use Microdata (PUMS). The models that examine veterans only
were also run with the ACS 2006-2010 files, but the results were
largely the same, so we use the 2008-10 for all (since questions on
disability were only available in 2008 and after). The analysis was
run on the private sector.
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Controlling for the era of service, rather than just whether or not
the person served,
OFCCP finds that: Male Gulf War-era II veterans earn 1.4
percent less than non-veterans.
Male Vietnam era veterans earn 6.9 percent less than non-
veterans.\7\
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\7\ Females comprise an estimated 14.2% (nearly 167,000 women)
in the enlisted ranks.
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Though it is unclear what portion of these disparities is caused by
discrimination, employment discrimination and underutilization of
qualified workers, such as veterans and individuals with disabilities,
contribute to broader societal problems such as income inequality and
poverty.
The final rule is intended to provide contractors with the tools
needed to evaluate their own compliance and proactively identify and
correct any deficiencies in their employment practices. These tools
include, for example, removing barriers related to job postings so both
contractors can effectively post or advertise their jobs, and
jobseekers can take full advantage of these job opportunities. It also
includes data collection to support meaningful self-assessments of
employment practices and the ability for contractors to adjust their
outreach and recruitment efforts for greater effectiveness and
efficiency when needed.
II. Statement of Legal Authority
Initially enacted into law in 1974 and amended several times in the
intervening years, the purpose of VEVRAA is twofold. First, VEVRAA
prohibits employment discrimination against specified categories of
veterans by Federal Government contractors and subcontractors. The
universe of protected veterans includes disabled veterans, veterans who
have separated from the military within the past three years (recently
separated veterans), veterans who received an Armed Forces service
medal while on active duty, and veterans who served in active duty
during a war or in a campaign or expedition for which a campaign badge
was authorized. Second, it requires each covered Federal Government
contractor and subcontractor to take affirmative action to employ and
advance in employment these veterans.
The VEVRAA regulations found at 41 CFR part 60-250 generally apply
to Government contracts of $25,000 or more entered into before December
1, 2003. The threshold amount for coverage is a single contract of
$25,000 or more; contracts are not aggregated to reach the coverage
threshold. If a Federal contractor received a Government contract of at
least $50,000 prior to December 1, 2003, an affirmative action program
(AAP), the specific obligations of which are detailed at 41 CFR 60-
250.44, must be developed. See 41 CFR 60-250.40.
The VEVRAA regulations found at 41 CFR part 60-300 apply to
Government contracts entered into on or after December 1, 2003. The
threshold amount for VEVRAA coverage and AAP threshold coverage is a
single contract of $100,000 or more, entered into on or after December
1, 2003; contracts are not aggregated to reach the coverage threshold.
Federal contractors and subcontractors that meet the coverage threshold
and have 50 or more employees must develop an AAP. See 41 CFR 60-
300.40. The regulations found at 41 CFR part 60-300 also apply to
modifications of otherwise covered Government contracts made on or
after December 1, 2003. Consequently, a contract that was entered into
before December 1, 2003, will be subject only to the part 60-300
regulations if it is modified on or after December 1, 2003, and meets
the contract dollar threshold of $100,000 or more.
In the VEVRAA context, receiving a Federal contract comes with a
number of responsibilities, including compliance with the VEVRAA non-
discrimination and non-retaliation provisions, meaningful and effective
efforts to recruit and employ veterans protected under VEVRAA, creation
and enforcement of personnel policies that support the contractor's
affirmative action obligations, maintenance of accurate records
documenting the contractor's affirmative action efforts, and providing
OFCCP access to these records upon request. Contractor compliance with
these provisions is, therefore, vital to improving the employment
opportunities of veterans protected by VEVRAA. And, given the unique
skills and experiences that veterans have acquired as a result of their
service, improving employment opportunities benefits not only the
veterans and their families but also the contractor as an employer.
Failure to abide by these responsibilities may result in various
sanctions, including withholding progress payments, termination of
contracts, and debarment from receiving future contracts. It also
deprives the contractor of the opportunity to benefit from this
uniquely qualified pool of applicants.
III. Major Provisions
The following major provisions in the final rule would:
Provide contractors with a quantifiable means to measure
their success in recruiting and employing veterans by requiring, for
the first time, that contractors establish their own or adopt a
predetermined annual hiring benchmark (currently 8 percent based on
national labor force data).
Create greater accountability for employment decisions and
practices by requiring that contractors maintain several quantitative
measurements and comparisons for the number of veterans who apply for
jobs and the number of veterans they hire. Having this data will also
assist contractors and OFCCP in measuring the effectiveness of
contractors' outreach and recruitment efforts.
Provide knowledge and support to veterans seeking jobs by
improving the effectiveness of the VEVRAA requirement that contractors
list their job openings with the appropriate state employment service
agency. Contractor job listings must be provided in a format that the
state agency can access and use to make the job listings available to
job seekers.
Provide knowledge and increasing compliance by
subcontractors with their obligations by requiring prime contractors to
include specific, mandated language in their subcontracts alerting
subcontractors to their responsibilities as Federal contractors.
Create flexibility for contractors when they are
establishing formal relationships with organizations that provide
recruiting or training services to veterans. The relationships or
``linkage agreements'' can be established to meet the contractors'
specific needs, while assuring outreach to veterans seeking employment.
Clarify the contractor's mandatory job listing
requirements and the relationship between the contractor, its agents,
and the state employment
[[Page 58616]]
services that providepriority referral of protected veterans.
Repeal outdated and obsolete regulations at 41 CFR Part
60-250 that apply to contracts entered into before December 1, 2003 and
not since modified. OFCCP believes that all such contracts have either
expired or been modified, and that there is, therefore, no longer a
need for the Part 60-250 regulations.
IV. Costs and Benefits
This is an economically significant and major rule. Veterans make
up 7.25 percent of the employed population.\8\ Under the VEVRAA rule,
contractors have the option of establishing their own benchmark for
employing protected veterans or meeting a benchmark set by OFCCP,
currently 8 percent. Assuming all contractors will choose to meet the
OFCCP benchmark of 8 percent, OFCCP estimates that Federal contractors
would need to hire an additional 205,500 protected veterans.\9\
Dividing our estimate of this rule's first-year cost by our estimate of
the number of protected veterans expected to be hired in the first year
because of this rule returns a cost of approximately $863 to $2,353 per
new hire.
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\8\ Calculation based on unpublished table, Employment status of
persons 18 years and over by veteran status, period of service, sex,
race, Hispanic or Latino ethnicity, and disability status, Annual
Average 2012 (Source: Current Population Survey). (10,233/141,050) *
100 = 7.25%. The table is available on request from the Bureau of
Labor Statistics at the Department of Labor. BLS does not release
some tables for a variety of reasons, such as sample size or
possibility of confusion. Finally, this estimate includes all
veterans, not only the protected veterans.
\9\ Based on data from the Bureau of Labor Statistics Quarterly
Census of Employment and Wages, OFFCP estimates that approximately
27.4 million employees could be affected.
Total Cost of the Final Rule (Year One) \10\
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Low High
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Total Cost of the Rule.............. $177,296,772 $483,560,138
Cost Per Company.................... 3,830 7,120
Cost Per Establishment.............. 1,035 1,924
Company Cost Per Hire............... 863 2,353
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\10\ The high cost estimates are based on the highest contractor
establishment count of 251,300 and 67.919 companies while the low
estimates are based on a contractor establishment count of 171,275
and 46,291 companies.
Projected Veteran Hires
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Year 1 Year 2 Year 3 Year 4 Year 5
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Employees of Fed Contractors (assuming steady with population) 27,400,000.00 27,610,980.00 27,823,584 28,037,826.15 28,253,717.41
Veterans...................................................... 2,192,000.00 2,208,878.40 2,225,886.76 2,243,026.09 2,260,297.39
Veterans Gap.................................................. 205,500.00 207,082.35 208,676.88 210,283.70 211,902.88
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Present value costs over ten years for the final rule range from $1.08
billion to $3.1 billion using a 3 percent discount rate. If we use a 7
percent discount rate then the present value costs range from $899
million to $2.57 billion. Annualizing these costs yields a cost range
of $127 million to $363 million at the 3 percent discount rate and $128
million to $366 million using a 7 percent discount rate.
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7% discount rate 3% discount rate
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Benefits.............................. Not Quantified........... Not Quantified.
Costs................................. $899 million to $2.57 $1.08 billion to $3.1 billion.
billion.
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These projected hires, some of whom will require reasonable
accommodation, will not add significant costs for the employers.
According to a study conducted by the Job Accommodation Network (JAN),
of the employers who gave the researchers cost information related to
accommodations they had provided, 57 percent said the accommodations
needed by employees cost absolutely nothing.\11\ For 43 percent of
employers, the typical one-time expenditure by employers to provide a
reasonable accommodation was $500. Finally, 2 percent reported that
accommodations required a combination of one-time and annual costs.
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\11\ Job Accommodation Network, ``Workplace Accommodations: Low
Cost, High Impact,'' Sept. 1, 2012. Accommodation and Compliance
Series, http://askjan.org/media/lowcosthighimpact.html (last
accessed Aug. 9, 2013), p.3; ``Fast Facts: Reasonable Accommodations
& The Americans with Disabilities Act,'' U.S. Chamber of Commerce &
the Virginia Commonwealth University, Rehabilitation Research and
Training Center on Workplace Supports,'' http://www.worksupport.com/Topics/downloads/rrtcfactsheet2.pdf (last accessed August 12, 2013).
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In projecting the overall increase in Federal contractor employment
of protected veterans under the VEVRAA rule and individuals with
disabilities under the section 503 rule, there is likely to be an
interaction between the two categories. Some of the newly hired
individuals with disabilities will likely be protected veterans. There
are 5.78 million people 18 years or older in the labor force with a
disability, 822,000, or 14.21 percent, of whom are veterans.\12\
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\12\ Calculation based on unpublished table, Employment status
of persons 18 years and over by veteran status, period of service,
sex, race, Hispanic or Latino ethnicity, and disability status,
Annual Average 2012 (Source: Current Population Survey).
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To meet the section 503 rule's utilization goal of 7 percent,
Federal contractors would have to hire an additional 594,580
individuals with disabilities. Assuming that the number of disabled
veterans hired will be proportional to their share of the disabled
labor force, then we estimate that 84,490 of the newly hired
[[Page 58617]]
individuals with disabilities will also be protected veterans.\13\
Subtracting 84,490 protected veterans from the target of 205,500 leaves
121,010 non-disabled veterans needed to meet the hiring goal. Viewed
independently, Federal contractors under VEVRAA would employ an
additional 205,500 protected veterans and under section 503 employ an
additional 594,580 individuals with disabilities. In the aggregate, we
anticipate the overall number of hires across both rules will be closer
to 715,590. We adjust the reasonable accommodation estimates based on
the aforementioned assumptions. The total cost of providing reasonable
accommodation to protected veterans with disabilities is $19,010,209 in
the year the target is met and $8,037,516 in recurring costs.
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\13\ Because of data limitations, OFCCP is using the share of
veterans as a proxy for ``protected'' veterans. For more information
on the difference between protected and unprotected veterans, please
visit, http://www.dol.gov/ofccp/regs/compliance/factsheets/vetrights.htm#Q2.
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Employers often think providing a reasonable accommodation is more
costly than it actually is. Sometimes an accommodation may be something
as simple as allowing someone to have their instructions tape recorded,
or allowing someone to wear ear phones so they are not distracted by
noise around them, or allowing someone an empty office as space when
they have difficulty with concentration or attention span. Employers
must provide effective accommodations but are not expected to create an
undue hardship for themselves by doing so. Individuals seeking
reasonable accommodation beyond what is effective have the option of
paying the difference between the cost of the more expensive
accommodation and the cost of what the employer will pay for an
effective reasonable accommodation.
We estimate the percentage of veterans in the civilian labor force
with disabilities, with service-connected disabilities, to be 12
percent.\14\ For all Gulf War-era veterans it is 19 percent but for
Gulf War-era II veterans it is 24 percent.\15\ We have not found
projections on the percentage of these populations that are likely to
seek reasonable accommodation. The requirement to provide reasonable
accommodations to individuals with disabilities existed under the ADA,
and now exists under the ADA Amendments Act for employers. This is not
a new obligation created by this rule. However, because this rule seeks
to increase employment of protected veterans, and some of those
veterans are expected to meet the ADA's definition of disabled and,
therefore, are entitled to a reasonable accommodation, we estimate the
cost of providing reasonable accommodations to those disabled protected
veterans that we expect to be hired because of this rule.
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\14\ Bureau of Labor Statistics, Table 6: Employment status of
veterans 18 years and over by presence of service-connected
disability, reported disability rating, period of service, and sex,
August 2012, not seasonally adjusted http://www.bls.gov/news.release/vet.t06.htm (last accessed July 9, 2013).
\15\ Id.
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There are tangible and intangible benefits to investing in the
recruitment and hiring of disabled veterans. Among them are employer
tax credits, access to a broader talent pool, an expanded pool of job
applicants, access to new markets by developing a workforce that
mirrors the general customer base, lower turnover based on increased
employee loyalty, and lower training costs resulting from lower staff
turnover.\16\ According to the U.S. Business Leadership Network
(USBLN), ``corporate CEOs understand that it's cost effective to
recruit and retain the best talent regardless of disability.'' \17\
Broad public policy considerations also exist related to the decreased
demand for and cost of social services as more people move into jobs
and pay taxes. We were not able to quantitatively assess these broad
societal benefits.
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\16\ Job Accommodation Network, ``Workplace Accommodations: Low
Cost, High Impact,'' Sept. 1, 2012. Accommodation and Compliance
Series, http://askjan.org/media/lowcosthighimpact.html (last
accessed Aug. 9, 2013).
\17\ USBLN Disability at Work, and U.S. Chamber of Commerce,
``Leading Practices on Disability Inclusion,'' http://www.usbln.org/pdf-docs/Leading_Practices_on_Disability_Inclusion.pdf (last
accessed Aug. 9, 2013). The USBLN and Chamber report shares best
practices from larger corporations for hiring and providing
reasonable accommodations.
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Introduction
Addressing the barriers our veterans face in returning to civilian
life, particularly with regard to employment, is the focus of a number
of Federal efforts. Among these efforts is the VOW to Hire Heroes Act
signed into law by President Obama on November 21, 2011, which provides
tax credits for businesses that hire veterans who are unemployed or
have service-connected disabilities and creates a new Veteran's
Retraining Assistance Program for unemployed veterans. Other Federal
efforts presented during the August 2011 announcement by President
Obama included a plan for the private sector to hire 100,000 veterans
by the end of 2013 and creating a ``career-ready military'' which will
``ensure that every member of the service receives the training,
education, and credentials they need to transition to the civilian
workforce or to pursue higher education.'' These efforts are now a part
of the Administration's Joining Forces Initiative. Strengthening the
implementing regulations of VEVRAA, whose stated purpose is ``to
require Government contractors to take affirmative action to employ and
advance in employment qualified protected veterans,'' is another
important means by which the government can address the issue of
veterans' employment.
To that end, OFCCP published a notice of proposed rulemaking (NPRM)
on April 26, 2011 in the Federal Register (76 FR 23358), seeking
comment on a number of proposals that would strengthen the regulations
implementing VEVRAA. The NRPM was published for a 60-day public comment
period. The proposed regulations detailed specific actions that
contractors and subcontractors must satisfy to meet their VEVRAA
obligations, including increasing data collection obligations, and
requiring covered Federal contractors and subcontractors to establish
hiring benchmarks for protected veterans. The NPRM also proposed the
rescission of 41 CFR part 60-250. After receiving several requests to
extend the public comment period, OFCCP published a subsequent notice
in the Federal Register on June 22, 2011 (76 FR 36482), extending the
public comment period an additional 14 days.
OFCCP received over 100 comments on the NPRM. Commenters
represented diverse perspectives including: Approximately 40
individuals; ten groups representing contractors; three disability
rights advocacy groups; two veterans' associations; two unions; and two
governmental entities. Commenters raised a broad range of issues,
including concerns with the cost and burden associated with the
proposed rule, the extended recordkeeping requirements, developing
benchmarks, and the new categories of data collection and analyses.
OFCCP carefully considered the comments in the development of this
final rule.
Pursuant to Executive Order (EO) 13563, the final rule was
developed through a process that involved public participation. In
addition to the 60-day public comment period, OFCCP conducted multiple
town hall meetings, webinars, and listening sessions with individuals
from the contractor community, state employment services, disability
organizations, veterans' service organizations and other interested
parties to understand the features of VEVRAA regulations that
[[Page 58618]]
work well, those that can be improved, and possible new requirements
that could help to effectuate the overall goal of increasing the
employment opportunities for qualified veterans with Federal
contractors.
I. Compliance With the Final Rule
Although this final rule becomes effective 180 days after
publication, full compliance with the requirements of this final rule
by current contractors will be phased in as follows. Current
contractors subject to subpart C of the existing 41 CFR part 60-300
regulations that have written affirmative action programs (AAP)
prepared pursuant to those regulations in place on the effective date
of this final rule may maintain that AAP for the duration of their AAP
year. Such contractors are required to update their affirmative action
programs to come into compliance with the requirements of subpart C of
this final rule at the start of their next standard 12-month AAP review
and updating cycle. OFCCP will verify a contractor's compliance with
the requirements of this final rule if the contractor is selected for a
compliance evaluation pursuant to Sec. 60-300.60 or subject to a
complaint investigation pursuant to Sec. 60-300.61. The effective date
and the approach to compliance are the same as those set forth in the
section 503 Final Rule. OFCCP believes that adopting similar approaches
to the effective date and to compliance makes the most sense based on
the similarity of the two rules, and will help contractors make
required system and process changes at one time.
II. Overview of the Final Rule
As stated above, the final rule incorporates many of the proposed
changes set forth in the NPRM. However, in order to focus the scope of
the final rule more closely on key issues, and in an effort to reduce
the burden of compliance on contractors, the final rule also revises or
eliminates some of the NPRM's proposals. This discussion highlights the
major provisions of the final rule and summarizes relevant comments.
The fuller discussion of the provisions of the rule is in the Section-
by-Section Analysis.
The final rule strengthens the affirmative action provisions for
Federal contractors in several ways. The regulations reiterate the
contractor's mandatory job listing requirements and the relationship
between the contractor, its agents, and the state employment services
that provide priority referral of protected veterans. The mandatory job
listing obligation, which is set forth in and required by the VEVRAA
statute, see 38 U.S.C. 4212(a)(2)(A), ensures that veterans seeking the
assistance of state employment service delivery systems to find
employment will be able to find job listings from Federal contractors,
and that the delivery systems will be able to provide priority referral
of these veterans back to contractors. The final rule also addresses
the increased use of technology in the workplace by allowing for the
electronic posting of employee rights and contractor obligations under
VEVRAA and updating the manner in which compliance evaluations are
conducted. Further, the regulations enhance data collection pertaining
to protected applicants and hires in order to provide contractors vital
information against which they can effectively measure their
recruitment efforts, and establish two mechanisms--the flexible
approach set forth in the NPRM, or a more simplified, single national
target--from which contractors may choose in order to establish a
hiring benchmark. These revisions will help contractors better evaluate
their outreach efforts and modify them as needed, toward the end of
increasing employment opportunities for protected veterans by Federal
contractors and subcontractors. Additionally, as proposed in the NPRM,
part 60-250 of these regulations is rescinded. However, as we discuss
further in the Section-by-Section Analysis, part 60-300 is revised to
provide that any protected veteran as defined in the former part 60-250
regulations who is employed by or applies for a position with a part
60-250 covered contractor will still be protected under the anti-
discrimination provisions of part 60-300, and will be able to file
complaints with OFCCP regarding discriminatory treatment.
OFCCP revised or eliminated a number of provisions from the NPRM in
response to the comments that were received, particularly as they
relate to the cost and burden of the rule, recordkeeping requirements,
data collection and analyses, and benchmarks. These changes are
summarized below.
OFCCP received 55 comments concerning the overall burdens and costs
of the proposed rule from several contractor groups and contractors,
including 21 form letters. Most commenters stated that OFCCP's
estimates in costs and hours were too low. Commenters also noted that
OFCCP's contractor universe was too small. In response to these
concerns, OFCCP modified the burden and costs estimates for the final
rule. As discussed further in the Regulatory Procedures section, OFCCP
also increased the overall contractor and subcontractor establishment
count to 171,275 based on Fiscal Year 2009 Employer Information Report
EEO-1 (EEO-1), the Federal Procurement Data System-Next Generation
(FPDS-NG) report data on contractor establishments, and other
information. These changes provide a more accurate depiction of the
burden and cost associated with the final rule. As discussed in more
detail below, OFCCP also made key changes to the recordkeeping
requirements to minimize the burden on contractors.
We received comments on the estimated number of contractor
establishments as well, including recommending an establishment count
of 285,390 using the Veterans Employment Training Services (VETS)
annual report. While OFCCP declines to exclusively rely on the VETS
report number, we present an estimated high end for the range of the
cost of the rule based on a contractor establishment number of 251,300.
This number is based on 2010 VETS data from their pending Information
Collection Request.\18\
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\18\ OMB Control Number 1293-0005, Federal Contractor Veterans'
Employment Report, VETS-100/VETS-100A, http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201104-1293-003 (last accessed
Aug. 13, 2013).
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The NPRM proposed that contractors maintain data pursuant to
Sec. Sec. 60-300.44(f)(4) (linkage agreements and other outreach and
recruiting efforts), 60-300.44(k) (collection of referral, applicant,
and hire data), and 60-300.45(c) (criteria and conclusions regarding
hiring benchmarks) for five years. Twenty-three commenters opposed
these provisions. Several of the commenters were particularly concerned
with the burden associated with the five-year requirement. In response,
OFCCP reduces the proposed five-year recordkeeping requirement to three
years in the final rule. Further, in light of the comments we received,
the final rule does not incorporate the proposal under paragraph 5 of
the Equal Opportunity (EO) Clause and Sec. 60-300.44(k) of the NPRM to
maintain data related to referrals from employment service delivery
systems. The proposal required contractors to maintain quantitative
measurements and comparisons regarding those protected veterans who
were referred by state employment services. Commenters were concerned
with the requirement to obtain referral data, as they indicated that
the state employment delivery service either cannot provide data or
provides data inconsistently across the states, and that acquiring the
data and
[[Page 58619]]
synthesizing it would be burdensome. In reviewing the practical utility
of the referral data in light of the burden that it would create on
contractors, OFCCP has eliminated the requirement to collect and
analyze referral data. Eliminating the referral data requirement and
reducing the length of recordkeeping for the other provisions minimizes
the burden on contractors yet still requires contractors to keep
adequate records to aid and inform their outreach and recruitment
efforts.
The NPRM also proposed to require many of the affirmative action
efforts that are only suggested in Sec. 60-300.44 of the existing
rule. Among these were proposals requiring contractors to: review
personnel processes on an annual basis (Sec. 60-300.44(b)); establish
linkage agreements with three veteran-related organizations to increase
connections between contractors and veterans seeking employment (Sec.
60-300.44(f)); take certain specified actions to internally disseminate
its affirmative action policy (Sec. 60-300.44(g)); and train all
personnel on specific topics related to the employment of protected
veterans (Sec. 60-300.44(j)). After consideration of the comments and
taking into account the expected utility of these provisions in light
of the burden that contractors would incur to comply with the
proposals, OFCCP decided not to incorporate the majority of these
proposals, and instead retains the language in the existing rule. The
proposals in the NPRM, for the most part, required certain specific
steps contractors must take to fulfill their already existing, general
affirmative action obligations. These general affirmative action
obligations--reviewing personnel processes on a periodic basis,
undertaking appropriate outreach and positive recruitment activities,
developing internal procedures to disseminate affirmative action
policies, and training its employees on these policies--remain in the
final rule. By eliminating the specific provisions but maintaining the
general affirmative action obligations, the final rule provides the
contractor flexibility and lesser burden while maintaining a robust
affirmative action program.
The final rule also modifies the approach to setting benchmarks.
The NPRM proposed requiring contractors to establish annual hiring
benchmarks, expressed as the percentage of total hires who are
protected veterans that the contractor seeks to hire in the following
year. The hiring benchmarks were to be established by the contractor
using existing data on veteran availability, while also allowing the
contractor to take into account other factors unique to its
establishment that would tend to affect the availability determination.
OFCCP received a total of 38 comments on the proposed benchmarks.
Twelve commenters questioned whether contractor established benchmarks
would be arbitrary and ineffective because of concerns about the
reliability of data on the number of protected veterans in the
workforce. Commenters also sought clarity on exactly how they should
develop benchmarks based on the varying sources of data available. In
addition, commenters asserted that the benchmarks were quotas that
would adversely impact women and minorities since demographically
veterans are predominantly white males. In response to these concerns,
OFCCP has revised Sec. 60-300.45 to provide a simpler, nationwide
benchmark as another option that contractors can use, in addition to
the flexible approach set forth in the NPRM. Further, the final rule
addresses the incorrect assumptions--e.g., that goals represent a
``quota'' or will place contractors in jeopardy of violating the sex
discrimination provisions of Executive Order 11246--that many comments
in the NPRM detailed.
Finally, in response to some comments and to further reduce costs,
the final rule eliminates a few other minor requirements included in
the NPRM. For instance, the final rule does not include the proposed
requirement in Sec. 60-300.42(d) of the NPRM that contractors
affirmatively ask disabled veterans if they require a reasonable
accommodation, retaining the requirement in the existing rule that
contractors must take part in an interactive process regarding
accommodation and should, but are not required to, seek the advice of
the applicant regarding such accommodation. This aligns the rule with
the obligations set forth in the Americans with Disabilities Act.
Additionally, the final rule eliminates the specific obligation to
inform off-site employees about the availability of the contractor's
affirmative action plan, and instead retains the existing obligation
that requires the affirmative action plan to be available upon request
with the location and hours of availability posted publicly. As with
the other changes discussed, these revisions maintain the general
obligations while reducing the burden of compliance for contractors.
The final rule presents the most substantial re-write of VEVRAA
regulations since their inception. In light of these significant
changes, and in response to contractors' requests to delay
implementation due to these changes, the effective date of this final
rule is set for 180 days after publication in the Federal Register. The
detailed Section-by-Section Analysis below identifies and discusses all
of the final changes in each section. For ease of reference, part 60-
300 will be republished in its entirety in the final rule.
Section-by-Section Analysis
41 CFR Part 60-250
Rescission of Part 60-250
The NPRM proposed two alternative approaches to updating part 60-
250. The first approach proposed rescinding part 60-250 in its
entirety. The second approach proposed revising part 60-250 so that it
mirrors the proposed changes to part 60-300. OFCCP received 16 comments
on these proposals from a variety of entities including individuals,
law firms, contractors, and associations representing veterans,
contractors, or individuals with disabilities.
OFCCP received few comments supporting retaining part 60-250. One
commenter stated that it held several contracts that are covered under
parts 60-250 and 60-300. One individual commenter stated that part 60-
250 should remain in place as some major contractors have contracts
spanning several decades that are still in force. The commenter also
expressed concern about eliminating the definition of ``special
disabled veteran.'' The commenter noted that 30 percent of disabled
veterans may need additional affirmative action since it would be
difficult to compete with a veteran that has no service connected
disability.
OFCCP received 14 comments that either recommended rescinding part
60-250, indicated that the commenter was unaware of contractors that
were subject to part 60-250, or stated that the commenter was neutral
on the proposal to rescind part 60-250. Many commenters questioned
whether there were any remaining active contracts that would still be
covered by part 60-250. One commenter, an industry group, stated that
one of its members has a continuing contract from the 1980s; however,
that contract has since been modified and is no longer covered under
part 60-250.
Commenters provided alternative recommendations to implementing a
part 60-250 that mirrors part 60-300. An equal employment opportunity
consulting firm recommended allowing contractors to combine their
obligations under both parts 60-250 and 60-300 into a single AAP to
eliminate unnecessary duplication. Another
[[Page 58620]]
commenter recommended widening the scope of part 60-300 to incorporate
contracts that are covered under part 60-250.
Part 60-250 is rescinded. As stated in the NPRM and echoed by many
commenters, we do not believe that there are any remaining contracts
for $25,000 or more entered into prior to December 1, 2003, that have
not either terminated or since been modified (which, if over $100,000
in value, would fall under part 60-300's coverage). While the agency
received one comment from a company that asserted that it held
contracts that are subject to part 60-250, OFCCP's research revealed
that the commenter is a grantee. However, out of an abundance of
caution that any contracts falling under part 60-250's coverage still
exist, and to ensure that all veterans that are protected by part 60-
250 (and not part 60-300 as well) will be able to pursue complaints of
discrimination, the final rule includes a definition of ``pre-JVA
veteran'' in Sec. 60-300.2, and provides that such individuals
continue to be protected by the non-discrimination prohibitions in
Sec. 60-300.21 and are able to file discrimination complaints pursuant
to Sec. 60-300.61. There is further discussion of this definition in
the analysis of Section 60-300.2.
41 CFR Part 60-300
Subpart A--Preliminary Matters, Equal Opportunity Clause
Section 60-300.1 Purpose, Applicability and Construction
Section 60-300.1 of the current rule sets forth the scope of VEVRAA
and the purpose of its implementing regulations. The NPRM proposed
deleting references throughout the regulation to the ``Vietnam Era
Veterans' Readjustment Assistance Act of 1974'' or ``VEVRAA'' and
replacing it in this section and throughout the regulation with
``Section 4212.'' OFCCP proposed the change due to concerns that the
continued reference to ``Vietnam era veterans'' leads to confusion
regarding the categories of veterans that are protected under the law.
There were a total of six comments on the proposed revision.
Some commenters supported referring to the regulations as ``Section
4212.'' One commenter stated that the change would be an important and
positive step to clarifying the fact that the regulations are no longer
focused on issues that only concern veterans of the Vietnam era.
Another commenter believed that the proposed change would eliminate
confusion entirely regarding whether VEVRAA applied to only Vietnam era
veterans. One commenter opposed the revision and argued that deleting
the reference to ``VEVRAA'' would be an insult to Vietnam era veterans.
Commenters also provided several recommendations for this section. One
commenter suggested that if the agency is going to use the term
``Section 4212,'' it should do so consistently. The commenter cited
several examples where ``Section 4212'' was used inconsistently in the
NPRM. Other commenters suggested that the agency utilize a name that
connects ``Section 4212'' to the veterans who are protected, such as
``Section 4212/Protected Veterans.'' The commenter that opposed the
revision stated that OFCCP should invest resources into properly
advertising the law rather than changing the name.
The final rule does not incorporate the proposal to use the term
``Section 4212,'' and instead continues the use of the term ``VEVRAA.''
While referring to the law as ``Section 4212'' had potential benefits
as described in the NPRM, there was also concern that the new term
``Section 4212'' might invite further confusion. For instance, for
those unfamiliar with the law, the term ``Section 4212'' does not
indicate any relationship to veterans' rights on its face. Further,
there was concern that some may think that ``Section 4212'' and
``VEVRAA'' were two unrelated laws. Accordingly, the final rule retains
the term ``VEVRAA,'' and in response to comments we have ensured that
the term is used consistently throughout the regulation.
In addition, to address confusion among contractors and veterans
regarding the scope of the various veterans' employment rights
statutes, the final rule adds language to the discussion in paragraph
(c)(2) of VEVRAA's ``relationship to other laws.'' New paragraph
(c)(2)(i) highlights that VEVRAA and the Uniformed Services Employment
and Reemployment Rights Act (USERRA) are separate laws with distinct
obligations for contractors and distinct protections for employees who
have past, present or future military service, status or obligations.
It clarifies that this part does not limit the contractor's
obligations, responsibilities, and requirements under USERRA, including
the obligation to reemploy employees returning from qualifying military
service, and emphasizes that compliance with this part is not
determinative of compliance with USERRA.
Section 60-300.2 Definitions
The NPRM proposed clarifying several key definitions in part 60-
300. The current classifications of protected veterans under VEVRAA
include: (1) Disabled veterans, (2) veterans who served on active duty
in the Armed Forces during a war or in a campaign or expedition for
which a campaign badge was authorized, (3) veterans who, while serving
on active duty in the Armed Forces, participated in a United States
military operation for which an Armed Forces service medal was awarded
pursuant to Executive Order No. 12985, and (4) recently separated
veterans. The regulations define ``disabled veteran,'' ``recently
separated veteran,'' and ``Armed Forces service medal veteran.'' The
definition of ``other protected veteran'' in the existing regulation
applies to veterans who served on active duty in the Armed Forces
during a war or in a campaign or expedition for which a campaign badge
has been authorized. OFCCP proposed replacing ``other protected
veteran'' with ``active duty wartime or campaign badge veteran'' to
eliminate confusion regarding the veterans that are protected under
this category. Some have interpreted erroneously the ``other protected
veteran'' category as a ``catch-all'' that includes all veterans. The
proposed rule also added new definitions for ``protected veteran'' and
``linkage agreement.'' OFCCP received a total of 18 comments on the
proposed changes to Sec. 60-300.2 from a variety of entities including
individuals, law firms, contractors, and associations representing
veterans, contractors, or disability rights.
Definition for ``Active Duty Wartime or Campaign Badge
Veteran''
There were a total of eight comments on the proposal to change the
category of veterans referred to as ``other protected veteran'' in the
existing rule to ``active duty wartime or campaign badge veteran.''
This category of veteran includes all those who served on active duty
in the U.S. military, ground, naval, or air service either: (a) during
a war; or (b) in a campaign or expedition for which a campaign badge
was authorized by the Department of Defense (DOD). The proposal did not
change which veterans are covered; we made the change so that the
category name was more accurately descriptive of who it covered.
Most commenters supported the proposal. One commenter noted that
the proposed language would more accurately reflect the language in the
statute and alleviate some of the past confusion surrounding the
wording. Another commenter stated that the proposed change is helpful
in understanding the nature of veterans protected by this category.
[[Page 58621]]
A few commenters expressed concern about the proposed definition.
One commenter argued that the law is quite clear on who is protected by
VEVRAA and that the proposed term ``active duty wartime or campaign
badge veteran'' does not provide any additional clarification. A human
resources consulting company suggested that using ``active duty'' may
lead to under-reporting. The company asserted that individuals may
interpret this to mean that they have to be on active duty to qualify.
Commenters also stated that it is unclear who qualifies as a
``wartime'' or ``campaign badge veteran.'' One commenter noted that the
clearest guidance on who qualifies as a ``campaign badge veteran''
could only be found on the United States Department of Defense and
Office of Personnel Management Web sites. The commenter further stated
that many contractors do not want to directly reference the information
on those sites because they are related to the Federal government's
veterans' preference. The commenter requested that OFCCP develop
guidance specifically for contractors clearly identifying which
veterans are protected under the ``wartime'' or ``campaign badge
veteran'' classification.
The final rule adopts the definition ``active duty wartime or
campaign badge veteran'' as proposed in the NPRM. OFCCP believes that
this is a more accurate description, and less subject to confusion,
than the general ``other protected veteran'' classification. OFCCP
notes that the Department of Defense and the individual services of the
Armed Forces (e.g., Army; Navy) administer these campaign badges, and
thus contractors should consult with DOD or the issuing military
service if they have questions about whether a particular badge is a
campaign badge that provides coverage under VEVRAA.
Definition for ``Protected Veterans,'' ``Pre-JVA
Veterans''
While commenters were generally supportive of the proposal to
create a definition for ``protected veteran,'' there were a few
concerns regarding using the term ``protected'' to label the
definition. One commenter argued that using the term ``protected
veteran'' may cause further confusion since many mistakenly interpreted
``other protected veteran'' to mean all other veterans not protected
under the other defined categories. Another commenter argued that the
definition should utilize the label ``protected veteran,'' since this
is the statutory language in VEVRAA.
The final rule retains the proposed definition for ``protected
veteran.'' As this final rule eliminates the ``other protected
veteran'' definition and replaces it with a clearer, more specific
alternative, we believe that the new ``protected veteran'' term will
not be confused with the previous ``other protected veteran'' term.
Further, while we understand that the VEVRAA statute uses the term
``protected veterans'' to describe the various categories of veterans
protected by VEVRAA, we use the term ``protected veteran'' in the
regulations for consistency with other regulations administered by
OFCCP. The Executive Order 11246 and section 503 regulations, as well
as the VEVRAA regulations to date, have used the term ``protected'' to
refer to the individuals and groups of individuals who have rights
under the various statutes (e.g., ``protected classes''). Meanwhile,
the term ``covered'' has typically referred to the contractors to whom
the regulations apply (e.g., ``covered contractor''). Therefore, in
order to maintain word usage continuity with all of OFCCP's laws, we
retain the term ``protected veteran'' as proposed in the NPRM.
One commenter suggested that OFCCP expand the types of veterans
protected under VEVRAA to include Desert Storm-era veterans, veterans
that served in a war zone and veterans who utilize service dogs. The
categories of ``protected veterans'' are not set by OFCCP, but rather
are defined by the VEVRAA statute codified at 38 U.S.C. 4212(a)(3).
OFCCP cannot expand the categories beyond those set forth in the
statute. We note that most of the types of veterans listed above are
protected by the categories of veterans set forth in the statute.
Veterans that served in the Desert Storm-era or otherwise in a war zone
likely will be protected under the ``active duty wartime or campaign
badge veteran'' category of protected veteran, and possibly the
``recently separated veteran'' category as well. As for veterans who
use service dogs, if they were discharged or released from active duty
due to a service-connected disability, or are otherwise entitled to
compensation for disability under laws administered by the Department
of Veterans Affairs, they would already be protected under the
``disabled veteran'' classification.
Finally, as noted in the discussion on the rescission of part 60-
250, the final rule also includes a definition for ``pre-JVA veteran,''
which incorporates those individuals who were previously protected
under part 60-250 into part 60-300. The definition is as follows:
``Pre-JVA veteran means an individual who is an employee of or
applicant to a contractor with a contract of $25,000 or more entered
into prior to December 1, 2003, and who is a special disabled veteran,
veteran of the Vietnam era, pre-JVA recently separated veteran, or
other protected veteran, as defined below:
(1) Special disabled veteran (also referred to in this regulation
as `Pre-JVA 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) Veteran of the Vietnam era means a person who:
(i) Served on active duty for a period of more than 180 days, and
was discharged or released there from with other than a dishonorable
discharge, if any part of such active duty occurred:
(A) In the Republic of Vietnam between February 28, 1961, and May
7, 1975; or
(B) Between August 5, 1964, and May 7, 1975, in all other cases; or
(ii) Was discharged or released from active duty for a service-
connected disability if any part of such active duty was performed:
(A) In the Republic of Vietnam between February 28, 1961, and May
7, 1975; or
(B) Between August 5, 1964, and May 7, 1975, in all other cases.
(3) Pre-JVA recently separated veteran means a pre-JVA veteran
during the one-year period beginning on the date of the pre-JVA
veteran's discharge or release from active duty.
(4) Other protected veteran means a person who served on active
duty during a war or in a campaign or expedition for which a campaign
badge has been authorized, under the laws administered by the
Department of Defense.''
As stated in the discussion of the rescission of part 60-250,
references to ``Pre-JVA veteran'' are included in the discrimination
prohibition section for the final rule (Sec. 60-300.21) and the
complaint procedures section of the final rule (Sec. 60-300.61) to
ensure that, if there are any individuals remaining who are protected
solely by part 60-250, such individuals will be able to avail
themselves of their rights and file complaints for discrimination based
on their veteran status just as ``protected veterans'' under part 60-
300 are able to do. We do not include ``pre-JVA veterans'' along with
``protected
[[Page 58622]]
veterans'' in the sections of the regulation pertaining to contractors'
affirmative action obligations. As we have noted above, we have no
evidence that there are any contracts remaining that fall solely under
part 60-250's coverage, and thus requiring contractors to engage in
affirmative action efforts pursuant to contracts that by all accounts
no longer exist is not a good use of resources. Regardless, the
protected veteran categories under part 60-300 include the vast
majority of veterans who were protected under the part 60-250
categories--indeed, the part 60-300 categories are even broader with
regard to recently separated veterans and disabled veterans. To the
extent they do not, many of contractors' affirmative action obligations
under part 60-300 would likely reach such individuals anyway (e.g., a
contractor's recruitment and outreach effort, which could include a
linkage agreement with a local veterans service group).
Definition for ``Linkage Agreements''
Commenters expressed a variety of concerns regarding the proposed
definition of ``linkage agreements.'' However, as the final rule
eliminates the requirement for contractors to enter into linkage
agreements--see discussion of Sec. 60-300.44(f), below--there is no
need for the regulation to contain a definition for it, and thus it is
eliminated from the final rule.
Additional Definitions
Commenters recommended adding certain definitions to Sec. 60-300.2
for clarification purposes. Two commenters stated that OFCCP needed to
clearly define ``priority referral.'' One of the commenters, a law
firm, expressed concern that contractors are specifically directed to
request ``priority referrals'' and conduct analyses of ``priority
referrals'' in comparison to other referrals, but the regulations do
not clearly define ``priority referral.'' Another commenter requested
that OFCCP define ``external job search organizations'' because the
term has been broadly interpreted to encompass a broad range of
organizations including online job search engines, veterans' service
organizations, and other third parties that provide candidates for
contractors.
OFCCP declines to include a definition of ``priority referral'' in
Sec. 60-300.2. OFCCP believes that it is clear from the statute that
the term refers to individuals referred pursuant to a local employment
services office's requirement to give ``veterans priority in referral''
for contractor employment listings. See 38 U.S.C. 4212(a)(2). Further,
the requirement that the One-Stop service delivery systems provide
priority referral of veterans is not administered and carried out by
OFCCP, but by other agencies within the Department. The Department's
Employment and Training Administration (ETA) and Veterans' Employment
and Training Service (VETS) have published guidance on implementing
priority of service requirements for veterans, including: the Training
and Employment Guidance Letter 10-09 (accessible on ETA's Web site at
http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2816); Veterans'
Program Letter 07-09; and Training and Employment Notice 15-10, ``A
Protocol for Implementing Priority of Service for Veterans and Eligible
Spouses.'' However, we note that the final rule eliminates the proposed
requirement to collect and maintain data on priority referrals, which
should limit any concerns raised in response to the NPRM about how to
specifically categorize priority referrals.
OFCCP also disagrees with the assertion that the agency should
define ``external job search organization.'' The NPRM noted in the
discussion of the proposed Paragraph 4 of the EO Clause that if a
``contractor uses any outside job search companies (such as a temporary
employment agency) to assist in its hiring, the contractor must provide
the state employment service with the contact information for these
outside job search companies.'' This context clarifies the kinds of
organizations that are considered ``external job search
organizations.'' OFCCP intends for ``external job search organization''
to be read as broadly as possible. ``External job search organization''
includes any entity not wholly owned and operated by the contractor
that assists with its hiring.
Finally, the final rule appends additional language to the
definition for ``employment service delivery system'' (ESDS). The
existing rule references that the ESDS offers services in accordance
with the Wagner-Peyser Act. The final rule adds some additional
background and explanation of the Wagner-Peyser Act, stating that
``[t]he Wagner-Peyser Act requires that these services be provided as
part of the One-Stop delivery system established by the States under
Section 134 of the Workforce Investment Act of 1998.'' The Wagner-
Peyser Act of 1933 established a national network of Employment Service
offices that provided labor exchange services to jobseekers and
employers. The Workforce Investment Act of 1998 (WIA) amended the
Wagner-Peyser Act and required states and localities to integrate
employment and training programs into a single public workforce system.
Thus, employment services and training programs are all provided
through a national network of One-Stop Career Centers established in
the local workforce investment areas of the states. The description of
the Employment Service's role in the public workforce system can be
found at 20 CFR 652.202, and Section 7(e) of the Wagner-Peyser Act.
We also note that several commenters representing the contractor
community requested that OFCCP add formal definitions for ``applicant''
and for ``Internet applicant,'' as those terms are defined in the
Executive Order 11246 (EO 11246) implementing regulations at 41 CFR
part 60-1. While OFCCP does not formally adopt the definition of
``Internet applicant'' into the section VEVRAA regulations, OFCCP is
harmonizing the requirements of these regulations and the EO 11246
Internet Applicant Rule. OFCCP provides further guidance on this issue
in the preamble discussion related to Sec. 60-300.42.
Section 60-300.5 Equal Opportunity Clause
The NPRM proposed several changes to the content of the Equal
Opportunity Clause found in Sec. 60-300.5, and the manner in which the
Clause is included in Federal contracts. These proposals, the comments
to these proposals, and the revisions made to the final rule are
discussed in turn below.
EO Clause Paragraph 2--Clarification of Mandatory Job
Listing Obligations
The NPRM proposed additional language to this paragraph clarifying
that the contractor must provide job vacancy information to the
appropriate employment service in the manner that the local employment
service delivery system (ESDS) requires in order to include the job in
their database so that they may provide priority referral of veterans.
The NPRM also proposed additional language to this paragraph clarifying
that, for any contractor who utilizes a privately-run job service or
exchange to comply with its mandatory listing obligation, the
information must be provided to the appropriate employment service in
the manner that the employment service requires. OFCCP received 14
comments concerning this section from an individual, law firms,
contractors, contractor groups, a veteran's group, and others. As
explained below, we adopt the language proposed in the NPRM for this
paragraph with one minor revision.
The majority of the comments received asserted that posting jobs in
the
[[Page 58623]]
format required by a given ESDS was burdensome, as ESDSs in varying
states and localities require different submission formats and
information for their job listing system. On a related note, several
commenters suggested that the Department reinstitute America's Job
Bank, a nationwide job listing service operated and eventually
eliminated several years ago by the Employment and Training
Administration. OFCCP did not develop or maintain America's Job Bank,
as one law firm commenter asserted.
A bit of historical background is perhaps helpful in addressing
these comments. As was discussed in the NPRM, the requirement to list
jobs with the appropriate ESDS is not a purely regulatory creation, but
is established in the statute itself. See 38 U.S.C. 4212(a)(2)(A). The
statute has long required that each contractor ``shall immediately list
all of its employment openings with the appropriate employment service
delivery system.'' Id. The JVA, in amending VEVRAA in 2002, further
specified that while contractors could also list a job with America's
Job Bank or any additional or subsequent national electronic job bank
established by the Department of Labor, this was not in and of itself
sufficient to satisfy the job listing requirement. Id. at
4212(a)(2)(A). Accordingly, reinstitution of America's Job Bank or
something similar would not change the statutory requirement that
contractors list their jobs with the appropriate ESDS. OFCCP is
obligated to comply with the statute as written.
Thus, the mandatory job listing requirement set forth in the NPRM
is not a new creation; it merely clarified that contractors list their
jobs with the ESDS ``in the manner and format required'' by the ESDS.
This, for example, could include requiring electronic transmission
through a web-based form or electronic document format (such as PDF),
requiring paper transmission using mail or facsimile, or requiring the
contractor to provide particular types of information in its
submissions. As we stated in the NPRM, this clarification stems from
numerous reports received by OFCCP that contractors were occasionally
providing job listing information to the ESDS in an unusable format,
such that their jobs were not being listed and the ESDS could not
properly carry out the priority referral of veterans, which is required
by VEVRAA and its regulations. We received input during the public
comment period from individuals working for or with an ESDS that
corroborated these reports. If the purpose of the mandatory job listing
requirement is to help veterans find work with Federal contractors,
then surely Congress did not intend to permit contractors to provide
information about their job openings in an unusable format, completely
defeating the purpose of the requirement. Some commenters were
concerned that the proposed language in the NPRM required contractors
to provide information about their job openings in one specific format
mandated by the ESDS. This was not the intention of the proposal.
Rather, the aim of the proposal was simply to ensure that contractors
provide information about their job openings with the ESDS in a format
that the ESDS can use to provide priority referrals of protected
veterans to contractors. If an ESDS permits the contractor to provide
this information in various formats, the contractor would be free to
use any one of them. To clarify this requirement, the final rule
revises the proposal's language (providing the listing ``in the manner
or format required by the appropriate [ESDS] . . .'') to require
contractors to list their jobs ``in a manner and format permitted by
the appropriate [ESDS] which will allow that system to provide priority
referral of veterans. . .''
Finally, a few commenters questioned whether the language proposed
in the NPRM for the last sentence of this paragraph, which clarifies
that any contractor using a privately-run job service or exchange to
list its jobs is still required to have the job listed with the
appropriate ESDS in a usable format, would forbid third parties from
posting jobs for contractors or the use of private job boards. The
language in the NPRM, now adopted into the final rule, does not prevent
a contractor from utilizing a third party to list its jobs, so long as
the job listing is submitted to the appropriate ESDS in any manner and
format permitted by the ESDS. However, if the job is not listed by the
third party with the appropriate ESDS in a permitted manner and format,
the contractor will be held responsible. Similarly, the language in the
NPRM, now adopted into the final rule, does not prevent a contractor
from listing its jobs on any privately-run job boards it may deem
worthwhile; however, it may only do so in addition to, and not instead
of, the mandatory job listing requirement established by statute and
set forth in the rule.
EO Clause Paragraph 4--Information Provided to State
Employment Services
The NPRM proposed that the contractor, when it becomes obligated to
list its job openings with the appropriate state employment service,
must provide additional information, including its status as a Federal
contractor, the contact information for the contractor hiring official
at each location in the state, and its request for priority referrals
of protected veterans for job openings at all its locations within the
state, and that this information must be updated annually. These
requirements were added in response to feedback received from ESDSs
that there is no centralized list of Federal contractors that they can
consult in order to determine if a listing employer is a Federal
contractor, and to ensure that these ESDSs have contact information for
the listing contractor if there are any questions that need to be
resolved in the job listing or priority referral process. The NPRM also
required that the contractor provide the ESDS with the contact
information for any outside job search companies (such as a temporary
employment agency) assisting with its hiring process.
OFCCP received four comments specific to these proposed changes.
One commenter stated that GSA has a list of Federal contractors and,
therefore, the Federal Government should make this list available to
the ESDS and not require listing companies to indicate whether or not
they are a Federal contractor as defined by the VEVRAA regulations.
While it is true that the GSA e-library Web site has a list of
contractors, this list does not contain companies that have contracts
with all agencies throughout the Federal Government, and in fact did
not include certain contractors that OFCCP has investigated in recent
years and for whom coverage is not disputed. Additionally, the library
is not limited to those contracts entered into on or after December 1,
2003 with a value of $100,000 or more, the criteria for coverage under
part 60-300 of the regulations. As such, this list is both under-
inclusive and over-inclusive, and cannot be relied upon for VEVRAA
enforcement purposes. In this context, and in the interest of insuring
that Federal contractors are properly identified so an ESDS can fulfill
its duty to give priority referral of protected veterans to
contractors, we believe that requiring contractors to simply indicate
``VEVRAA Federal Contractor'' on its job listings facilitates the
business engagement efforts of the ESDS and is not unduly burdensome
for either the contractor or the ESDS (this revision does not add any
additional reporting requirements for the ESDS aside from those already
set forth in the VEVRAA and these regulations). Accordingly, the final
rule incorporates this proposal.
[[Page 58624]]
Some commenters stated that posting the contact information for
``the contractor official responsible for hiring at each location''
would be burdensome on that person, especially if recruiting
nationwide, and might be confusing, as multiple persons could be
involved in hiring. Among the alternative suggestions in the comments
was using ``chief hiring official,'' ``HR contact,'' or ``senior
management contact'' in the place of ``contractor official responsible
for hiring at each location.''
As stated in the NPRM, the reason for requiring this information
was to ensure that the ESDS had the contact information for someone
working for the contractor that could answer any questions the ESDS may
have about the listing to ensure it is processed appropriately and was
the proper recipient of priority referrals of veterans. In order to
make this requirement less vague and to provide contractors with
greater flexibility, the final rule includes a sentence providing
further guidance that the ``contractor official'' may be a chief hiring
official, a Human Resources contact, a senior management contact, or
any other manager for the contractor that can verify the information
set forth in the job listing. Additionally, the final rule makes a
small change to the reporting schedule for the information required by
this paragraph. While the NPRM required that this information be
reported annually, the final rule requires that contractors provide
this information at the time of its first job listing, and then update
it for subsequent job listings only if any of the provided information
has changed. This will ensure that the ESDS has the information it
needs while potentially limiting the reporting burden on contractors.
The NPRM also required that the contractor provide the ESDS with
the contact information for any outside job search companies (such as a
temporary employment agency) assisting with its hiring process, and
replaced the term ``state workforce agency'' and ``state agency''
throughout the regulation with the term ``employment service delivery
system,'' which was already a defined term in the regulation. We did
not receive any comments specific to these proposals, and thus they are
adopted in the final rule as proposed.
EO Clause Paragraph 5--Maintaining Referral Data
The NPRM proposed an entirely new paragraph 5 to the EO Clause that
would require contractors to collect and maintain data on the number of
referrals and priority referrals they receive, in order to give the
contractor and OFCCP a quantifiable measure of the availability of
protected veterans and, therefore, provide part of a baseline for
measuring the success of a contractor's outreach and recruitment
programs. The NPRM also proposed that contractors maintain this data
for five years, in order to ensure that contractors had enough
historical referral data to consider when evaluating its outreach
efforts (see Sec. 60-300.44(f)(3)) and establishing benchmarks (see
Sec. 60-300.45).
OFCCP received several comments on this proposal, the majority of
which stated that the data collection and five-year recordkeeping
requirements were unduly burdensome. Other commenters believed that it
would be difficult and perhaps impossible to obtain accurate referral
data, and thus the practical utility of the data collection requirement
was limited. For instance, one commenter asserted that accurate
referral data would be difficult to obtain if an applicant filed
directly with a contractor, and that referral data from private Web
sites would not be counted as referral. Several commenters representing
the contractor community also asserted that requiring contractors to
collect and maintain this data was inconsistent with the Internet
Applicant rule set forth in the Executive Order 11246 regulations.
OFCCP has considered these comments and believes that the points
raised by commenters regarding the practical utility of the referral
data, in light of the burden of collecting it, have merit. Accordingly,
the final rule deletes the proposed paragraph 5 and renumbers the
subsequent paragraphs in the EO Clause accordingly.
EO Clause Paragraph 10 (NPRM)/Paragraph 9 (Final Rule)--
Providing Notice to People with Disabilities
In paragraph 10 of the EO Clause in the NPRM, we proposed two
changes. First, we updated the contractor's duty to provide notices of
rights and obligations that are accessible to individuals with
disabilities, replacing the outdated suggestion of ``hav[ing] the
notice read to a visually disabled individual'' as an accommodation
with the suggestion to provide Braille, large print, or other versions
that allow persons with disabilities to read the notice themselves.
OFCCP received one comment from a contractor asserting that there were
``too many'' types of notices possible for all types of disabilities.
We respectfully disagree with this commenter's assertion. The context
of the existing regulation and the proposed changes clearly and
specifically refer to providing an alternative notice to individuals
who are unable to read it due to visual impairment or visual
inaccessibility (such as an individual who uses a wheelchair being
unable to read the fine print of a notice posted high on a wall). The
commenter did not specify any other disabilities for which contractors
would need to create alternative notices, and we cannot conceive of any
that would create any significant burden. Further, any burden in
providing a notice in Braille is slight given the fact that they are
available from the EEOC's Office of Communications and Legislative
Affairs, who may be contacted at 202-663-4191 or TTY 202-663-4494. See
http://www1.eeoc.gov/eeoc/publications/. We have amended the language
slightly in the final rule to clarify that among the ``other versions''
of the notice there are additional technological options available to
contractors that would fulfill the requirement, such as providing it
electronically or on computer disc.
Second, we proposed additional language detailing that a contractor
can satisfy its posting obligations through electronic means for
employees who use telework arrangements or otherwise do not work at the
physical location of the contractor, provided that the contractor
provides computers to its employees or otherwise has actual knowledge
that employees can access the notice. The addition of this language is
in response to several things: the increased use of telecommuting and
other work arrangements that do not include a physical office setting;
internet-based application processes in which applicants never enter a
contractor's physical office; and a number of complaints received by
OFCCP in recent years from individuals employed by contractors without
a constant physical workplace--such as airline pilots--who assert that
they were unaware of their rights under VEVRAA. OFCCP received two
comments on this proposal, one from a law firm and one from a
contractor, raising two separate issues.
The first issue raised by one of these comments was that ``actual
knowledge'' of an off-site employee being able to access the notice is
unduly burdensome. We respectfully disagree. First, to clarify,
``actual knowledge'' does not mean actual knowledge that the employee
accessed the notice, but rather actual knowledge that the notice was
posted or disseminated in such a way that would be accessible to the
employee. As set forth in the proposed language, for a contractor with
employees who do not work at a physical location of the contractor,
electronic notices that are posted in a conspicuous location and format
on the company's intranet or sent by electronic
[[Page 58625]]
mail to employees satisfies the posting obligations. In the example of
electronic mail, ``actual knowledge'' could easily be documented merely
by maintaining an electronic copy of the email message sent to
employees--something that is done (or can be done) automatically by
virtually all enterprise-based email systems. Similarly, ``actual
knowledge'' for postings on a company intranet can be verified simply
by having an employee in personnel or IT periodically check the link to
the electronic posting to ensure that it works and the posting is
readable. Performing these types of checks on information posted on a
company intranet is a common best practice that takes seconds to
complete. In light of the numerous comments and complaints OFCCP has
received from protected veteran employees of Federal contractors--
particularly those without a traditional physical workplace--that they
were unaware of their rights or their contractor's affirmative action
obligations, we believe the importance of ensuring that employees have
access to statements of their rights and the contractor's obligations
far outweighs the slight burden that compliance creates.
The second issue raised in the comments pertained to the
requirement that, for contractors using electronic or internet-based
application processes, an electronic notice of employee rights and
contractor obligations must be ``conspicuously stored with, or as part
of, the electronic application.'' One commenter opined that storing the
electronic notice with the application would increase the size of
applicant files. The potentially small increase in the size of the
electronic file does not outweigh the benefit of providing employees
notice of their employment rights and protections.
Accordingly, for the reasons stated above, OFCCP has adopted the
proposed changes to paragraph 10 of the EO Clause into paragraph 9 of
the final rule. We have also added a clarification stating that a
contractor is able to satisfy its posting obligation by electronic
means for employees who do not work at a physical location of the
contractor, provided that the contractor provides computers ``or access
to computers'' that can access the electronically posted notices. This
clarifies that electronic posting is appropriate not only for employees
who telework, but also for those who share work space--and contractor-
provided computers--at a remote work center.
EO Clause Paragraph 11 (NPRM)/Paragraph 10 (Final Rule)--
Providing Notice to Labor Organizations
The NPRM proposed additional language that a contractor, in
addition to its existing obligation to notify labor organizations with
which it has collective bargaining agreements about its affirmative
action efforts, must also notify the labor organizations about its non-
discrimination obligations as well. There were no comments specific to
this minor change, and thus the language in paragraph 11 of the NPRM is
adopted as paragraph 10 of the final rule as proposed.
EO Clause Paragraph 13 (NPRM)/Paragraph 12 (Final Rule)--
Contractor Solicitations and Advertisements
The proposed regulation added a new paragraph 13 to the EO clause
which would require the contractor to state and thereby affirm in
solicitations and advertisements that it is an equal employment
opportunity employer of veterans protected by VEVRAA, much like it is
already required to do under the Executive Order 11246 regulations.
OFCCP received one comment from a contractor group, objecting to
this proposal on the grounds that advertisements would cost more due to
their increased word length. However, as stated in the NPRM,
contractors are already required under Executive Order 11246 to state
in advertisements and solicitations that ``all qualified applicants
will receive consideration for employment without regard to race,
color, religion, sex, or national origin.'' See 41 CFR 60-1.4(a)(2).
The requirement set forth in paragraph 13 of the NPRM would require
adding ``protected veteran status,'' or an abbreviation thereof, to the
language that contractors are already required to use in
advertisements. This is a very minor change involving nominal time and
expense to contractors that will affirm to the public a fact that many
do not know--that protected veterans are entitled to non-discrimination
and affirmative action in the workplace of Federal contractors.
Accordingly, the language in paragraph 13 of the NPRM is adopted as
paragraph 12 of the final rule as proposed.
Inclusion of EO Clause in Federal Contracts (proposed
Sec. Sec. 60-300.5(d) and (e))
Finally, the NPRM proposed requiring that the entire equal
opportunity clause be included verbatim in Federal contracts. This
proposed change was to ensure that the contractor, and particularly any
subcontractor, who often relies on the prime contractor to inform it of
nondiscrimination and affirmative action obligations, reads and
understands the language in this clause. OFCCP received four comments--
from two law firms, a contractor, and a contractor group--all of whom
opposed this proposed new requirement. These commenters asserted that
the requirement to incorporate the EO Clause into Federal contracts was
too burdensome, as the length of a contract would increase greatly in
size to perhaps double or triple its original length. The commenters
further opined that the increase in the length would cause contracts to
be rewritten, and that the increase in paper that would accompany such
a requirement was not environmentally friendly. Finally, the commenters
asserted that cutting and pasting the text of the clause into the text
of contracts was not a simple task, and would require time to reformat
and otherwise edit the contract prior to signing it.
In light of the comments and upon further consideration of the
issue, OFCCP withdraws and revises the proposal to incorporate the
entire EO Clause into Federal contracts. In addition to the burden
concerns set forth by commenters, there is concern that the length of
the EO Clause will dissuade, rather than promote, contractors and
subcontractors from reading and taking note of the non-discrimination
and affirmative action obligations toward protected veterans. This is
contrary to the intent behind the proposal in the NPRM.
However, the requirement in the existing regulations does little to
notify contractors and subcontractors of the nature of their
obligations to employ and advance in employment protected veterans,
which was a primary objective of the NPRM proposal. Accordingly, in
order to draw greater attention to the contractors' obligations under
VEVRAA without the burden of including the entire VEVRAA EO clause, the
final rule revises paragraph (d) of this section to require the
following text, set in bold text, in each contract, following the
reference to VEVRAA required by the FAR:
``This contractor and subcontractor shall abide by the
requirements of 41 CFR 60-300.5(a). This regulation prohibits
discrimination against qualified protected veterans, and requires
affirmative action by covered prime contractors and subcontractors
to employ and advance in employment qualified protected veterans.''
This requirement would apply to all contracts entered into after
the effective date of the rule.
Lastly, the final rule does not incorporate the proposed change to
paragraph (e), and instead reverts to the existing language in that
subsection. The NPRM proposed eliminating the last clause of the
paragraph (``whether or not it is physically incorporated in
[[Page 58626]]
such contract and whether or not there is a written contract between
the agency and the contractor'') to align with the proposed paragraph
(d), which required incorporation of the entire EO Clause into Federal
contracts. Because paragraph (d) of the final rule does not include
this requirement, the final rule revises paragraph (e) accordingly back
to its existing form.
Subpart B--Discrimination Prohibited
Section 60-300.21 Prohibitions
The proposed rule included clarifying language to paragraph (f)(3)
of this section, qualifying that an individual who rejects a reasonable
accommodation made by the contractor may still be considered a
qualified disabled veteran if the individual subsequently provides or
pays for a reasonable accommodation. One law firm commenter stated that
the proposal to allow individuals to provide their own accommodations
could lead to legal, safety, and equal treatment issues.
OFCCP opts to retain the proposed language in the final rule.
First, this proposal is not ``wholly inconsistent'' with the ADA like
the commenter suggested. Rather, it is entirely consistent with
longstanding EEOC ADA reasonable accommodation policies. See, e.g.,
EEOC's ``Enforcement Guidance on Reasonable Accommodation and Undue
Hardship Under the Americans with Disabilities Act,'' October 17, 2002
(``to the extent that a portion of the cost of an accommodation causes
undue hardship, the employer should ask the individual with a
disability if s/he will pay the difference.'') We likewise do not
believe that safety concerns warrant a change in the regulation, as the
provisions on ``direct threat'' in this regulation and any contractors'
general workplace safety policies will guard against these concerns.
Nor would a contractor have to permit a disabled veteran to provide an
accommodation if the contractor can show that that accommodation would
significantly disrupt the workplace or otherwise impose an undue
hardship on its operations.
Finally, as set forth in the discussion of the new ``pre-JVA
veteran'' definition in Sec. 300.2, the final rule adds ``or pre-JVA
veteran'' after each instance of ``protected veteran'' in this section,
and adds ``or pre-JVA special disabled veteran'' after each instance of
``disabled veteran'' in this section. This incorporates the categories
of veterans protected by the now rescinded part 60-250 into this part,
ensuring that pre-JVA veterans, if any still exist, are protected by
the anti-discrimination provisions of this section.
Subpart C--Affirmative Action Program
Section 60-300.40 Applicability of the affirmative action program
requirement
The NPRM proposed one small change to paragraph (c) of this
section, specifying that a contractor's affirmative action program
shall be reviewed and updated annually ``by the official designated by
the contractor pursuant to Sec. 60-300.44(i).'' We received no
comments on this section. Accordingly, Sec. 60-300.40 is adopted in
the final rule as proposed.
Section 60-300.41 Availability of affirmative action program
The proposed regulation added a sentence requiring that, in
instances where the contractor has employees who do not work at the
contractor's physical establishment, the contractor shall inform these
employees about the availability of the affirmative action program by
means other than a posting at its establishment, in light of the
increased use of telecommuting and other flexible workplace
arrangements. This proposal in many respects mirrored the electronic
notice requirements set forth in paragraph 10 of the EO Clause at Sec.
60-300.5 of the rule. OFCCP received 6 comments from an individual, two
law firms, two contractors and a contractor association regarding the
proposed revisions to this section, discussed in turn below.
The comments from the two law firms assert that the proposed
changes regarding data collection and analysis in Sec. Sec. 60-
300.44(f) and 60-300.44(k) change the character of the VEVRAA AAP by
including potentially confidential information and should warrant
excluding ``data metrics'' contained in the AAP when the AAP is
accessible by applicants and employees. One of these comments indicated
that even if data is aggregated, it may still identify an employee as a
veteran violating confidentiality, e.g., one hire occurs for which the
position is named and the individual is identified as a disabled
veteran. Another comment similarly recommended that a ``soft'' copy of
the AAP be made available to those requesting a copy. Finally, one
comment noted that the AAP should simply be made available at the
convenience of the requesting applicant and/or employee, which is
essentially the function of the existing rule.
In response to these comments, and as part of the effort to focus
the final rule on those elements that are of critical importance to
OFCCP and reduce burden on contractors where possible, the final rule
does not incorporate the proposals in the NPRM regarding informing off-
site individuals about the availability of the contractor's affirmative
action program. Rather, the final rule retains the language in the
existing Sec. 60-300.41 in that regard. Therefore, contractors must
still make available their affirmative action programs to employees and
applicants for inspection upon request. We further clarify, in light of
the modern workplace in which more and more workplaces house
information electronically, that contractors may respond to requests by
making their AAPs available electronically, so long as the requester is
able to access the electronic version of the information. In response
to the law firm commenters' concerns about confidentiality and the
AAP's ``data metrics,'' OFCCP revises the language for the final rule
to state that ``[t]he full affirmative action program, absent the data
metrics required by Sec. 60-300.44(k), shall be made available to any
employee or applicant . . .'' (revisions emphasized). This balances the
interest in confidentiality of the contractor and its employees with
the need for transparency regarding the contractor's affirmative action
efforts.
Section 60-300.42 Invitation to self-identify
The NPRM included three significant revisions to this section: (1)
Requiring the contractor to invite all applicants to self-identify as a
``protected veteran'' prior to the offer of employment without
disclosing the particular category of veteran; (2) in addition to the
new pre-offer inquiry, requiring a post-offer self-identification
process to collect more refined data regarding the specific category or
categories of protected veteran to which an applicant belongs; and (3)
requiring, rather than suggesting, that the contractor seek the advice
of the applicant regarding accommodation. OFCCP received 28 comments on
this section, 9 of which were in support of the self-identification
proposals in the NPRM. For those that opposed portions of the NPRM,
most comments centered on the issues of burden, the possibility of
inaccurate self-reporting, alleged conflict between the pre-offer
inquiry and requirement to seek accommodation advice with State and
Federal laws (most notably the ADA and the ADAAA), and interplay
between the pre-offer data collection requirement and the Internet
Applicant Rule set forth in the regulations for Executive Order 11246.
The proposals and the comments to these proposals, and the revisions
made to the final rule are discussed in
[[Page 58627]]
turn below (with the exception of some specific comments on burden,
which are addressed in the Regulatory Procedures section of the final
rule).
Paragraph (a): Pre-offer invitation to self-identify
As discussed in the NPRM, the primary reason for proposing a pre-
offer invitation to self-identify was to allow the contractor, and
subsequently OFCCP, to collect valuable, targeted data on the number of
protected veterans who apply for Federal contractor positions. The data
would enable the contractor and OFCCP to measure the effectiveness of
the contractor's recruitment and affirmative action efforts over time,
and thereby identify and promote successful recruitment and affirmative
efforts taken by the contractor community.
At the outset, several commenters addressed the issue of whether a
pre-offer invitation to self-identify as a protected veteran was
legally permissible under the Americans with Disabilities Act
regulations, which limit the extent to which employers may inquire
about disabilities prior to an offer of employment. The vast majority
of commenters addressing the issue--including disability rights groups,
veterans groups, and two commenters representing the contractor
community--stated that the proposed pre-offer inquiry was legally
permissible. Two commenters representing contractors on EEO matters
disagreed. One stated that its clients avoid pre-offer inquiries
specifically to avoid ``running afoul'' of the ADA. The other stated
that ``[w]hile the ADA provides that an applicant can ask for a
reasonable accommodation during the hiring process, employers cannot
otherwise ask any questions about an individual's disability.''
OFCCP believes the concerns of these two commenters are based on an
incorrect reading of the ADA and its regulations. As we discussed in
the NPRM, the ADA and section 503 regulations specifically permit the
contractor to conduct a pre-offer inquiry into disability status if it
is ``made pursuant to a Federal, state or local law requiring
affirmative action for individuals with disabilities,'' such as VEVRAA.
See 29 CFR 1630.13, 1630.14; 41 CFR 60-741.42. Further, as discussed in
the NPRM, even though a pre-offer inquiry into disability status is
legally permissible, the proposed pre-offer inquiry does not ask about
disability status specifically; rather, it only asks that the applicant
identify whether he or she is a protected veteran generally.
Regardless, the ``affirmative action'' exception carved into the ADA
clearly allows the type of pre-offer self-identification proposed in
the NPRM, and thus there is no legal reason to modify it.\19\
---------------------------------------------------------------------------
\19\ To assuage any remaining doubt on this matter, OFCCP
obtained a letter from EEOC's Office of Legal Counsel in advance of
the publication of this rule affirming that a requirement to invite
pre-offer self-identification of disability is permissible under the
ADA and its regulations. This letter will be posted on OFCCP's Web
site.
---------------------------------------------------------------------------
Among those commenters agreeing that the proposed pre-offer inquiry
was legally permissible, however, two commenters--a disability rights
association and a contractor--stated that the inclusion of paragraphs
(a)(1) and (a)(2), which describe the conditions under which pre-offer
invitations of disabled veterans are legally allowed, is confusing when
they are stated ``additionally'' to the required pre-offer invitation
in paragraph (a). One of these commenters stated it was unclear whether
the inclusion of these paragraphs ``intended to require pre-offer
invitation for all protected veterans or only for non-disabled
protected veterans.'' Given that the new regulation requires all
contractors to conduct a pre-offer inquiry that is lawful under the
ADA, this guidance is now largely superfluous. Accordingly, as
suggested by these commenters, this language (i.e., the third sentence
of paragraph (a), and subparagraphs (1) and (2)) are not included in
the final rule.
The majority of those commenting upon the scope of the proposed
pre-offer inquiry--requesting ``protected veteran'' status in the
aggregate, as opposed to inviting individuals to identify as one or
more of the categories of protected veteran--approved of it, but one HR
consulting firm commenter stated that the pre-offer inquiry should ask
individuals to denote the specific categories of veteran under which
they fall, and that contractors could then aggregate the data for
purposes of evaluating their outreach efforts and setting benchmarks.
OFCCP declines to require contractors to collect data by protected
veteran category at the pre-offer stage. We believe maintaining such
refined data at this stage would be more burdensome on contractors than
simply capturing whether interested job seekers are protected veterans
or not, particularly given that the overall population of protected
veterans is relatively small and that further division of the pool
would tend to reduce the contractor's ability to engage in any
meaningful data analysis. Further, as discussed in the NPRM, the
contractor's obligations would be the same with respect to each
category of protected veteran at the pre-offer stage, thus there is
limited benefit at that stage to knowing the specific categories of
protected veteran to which each individual belongs.
The majority of those commenters opposed to the proposed pre-offer
inquiry expressed concerns about the accuracy of veteran self-
identification data. First, several commenters from the contractor
community asserted that not all protected veterans will self-identify--
either due to privacy concerns, fear of reprisal, or a failure to
understand that they fall within one of the four listed categories of
protected veterans--which will result in an underreporting of actual
protected veteran applicants. Second, the commenters asserted that some
veterans that are not protected by VEVRAA may nevertheless choose to
self-identify as a protected veteran due to a misunderstanding of the
four categories of protected veterans, which could lead to an
inaccurate over-reporting of protected veterans. While some commenters
urged OFCCP to eliminate the pre-offer inquiry entirely on these
grounds, others propounded suggestions for how to increase the accuracy
of self-reporting. One commenter suggested that the invitation include
language that the applicant must know he or she is a protected veteran
in order to self-identify as such (rather than the model language in
Appendix B, which asks applicants to self-identify if they believe they
are a veteran who may be protected), in order to ``minimize the
possibility of self-identification error.'' Several other commenters
requested that OFCCP provide contractors (and, in turn, applicants)
with more detailed descriptions of the protected veteran categories,
including, for instance, the specific campaign badges or Armed Forces
service medals that qualify a veteran as an ``active duty wartime or
campaign badge veteran'' or ``Armed Forces service medal veteran,''
respectively.
At the outset, while OFCCP concedes the possibility that self-
reporting data on veterans will not be entirely accurate, OFCCP
disagrees that this is sufficient reason to eliminate the pre-offer
inquiry. Contractors already collect and report data on the number of
protected veteran employees and new hires on an annual basis pursuant
to the VETS-100A form. While this data is subject to the same accuracy
concerns, it provides the Department with a useful measure for
identifying and tracking the number of protected veteran new hires and
employees among the Federal contractor workforce. Similarly, while
self-reported applicant data will never be perfect, it is nonetheless a
useful
[[Page 58628]]
mechanism for collecting important information that currently goes
completely unrecorded--the number of protected veterans who are able to
connect to Federal contractors and submit an expression of interest in
employment. With regard to more detailed descriptions of the protected
veteran categories, we note that the campaign badges and service medals
are created and administered by the Department of Defense and the
individual services of the Armed Forces, and thus those with questions
would be best served consulting with DOD or the issuing military
service if they have questions about whether a particular badge or
medal is a campaign badge or service medal that provides coverage under
VEVRAA.
Another concern raised by several commenters is that the
requirement to collect and maintain self-identification data from
applicants does not comport with the Internet Applicant Rule found in
the regulations to Executive Order 11246. See 41 CFR 60-1.3, 1.12.
These commenters recommended that OFCCP add a definition of
``applicant'' and ``Internet applicant'' to this final rule and ensure
that wherever in the regulations the term ``applicant'' is used, the
term ``Internet applicant'' applies as well. OFCCP did not propose to
add a definition of ``applicant'' or ``Internet applicant'' in its
NPRM. Therefore, the final rule does not do so. However, the discussion
that follows provides guidance about how contractors may invite
Internet applicants to self-identify as a protected veteran under
VEVRAA in a manner consistent with demographic collection requirements
under the Executive Order Internet Applicant Rule. Under this final
rule, contractors will be able to invite applicants to self-identify as
a protected veteran at the same time the contractor solicits
demographic data on applicants under the Executive Order 112146
Internet Applicant Rule. For Internet applicants this generally will be
after the contractor has determined the individual has been screened
for basic qualifications and meets other requirements for being an
Internet applicant. Therefore, this final rule does not require
contractors to change their existing systems for screening Internet
applicants so long as those systems comply with existing law.
By way of background, OFCCP's longstanding definition of
``applicant'' is contained in agency subregulatory guidance. See the
Uniform Guidelines on Employee Selection Procedures (UGESP), Question
and Answer 15, 44 FR 11996 (March 2, 1979).\20\ According to that
guidance, in general, an applicant is a person who has indicated an
interest in being considered for hiring, promotion, or other employment
opportunities, either in writing (by completing an application form or
submitting a resume) or orally, depending upon the contractors'
practice. The Internet Applicant Rule came into effect in February
2006, and pertains to recordkeeping by contractors on Internet-based
hiring processes and the solicitation of race, gender, and ethnicity
data, in conjunction with their recordkeeping obligations under the
Executive Order implementing regulation at Sec. 60-1.12. Under Sec.
60-1.12, contractors' recordkeeping obligations include maintaining
expressions of interest through the Internet that the contractor
considered for a particular position, as well as applications and
resumes. Contractors also are required to maintain, where possible,
data about the race, sex, and ethnicity of applicants and Internet
applicants, as appropriate. The term Internet applicant is defined in
Sec. 60-1.3 and generally means an individual who: (1) Submitted an
expression of interest in employment through the Internet; (2) is
considered by the contractor for employment in a particular position;
(3) possessed the basic qualifications for the position; and (4) did
not remove himself or herself from consideration.
---------------------------------------------------------------------------
\20\ Question and Answer 15 reads: ``Q. What is meant by the
terms ``applicant'' and ``candidate'' as they are used in the
Uniform Guidelines? A: The precise definition of the term
``applicant'' depends upon the user'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 employer's practice.''
---------------------------------------------------------------------------
OFCCP has taken into account contractors' concerns about inviting
self-identification for applications submitted electronically,
particularly for those contractors who create resume data bases which
they mine for applicants when they have a job opening. In recognition
of these concerns, and consistent with EO 13563's focus on simplifying
and harmonizing requirements, OFCCP will permit contractors to invite
applicants to self-identify as a protected veteran at the same time as
the contractor collects the demographic data for applicants required
under EO 11246. The Internet Applicant Rule under EO 11246 generally
allows contractors to do a ``first cut'' and screen out individuals
whom they believe do not meet the basic qualifications of the
position--without capturing or retaining any demographic documentation
on these individuals. There is the concern, however, that in doing this
``first cut'' contractors may be engaging in discrimination (e.g., if
they are incorrectly applying their basic qualifications, or the basic
qualifications have an adverse impact on a protected group and are not
job related and consistent with business necessity), and by not keeping
the demographic information on the individuals they screened out they
are eliminating evidence to prove that discrimination may be occurring.
This concern is even greater with regard to disabled veterans because
these Executive Order ``first cuts'' are not designed to take into
account the possibility that someone with a disability might be able to
meet the qualification standard or perform the essential functions of
the job with the provision of a reasonable accommodation.
Under existing law, it is unlawful under VEVRAA to use
qualification standards, including at the ``basic qualifications''
screen stage, that screen out or tend to screen out a disabled veteran
or class of disabled veterans unless the standard is shown to be job-
related for the position in question and consistent with business
necessity. Selection criteria that concern an essential function may
not be used to exclude a disabled veteran if that individual could
satisfy the criteria with a reasonable accommodation. See Sec. 60-
300.21(g). These requirements, therefore, apply when contractors design
and implement their ``basic qualifications'' screens. In addition,
after the initial screening for ``basic qualifications,'' contractors
must also ensure that they are complying with their duty to evaluate
all applicants for jobs based on the applicant's ability to perform the
essential functions of the job with or without reasonable
accommodation.
OFCCP will treat the recordkeeping provisions of VEVRAA at 60-
300.80 in the same manner as the recordkeeping requirements under EO
11246 at 41 CFR 60-1.12 as applied to Internet applicants. These
recordkeeping requirements are not new and will impose no additional
burden on contractors. The record retention requirements exist
independently of whether and when individuals are invited to self
identify under VEVRAA.
The VEVRAA recordkeeping provisions require contractors to retain
personnel or employment records made or kept by the contractor for one
or two years depending on the size of the contractor and contract.
These records
[[Page 58629]]
include the records contractors are required to maintain under 41 CFR
60-1.12. Section 60-1.12 requires contractors to maintain all
expressions of interest through the Internet or related technologies
considered by the contractor for a particular position, such as on-line
resumes or internal resume databases, and records identifying job
seekers contacted regarding their interest in a particular position.
For purposes of recordkeeping with respect to internal resume
databases, the contractor also must maintain a record of each resume
added to the database, a record of the date each resume was added to
the database, the position for which each search of the database was
made, and corresponding to each search, the substantive search criteria
used and the date of the search. For purposes of recordkeeping with
respect to external databases the contractor must maintain a record of
the position for which each search of the database was made, and
corresponding to each search, the substantive criteria used, the date
of the search, and the resumes of job seekers who met the basic
qualifications for the particular position who are considered by the
contractor. As with records retained under the EO 11246, these records
are to be maintained regardless of whether the job seeker is an
Internet applicant.
If a contractor has a practice of welcoming unsolicited resumes
regardless of current job openings, OFCCP will permit the contractor to
invite self-identification only of those considered for employment,
consistent with requirements under EO 11246 and its regulations at 41
CFR 60-1.3 and 60-1.12. The obligation to invite self-identification is
triggered by considering the job seeker for employment, not by
including the resume in the resume database. For example, if a
contractor has an internal resume database with 1,000 resumes and is
looking for applicants to fill a job as an engineer in Omaha, the
contractor could limit the pool of resumes under review by applying a
``basic qualifications'' screen that identifies those who have a
masters degree in electrical engineering, at least three years of
experience as an electrical engineer, and further limit the review to
resumes submitted within the last three months. If that search produced
a pool of 30 job seekers, the contractor might narrow the pool further
by asking the 30 job seekers if they are interested in being considered
for the job. If 10 job seekers indicate interest in being considered,
they would be applicants and the contractor would invite the 10 job
seekers to self-identify. In contrast, if a contractor has a practice
of not accepting unsolicited resumes, job seekers who submit an
unsolicited resume are not applicants. Accordingly, the contractor
would have no obligation to invite them to self-identify as a protected
veteran.
It is also possible that potential and qualified job applicants
with disabilities may not apply for jobs posted on contractors' online
application systems because, for example, they are not aware that
selection criteria concerning essential functions may not be used to
exclude them if they can satisfy the criteria with a reasonable
accommodation. Contractors seeking to fill jobs should seek to attract
the best possible pool of applicants; this includes applicants who are
disabled veterans who could perform the job with or without reasonable
accommodations. OFCCP notes that a best practice for ensuring a
diverse, qualified pool of applicants for contractors using online
application systems is posting a notice on their human resources Web
page or online application portal that notifies job applicants who may
need a reasonable accommodation to perform the functions of a job that
they are entitled to one under the ADAAA. This best practice encourages
qualified individuals with disabilities to pursue job vacancies, and
provides contractors with access to a wide range of skills and talents.
In providing this guidance as to application of the self-
identification requirement under VEVRAA, contractors should be able to
operate as they have been using their existing systems and processes
because this final rule does not change how contractors handle Internet
applicants. This should allow contractors to avoid creating separate
data collection and storage systems as many contractors feared. For
those contractors that need further help determining which individuals
must be given a pre-offer self-identification inquiry, OFCCP is
available to provide technical guidance.
One commenter expressed concern regarding possible liability in
connection with storing large amounts of sensitive data, such as that
disclosed in an applicant's pre-offer self-identification form.
However, the current regulations have long required contractors to
maintain sensitive self-identification data that comes from post-offer
inquiries, thus contractors should already have a mechanism in place
for the proper storage of this information. While the additional pre-
offer data increases the amount of data that contractors will need to
maintain, this is largely a scope or resources question, not an
information security issue. We have addressed the expected cost and
burden of the pre-offer requirement in the revised Regulatory
Procedures section of the final rule.
Finally, several commenters asserted that the new pre-offer inquiry
would require significant lead time for contractors to change their
current human resources information and applicant tracking systems so
as to capture the pre-offer self-identification data. A revised burden
analysis for these endeavors is included in the Regulatory Procedures
section of the final rule. With regard to the amount of lead time
necessary to incorporate the changes in this paragraph, one law firm
commenter suggested that contractors be given ``a substantial grace
period, which we propose to be at least one to two years,'' so that
contractors and their systems providers can get up to speed. Another
law firm commenter was less specific with the time needed, but said
that ``90 days would not be enough time for some companies that do not
have the internal resources to do it themselves.'' OFCCP has consulted
with information systems analysts regarding an appropriate amount of
preparation time, and on the basis of those discussions believes an
effective date of 180 days after publication of the final rule is
sufficient for contractors to incorporate Appendix B, or a
substantially similar form, into their systems. Moreover, as noted in
the Introduction to this preamble, contractors are permitted to update
their affirmative action programs to come into compliance with the new
requirements during their standard 12-month AAP review and updating
cycle. If a contractor has prepared an AAP under the old regulations it
may maintain that AAP for the duration of the AAP year even if that AAP
year overlaps with the effective date of this final rule.
Paragraph (b): Post-offer invitation to self-identify
The NPRM created a new paragraph (b) to describe the contractor's
duty to invite applicants to submit post-offer self-identification
regarding the specific category of protected veteran to which the
applicant belongs, and retain this information. As we explained in the
NPRM, this self-identification requirement will enable the contractor
to capture refined data pertaining to each category of protected
veteran to foster the contractor's compliance with the requirement to
report such data set forth in the Veterans' Employment and Training
Service (VETS) regulations at 41 CFR part 61-300. Although OFCCP
received no comments specific to new paragraph (b), the paragraph is
revised
[[Page 58630]]
in the final rule to make this intent explicit. Accordingly, paragraph
(b) is revised to state that, post-offer, ``the contractor shall invite
applicants to inform the contractor'' if they belong to one or more of
the categories of protected veteran ``for which the contractor is
required to report pursuant to 41 CFR part 61-300.'' This clarifies
that the contractor's paragraph (b) obligation to ask applicants to
identify their specific protected veteran classification(s) is
contingent upon their having an obligation to report that information
on the VETS-100A, or other future form, pursuant to 41 CFR part 61-300.
Paragraph (c): Content of invitations
The NPRM revised paragraph (c) of this section by deleting the
second sentence of the parenthetical at the end of the paragraph. This
sentence described the format of and rationale behind the current
Appendix B, which has been substantially amended in light of the new
self-identification procedures proposed herein. We received no comments
on this paragraph. Accordingly, the language in the NPRM is adopted as
proposed. In addition, we revised the first sentence of paragraph (c)
to say that invitations to self-identify ``shall state that the
contractor is a Federal contractor required to take affirmative action
to employ and advance in employment protected veterans pursuant to the
Act.'' This language replaces the statement in the existing regulation
that ``a request to benefit under the affirmative action program may be
made immediately and/or at any time in the future.'' OFCCP believes
that this statement could be misinterpreted to suggest that affirmative
action must be ``requested'' by a protected veteran, thus confusing
protected veterans and contractors alike.
Paragraph (d): Requirement that contractor seek
applicant's advice regarding accommodation
There were three proposed changes to paragraph (d). First, we
revised the language to reflect the newly proposed self-identification
process in which applicants will only identify themselves as disabled
veterans at the post-offer self-identification stage. Second, we
replaced the term ``appropriate accommodation'' in paragraph (d) with
``reasonable accommodation,'' which is the more broadly used and
accepted legal term. OFCCP received no comments on these two changes,
and thus the language in the NPRM is adopted as proposed.
As for the third proposed change to paragraph (d), the NPRM
required, rather than suggested, that the contractor seek the advice of
the applicant regarding accommodation. As we explained in the NPRM, the
idea was that this requirement would help to initiate a robust
interactive and collaborative process between the contractor and the
employee or applicant to identify effective accommodations that will
facilitate a disabled veteran's ability to perform the job. OFCCP
received 10 comments from various organizations on this change, all of
which opposed the proposal.
Several of these commenters argued that the proposed change is
inconsistent with (and, according to some commenters, in violation of)
the ADA, which states that an employer may ask all individuals if they
require a reasonable accommodation, not just individuals that self-
identify as disabled. Specifically, several commenters cited ADA
enforcement guidance from the EEOC stating that if an employer asks
post-offer disability-related questions to entering employees, it must
ask the same question to all entering employees in the same job group,
and not a single classification of employees (such as ``disabled
veterans''). However, as set forth in the discussion of paragraph (a)
of this section, both herein and in the NPRM, the EEOC's interpretive
guidance for its ADA regulations permits inquiries into disability
status if made pursuant to another Federal law or regulation. It states
that ``[t]he ADA does not preempt any Federal law, or any State or
local law, that grants to individuals with disabilities protection
greater than or equivalent to that provided by the ADA. This means that
the existence of a lesser standard of protection to individuals with
disabilities under the ADA will not provide a defense to failing to
meet a higher standard under another law.'' See Appendix to 29 CFR part
1630. Accordingly, the proposed affirmative action obligation, in
requiring contractors to inquire with disabled veterans offered
employment to determine if they need a reasonable accommodation, is not
inconsistent with the ADA.
However, other commenters, including a human resources association,
asserted that disabled veterans should not be treated differently than
disabled non-veterans with regard to reasonable accommodations, and
that creating unique processes for veterans could serve to stigmatize
veterans rather than help them. One commenter argued that the proposed
change implies that contractors should assume that just because an
individual self-identifies as a disabled veteran, they are in need of
an accommodation, which may have negative and unintended consequences.
Several other comments suggested that the proposed change does not take
into account the administrative burden associated with ascertaining
whether an individual is legally entitled to an accommodation and to
research alternative sources of funding for requested accommodations
when the accommodation is financially burdensome. Since the contractor
is to be proactive in determining whether an individual needs an
accommodation, the contractor would potentially have to conduct this
research for each person that self-identifies as having a disability.
The final rule does not incorporate the proposed requirement, and
instead retains the existing rule's suggestion that contractors ask
disabled veteran applicants whether an accommodation is necessary. The
final rule also states that the contractor should engage in an
interactive process with the applicant to help identify a reasonable
accommodation, which is consistent with ADA guidance. Eliminating the
proposed requirement alleviates the administrative burden concerns
raised by some commenters, thus reducing the burden associated with the
rule, while highlighting the importance of the reasonable accommodation
obligation.
Finally, the final rule makes a technical, non-substantive change
by eliminating the parenthetical at the end of the second sentence
which provides an example of a post-offer inquiry. OFCCP finds that
this language is unnecessary and potentially confusing.
Section 60-300.43 Affirmative action policy
The NPRM proposed replacing the phrase ``because of status as a''
in this section to ``against,'' in order to clarify that the
nondiscrimination requirements of VEVRAA are limited to protected
veterans and that reverse discrimination claims may not be brought by
individuals who do not fall under one of the protected veteran
categories. We received no comments on this section. Accordingly, Sec.
60-300.43 is adopted in the final rule as proposed.
Section 60-300.44 Required contents of affirmative action programs
The proposed rule contained significant revisions to several of the
paragraphs under this section. These proposals, the comments to these
proposals, and the revisions made to the final rule are discussed in
turn below.
Paragraph (a): Affirmative action policy statement
Section 60-300.44(a) requires contractors to state their equal
[[Page 58631]]
employment opportunity policy in the company's AAP. The NPRM proposed
revising the section to clarify the contractor's duty to provide notice
of employee rights and contractor obligations in a manner that is
accessible and understandable to persons with disabilities. The NPRM
also proposed revising paragraph (a) to require the contractor's chief
executive officer to clearly articulate their support for the company's
AAP in the policy statement. OFCCP received three comments on the
proposed revisions from an individual, a law firm and a human resources
consulting group.
There were a variety of comments on this section. One individual
suggested that the policy statement include `retain' in the following
sentence ``* * * the contractor will: Recruit, hire, train and promote
persons in all job titles * * *'' Another commenter, a law firm,
recommended revising the language so that it is inclusive of
contractors that have foreign parent companies by requiring the top
United States based executive to attest to their support for the
contractor's AAP. Finally, the human resources consulting group
expressed concern that OFCCP seemed to dictate the terms of the policy
statement, but did not provide a sample statement as an Appendix.
OFCCP declines to add the term ``retain'' to this section. The
regulation currently states that the contractor's affirmative action
policy must state that it will ``recruit, hire, train and promote
persons in all job titles, and ensure that all other personnel actions
are administered, without regard to'' protected veteran status. Given
that the regulation already prohibits veteran status to be a
consideration for ``all other personnel actions,'' there is no need to
delineate further specific personnel actions in the regulatory text.
OFCCP agrees with the suggestion to revise the language of this
section to clarify the level of company leadership that must
demonstrate their support for the company's AAP. The purpose of the
proposed revision is to ensure that the statement communicates to
employees that support for the AAP goes to the very top of the
contractor's organization. For contractors with foreign-based parent
companies, it is appropriate to require the company leadership that is
based in the United States to express that support. Therefore, Sec.
60-300.44(a) of the final rule is revised to state ``[t]he policy
statement shall indicate the top United States executive's (such as the
Chief Executive Officer or the President of the United States Division
of a foreign company) support for the contractor's affirmative action
program * * *.''
OFCCP declines to make any modifications to the portion of Sec.
60-300.44(a) related to the content of the policy statement. OFCCP
outlined the required content of the policy statement when the agency
issued the final rule implementing VEVRAA in 2007 (72 FR 44408). The
NPRM did not propose any revisions to this language. OFCCP declines to
append a policy statement to the rule. OFCCP believes that providing a
policy statement in the Appendix may discourage contractors from
proactively developing a policy statement that reflects the company's
culture and values. If contractors need additional guidance on how to
develop an equal opportunity policy statement, OFCCP staff is available
to provide technical assistance.
Paragraph (b): Review of personnel processes
The proposed rule made two changes to this paragraph. First, it
required that the contractor review its personnel processes on at least
an annual basis to ensure that its obligations are being met, as
opposed to ``periodically.'' Second, the proposed paragraph (b)
mandated certain specific steps (carried over from the existing
Appendix C) that the contractor must take, at a minimum, in the review
of its personnel processes, including: (1) Identifying the vacancies
and training programs for which protected veteran applicants and
employees were considered; (2) providing a statement of reasons
explaining the circumstances for rejecting protected veterans for
vacancies and training programs and a description of considered
accommodations; and (3) describing the nature and type of
accommodations for disabled veterans who were selected for hire,
promotion, or training programs.
OFCCP received 13 comments from contractors, contractor
associations and law firms regarding these proposals. Eleven of the 13
comments asserted that a significant burden was imposed by the proposed
section, much greater than that calculated by OFCCP in the NPRM's
Regulatory Procedures section. For instance, regarding compliance with
item (1) above, the commenters indicated that for most contractors
there are no such tracking systems in place and these will take time,
staff, and money to establish. The comments also indicate that
promotion and training opportunities, unlike hiring, are not as readily
distinguishable for individual candidates. It is noted that these
opportunities may be available to all employees, take a number of
different forms, and may be noncompetitive. The comments indicate it is
``unreasonable'' to make this mandatory because it fails to recognize
these differences and creates additional administrative and documentary
burdens. These commenters further objected that the requirement to
create and maintain a statement of reasons for every instance in which
a protected veteran was denied a position or training activity was
unreasonable and tantamount to requiring a drafted legal defense before
any claims were brought, could serve to ``drive underground'' the real
reason for the rejection, and treated protected veterans differently
than protected classes under E O 11246 and section 503.
Based on the comments submitted and the questions raised about the
efficacy of these requirements toward the end of increasing employment
of protected veterans as compared to the burden that it creates, OFCCP
does not adopt the proposal as drafted in the NPRM, and the final rule
retains the existing language in Sec. 60-300.44(b). However, in so
doing, OFCCP reiterates that the existing paragraph (b) contains
several requirements--including ensuring that its personnel processes
are careful, thorough, and systematic, ensuring that these processes do
not stereotype protected veterans, and designing some kind of
procedures that facilitate a review of the implementation of these
obligations--that still apply to contractors. As they do currently,
contractors may coordinate the periodic review of their personnel
processes for compliance with both VEVRAA and section 503.
Paragraph (c): Physical and mental qualifications
The NPRM proposed three substantive revisions to this paragraph.
First, it required that all physical and mental job qualification
standards must be reviewed and updated, as necessary, on an annual, as
opposed to a ``periodic,'' basis. Second, paragraph (c)(1) of the NPRM
required the contractor to document its annual review of physical and
mental job qualification standards. Third, paragraph (c)(3) of the NPRM
required the contractor to contemporaneously document those instances
in which it believes that an individual would constitute a ``direct
threat'' as understood under the ADA and as defined in these
regulations.
As to the proposal to require annual reviews of physical and mental
job qualification standards, OFCCP received 10 comments from
contractors, a contractor association, employee and other associations,
and law firms. Nine of the 10 comments stated that the requirement to
review physical and mental qualifications of all jobs with
[[Page 58632]]
openings during the AAP period would be burdensome because of the
number of job openings, variety of jobs, time, staff and needed changes
to HRIS systems. One employment benefit consultant firm commenter
characterized the burden as ``one of the most burdensome requirements
of the proposal.'' Additionally, one comment noted that the assumption
that a description of the job's physical and mental requirements should
already be available when a job opening occurs is a false assumption.
Five comments suggested less burdensome approaches. One comment
suggested continuing to follow the current regulation and conducting
periodic reviews. Three comments suggested reviewing the qualifications
only when a change in the job occurs. One of the three comments also
noted that an initial review should occur with the start of the covered
contract along with reviews when changes occur. One comment suggested
doing reviews of only ``jobs filled,'' not all job openings.
We note at the outset that the existing regulation clearly
prohibits the contractor from using job qualification standards that
are not job related and consistent with business necessity and have the
effect of discriminating (or perpetuating discrimination) against
protected veterans. See 41 CFR 60-300.21(d), 60-300.44(c)(2). This is a
primary reason that the affirmative action provisions require reviews
of physical and mental job qualification standards. To the extent that
contractors are not conducting these reviews at all, they are already
in violation of the existing regulations.
With this in mind, and taking into account the commenters' concerns
about the burden associated with the proposal, the final rule does not
adopt the proposal as drafted in the NPRM. Instead, the final rule
retains the language in existing Sec. 60-741.44(c)(1), requiring that
contractors adhere to a schedule for the ``periodic review of all
physical and mental job qualification standards,'' and providing that
contractors have the burden to demonstrate that qualification standards
that tend to screen out qualified individuals with disabilities are job
related and consistent with business necessity.
With regard to the second proposed change in paragraph (c)(1)
requiring that the contractor document its job qualification standard
reviews, we received four comments. All of these commenters questioned
what evidence will be necessary to demonstrate that a review has been
completed. One of these comments noted that the proposed regulation
lacks clarity as to how job-relatedness is evidenced and asserted that
the ADA practice of examining ``essential functions'' of a job should
be sufficient. OFCCP declines to adopt this proposal into the final
rule as well, and retains the existing provision. As for the comment
that the ``job relatedness'' standard lacks clarity and should be
replaced with an ``essential functions'' standard, we note that the
``job related and consistent with business necessity'' standard has
been used in the existing VEVRAA regulations for several years, and is
the same standard that is well-understood and applies to the section
503 regulations prohibiting discrimination on the basis of disability.
We therefore decline to revise the standard in the final rule.
Finally, with regard to the third proposed change requiring the
contractor to contemporaneously document those instances in which it
believes that an individual would constitute a ``direct threat,'' one
comment raised the concern that the provision differed from the
requirement in proposed Sec. 300.44(b)(3) to disclose the ``direct
threat'' determination to the affected applicant or employee. However,
because proposed Sec. 60-300.44(b)(3) was not adopted into the final
rule, we decline to amend this paragraph to coordinate with it. Rather,
we adopt paragraph (c)(3) as proposed in the NPRM.
Paragraph (f): Outreach and recruitment efforts
Paragraph (f) as it existed prior to the NPRM suggested a number of
outreach and recruitment efforts that the contractor could undertake in
order to increase the employment opportunities for protected veterans.
The NPRM proposed several changes to this paragraph: the proposed
paragraph (f)(1) required that the contractor enter into three linkage
agreements with veteran-related entities to serve as sources of finding
potential veteran applicants; paragraph (f)(2) included a list of
additional suggested outreach and recruitment efforts that contractors
could take; paragraph (f)(3) proposed a new requirement that the
contractor conduct self-assessments of their outreach and recruitment
efforts; and paragraph (f)(4) clarified the contractor's recordkeeping
obligations with regard to these outreach and recruitment efforts.
Overall, OFCCP received 34 comments on the proposed changes to
Sec. 60-300.44(f). While a few commenters praised OFCCP's efforts to
strengthen Federal contractors' recruitment and outreach efforts, the
majority of the comments expressed concerns about the proposed rule.
Commenters raised a variety of issues including concerns about the
burden associated with the proposed mandatory requirements, technical
questions regarding the drafting of the proposed rule language, and the
utility of some of the recommended provisions.
As stated above, paragraph (f)(1) required contractors to enter
into three linkage agreements with three different veteran-related
entities: specifically, the proposal required linkage agreements with
(1) the Local Veterans' Employment Representative (LVER) in the local
employment service office nearest the contractor's establishment; (2)
one of several organizations listed in the existing regulation, with
the addition of the Department of Defense Transition Assistance Program
(TAP); and (3) an organization listed on the National Resource
Directory (NRD), a Web site provided by the Departments of Labor,
Defense, and Veterans Affairs. Commenters voiced several concerns with
this proposal. Several commenters expressed concern about the
administrative and financial burden related to requiring three linkage
agreements. Further, a specific point made by one commenter echoed in
general terms by several others was that, if the linkage agreement
requirement was to be a ``per establishment'' requirement rather than a
``per contractor'' requirement, a Federal contractor with multiple
establishments could end up entering into hundreds of linkage
agreements. Commenters also questioned the capacity of the
organizations that are outlined in the proposed rule, noting that some
of the entities listed in the NRD do not exist anymore, the DOD's TAP
program does not reach all service members, and that some veterans'
service organizations have difficulty generally getting through to
staff or returning phone calls. While two commenters stated that
entering into linkage agreements with LVERs was an appropriate
requirement, several others raised the concern that LVERs, of which
there are fewer than 1,000 in the entire country, may not have the
capacity to enter into and manage linkage agreements with all Federal
contractor establishments.
In light of these comments, and in order to reduce the burden on
contractors, the final rule does not incorporate the proposal requiring
contractors to enter into linkage agreements. Rather, the final rule
retains the existing language of Sec. 60-300.44(f), which requires
that the contractor undertake ``appropriate outreach and positive
recruitment activities,'' in paragraph (f)(1)(i) of the final rule, and
then provides a number of suggested
[[Page 58633]]
resources in paragraph (f)(2)(i) that contractors should utilize to
carry out their general recruitment obligations. Paragraph (f)(2)(i) of
the final rule differs from the existing rule only in that it adds two
additional resources discussed in the NPRM--the Department of Defense
Transition Assistance Program (TAP) and the National Resource
Directory--to the list of suggested resources that contractors should
consult. This will allow contractors flexibility to choose the
resources they feel will be most helpful in identifying and attracting
protected veteran job seekers. It will also provide contractors with
greater flexibility to switch between and among different resources in
order to find those that are the most effective, in light of the self-
assessment obligation set forth in paragraph (f)(3) of the final rule.
For those commenters who had concerns that the NRD contained resources
that were out of date or did not contain additional resources that
would be a good source for protected veteran job seekers, we note that
the NRD is a dynamically-updated resource, and that contractors may
suggest that additional veterans groups and service organizations be
added to it through the ``Suggest a Resource'' link on the NRD's front
page. On a related note, however, the reference to the specific URL
address for the NRD's employment resources in the text of the
regulation has been revised to refer to the NRD's home page. As one
commenter noted, the URL listed in the regulation had changed since the
publication of the NPRM, and may very well change again in the future,
thus listing the URL address for a specific Web page in the regulation
text makes little sense.
Lastly with regard to paragraph (f)(1), several commenters argued
that OFCCP underestimated the burden hours associated with complying
with the proposed paragraph (f)(1)(iii) (paragraph (f)(1)(ii) in the
final rule), which requires the contractor to send written notification
of company policy related to its affirmative action efforts to all
subcontractors, including subcontracting vendors and suppliers. OFCCP
retains this requirement as proposed, as we believe it is crucial to
effective implementation and enforcement of the regulations that
subcontractors are aware of VEVRAA's affirmative action obligations.
Compliance with this requirement could be met by providing
subcontractors with the affirmative action policy statement it is
already required to post on company bulletin boards pursuant to Sec.
60-300.44(a), either electronically or in paper form. A discussion
responding to commenters' concerns regarding the burden of compliance
with this requirement is found in the Regulatory Procedures section of
this final rule.
OFCCP received relatively few comments regarding the proposed
paragraph (f)(2) (paragraph (f)(2)(ii) in the final rule), which set
forth additional suggested outreach efforts that contractors could
engage in to increase its recruitment efforts. These comments centered
on the proposed paragraph (f)(2)(vi) (which is paragraph (f)(2)(ii)(F)
in the final rule), which states that ``the contractor, in making
hiring decisions, shall consider applicants who are known protected
veterans for all available positions for which they may be qualified
when the position(s) applied for is unavailable'' (emphasis added). The
commenters indicated that the word ``shall'' suggested that contents of
that paragraph were mandatory. The use of ``shall'' in this paragraph
was an inadvertent error in the NPRM. OFCCP intended the paragraph to
state that contractors ``should consider applicants * * *'' and the
final rule amends the NPRM in that regard. We also note that this
suggested activity is intended to be a limited one. Contractors who
choose to consider protected veterans for jobs other than those for
which they applied may exercise discretion to limit this consideration
based on geography, the qualifications of the applicant, and other
factors. Contractors may also exercise discretion with respect to the
time period by which they will consider applicants for other positions.
This provision is intended to be flexible and is not required of
contractors.
The final rule adds an additional resource to paragraph (f)(2)(ii)
that contractors are suggested to use, and that is the Veterans Job
Bank. The Veterans Job Bank, created by the Obama Administration and
launched in November 2011 as part of the National Resource Directory
Web site, is an easy-to-use tool aimed at helping veterans find job
postings from companies looking to hire them. Through the Veterans Job
Bank, veterans are able to search hundreds of thousands of jobs
(500,000 at the time the Veterans Job Bank was launched) by location,
keyword, and military occupation code (MOC). Further, the Web site
provides detailed instructions for employers wishing to post their job
openings with the Veterans Job Bank, so that the resource can continue
to grow and become an even more effective resource for veterans seeking
new job opportunities and employers seeking qualified workers.
Paragraph (f)(3) of the NPRM required the contractor, on an annual
basis, to review the outreach and recruitment efforts it has undertaken
over the previous twelve months and evaluate their effectiveness in
identifying and recruiting qualified protected veterans, and document
its review. Several commenters expressed concern about the utility of
the suggested metrics for analyzing external outreach and recruitment
efforts. One commenter stated that if the only standard used for
assessing outreach and recruitment is the number of veterans hired, the
proposed rule would effectively become a quota system for hiring
protected veterans. Another commenter questioned whether overall hiring
statistics would provide much useful information about the
effectiveness of specific outreach efforts. Commenters also had
concerns about the requirement to analyze hiring data for the current
year as well as the previous two years. One commenter stated that
``[e]very other analytical requirement under the affirmative action
regulations, including Executive Order 11246, focuses on reviewing the
past one-year recordkeeping period.'' Commenters argued that the most
recent year is the most relevant year in measuring effectiveness of
affirmative action efforts. Finally, commenters also questioned OFCCP's
calculation of the cost of compliance with this provision.
OFCCP declines to make changes to the proposed paragraph (f)(3) in
response to these comments. With regard to the comment suggesting that
the number of veterans hired was the ``only'' standard for analyzing
the effectiveness of outreach efforts, OFCCP respectfully disagrees.
The proposed rule makes clear that the number of veterans hired should
be a primary factor considered, given VEVRAA's stated purpose to
``employ and advance in employment'' protected veterans, but is far
from the only metric used for analyzing external outreach and
recruitment efforts. Rather, the proposed rule required that the
contractor consider all the metrics required by Sec. 60-300.44(k)
(which includes applicant and hiring data), but also clearly allows the
contractor to consider any other criteria, including ``a number of
factors that are unique to a particular contractor establishment,'' in
determining the effectiveness of its outreach, so long as these
criteria--whatever they are--are reasonable and documented so that
OFCCP compliance officers can understand what they are. The purpose of
the self-assessment is simply to ensure that the contractor
[[Page 58634]]
thinks critically about how to evaluate and improve upon its
recruitment and outreach efforts in order to maximize its connections
to protected veterans seeking jobs. OFCCP strongly believes this is a
worthy goal--indeed, a goal central to the very heart of VEVRAA's
affirmative action obligations--and that the proposal provides the
contractor a significant amount of flexibility to meet that goal.
With regard to the timeframe of applicant and hire data that a
contractor must consider when evaluating its outreach efforts--the
current year and two previous years--OFCCP understands that this is a
longer period than that required by, for instance, the Executive Order,
which looks to hiring and applicant data over the previous year.
However, VEVRAA is a different law with different analytic mechanisms.
As explained in the NPRM, the purpose of considering a longer history
of data under VEVRAA is because it will provide more complete
information through which a contractor can understand which outreach
efforts it has engaged in historically have tended to correspond with
increased veteran applicants and hires. Further, we do not believe that
requiring contractors to look at and compare a few additional numbers,
which are already calculated pursuant to Sec. 60-300.44(k), is
onerous, particularly compared to the potential benefit. Accordingly,
we retain the paragraph (f)(3) in the final rule as written in the
NPRM. OFCCP has conducted an amended calculation of the cost of this
provision in light of the comments provided, set forth in the
Regulatory Procedures section of this final rule.
The final rule makes one small change to the second to last
sentence in paragraph (f)(3). As explained in the preamble to the NPRM,
OFCCP proposed that the contractor's conclusion as to the effectiveness
of its outreach efforts ``shall be reasonable as determined by OFCCP in
light of these regulations.'' The final rule replaces the word
``shall'' with ``must,'' which more clearly describes the requirement.
Finally, several commenters expressed concern about the five-year
recordkeeping requirement set forth in paragraph (f)(4). As discussed
previously in this final rule and in the discussion of recordkeeping in
Sec. 60-300.80, and for the reasons stated therein, OFCCP amends this
to a three-year recordkeeping requirement. While this documentation may
take several forms, such documentation may include, for example, the
numbers and types of outreach and recruitment events, the targeted
group(s) or types of participants, when and where the events occurred,
and who conducted and participated in the outreach and recruitment
efforts on behalf of the contractor.
Paragraph (g): Internal dissemination of affirmative
action policy
This section requires contractors to develop internal procedures to
communicate to employees their obligation to engage in affirmative
action efforts to employ and advance in employment qualified protected
veterans. The NPRM proposed requiring the contractor to undertake many
specific actions that are only suggested in the existing rule,
including incorporating the affirmative action policy in company policy
manuals, informing all applicants and employees of the contractor's
affirmative action obligations, and conducting meetings with management
and company leadership to ensure they are informed about the
contractor's obligations. The NPRM also proposed requiring contractors
to hold meetings with employees at least once a year to discuss the
company's VEVRAA affirmative action policy. OFCCP received 17 comments
on Sec. 60-300.44(g) from a variety of groups, including a disability
association, an employee association, four contractor associations,
four law firms, and two individuals, among others.
One commenter proposed maintaining some of the language in the
current Sec. 60-300.44(g)(1). The commenter expressed concern about
the NPRM's deletion of the following sentence: ``[t]he scope of the
contractor's efforts shall depend upon all the circumstances, including
the contractor's size and resources and the extent to which existing
practices are adequate.'' The commenter asserted that deleting this
sentence leaves the requirement without an applicable measure of
compliance. The commenter recommended maintaining the language in the
section and defining ``adequate'' to mean ``being received and
understood by veterans, as determined in sample interviews.''
The final rule adopts the proposed language in Sec. 60-
300.44(g)(1) without change because the rule provides a measure of
compliance, thus making the suggested change unnecessary. This section
clearly states that the procedures for internally disseminating
affirmative action policies ``. . . 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.'' Further, the revisions clearly identify the actions
that contractors must undertake to meet this obligation.
With regard to the remainder of paragraph (g), the existing rule
has a single paragraph (g)(2) that lists eight separate actions that
contractors were suggested to undertake to implement and internally
disseminate their internal affirmative action policies. The NPRM
proposed to mandate some of these actions and thus restructured the
remainder of paragraph (g). Paragraph (g)(2) of the NPRM listed five
internal dissemination efforts that would be required of all
contractors: (i) Including the contractor's affirmative action policy
toward veterans in the contractor's policy manual; (ii) informing all
employees and prospective employees of the contractor's affirmative
action obligations and having annual meetings with employees to discuss
these obligations; (iii) conducting meetings with executive, managerial
and supervisory personnel to ensure they understood the intent of the
policy and responsibility for its implementation; (iv) discussing the
policy thoroughly in employee orientation and management training
programs; and (v) if the contractor is party to a collective bargaining
agreement, informing union officials and/or employee representatives of
the contractor's affirmative action policy and requesting the union's
cooperation in implementing it. Paragraph (g)(3) of the NPRM listed
additional dissemination efforts that would continue to be suggested
efforts as in the existing rule, such as publicizing its affirmative
action policy in company publications and including in these
publications features and articles of protected veteran employees.
Finally, paragraph (g)(4) of the NPRM set forth the recordkeeping
obligations in connection with those actions contractors undertook.
We received many comments in response to the elements that were
required in paragraph (g)(2) of the NPRM. Some commenters requested
alternative options to including the affirmative action policy in the
contractor's policy manual pursuant to the proposed Sec. 60-
300.44(g)(2)(i). A law firm suggested allowing for posting the policy
on the company's intranet where similar human resources and EEO
pronouncements are found. One comment requested that OFCCP clarify the
requirement to make it optional for contractors that do not have policy
manuals. Several of the comments expressed concern about the
requirement in the proposed paragraph
[[Page 58635]]
(g)(2)(ii) to hold a meeting at least once a year with employees to
discuss affirmative action obligations. Commenters asserted the OFCCP
miscalculated the burden associated with hosting these meetings,
stating that requiring this element would incur a much higher burden.
Commenters stated that OFCCP should allow contractors to disseminate
the equal employment opportunity policy at regularly scheduled meetings
and allow for electronic and web-based formats. Commenters also stated
that it was unclear what would constitute adequate training and
compliance with the newly required elements of paragraph (g)(2).
In response to the comments, and with an eye toward reducing the
burden on contractors, the final rule narrows the scope of the internal
dissemination efforts that will be required of contractors from that
set forth in the NPRM. Two of the five elements that the NPRM proposed
to require are maintained as requirements in paragraph (g)(2) of the
final rule: (1) Including the policy in the contractor's policy manual;
and (2) notifying (a change from ``meeting with'' in the NPRM, in order
to facilitate compliance) union officials to inform them of the policy
and request their cooperation, if the contractor is party to a
collecting bargaining agreement. The first of these requirements is
modified slightly from what was proposed in the NPRM based on comments
received so as to allow contractors to include the affirmative action
policy either in the contractor's policy manual, or to otherwise make
the policy available to its employees. We believe that most companies
generally have some form of document that provides guidance on human
resources policies and procedures--either a policy manual, employee
handbook, or similar document- that is available to employees that is
an appropriate place to put the policy. OFCCP believes including the
affirmative action policy in these documents will enhance the
visibility of the contractor's commitment to protected veterans.
However, the final rule also allows contractors the flexibility to make
the policy available to its employees through other means. This could
include posting the policy on a company intranet, but this will only
fulfill the requirement if all employees have access to this intranet.
The remaining elements that were required in the NPRM and/or were
suggested in the existing rule remain in paragraph (g)(3) of the final
rule as actions that the contractor is suggested to take, with the
exception of the recordkeeping provision, which has been eliminated. We
note, however, that to the extent any activities undertaken pursuant to
paragraph (g) involve the creation of records that are subject to the
general recordkeeping requirement of Sec. 60-300.80, contractors will
still be required to maintain such documents as specified by Sec. 60-
300.80.
Paragraph (h): Audit and reporting system for affirmative
action program
Section 60-300.44(h) outlines the contractor's responsibility to
design and implement an audit and reporting system for the company's
AAP. The NPRM proposed requiring contractors to document the actions
taken to comply with the section. The NPRM also proposed that
contractors maintain the records of their documentation subject to the
recordkeeping requirements of Sec. 60-300.80. OFCCP received one
substantive comment on the proposed revisions. The commenter, a human
resources consulting group, stated that the documentation requirement
would be potentially burdensome.
This section is adopted in the final rule as proposed. Many of the
requirements of Sec. 60-300.44(h) necessitate developing
documentation. The section requires contractors to measure the
effectiveness of its affirmative action program, indicate any need for
remedial action, determine the degree to which the contractor's
objectives have been attained, determine whether protected veterans
have had the opportunity to participate in all company professional and
social activities, and measure the contractor's compliance with the
program's specific obligations. Section 60-300.44(h)(2) requires
contractors to undertake necessary action to bring the program into
compliance. In order to conduct this kind of analysis, many contractors
will likely develop documentation. The final rule formalizes that
process for all contractors and requires that the documentation be
maintained in accordance with the recordkeeping requirements of Sec.
60-300.80. OFCCP feels strongly that this requirement will allow for a
more effective review of whether the contractor's affirmative action
obligations in this paragraph are being met.
Paragraph (i): Responsibility for implementation
The only substantive proposed change in paragraph (i) required that
the identity of the officials responsible for a contractor's
affirmative action activities must appear on all internal and external
communications regarding the contractor's affirmative action program.
In the current regulation, this disclosure is only suggested. Upon
further review, OFCCP does not believe that the benefit of this
suggested change outweighs the potential burden that it would place on
contractors. Accordingly, the final rule does not incorporate the
proposal, and the language in the existing regulation that contractors
should, but are not required, to take this step is retained.
Paragraph (j): Training
Paragraph (j) of the existing regulation already requires that the
contractor train ``[a]ll personnel involved in the recruitment,
screening, selection, promotion, disciplinary and related processes . .
. to ensure that the commitments in the contractor's affirmative action
program are implemented.'' The NPRM proposed revising this paragraph to
identify specific topics that must be considered in this training,
including: the benefits of employing protected veterans; appropriate
sensitivity toward protected veteran recruits, applicants and
employees; and the legal responsibilities of the contractor and its
agents regarding protected veterans generally and disabled veterans
specifically, such as reasonable accommodation for qualified disabled
veterans and the related rights and responsibilities of the contractor
and protected veterans. The NPRM also required that the contractor
record which of its personnel receive this training, when they receive
it, and the person(s) who administer(s) the training, and maintain
these records, along with all written or electronic training materials
used.
OFCCP received 12 comments from law firms, disability and veterans
associations, and contractors and contractor associations. The majority
of these comments raised concern regarding the burden the training
requirements places on contractors and the manner in which OFCCP
calculated it. Several comments noted specific concerns about what
constitutes ``sensitivity'' training. Two commenters suggested that
OFCCP or OFCCP-approved training programs should be offered, instead of
the contractor having to create additional training to what is done
now.
Taking these comments into account, and balancing the utility of
the proposal against the burden that it would create for contractors,
the final rule does not incorporate the portion of the proposed rule
listing specific training items that must be covered by contractors or
the specific recordkeeping requirement. However, the final rule does
retain the existing rule's general requirement that ``[a]ll personnel
involved in the recruitment, screening, selection, promotion,
disciplinary, and related processes'' must be trained to ensure that
the contractor's affirmative action
[[Page 58636]]
commitments are implemented. Further, we note that to the extent any
activities undertaken pursuant to paragraph (j) involve the creation of
records that are subject to the general recordkeeping requirement of
Sec. 60-300.80, contractors will still be required to maintain such
documents as specified by Sec. 60-300.80.
Paragraph (k): Data Collection Analysis
The proposed regulation added paragraph (k) to the rule, requiring
that the contractor document and update annually the following
information: (1) For referral data, the total number of referrals, the
number of priority referrals of protected veterans, and the ``referral
ratio'' of referred protected veterans to total referrals; (2) for
applicant data, the total number of applicants for employment, the
number of applicants who are known protected veterans, and the
``applicant ratio'' of known protected veteran applicants to total
applicants; (3) for hiring data, the total number of job openings, the
number of jobs filled, the number of known protected veterans hired,
and the ``hiring ratio'' of known protected veteran hires to total
hires; and (4) the total number of job openings, the number of jobs
that are filled, and the ``job fill ratio'' of job openings to job
openings filled.
As stated in the NPRM, the impetus behind this new section is that
no structured data regarding the number of protected veterans who are
referred for or apply for jobs with Federal contractors is currently
maintained. This absence of data makes it nearly impossible for the
contractor and OFCCP to perform even rudimentary evaluations of the
availability of protected veterans in the workforce, or to make any
sort of objective, data-based assessments of how effective contractor
outreach and recruitment efforts have been in attracting protected
veteran candidates. Conversely, maintaining this information will
provide the contractor with much more meaningful data for evaluating
and tailoring its recruitment and outreach efforts.
OFCCP received a total of 52 comments from veterans' associations,
a disability association, an employee association, contractor
associations, medical and other associations, law firms, and
contractors. The three veterans and disability associations that
commented on the proposal supported the required data collection and
the goal behind it. Virtually all commenters from the contractor
community opposed the proposal on varying grounds, including: issues
with the integrity of the data to be collected (and particularly data
on referrals); assertions that some of the data conflicts with the
Internet Applicant Rule in the Executive Order regulations; and
assertions that collecting, analyzing, and maintaining the data would
be unduly burdensome. Further, 19 commenters, all of whom were members
of the construction industry, submitted form letters asserting that
they should be exempted from the requirement due to the unique nature
of their industry. Finally, a number of commenters sought clarification
of some of the processes set forth in paragraph (k). These issues are
considered in turn below.
With regard to the eleven data elements required by the proposed
new section, 40 comments (total includes 19 form letters) articulated
data integrity concerns regarding data to be used in calculating the
referral ratio. Comments describe the state employment service delivery
systems as ``self-service,'' leaving source identification to the
candidate for the job, and as such making data unreliable in terms of
identifying referrals. Examples were provided indicating that veterans
may apply directly online with a company and may fail to identify that
he/she was referred and even that he/she is a veteran. These comments
also raised the issue that the referral ratio does not account for
referrals from sources other than the state employment service delivery
systems and may include referrals of veterans that are not qualified
for the position(s) at issue. For the reasons set forth in the
discussion of the proposed paragraph 5 of the EO Clause (Sec. 60-
300.5), OFCCP has eliminated from the final rule the requirement for
contractors to collect, maintain, and analyze information on the number
of referrals and the ratio of priority referrals of veterans to total
referrals, i.e., paragraphs (k)(1), (k)(2), and (k)(3) in the NPRM.
This eliminates many of the concerns commenters had with regard to this
paragraph, and also serves to decrease the burden on contractors.
However, eight of these comments also discussed the requirement to
document and maintain applicant and hiring ratios. These comments
reiterated data integrity issues and questions about the purpose of
conducting the calculations or comparisons. One of the primary issues
identified by commenters is that applicant data appears to be dependent
upon self-identification which is not reliable. These issues were
addressed in the discussion of the invitation to self-identify
proposals in Sec. 60-300.42(a). In short, demographic data based on
self-identification will never be perfect, but it is the best data that
is available.
Another identified concern is that the proposed data collection and
analysis is not aligned with the availability analysis conducted when
examining employment activities for females and minorities. However, as
stated previously in this preamble, VEVRAA and the Executive Order are
different laws with different data calculation and enforcement schemes,
largely because of the differences in the Census and other data
available. It is, therefore, not feasible to pattern data collection
after the Executive Order regulations.
Comments also questioned the purpose of the job opening/job filled
ratio. On a related point, one comment from a law firm noted that there
appears to be an underlying assumption that there will be jobs that are
not filled which is seldom true in the current economic environment.
While it may not be a common occurrence in the current economic
environment: (a) this does not mean it never happens (and if it never
does, the burden on the contractor to calculate a ``job fill ratio''
shrinks to virtually nothing); and (b) the current economic environment
will not last forever, at which point these regulations will still be
in effect. The job fill ratio is a commonly recorded metric by
companies and HR professionals, as it measures the effectiveness of a
company's recruiting efforts. Also, in some cases, a particularly low
job fill ratio could be an indicator that the company's hiring process
is being conducted incorrectly. This is useful information for both the
contractor and OFCCP. We have eliminated the requirement, however, that
contractors document and maintain for three years the ratio of jobs
filled to job openings and the ratio of protected veterans hired to all
hires. The remaining data points permit OFCCP and the contractor to
make those calculations; thus separate data collection is unnecessary.
Several commenters also objected to the collection of data about
protected veteran status of applicants because it differs from the
recordkeeping requirements related to Internet Applicants under the EO
11246 implementing regulations at 41 CFR 60-1.12. We addressed this
issue in the discussion of the pre-offer self-identification
requirement, and incorporate by reference that discussion here, but we
wish to reiterate the salient points here in response. Under Sec. 60-
1.12, contractors' recordkeeping obligations include maintaining
expressions of interest through the Internet that the contractor
considered for a particular position, as well as applications and
resumes. Contractors
[[Page 58637]]
also are required to maintain, where possible, data about the race,
sex, and ethnicity of applicants and Internet Applicants, as
applicable. The term Internet Applicant is defined at Sec. 60-1.3. The
term ``applicant'' is defined in OFCCP subregulatory guidance. The
Internet Applicant definition is limited to OFCCP recordkeeping and
data collection requirements under the Executive Order implementing
regulations in Sec. 60-1.12.
In sum, after consideration of the comments received, the final
rule retains the NPRM's proposal for contractors to document and
maintain applicant, hiring, and job fill ratio data, but eliminates the
requirement for contractors to document and maintain referral data.
With regard to burden calculation issues, 43 of the 52 commenters,
entirely from the contractor community, indicated that OFCCP had not
correctly calculated the burden of this section. Specific cost
information was provided by two commenters. A contractor association
that combined comments from three such entities indicated that a survey
conducted by the association found OFCCP's estimate of six minutes a
year to collect, maintain and ``in some cases'' calculate the data
elements should be stated more accurately as six hours. A revised
burden calculation is included in the Regulatory Procedures section of
this final rule, as well as the methodology behind the revised
calculation, but we wish to highlight a few points here where we
believe the contractor community may have misunderstood portions of the
burden we proposed they undertake. First, as stated above, the referral
data metrics have been eliminated, which reduces the burden. Second,
the hiring metrics are already maintained and calculated by the
contractor as part of its existing obligation under 41 CFR part 61-300;
therefore, that portion of paragraph (k) does not create any additional
burden. The only ``new'' items proposed were those pertaining to the
self-identification applicant data and the job fill ratio.
Also pertaining to burden, 19 commenters from the construction
industry asserted that they should be exempted from this section of the
proposed regulation because of the unique nature of the industry,
namely that it is project-based and its workers are transitory and
seasonal. Traditionally, construction contractors who meet the basic
coverage requirements (contract amount and number of employees) of
VEVRAA have not been exempted from any of its provisions. This includes
the collection of data under part 61-300 for the VETS-100A report,
which tracks the numbers of new hires and overall employees who are
protected veterans, data which makes up a significant portion of the
requirements under paragraph (k). Accordingly, we decline to exempt
construction contractors.
Commenters from the contractor community also cited burden concerns
with the proposed requirement to maintain the paragraph (k)
computations for a period of five (5) years. As set forth in the
discussions of Sec. 60-300.44(f)(4) and Sec. 60-300.80 herein, the
final rule reduces the document retention requirement to three (3)
years, and revises the language of paragraph (k) to reflect this
change.
Finally, a few of the comments raised clarification questions we
would like to address, including: (1) Whether the intent of the
analyses is to measure change from year to year; (2) whether the ratios
should be run by job group, job title, or establishment; and (3) how
compliance determinations will be made. As to the first question, as
set forth in the discussion of Sec. 60-300.44(f)(3), measuring change
from year to year, and looking at two previous years of data, is a
central intent of the analyses, as that can aid the contractor in
seeing trends that may be associated with certain of its outreach and
recruitment efforts over time. However, as discussed in that section,
contractors are also free to use any other reasonable criteria in
addition to the applicant and hiring data they feel is relevant to
evaluate the effectiveness of their efforts. As to the second question,
the ratios in paragraph (k) will be calculated by establishment, and
not by job groups or titles within a given establishment. The number of
protected veterans in the civilian workforce is relatively small (at
least compared to the number of women or minorities nationwide), and
thus we believe that running analyses by job groups or titles is
unlikely to provide any meaningful analysis.
With regard to the third question, compliance determinations for
paragraph (k) will be made based simply on whether the contractor has
documented and maintained the five listed metrics in the final rule.
OFCCP Compliance Officers will not be using the applicant and hiring
data to conduct underutilization or impact ratio analyses, as is the
case under the Executive Order, and enforcement actions will not be
brought solely on the basis of statistical disparities between veterans
and non-veterans in this data. Compliance officers will look to see
whether the contractor has fulfilled its obligations under Sec. 60-
300.44(f)(3) to critically analyze and assess the effectiveness of its
recruitment efforts, using the data in paragraph (k) as well as any
other reasonable criteria the contractor believes is relevant, and has
pursued different and/or additional recruitment efforts if the
contractor concludes that its efforts were not effective.
Section 60-300.45 Benchmarks for hiring
The NPRM proposed that the contractor establish annual hiring
benchmarks by using existing data on veteran availability from five
different sources of information: (1) Bureau of Labor Statistics data
of the average percentage of veterans in the civilian labor force in
the State where the contractor is located; (2) the raw number of
protected veterans who participated in the employment service delivery
system (i.e., One-Stop Career Centers) in the State where the
contractor is located; (3) the referral, applicant, and hire data
collected by the contractor pursuant to Sec. 60-300.44(k); (4) the
contractor's recent assessments of its outreach and recruitment efforts
as set forth in Sec. 60-300.44(f)(3); and (5) any other factors,
including but not limited to the nature of the contractor's job
openings and/or its location, which would tend to affect the
availability of protected veterans. The last of these factors would
allow the contractor to take into account other factors unique to its
establishment that would tend to affect the availability determination.
The NPRM also proposed to require contractors to document the hiring
benchmark it established each year, detailing each of the factors that
it considered in establishing the hiring benchmark and the relative
significance of each of these factors, and required the contractor to
retain this document for a period of five years.
OFCCP received a total of 38 comments on the proposed new
requirement to establish annual hiring benchmarks for protected
veterans. Three comments from organizations representing employee
interests, including a disability association and a veterans
association, stated that requiring benchmarks using available
statistics was an important development, and supported the proposed
regulation in general terms. The remaining comments, virtually all of
which were from contractors or those representing contractors, opposed
the requirement for contractor-established benchmarks as proposed. The
reasons set forth for their opposition fell into five general
categories: (1) A belief that
[[Page 58638]]
the benchmarks were equivalent to ``quotas''; (2) hiring benchmarks for
protected veterans would adversely impact women and minorities; (3) the
benchmarks as proposed were arbitrary and ineffective given that the
data to be relied upon is not specific to veterans protected by VEVRAA
and does not correlate to specific job groups, skills, or geographical
areas; (4) the proposed five-year recordkeeping requirement conflicts
with equivalent requirements in other laws administered by OFCCP; and
(5) that setting benchmarks as proposed in the NPRM was unduly
burdensome for contractors, and OFCCP underestimated the cost and
burden of the proposal. Further, some commenters provided
recommendations for how to amend the proposed benchmarks, and others
submitted questions seeking clarification of aspects of OFCCP's
proposal. As detailed below, the final rule contains a substantial
revision, allowing contractors the option of using a benchmark based on
national veteran data. This option would substantially decrease the
burden on contractors.
Before addressing each of the issues raised by the commenters,
providing some further context and explanation for the proposal and how
OFCCP envisioned the proposed requirement would work in practice is
appropriate.
The primary intent of the benchmark proposal was to provide the
contractor a yardstick that could be used to measure progress in
employing protected veterans. OFCCP recognized that data demonstrating
the availability of protected veterans that is similar to the data used
to compute availability and establish goals under the EO 11246 program
does not exist. Owing to the imprecise nature of the data upon which
benchmarks would be based, OFCCP did not propose additional affirmative
action obligations (or OFCCP enforcement actions) if a contractor did
not meet the benchmark that it set. To be sure, OFCCP would expect that
as part of its annual recruitment and outreach assessment, the
contractor would assess why it did not meet the benchmark and adjust
its recruitment efforts for the following year based on what it has
learned. However, the proposal would not have OFCCP undertake
enforcement action solely on the basis of a disparity between the
benchmark and the actual percentage of veterans hired.
Further highlighting the difference between the benchmark proposal
and the availability and utilization calculations traditionally
required under the Executive Order 11246 program, OFCCP designed the
benchmark proposal to allow the contractor maximum flexibility to take
into account any additional factors it thought would increase or
decrease a reasonable benchmark and to weigh these factors in any
reasonable manner it saw fit. For instance, the contractor might start
with the average veteran population for its state, reduce this number
slightly to account for the fact that this data was not limited to
protected veterans, average this number with the percentage of
protected veteran applicants it had received over the past three years,
and increase the resulting percentage slightly in anticipation of
additional recruiting efforts it knew it would be doing in the next
year. Then, the contractor could adjust this number up or down
depending on the overall nature of the work performed at the
establishment and how that coincides with experience veterans generally
have, whether the contractor knew that there was a particularly high or
low number of veterans in the relevant hiring area, or any other
reasonable factor. So long as the contractor adequately described and
documented the factors it took into account, it would comply with the
Sec. 60-300.45 requirement.
Finally, OFCCP intended the benchmark proposal to raise awareness
of the significant number of veterans who, having made enormous
sacrifices defending our nation on our behalf, nevertheless continue to
face considerable difficulties finding work upon their return home.
These veterans are highly trained, highly skilled, disciplined, and
possess considerable leadership and team-building experience--in other
words, excellent candidates for employment. While recent Federal
efforts have greatly helped veterans' employment prospects, the service
of these veterans to our nation abroad is still too often forgotten,
and the lasting contribution they can make to our private sector at
home is still too often unfulfilled. The proposed hiring benchmark,
therefore, is a tool to address this pressing national issue and the
important role Federal contractors have in addressing it.
The purposes and intentions of the benchmark proposal made clear,
we turn to the concerns raised by commenters.
Five commenters stated that the proposed benchmarks were the
equivalent of a ``quota.'' One commenter stated that the benchmark
requirement would make contractors feel the need to meet the data
requirements by hiring protected veterans who may not be qualified in
order to meet the benchmark. Another believed the benchmarks suggested
``quotas'' because the availability analysis factors proposed do not
factor in the approximate percentage of qualified protected veterans by
occupational codes or geographical areas. Still another asserted that
the proposed benchmarks were ``quotas'' and thus unconstitutional, as
they were not ``narrowly tailored'' to ``a compelling governmental
interest.''
The proposed benchmarks are not quotas and should not be conceived
as quotas. The benchmark is not a rigid and inflexible quota which must
be met, nor is it to be considered either a ceiling or a floor for the
employment of particular groups. Quotas are expressly forbidden. We
hope the discussion in the previous paragraphs clarifying that
contractors have significant flexibility to set their own benchmarks,
and will not be cited for violations solely for failing to meet the
benchmarks they set, allay the fears of these commenters. Further, the
omission of breaking down the benchmarks by occupational codes or
geographical areas is merely a function of the fact that such data does
not exist for protected veterans; it does not evince an intent to set
rigid quotas. Finally, we note that the legal standard raised by the
final commenter regarding the constitutionality of the benchmarks is
incorrect. The ``narrowly tailored to a compelling governmental
interest'' standard, otherwise known as ``strict scrutiny,'' is applied
to race-based decision making. See Adarand Constructors, Inc. v. Pena,
515 U.S. 200 (1996). The benchmarks proposed in the VEVRAA regulations
are not race-based. Classifications that are based on veteran status
are subject to so-called ``rational basis review,'' and are legally
permissible so long as the government action--in this case, the setting
of benchmarks--is ``rationally related'' to a ``legitimate governmental
interest.'' See, e.g., Sturgell v. Creasy, 640 F.2d 843, 852 (6th Cir.
1981). Clearly, requiring contractors to set benchmarks for the hiring
of protected veterans--particularly benchmarks that afford the
contractor significant flexibility in their establishment and are not
rigidly applied so as to automatically create a violation of the law if
they are not met--is rationally related to the legitimate governmental
interest of increasing outreach to and employment opportunities for
protected veterans.
Six commenters, including individuals, contractor associations,
consultants, and human resource management firms, expressed concern
that requiring contractors to establish annual hiring benchmarks for
protected veterans would adversely impact women and minorities, and
thus impede
[[Page 58639]]
contractors' nondiscrimination efforts under EO 11246, due to low
numbers of minorities and women among protected veterans. One commenter
asked for clarity on whether contractor veteran affirmative action
efforts could be used as an affirmative defense if those efforts result
in adverse impact against women, because a large percentage of
protected veterans are men. Finally, a commenter asked whether OFCCP
would still require contractors to establish annual hiring benchmarks
for protected veterans if women and minorities were underutilized.
OFCCP does not agree that contractor-established benchmarks will
adversely affect women or minorities. As an initial matter, recent
Department of Veterans Affairs (DVA) data indicate that for Gulf War-
era I veterans 30.3 percent were minority; Gulf War-era II veterans
33.6 percent were minority; and Vietnam era veterans 16.4 percent were
minority.\21\ This compares quite closely with the 27 percent national
non-white population figure calculated by recent Census data.\22\ For
this reason alone we do not anticipate any potential effect on
minorities. Although the representation of women among veterans is
lower than in the civilian labor force, as discussed in more detail
below, the employment of women will not be adversely affected by VEVRAA
affirmative action requirements.
---------------------------------------------------------------------------
\21\ U.S. Department of Veteran Affairs, National Center for
Veterans Analysis and Statistics, ``Minority Veterans 2011,'' May
2013, http:[sol][sol]www.va.gov/vetdata/docs/SpecialReports/
Minority_Veterans_2011.pdf (last accessed Aug. 15, 2013).
\22\ U.S. Census Bureau, Overview of Race and Hispanic
Origin:2010, Table 1: Population by Hispanic or Latino Origin and by
Race for the United States: 2000 and 2010, Mar. 11, 2011,
http:[sol][sol]www.census.gov/prod/cen2010/briefs/c2010br-02.pdf
(last accessed Aug. 15, 2013).
---------------------------------------------------------------------------
The purpose of, and requirements related to, VEVRAA benchmarks do
not serve to impact the hiring of women or minorities. The purpose of
VEVRAA hiring benchmarks is simply to provide the contractor a
quantifiable means to measure its progress towards achieving equal
employment opportunity for protected veterans. The contractor's
obligation under Sec. 60-300.45 is to establish a benchmark and
document that it has done so. Contractors will not be subject to an
enforcement action or found to be in violation of the VEVRAA
regulations for failing to meet the benchmark. Hiring preferences are
not required, the rule does not state that contractors will be expected
to achieve benchmarks, and the VEVRAA rule does not prescribe actions
the contractor must take if the benchmark is not achieved. The
benchmark simply provides the contractor a tool to measure its progress
in employing protected veterans. Consequently, the VEVRAA enforcement
scheme does not provide an incentive for contractors to disfavor non-
protected veterans in employment. The point of the benchmark is to
encourage contractors to be inclusive of protected veterans rather than
to discriminate against nonveterans through preferences or quotas.
OFCCP sees no reason why a contractor's VEVRAA obligations would
affect its nondiscrimination obligations under EO 11246 or Title VII.
VEVRAA does not require hiring preferences or veteran quotas. Because
contractors are not required to meet the VEVRAA benchmark, efforts by
contractors to do so would not be a defense to a charge of employment
discrimination, including adverse impact, under another law. Further, a
contractor's obligations under other civil rights laws will not create
a violation of VEVRAA. To avoid this problem Sec. 60-300.1(c)(2)
provides that it may be a defense to a charge of violation of VEVRAA
regulations that a challenged action is required or necessitated by
another Federal law or regulation, or that another Federal law or
regulation prohibits an action that would be required by VEVRAA.
Finally, in response to the question about whether a contractor
will need to establish a VEVRAA hiring benchmark regardless of its
utilization of women and minorities, the answer is yes. The VEVRAA
benchmark is to be established annually regardless of the contractor's
utilization of any group of employees, including protected veterans.
The hiring benchmark is simply a tool to allow contractors to measure
their progress in providing equal opportunity to protected veterans.
A number of commenters objected to the proposed benchmarks on the
grounds that the data upon which the contractors are required to rely
generally is structurally incompatible with the contractor's workplace.
For instance, one commenter asserted that it opposes hiring benchmarks
because the metrics outlined in the proposal have no relationship at
all to the population of qualified candidates eligible for employment.
Additionally, an organization argued that just because there may be a
high availability of veterans in a specific location, does not mean
those same veterans are qualified for the types of jobs available in
that same location. Furthermore, commenters in opposition to the
proposed rule argued that the benchmark proposal is flawed because it
contemplates facility-wide goals. Another organization explains that
placement goals for an accounting firm will look very different than
the placement goals for a manufacturing company, and the placement
goals for entry-level production positions at the manufacturing company
will look very different than the placement goals for management
positions at the same company.
These comments are well-taken, and we submit that some of these
issues are precisely why the benchmarks we proposed allowed the
contractor such a significant amount of flexibility in creating them.
This would allow, for instance, an accounting firm and a manufacturing
firm in the same city to have different hiring benchmarks, depending on
the types of positions available and the skill sets required for these
positions. The decision to have the regulation require the contractor
to create facility-wide benchmarks rather than goals tied to particular
job codes or titles is dictated by the limited scope of the veteran
data available.
A substantial number of commenters objected to the proposed
benchmarks on the grounds that the specific categories of data which
the contractors are required to consider are not specific to protected
veterans, and otherwise do not provide clear guidance to contractors on
how to arrive at an overall benchmark. With regard to the BLS data
specified in paragraph (b)(1), commenters argued that relying on such
data would inflate benchmarks because data collected by BLS and state
employment services reflects all veterans in the civilian labor force--
not just protected veterans, and that such data would be based on the
entire state rather than a more narrow recruitment area. With regard to
the VETS data specified in paragraph (b)(2), commenters contended that
this statewide data would have limited relevance to the recruiting that
occurs in most companies because contractors may recruit from a very
local market for some positions and may recruit on a national basis for
other positions. Additionally, commenters argued that to the extent
contractors are required to rely on statewide data to inform localized
hiring benchmarks, there are no assurances the statewide data is an
accurate reflection of the composition of protected veterans in the
subject locale. Regarding consideration of the contractor's own
referral, applicant and hiring data of protected veterans in paragraph
(b)(3), commenters generally questioned the reliability of the data,
specifically the referral and applicant data, for reasons that have
been
[[Page 58640]]
thoroughly addressed in previous sections.
In response to the comments on the proposed data considerations in
paragraphs (b)(1) and (b)(2), as previously discussed, OFCCP agrees
that precise and statistically meaningful availability data
specifically capturing veterans protected under VEVRAA at the local
level, divided by job group, would be optimal in setting specific,
refined goals. However, such data does not exist. Accordingly, the
proposal had contractors consider a variety of sources of data
capturing large portions of the relevant population (including actual
applicant flow and hiring data from the contractor's establishment),
and provided contractors with the flexibility, in the proposed
paragraphs (b)(4) and (b)(5), to take into account any other factors
which could reasonably affect protected veteran availability. However,
commenters also asserted that paragraphs (b)(4) and (b)(5) were
unhelpfully vague and introduced a high degree of subjectivity into the
entirety of the benchmark setting process that was uncomfortable.
Multiple commenters suggested alternative methods for setting
benchmarks, including a nationwide goal for hiring protected veterans.
One commenter in particular, a consultant to contractors on EEO issues,
proposed a mechanism by which aggregate annual VETS-100A data could be
used to estimate the number of protected veterans in the civilian
workforce, and by dividing this number by the total civilian workforce,
arrive at a national goal for protected veterans.
OFCCP does not believe that VETS-100 data, as currently collected
and reported, is an appropriate source for establishing benchmarks.
However, should the VETS data collection and reporting structures
change in the future, the VETS 100-A data may be a source contractors
could use when establishing their own benchmarks or that is considered
by OFCCP should it revise the national benchmark. First, the structure
of the VETS-100 form is such that contractors do not record a total
number of protected veteran employees or hires, but rather how many
veterans fall within each of the four protected categories. Because a
veteran may fall within multiple categories (e.g., a disabled veteran
who is also recently separated and earned a campaign badge for his or
her service), VETS-100 data can double, triple, or even quadruple-count
the number of protected veteran hires and employees. Also, VETS-100
data only reflects those protected veterans employed by Federal
contractors, and not the population of protected veterans available for
work. Accordingly, if a contractor's protected veteran recruitment
efforts were deficient and resulted in an unreasonably small number of
protected veteran hires and employees, this deficiency would therefore
be incorporated into the contractor's benchmark.
However, in order to address the concerns of those commenters
seeking greater clarity and objectivity in setting hiring benchmarks,
the final rule contains a significant revision allowing contractors
another method for establishing a hiring benchmark: simply using the
national percentage of veterans in the civilian labor force, which will
be published and updated annually on OFCCP's Web site, as the annual
hiring benchmark. As of September 2011, the national percentage of
veterans in the civilian labor force was 8.0 percent. OFCCP recognizes
that this data captures all veterans, and not just veterans protected
by VEVRAA, but OFCCP reiterates that the benchmark is not a quota. It
serves primarily as a yardstick by which contractors can measure the
effectiveness of their affirmative action efforts, and a tool for
contractors to use in the evaluation of their outreach and recruitment
efforts. Importantly, as with benchmarks calculated under the five-
factor method set forth in the NPRM, contractors will not be cited
simply for failing to meet it. For those commenters who asserted that
the proposed five-factor approach to setting benchmarks was unduly
burdensome, this approach will decrease the burden significantly, as
set forth in the Regulatory Procedures section of this final rule.
For those contractors that would rather use the five-factor
approach to setting benchmarks proposed in the NPRM, the final rule
retains this as an option. This option, however, is modified slightly
to eliminate the consideration of referral data, which contractors are
no longer required to collect and maintain in the final rule. For those
who choose this method of setting benchmarks, OFCCP will provide
technical assistance to contractors upon request.
With regard to commenters' concerns about the proposed five-year
recordkeeping requirement in paragraph (c) of this section, the final
rule reduces this to a three-year requirement, for the reasons set
forth in the discussion of Sec. 60-300.80 below and previous sections
that had a proposed five-year recordkeeping requirement discussed
above.
Some commenters questioned why the term ``benchmarks'' was used in
this section as opposed to the term ``goals'' which is used in the EO
11246 program. We proposed a different term to avoid confusion and to
highlight the difference in how the two concepts operate. The purposes
of the EO 11246 placement goals are twofold: (1) ``to serve as
objectives or targets reasonably attainable by means of applying every
good faith effort to make all aspects of the entire affirmative action
program work'' and (2) ``to measure progress toward achieving equal
employment opportunity.'' 41 CFR 60-2.16(a). The benchmarks established
under this regulation are intended to serve only the second of these
two objectives, that is, they serve as a measure of progress and the
effectiveness of a contractor's outreach and recruitment efforts. The
Executive Order regulations state goals are ``reasonably attainable''
when sufficiently robust data exists describing the availability of
women and minority workers, the groups for which goals may be
established under the Executive Order program. As discussed previously
in this section, however, we do not believe that the data currently
available is sufficiently robust on the issue of the availability of
protected veterans. Consequently, the purpose and function of goals
established in the Executive Order regulations differ from benchmarks
under the VEVRAA regulations. Therefore, we use different terminology
to distinguish the terms clearly. To further clarify this difference,
the final rule slightly revises the language in paragraph (b) of this
section. The proposal defined hiring benchmarks as ``the percentage of
total hires that are protected veterans that the contractor will seek
to hire. . . .'' The final rule deletes the clause ``that the
contractor will seek to hire'' from the text of paragraph (b) given the
explanation above.
Finally, one commenter asked if the annual hiring benchmark it sets
should be included in the text of the AAP or maintained on-site in the
event of an OFCCP audit. It is OFCCP's position that annual hiring
benchmarks should be included in both the text of the AAP and
maintained on-site in the event of an OFCCP audit, for maximum
transparency.
Subpart D--General Enforcement and Complaint Procedures
Section 60-300.60 Compliance evaluations
The proposed rule set forth several changes to the process the
contractor and OFCCP will follow in conducting compliance evaluations.
These proposals, the comments to these
[[Page 58641]]
proposals, and the revisions made to the final rule are discussed in
turn below.
Paragraph (a)(1): Review of personnel processes
The NPRM added a sentence to paragraph (a)(1)(i) regarding the
temporal scope of desk audits performed by OFCCP, stating that OFCCP
``may extend the temporal scope of the desk audit beyond that set forth
in the scheduling letter if OFCCP deems it necessary to carry out its
investigation of potential violations of this part.'' Several
commenters, including those from individuals, contractors, contractor
associations, and law firms, objected to this proposed change and asked
that it be withdrawn. These commenters asserted that the language of
the proposed rule could result in ``never-ending'' audits for
contractors, was contrary to a 2010 Administrative Law Judge (ALJ)
decision in the case OFCCP v. Frito-Lay and would lead to an increased
burden for contractors.
As stated in the NPRM, the purpose of this proposal was to clarify
that OFCCP may need to examine information after the date of the
scheduling letter during the desk audit in order to determine, for
instance, if violations are continuing or have been remedied. While the
existing VEVRAA provision addresses the authority of the agency to
conduct desk audits, it does not expressly state the temporal scope of
these audits. It has been OFCCP's longstanding position that the agency
has authority to obtain information pertinent to the review for periods
after the date of the letter scheduling the review, including during
the desk audit. However, in 2010 an ALJ disagreed in a recommended
decision in the Frito-Lay case, in part because the parallel Executive
Order 11246 desk audit regulation at issue in the case does not address
the temporal scope of a desk audit. OFCCP v. Frito-Lay, Inc., Case No.
2010-OFC-00002, ALJ Recommended Decision and Order (July 23, 2010). On
May 8, 2012, the Department's Administrative Review Board (ARB)
reversed this recommended decision, concluding that a desk audit
authorized by the regulation permitted OFCCP to request additional
information relating to periods after the scheduling letter. The ARB
concluded that the regulation does not have an inflexible temporal
limitation. OFCCP v. Frito-Lay, Inc., Case No. 2010-OFC-00002, ARB
Final Administrative Order (May 8, 2012). OFCCP views the Frito-Lay
decision as equally applicable to desk audits concluded under its
VEVRAA authority as to those conducted under its EO 11246 authority.
Nevertheless, the final rule makes the clarification explicit in the
text of the regulation. OFCCP notes that paragraph (a)(1) also
authorizes OFCCP to request during the desk audit additional
information pertinent to the review after reviewing the initial
submission. See United Space Alliance v. Solis, 824 F.Supp.2d 68, 81-82
(D.D.C. 2011) (holding that agency's interpretation of its desk audit
regulation to authorize additional information requests when necessary
was entitled to deference).
Finally, commenters' concerns that this revision will lead to
``never-ending'' audits are inapposite. As stated above, the clarifying
language set forth in the final rule does not change OFCCP's
longstanding policy, or contractors' obligations, regarding the
temporal scope of the desk audit. Further, because the clarification
does not represent a change, concerns about increases in burden are
similarly unfounded.
Paragraph (a)(2): Off-site review of records
The NPRM sought to correct an error in the existing regulations in
this paragraph, changing the reference to the ``requirements of the
Executive Order'' to the ``requirements of Section 4212.'' We received
no comments on this proposed change, but in light of the discussion of
Sec. 60-300.2 above, we replace the reference to ``Section 4212'' with
``VEVRAA.''
Paragraph (a)(3) and (a)(4): Nature of document production
and scope of focused reviews
The NPRM revised these two paragraphs to allow OFCCP to review
documents pursuant to a compliance check and conduct focused reviews
either on-site or off-site, at OFCCP's option. We received no comments
on these specific paragraphs, and thus adopt the proposed language into
the final rule as written.
Paragraph (d): Pre-award compliance evaluation
Finally, the proposed rule added a new paragraph (d) to this
section detailing a new procedure for pre-award compliance evaluations
under VEVRAA, much like the procedure that currently exists in the
Executive Order regulations (see 41 CFR 60-1.20(d)). We received one
comment on this proposal that supported adding pre-award compliance
evaluation options. Accordingly, this paragraph is adopted into the
final rule as proposed.
Subpart E--Ancillary Matters
Section 60-300.80 Recordkeeping
Section 60-300.80 describes the recordkeeping requirements that
apply to contractors under VEVRAA. The NPRM proposed adding a sentence
at the end of paragraph (a) of this section clarifying that the newly
proposed recordkeeping requirements set forth in Sec. Sec. 60-
300.44(f)(4) (linkage agreements and other outreach and recruiting
efforts), 60-300.44(k) (collection of referral, applicant and hire
data), 60-300.45(c) (criteria and conclusions regarding contractor
established hiring benchmarks), and paragraph 5 of the EO Clause in
Sec. 60-300.5(a) (referral data) must be maintained for five years.
OFCCP received twenty-four comments on the proposed provision from an
individual, contractors, associations representing veterans or
individuals with disabilities, law firms, industry groups, and human
resources consulting firms. Twenty-three of the commenters opposed the
new requirement, citing burden and inconsistency with existing
regulations.
In response to comments regarding the burden associated with
maintaining records for five years, the final rule reduces the
recordkeeping requirements for Sec. Sec. 60-300.44(f)(4), 60-
300.44(k), and 60-300.45(c) to three years. The final rule also
eliminates the recordkeeping requirements for referral data under the
proposed paragraph 5 of the EO Clause and Sec. 60-300.44(k). The
comments regarding the burden associated with the proposed revisions
and OFCCP's response are discussed in further detail in the Regulatory
Procedures section.
Commenters also expressed the view that all of the VEVRAA
recordkeeping requirements should be consistent with EO 11246, section
503, and other laws that have recordkeeping obligations. Nearly all
commenters believed the difference in timeframes would lead to
confusion, and ultimately non-compliance, even for the most well-
intentioned contractors. One comment asserted that the proposed
provision is inconsistent with State laws that require employers to
destroy personal information of job seekers after two years when
records contain personal information. Several comments indicated that
the proposed requirement contradicts the Internet Applicant rule, which
sets forth certain requirements for applications received through the
internet or related electronic data technologies.
In response to these comments, the final rule includes a three-year
recordkeeping requirement, rather than the proposed five-year
requirement, for Sec. Sec. 60-300.44(f)(4), 60-300.44(k), and 60-
300.45(c). In order to clearly indicate this, the final rule includes a
new paragraph (b) specifying those records that have the three-year
requirement, moving paragraphs (b) and (c) in the
[[Page 58642]]
existing rule to paragraphs (c) and (d), respectively. OFCCP feels
strongly that extending the recordkeeping requirements for these
particular provisions, all primarily related to recruitment and
outreach, will enable contractors to better determine the effectiveness
of their recruitment and outreach activities over time. As noted in the
NPRM, the absence of data makes it nearly impossible for contractors
and OFCCP to perform even rudimentary evaluations of the availability
of protected veterans in the workforce, or to make any quantitative
assessments of how effective contractor outreach and recruitment
efforts have been in attracting protected veteran candidates. These
records will give contactors historical data that can be used for
analyzing their compliance efforts. As to conflicts with other laws,
particularly the Internet Applicant Rule, as set forth in detail in the
discussion of Sec. 60-300.42(a), the final rule harmonizes its
requirements with the Internet Applicant Rule in the EO 11246
regulations. With regard to the comment vaguely referencing State law
conflicts, generally speaking, State laws have provisions that
acknowledge Federal preemption if there is a conflict, and thus we see
no reason to change the proposal on that basis.
Commenters were particularly concerned about retaining referral
data for five years under paragraph 5 of the EO Clause and Sec. 60-
300.44(k). As discussed previously, the final rule eliminates the
recordkeeping requirements for referral data, eliminating this concern.
Section 60-300.81 Access to records
The NPRM made two changes to the current regulation. First, it
added a sentence requiring the contractor to provide off-site access to
materials if requested by OFCCP investigators or officials as part of
an evaluation or investigation. Second, it required that the contractor
specify to OFCCP all formats (including specific electronic formats) in
which its records are available, and produce records to OFCCP in the
formats selected by OFCCP. OFCCP received seven comments regarding the
proposed Sec. 60-300.81. All seven comments opposed the proposed
changes, citing confidentiality and burden concerns.
Commenters expressed concerns about providing records in a format
requested by OFCCP. Two commenters requested clarification regarding
whether OFCCP will require contractors to convert records into formats
requested by the agency. Several commenters stated that contractors
should have the discretion to determine the format that is most
efficient for records production based on organizational resources and
sensitivity of information.
The final rule clarifies the provision regarding OFCCP's ability to
request records in specific formats. The final rule states that:
``[t]he contractor must provide records and other information in any of
the formats in which they are maintained, as selected by OFCCP.'' The
final rule language makes clear that the provision will not require
contractors to invest time or resources creating records in a specific
format, or to create a documented ``list'' of the formats in which they
have documents available. Rather, contractors merely need to inform
OFCCP of the formats in which they maintain their records and other
information, and allow OFCCP to select the format(s) in which the
records or information will be provided. This provision should result
in more efficient OFCCP investigations.
Commenters also criticized the proposal to allow OFCCP access to
records off-site, particularly as it relates to the security of
confidential records. One comment identified an alleged incident where
an OFCCP Compliance Officer lost contractor information during a
compliance evaluation. In light of this alleged security breach, the
comment suggested that contractors should be permitted to determine how
records are produced to OFCCP. This commenter did not provide further
details of the incident, and OFCCP is unaware of any specific incident
such as the one described. Another commenter noted that the language
could be interpreted broadly to permit others outside of OFCCP to gain
access to vendor data. Yet another comment stated that it may be
difficult and time-consuming for contractors to make data accessible to
OFCCP off-site.
In order to address the above-referenced concerns, commenters
provided several recommendations to modify the proposed language of
this section. One comment recommended that OFCCP clarify that the
agency is the only entity that may be permitted access to information
submitted. Another commenter recommended including language in the
final regulation that states that OFCCP is committed to the
confidentiality of contractor information and that confidential
information related to individual employees is not subject to Freedom
of Information Act requests.
The final rule retains the proposed requirement to provide OFCCP
off-site access to materials by request. As an initial matter, it is
worth noting that access to company records off-site is not a novel
approach, as the Executive Order contains no limitation on the location
of access for the compliance evaluation, and indeed specifically
references off-site access. Thus, this general access regulation
conforms to those principles. In light of contractors' increased use of
electronic records in multiple locations, OFCCP feels that this change
will provide the agency greater flexibility during evaluations and
investigations. However, OFCCP modified Sec. 60-300.81 of the final
rule in response to comments regarding record confidentiality. Section
60-300.81 now includes the following language: ``OFCCP will treat
records provided by the contractor to OFCCP under this section as
confidential to the maximum extent the information is exempt from
public disclosure under the Freedom of Information Act, 5 U.S.C. 552.''
It is the practice of OFCCP not to release data where the contractor is
still in business, and the contractor indicates, and through the
Department of Labor review process it is determined, that the data are
confidential and sensitive and that release of the data would subject
the contractor to commercial harm. This language affirms OFCCP's
commitment to ensure confidentiality to the fullest extent allowed by
law. Further, all OFCCP Compliance Officers receive training on the
importance of keeping records confidential during compliance
evaluations and complaint investigations. OFCCP will continue to stress
this policy to ensure that contractor records are kept secure by the
agency at all times, and will work with contractors to respond to
specific data confidentiality concerns they may have.
Appendix A to Part 60-300--Guidelines on a Contractor's Duty To Provide
Reasonable Accommodation
The proposed rule included three changes to Appendix A which would
mandate activities that previously were only suggested. First, in the
third sentence of paragraph 2 and the fourth sentence of paragraph 5,
we proposed changing the language to reflect the change to Sec. 60-
300.42(d) requiring a contractor to seek the advice of disabled
veterans in providing reasonable accommodation. Second, in the last
sentence of paragraph 4, the NPRM proposed requiring that disabled
veterans, in the event an accommodation would constitute an undue
hardship for the contractor, be given the option of providing the
accommodation or paying the portion of the cost that constitutes the
undue hardship for the contractor, consistent with the change to Sec.
60-300.21(f)(3).
[[Page 58643]]
Finally, in the last sentence of paragraph 9, the proposed rule is
changed to require that a contractor must consider the totality of the
circumstances when determining what constitutes a ``reasonable amount
of time'' in the context of available vacant positions.
Comments describing concerns with the first and second proposed
changes were addressed in the discussion of Sec. Sec. 60-300.42(d) and
60-300.21(f)(3), respectively. We received no comments on the third
proposed change. Accordingly, Appendix A is incorporated into the final
rule as proposed, with small changes to update the references to
specific accommodations to reflect current technology and terminology
(such as replacing the reference to ``telecommunication devices for the
deaf (TDD)'' to the more current ``text telephones (TTYs),'' and
including modern technology such as speech activated software, and as
set forth in the discussion of paragraph 9 of the EO Clause in Sec.
60-300.5. Consistent with the change to Sec. 60-300.42(c), we also
deleted the words ``and wish to benefit under the contractor's
affirmative action program'' from paragraph 1.
Appendix B to Part 60-300--Sample Invitation to Self-Identify
The proposed rule amends Appendix B consistent with the proposed
changes to the self-identification regulation found at Sec. 60-300.42.
The majority of comments pertaining to aspects of Appendix B were
addressed in the discussion of Sec. 60-300.42 above. Separately, three
commenters stated specifically that the proposed Appendix B would be a
useful tool for contractors. One commenter stated that OFCCP should
make clear that a goal of a reasonable accommodation is to enable an
individual with a disability ``to perform the essential functions of
the job,'' as this is the accepted legal standard, while the proposed
paragraph 2 of Appendix B uses ``to perform the job properly and
safely.'' OFCCP adopts this commenter's language into the final rule.
OFCCP also eliminates from paragraph 2 of the sample invitation to
self-identify the option to ``choose not to provide this information.''
This option may serve to discourage applicants from self-identifying,
and is unnecessary, as applicants who wish not to reveal their
protected veteran status may simply choose not to respond to the
invitation. Consistent with the change to Sec. 60-300.42(c), paragraph
3 is deleted, and paragraphs 4, 5, and 6 are renumbered, accordingly,
as paragraphs 3, 4, and 5. In addition, to address confusion among
veterans regarding the scope of the protections afforded by the various
veterans' employment rights statutes, the final rule adds clarifying
language to paragraph 1 of Appendix B. The new language explains that
protected veterans with past, present or future military service,
status or obligations may have additional rights under USERRA,
including the right to be reemployed by an employer for whom they
worked immediately prior to their military service.
Appendix C--Review of Personnel Processes
The NPRM proposed eliminating Appendix C and incorporating relevant
parts of it into Sec. 60-300.44(b). However, as stated in the
discussion of Sec. 60-300.44(b), we have eliminated the proposal in
the NPRM that required specific personnel process reviews. Accordingly,
the final rule reinstates Appendix C, but substitutes the updated term
``protected veteran'' in paragraphs 1, 2, and 3, in place of ``disabled
veteran, recently separated veteran, other protected veteran, or Armed
Forces service medal veteran.''
Regulatory Procedures
Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)
OFCCP is issuing this final rule in conformity with Executive
Orders 13563 and 12866, which direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of
reducing costs, of harmonizing rules, and of promoting flexibility.
This rule is economically significant and major as it will have an
annual effect on the economy of $100 million or more. EO 12866 Sec.
3(f). OFCCP estimates that first year costs in the rule to be in the
range of $177,296,772 to $483,560,138. This includes (1) One-time
costs; (2) recurring costs; (3) capital start-up costs; and (4)
operations and maintenance costs.\23\ The range of recurring costs of
the final rule in subsequent years will be approximately $120,386,058
to $347,617,359.\24\ This rule was reviewed by the Office of Management
and Budget.
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\23\ These costs include both establishment and contractor
company level costs.
\24\ The recurring costs include those related to the recurring
substantive provisions and the copying costs identified in the
Operations and Maintenance Costs section.
---------------------------------------------------------------------------
A. Introduction
The final regulatory impact analysis is substantially different
from the preliminary regulatory impact analysis presented in the VEVRAA
NPRM based on comments received during the public and interagency
comment period. First, the final rule has been scaled down
significantly in order to minimize the costs employers would incur
under the rule. Second, OFCCP modified the contractor establishment
count to more accurately reflect the number of contractors that would
be impacted by the rule. Third, the analysis acknowledges that some
establishments and or companies may incur higher costs under the final
rule and illustrates a range of costs to implement several provisions.
1. Eliminated Several Provisions in the NPRM
While all the proposals in the NPRM had value, after assessing the
comments received on the NPRM published on April 26, 2011, we made
several changes in the final rule. OFCCP reconsidered whether the cost
of several proposals in the NPRM could be justified by their potential
benefits, and whether alternative methods or approaches could achieve
comparable or acceptable benefits for less cost or burden. We retain in
the final rule those provisions proposed in the NPRM that create
greater contractor accountability through enhanced data collection and
recordkeeping. Therefore, as an example, the final rule does not
require each contractor to establish three ``linkage'' agreements with
various veteran service organizations to facilitate recruitment.
Other examples of how the final rule takes a tailored approach
include, but are not limited to, eliminating the proposal that
contractors reproduce the entire equal opportunity clause in all
contracts and subcontracts; the proposal that contractor staff training
must cover a list of specific training items; the proposal to mandate
annual reviews of personnel policies; and the proposal to mandate that
contractors identify the official responsible for the affirmative
action program on all communications are also eliminated in the final
rule.
2. Increased the Contractor Establishment Count
In light of the comments concerning the size of the Federal
contractor
[[Page 58644]]
establishment universe, OFCCP reexamined the original number of 108,288
contractor establishments it used in the NPRM. For the final rule, we
combined Equal Employment Data System (EEDS) data with several other
information sources.\25\ We used FY 2009 EEDS data to determine the
number of Federal contractor establishments with 50 or more employees;
this resulted in a total of 87,013 Federal contractor
establishments.\26\ An additional 10,518 establishments were identified
through a cross-check of other contractor databases for a total of
97,531 establishments. Covered Federal contractors must develop AAPs
for all of their establishments, even those with fewer than 50
employees. Therefore, OFCCP added an additional 73,744 establishments,
using EEO-1 and FPDS data, for an adjusted total of 171,275 Federal
contractor establishments affected by the final rule. This adjustment
to the methodology for calculating the number of contractors and
contractor establishments results in a 58 percent increase over the
earlier estimate used in the NPRM.
---------------------------------------------------------------------------
\25\ OFCCP determined that the VETS-100 database is not the most
appropriate resource for calculating the number of federal
contractors and contractor establishments. Among the concerns
surrounding this data source are the use of contractor established
12-month reporting timeframes, the degree to which there is overlap
or duplication in the VETS-100 and VETS-100A reports, and the
absence of an employee threshold for reporting purposes.
\26\ A single firm, business, or ``entity'' may have multiple
establishments or facilities. Thus, the number of contractor
establishments or facilities is significantly greater than the
number of parent contractor firms or companies.
---------------------------------------------------------------------------
We received comments on the estimated number of contractor
establishments as well, including recommending an establishment count
of 285,390 using the VETS annual report. While OFCCP declines to
exclusively rely on the VETS report number, we present an estimated
high end for the range of the cost of the rule based on a contractor
establishment number of 251,300 for comparison. This number is based on
2010 VETS data from their pending Information Collection Request.\27\
---------------------------------------------------------------------------
\27\ OMB Control Number 1293-0005, Federal Contractor Veterans'
Employment Report, VETS-100/VETS-100A, http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201104-1293-003 (last accessed
Aug. 13, 2013).
---------------------------------------------------------------------------
All costs and hours in the burden analysis of this final rule are
calculated using adjusted numbers of Federal contractor establishments.
Federally assisted construction contractors are not subject to these
regulations and, therefore, are not included in this total. See section
60-300.2(n) for the definition of ``Government contract.''
3. Revised and Increased Burden Estimates
OFCCP received 55 comments concerning overall burden hours from
several employer groups and employers, including 21 form letters. Most
stated that OFCCP's overall estimate of dollars and hours was much too
low. Some commenters included estimates of their own for dollar costs
and burden hours. Several commenters specifically expressed concern
about the potential burden on smaller contractors, including smaller
construction contractors, veteran owned businesses, and service-
disabled veteran owned businesses.
OFCCP acknowledges that estimating the precise amount of time each
company will take to engage in certain activities will be difficult.
However in response to public comments, the final regulatory impact
analysis attempts to account for the fact that smaller contractors may
not have the same human resources capabilities as larger contractors.
Specifically, OFCCP has provided low and high range estimates for
certain requirements either based on the comparison of contractor
establishment numbers, assumptions about the use of automated
application systems and human resources information systems,\28\ and/or
other factors.
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\28\ The human resources system low range estimates assume that
most contractors have automated application systems and human
resources information systems to meet the data collection
requirements of the final rule. The high range estimate is based on
the assumption that contractors with 50-100 employees may still use
manual application or human resources processes. These contractors
would likely expend more time conducting the kind of data collection
and analysis required under the final rule.
---------------------------------------------------------------------------
B. The Need for the Regulation
Some commenters stated that OFCCP did not adhere to the
requirements of Executive Order 13563 or Executive Order 12866, which
require Federal agencies to identify a specific need for any regulation
they promulgate. These commenters asserted that the unemployment rate
for veterans was an insufficient basis for such ``extensive
regulations.'' Another commenter questioned the need for new
regulations and asserted that better enforcement of the current
regulations would achieve the same goals. Commenters further stated
that the anticipated benefits did not outweigh the overall costs of the
NPRM.
The current regulations are simply not sufficient to facilitate the
process of connecting veteran job-seekers with Federal contractors
seeking to hire qualified employees. The framework articulating a
contractor's responsibilities with respect to affirmative action,
recruitment, and placement of veterans has remained largely unchanged
since the VEVRAA implementing rules were first published in 1976.
Meanwhile, veterans are returning from tours of duty in Iraq,
Afghanistan, and other places around the world. These veterans possess
skills and personal qualities that are highly sought after in the job
market. However, veterans face substantial obstacles in finding
employment upon leaving the service and returning home. Addressing the
barriers our veterans face upon returning to civilian life is the focus
of a number of Federal efforts, including these revised VEVRAA
regulations.
Although progress has been made in the employment of veterans, the
number of unemployed veterans still remains too high, and substantial
disparities in unemployment and pay rates continue to persist,
especially for some categories of veterans. Annual unemployment rate
for post-September 2001 veterans, referred to as ``Gulf War-era II
veterans,'' is higher than the rates for all veterans and for non-
veterans. In 2012, according to BLS data on the employment situation of
veterans for that year, about 2.6 million of the nation's veterans had
served during Gulf War era II. The unemployment rate for this category
of veterans was 9.9 percent compared to nonveterans at 7.9 percent.\29\
In this same year, the unemployment rate for male Gulf War-era II
veterans age 18 to 24 was 20.0 percent, higher than the rate for
nonveterans of the same age group (16.4 percent).
---------------------------------------------------------------------------
\29\ U.S. Bureau of Labor Statistics, Economic News Release:
Employment Situation of Veterans Summary, Table A: Employment status
of the civilian noninstitutional population 18 years and over by
veteran status, period of service, and sex, 2011-2012 annual
averages, available online at http://www.bls.gov/news.release/vet.nr0.htm.
---------------------------------------------------------------------------
OFCCP found that process and institutional barriers, and data
collection issues are factors contributing to veterans being
underutilized in the Federal contractor workforce. We learned much from
conducting multiple town hall meetings, webinars, and listening
sessions with representatives of the contractor community, state
employment services, veterans' organizations and other interested
parties to understand those features of the current VEVRAA regulations
that work well, those that can be improved, and whether there was a
need for new requirements to help effectuate the regulations' goal of
increasing
[[Page 58645]]
employment opportunities for qualified protected veterans with Federal
contractors. We received information indicating that improvements to
the regulations were needed to assist protected veterans in gaining and
keeping employment. For instance, OFCCP learned that there were
significant problems with contractors submitting their job listings to
state agencies in usable formats--a requirement in the VEVRAA statute--
which would impede the veteran's ability to learn about job openings
with Federal contractors and receive priority referral to contractors
with available positions. In addition, the lack of veteran applicant
data hindered contractors' ability to assess the success of their
outreach and recruitment efforts, and whether alternative outreach
methods might attract greater numbers of protected veteran into their
applicant pools.
Efforts to address veterans' unemployment must be sustained, multi-
faceted, and coordinated; these regulations create an enforcement
structure that supports long-term monitoring, self-assessment, data
collection and accountability by employers doing business with the
Federal government. The benchmark created by the regulations provides
contractors with an aspirational hiring target against which they can
measure the success of their efforts, and identify any impediments to
hiring veterans. The regulations also provide more notice or knowledge
to subcontractors by requiring prime contractors to include specific,
mandated language in their subcontracts alerting subcontractors to
their responsibilities as Federal contractors. This supports voluntary
compliance by subcontractors and should increase job opportunities for
veterans.
The regulations address concerns surrounding process and
institutional challenges related to identifying available veteran job
applicants. The regulations clarify the contractor's mandatory job
listing requirements and the relationship between the contractor, its
agents, and the state employment services that provide priority
referral of protected veterans; and create flexibility for contractors
when they are establishing formal relationships with organizations that
provide recruiting or training services to veterans. The relationships
or ``linkage agreements'' can be established to meet the contractors'
specific needs, while assuring outreach to veterans seeking employment.
C. Discussion of Impacts
In this section, we present a summary of the costs associated with
the revisions to part 60-300. The estimated cost to contractors is
based on Bureau of Labor Statistics data in the publication ``Employer
Costs for Employee Compensation'' (September 2011), which lists total
compensation for management, professional, and related occupations as
$50.11 per hour and administrative support as $23.72 per hour. OFCCP
estimates that 52 percent of the burden hours will be management,
professional, and related occupations and 48 percent will be
administrative support.
Table 1--Contractor New Requirements--171,275 Establishments
------------------------------------------------------------------------
Provision Low cost High cost
------------------------------------------------------------------------
EO Clause, Parag 12............. $240,495.10 $240,495.10
EO Clause, Parag 10............. 534,418.00 534,418.00
300.42.......................... 2,101,102.72 2,583,328.54
300.45.......................... 2,404,913.60 2,404,913.60
---------------------------------------
Total....................... 5,280,929.38 5,763,155.20
------------------------------------------------------------------------
EO Clause, Parag 4.............. 1,736,859.16 1,736,859.16
300.44(f)(1).................... 4,328,771.47 4,809,761.68
300.44(f)(3).................... 3,174,438.00 3,174,438.00
300.44(f)(4).................... 1,603,263.25 1,603,263.25
300.44(h)....................... 1,068,842.17 1,068,842.17
300.44(k)....................... 3,740,925.75 6,840,549.94
---------------------------------------
Total....................... 17,256,363.05 20,836,977.45
------------------------------------------------------------------------
Reasonable Accommodation........ 19,010,209.00 19,010,209.00
Capital and Start-up............ 31,457,911.40 43,429,423.20
Rule Familiarization............ 8,582,590.25 34,330,361.00
Operations and Maintenance...... 616,590.00 1,356,498.00
Costs to Companies.............. 80,601,329.83 123,123,360.60
------------------------------------------------------------------------
Table 2--Contractor New Requirements--251,300 Establishments
------------------------------------------------------------------------
Provision Low cost High cost
------------------------------------------------------------------------
EO Clause, Parag 12............. $352,851.59 $352,851.59
EO Clause, Parag 10............. 784,114.64 784,114.64
300.42.......................... 3,102,510.41 3,814,616.30
300.45.......................... 3,528,515.87 3,528,515.87
---------------------------------------
Total....................... 7,767,992.51 8,480,098.40
------------------------------------------------------------------------
EO Clause, Parag 4.............. 2,548,372.57 2,548,372.57
300.44(f)(1).................... 6,351,328.56 7,057,031.73
300.44(f)(3).................... 4,657.640.94 4,657,640.94
300.44(f)(4).................... 2,352,343.91 2,352,343.91
300.44(h)....................... 1,568,229.27 1,568,229.27
[[Page 58646]]
300.44(k)....................... 5,488,802.46 10,036,667.35
---------------------------------------
Total....................... 23,013,764.59 28,267,332.65
------------------------------------------------------------------------
Reasonable Accommodation........ 19,010,209.00 19,010,209.00
Capital and Start-up............ 46,172,324.20 64,129,119.80
Rule Familiarization............ 12,592,643.00 50,370,572.00
Operations and Maintenance...... 904,680.00 1,990,296.00
Costs to Companies.............. 108,650,099.89 171,436,114.44
------------------------------------------------------------------------
Table 3--Completing Pre-offer Self-Identification
----------------------------------------------------------------------------------------------------------------
171,275 Establishments 251,300 Establishments
Provision -----------------------------------------------------------------------------------
Low cost High cost Low cost High cost
----------------------------------------------------------------------------------------------------------------
300.42(a)................... $96,695,442.00 $212,729,213.00 $141,874,556.25 $312,124,023.75
----------------------------------------------------------------------------------------------------------------
1. Section 60-300.5 Equal Opportunity Clause
The Equal Opportunity Clause (EO Clause) in the current rule, as
well as the VEVRAA statute itself, requires Federal contractors to list
their job openings with the state or local employment service delivery
system (employment service). See 38 U.S.C. 4212(a)(2)(a); 41 CFR 60-
300.5(a)(2). Paragraph 2 of the EO Clause in the current regulations
does not expressly address the manner in which contractors provide job
openings to the employment delivery service system. The NPRM proposed
requiring contractors to provide information to the employment service
in the manner and format that the employment delivery service system
requires. The NPRM estimated that collecting, informing the employment
service delivery system and recordkeeping would take 15 minutes per job
listing for an average of two listings per year. Some commenters
asserted that OFCCP significantly underestimated the number of annual
listings or the time required to post a listing, or both.
The final rule clarifies the intent of the provision by stating
that contractors need only provide job openings in a format that the
employment service delivery system will accept. The clarification in
the final rule does not create a new requirement; rather it explains
OFCCP's longstanding position regarding the statutory requirement to
list job openings. This position is explained in publically available
Frequently Asked Questions (FAQs), published several years ago,
addressing the various ways contractors must list job openings, the
documentation contractors must maintain to demonstrate compliance, what
contractors should do if they send an email and it is returned from the
state as undeliverable, and how to comply with the job listing
requirement by using third parties.\30\ Therefore, the final rule does
not assess burden for complying with existing requirements concerning
listing job openings in a manner permitted by the employment service
delivery system. We also do not assess burden for new language
clarifying that contractors may utilize privately run third-party
services or exchanges to list its jobs, in addition to listing them
with the employment service delivery system.
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\30\ Office of Federal Contract Compliance Programs, Jobs for
Veterans Act Frequently Asked Questions, Can a contractor satisfy
the job listing requirement by sending to the appropriate employment
delivery system a link to a specific job opening posted on the
contractor's Web site? http:[sol][sol]www.dol.gov/ofccp/regs/
compliance/faqs/jvafaqs.htm#Q20 (last accessed April 16, 2012).
---------------------------------------------------------------------------
Paragraph 4 of the EO Clause of the current rule requires
contractors to provide the appropriate employment service delivery
system with the name and location of each of the contractor's hiring
locations. See 41 CFR 60-300.5(a)(4). The NPRM proposed requiring a
contractor to inform the employment service delivery system that: (1)
It is a Federal contractor; (2) it is requesting priority referrals of
protected veterans; and (3) it is providing the contact information for
the hiring official at each location in the state. The NPRM also
proposed requiring contractors to provide the employment service with
the contact information for each external job search organization used
by the contractor. Several contractors use job search and human
resources firms to fill job vacancies in the belief that using these
firms saves them money, gives them greater staffing flexibility and
increases their access to talent. These firms can search for, recruit
and even train contractors' employees using human resource software
solutions that work independently or that can be integrated into a
contractor's own human resources information system. The NPRM estimated
that 25 percent of the Federal contractors use job search or similar
firms and that 20 minutes would be required to provide the four types
of information proposed in the NPRM. The status of the employer as a
Federal contractor, the need for priority referrals, the hiring
official's contact information and the information identifying the
contractor's external job search firm are all pieces of information
that should be readily available to the contractor and any job search
or human resources firm the contractor uses. Transmission of the
information via email or facsimile is not complex or time consuming and
can be done from a desktop computer, standalone facsimile or business
multi-function printer. We received no comments on this burden
estimate.
The final rule adopts proposed paragraph 4 of the EO Clause and
further clarifies the unchallenged burden analysis for this provision.
OFCCP estimates a total of 15 minutes to ensure that the new
information required by the regulation is provided to the employment
service. Because submitting job openings is already required by
paragraph 2 of the EO Clause, and burden was assessed for that
provision, we are only assessing additional burden for including a few
lines of text to identify the contractor as a ``Federal contractor,
request priority referrals, and identify the contractor's official that
is responsible for hiring.
[[Page 58647]]
This calculation assumes that the required information is readily
available within the contractor's human resources department, or the
job search or similar firm used by the contractor, or both. It is also
assumed that the language is being incorporated into a job listing
template and stored electronically, and that this template or similar
form is easily accessible for use and revision, as needed. The minimum
recurring burden estimate for this provision is 42,819 hours (171,275
contractor establishments x 15 minutes/60 = 42,819 hours). As in the
NPRM, OFCCP estimates that 25 percent of contractors, or 42,819, will
use outside job search organizations and incur an additional 5 minute
burden to simultaneously notify the employment service of the contact
information for its outside job search organizations when submitting
the required job posting. The burden for this provision is 3,568 hours
(42,819 contractor establishments x 5 minutes/60 = 3,568 hours). The
minimum cost for this provision is approximately $1,736,859.\31\
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\31\ All of the estimated costs to contractors is based on
Bureau of Labor Statistics data in the publication ``Employer Costs
for Employee Compensation'' (September 2011), which lists total
compensation for management, professional, and related occupations
as $50.11 per hour and administrative support as $23.72 per hour.
OFCCP estimates that 52 percent of the burden hours will be
management, professional, and related occupations and 48 percent
will be administrative support.
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Assuming there are 251,300 establishments that are impacted by the
final rule, the recurring burden for updating existing mandatory job
listing templates to include the required information would be 62,825
hours (251,300 contractor establishments x 15/60 = 62,825 hours). The
burden for providing information regarding job search organizations
would be 5,235 hours (251,300 contractor establishments x 25 percent x
5 minutes/60 = 5,235 hours. The cost for this provision would be
$2,548,372.
Paragraph 9 of the EO Clause in the final rule clarifies that
contractors have a duty to provide notices of employee rights and
contractor obligations in a manner that is accessible and
understandable to persons with disabilities. The final rule revises the
parenthetical at the end of the sentence by replacing the outdated
suggestion of ``hav[ing] the notice read to a visually disabled
person'' as an accommodation with the suggestion to provide Braille,
large print, or other versions that allow persons with disabilities to
read the notices themselves. The NPRM estimated that contractors would
take 10 minutes to receive this accommodation request, provide the
document in an alternative format and maintain a record of its
disposition of the request. Upon further consideration, OFCCP
determines that there is no additional cost for this provision. We
specifically note that the nondiscrimination requirements of VEVRAA
currently require contractors to provide reasonable accommodation upon
request. See 41 CFR 60-300.21(f). Therefore, this modification in the
final rule simply updates the examples of possible accommodations that
contractors may provide to a visually impaired person, and does not
impose a new obligation on contractors.
Paragraph 9 of the final rule also allows, but does not require,
contractors to post notices regarding employee rights and its equal
employment opportunity obligations electronically if the contractor
provides computers that can access the electronic posting to employees
working remotely or has actual knowledge the employees have access to
the postings. This provision simply provides contractors with another,
more expedient, way to meet their existing obligations. OFCCP estimates
no additional burden for contractors that opt to post relevant notices
electronically.
Paragraph 9 of the final rule requires contractors to
electronically post a notice of job applicants' rights if the
contractor utilizes an electronic application. The existing regulations
require contractors to post notices regarding employee rights and equal
employment opportunity obligations in conspicuous places for employees
and applicants. See 41 CFR 60-300.5(a)(9). The final rule clarifies how
contractors can meet this existing obligation for on-line applicants.
Therefore, there is no new burden for this provision.
The NPRM proposed adding a new paragraph 13 to the EO Clause that
would require contractors to add to their solicitations and
advertisements that they are an equal opportunity employer of veterans
covered under VEVRAA. Under existing Federal requirements, including EO
11246, contractors are required to state in solicitations and
advertisements that the company is an equal opportunity employer. See
41 CFR 60-1.4(a)(2). The final rule adopts the proposed requirement,
now paragraph 12 of the EO Clause, requiring contractors to state in
all solicitations and advertisements that they are equal opportunity
employers of protected veterans. The NPRM estimated that it would take
contractors 1 minute to comply with this provision. We received one
comment from an employer group stating that ads would cost more due to
their increased word length. OFCCP acknowledges that some contractors
may experience an increased cost in light of this requirement. However,
based on the comments that OFCCP received on this issue, there is no
indication that this would be a significant problem for a substantial
number of contractors. In fact, the cost of some advertisements and
solicitations are based on size (i.e., quarter-page, half-page, full-
page) or number of lines, and the type of listing. Moreover, the cost
of an advertisement will also depend on the publication's circulation
and location. The number of words in the text actually appears be a
lesser factor when determining cost. After some research, OFCCP
determined that the average cost per word nationally is between .10 and
.20 cents for a classified advertisement. Therefore, the cost would not
be greatly impacted by adding two words, ``protected veterans,'' to the
advertisement.
Information from OFCCP field staff indicates that many contractors
already include ``veterans'' in their equal employment opportunity
statement for solicitations, particularly universities and defense
contractors. These entities are often seeking the particular skills and
training that veterans receive while in the military. Therefore, based
on field experience evaluating contractor practices, OFCCP estimates
that approximately 55 percent of contractors, or 94,201, currently
comply with this requirement. OFCCP estimates that the remaining 77,074
contractors will have a one-time burden of 5 minutes for amending their
existing standard equal employment opportunity statement to include
``protected veterans'' or similar language. Though no commenter
specifically objected to the 1 minute estimate of time required to
incorporate the reference to veterans into an existing form or
template, OFCCP determined that additional time appears justified and
adjusted the time required from 1 minute to 5 minutes in the final rule
to ensure that the document is revised, saved or uploaded so that it is
readily available for use. Therefore, the total burden for this
provision is 6,423 hours (77,074 contractor establishments x 5 minutes/
60 = 6,423 hours). The total cost of this provision is approximately
$240,495.
Assuming there are 251,300 establishments impacted by the final
rule, the burden for this provision would be 9,424 hours (113,085
contractor establishments x 5 minutes/60 = 9,424 hours). The total cost
of the provision would be $352,852.
Paragraph 10 of the EO Clause in the final rule, originally
paragraph 11 in the
[[Page 58648]]
NPRM, clarifies that the existing requirement to notify labor unions
about a contractor's affirmative action efforts also includes notifying
them of the contractor's nondiscrimination obligations. This provision
in the NPRM is adopted as proposed. No additional burden is created by
this clarification of an existing requirement.
Paragraphs 1, 3, 5-8, and 11-12 of the EO Clause in the final rule
remain unchanged from the current rule. Consequently, no burden is
created.
Section 41 CFR 60-300.5(d) currently allows contractors to
incorporate the EO Clause into contracts by reference. Further, the EO
Clause is considered part of every covered contract and subcontract
even if it is not physically incorporated into the contract. See 41 CFR
60-300.5(e). The NPRM proposed requiring that the entire EO Clause be
included verbatim in Federal contracts. The NPRM estimated that it
would take 1 minute for contractors to copy and paste the clause into
its contracts. We received six comments on the burden created by this
paragraph, all opposing the requirement to include the entire EO Clause
verbatim in contracts. The commenters stated that this requirement
would be too burdensome, as the length of a contract, subcontract, or
purchase order would increase greatly in size, causing contracts to be
rewritten, and that the EO Clause could not, as we had suggested, be
readily cut and pasted into these documents. Commenters requested
retaining incorporation by reference, consistent with other statutory
and equal opportunity requirements. In light of these comments, the
final rule permits incorporation of the EO Clause, with the addition of
some additional language that OFCCP has provided in the regulatory text
summarizing VEVRAA's purpose. OFCCP estimates that contractors will
spend approximately 15 minutes modifying existing contract templates to
ensure the additional language is included. The burden for this
provision is 14,273 hours (171,275 contractor establishments x 5
minutes/60 = 14,273 hours). The cost for this provision is $534,418.
Assuming there are 251,300 establishments impacted by the final
rule, the burden for this provision would be 20,942 hours (251,300
contractor establishments x 5 minutes/60 = 20,942 hours). The cost for
this provision would be $784,115.
To align with the incorporation by reference approach in 41 CFR 60-
300.5(d), the final rule section 60-300.5(e) reverts back to the
current language in the regulations. That language considers the EO
Clause a part of the contract whether or not it is physically
incorporated into a written contract and whether or not there is a
written contract. No new burden is created by reverting back to the
existing language.
2. Section 60-300.21 Prohibitions
The NPRM proposed clarifying that an individual who rejects a
reasonable accommodation made by the contractor may still be considered
a qualified disabled veteran if the individual subsequently provides or
pays for a reasonable accommodation. See 41 CFR 300.21(f)(3). The final
rule retains the proposals in the NPRM; however, no new burden is
created.
3. Section 60-300.40 Applicability of the Affirmative Action Program
Requirement
The final rule adopts the small change to paragraph (c) of this
section. The change specifies that the official designated by the
contractor pursuant to Sec. 60-300.44(i) reviews and annually updates
the contractor's affirmative action program. This change reflects the
intent of the existing language. No burden is generated by this change.
4. Section 60-300.41 Availability of the Affirmative Action Program
Though changes to this section were proposed in the NPRM, OFCCP is
not incorporating those proposals into the final rule. Instead, the
final rule retains the language in the existing Sec. 60-300.41, with a
small adjustment to clarify that contractors do not need to include the
data metrics required by Sec. 60-300.44(k) in their AAP, due to
commenters' concerns about confidentiality. This small clarification
creates no new or additional burden.
5. Section 60-300.42 Invitation to Self-Identify
The current regulation requires the contractor to invite applicants
who are disabled veterans, as defined in section 60-300.2, to self-
identify only after making an offer of employment, subject to two
exceptions. See 41 CFR 60-300.42(a). For all other veterans protected
by part 60-300, the current regulation requires the contractor to
invite the applicant to self-identify ``before the applicant begins his
or her employment duties.'' See 41 CFR 60-300.42(b).
The final rule retains the mandatory pre-offer invitation to self-
identify as a ``protected veteran'' in Sec. 60-300.42(a), but
eliminates the language proposed in paragraphs (a)(1) and (a)(2)
describing the conditions under which pre-offer invitations of disabled
veterans are legally allowed because contractors found this language
confusing. The post-offer invitation to self-identify that is in the
existing rule remains in the final rule. Finally, instead of requiring
contractors to seek input from applicants regarding accommodation, the
final rule suggests that they should do so. The NPRM estimated that it
would take contractors 1 minute to copy and paste an OFCCP sample
invitation to identify into a separate form for electronic and paper
applications. The NPRM also estimated burdens for veterans to fill out
the self-identification form.
OFCCP received 11 comments opposing the proposed new pre-offer
inquiry requirement in section 60-300.42(a). The comments generally
stated that the estimated burden was too low because, even with the
sample invitations OFCCP included as Appendix B to the regulation,
contractors would still need to rewrite existing self-identification
forms and modify or update their human resources or applicant tracking
systems.
Based on feedback from commenters, OFCCP modified its approach to
this calculation. OFCCP's estimate is based on the assumption that
modifications to a contractor's application system would be conducted
at the parent company level.\32\ This estimate distinguishes between
contractors with web-based or automated application systems and those
relying on manual or paper-based systems. Larger contractors, those
with more than 100 employees are more likely to have web-based systems.
OFCCP estimates that 72 percent of contractors utilize web-based
application systems.\33\ Working at the corporate level, contractors
will take 1.5 hours to review and retrieve existing sample invitations
to self-identify, adopt the sample ``as is'' or make revisions to their
existing form, save the invitation to self-identify and incorporate the
document in the contractor's application form. This burden estimate
[[Page 58649]]
should be considered in conjunction with the start-up costs associated
with this rule. OFCCP allotted 20 hours in the VEVRAA final rule to
modify human resources information systems or establish a process to
comply with the rules' new data collection requirements. This is in
addition to costs specified for incorporating the invitation to self-
identify in the application process. Taken together, contractors will
have over 21 hours to modify their existing application process. The
burden for these contractors would be 49,676 hours (33,117 contractor
companies x 1.5 hours = 49,676 hours). The remaining contractors would
simply have to incorporate the invitation to self-identify in paper
applications. OFCCP estimates this will take approximately 30 minutes.
The burden for these contractors would be 6,440 hours (12,879
contractor companies x 30 minutes/60 = 6,440 hours). The minimum cost
for this provision is approximately $2,101,103.
---------------------------------------------------------------------------
\32\ The EEO-1 data base separately identifies contractor
entities (companies) and the facilities that comprise them. The
FPDS-NG data base, by contrast, identifies contractor facilities,
but does not identify the larger entities of which they are a part.
OFCCP utilized the ratio (approximately 3.7) of parent companies to
number of establishments from the EEO-1 data to determine that among
the universe of 171,275 establishments there are approximately
45,996 Federal contractor companies.
\33\ Based on EEO-1 data on the number of establishments 100 or
fewer employees we determined that 28% were at this level and would
likely have manual systems as ``smaller'' establishments. Moreover,
we used a 100 employee threshold as a cut-off for small employers
for application of the 7% goal at the workforce or EEO-1 job
category level.
---------------------------------------------------------------------------
If all contractors used a web-based application the one-time burden
of preparing the form and making the IT changes for this provision is
68,994 hours (45,996 contractor companies x 90 minutes/60 = 68,994
hours). The maximum cost for this provision is $2,583,328.
Assuming there are 251,300 establishments, or 67,919 contractor
companies,\34\ in OFCCP's jurisdiction, contractors working at the
corporate level will take 1.5 hours to review and retrieve existing
sample invitations to self-identify, adopt the sample ``as is'' or make
revisions to their existing form, save the invitation to self-identify
and incorporate the document in the contractor's application form. The
burden for these contractors would be 73,352 hours (48,901 contractor
companies x 1.5 hours = 73,352 hours). The remaining contractors would
simply have to incorporate the invitation to self-identify in paper
applications. OFCCP estimates this will take approximately 30 minutes.
The burden for these contractors would be 9,509 hours (19,017
contractor companies x 30 minutes/60 = 9,509 hours). The minimum cost
for this provision would be approximately $3,102,510.
---------------------------------------------------------------------------
\34\ OFCCP utilized the same ratio (approximately 3.7) of parent
companies to number of establishments from the EEO-1 data to
determine that among the universe of 251,300 establishments there
are approximately 67,919 Federal contractor companies
---------------------------------------------------------------------------
If all contractors used a web-based application, the one-time
burden of preparing the form and making the IT changes for this
provision is 101,879 hours (67,919 contractor companies x 90 minutes/60
= 101,879 hours). The maximum cost for this provision would be
approximately $3,814,616.
Applicants for available positions with covered Federal contractors
will have a minimal burden complying with section 60-300.42(a) in the
course of completing their application for employment with the
contractor. Section 60-300.42(a), on pre-offer self- identification,
requires contractors to invite all applicants to self-identify whether
or not they are a protected veteran. OFCCP estimates that there will be
a minimum of 15 applicants per job vacancy for on average 15 vacancies
per year. OFCCP further estimates that it will take applicants
approximately 5 minutes to complete the form. The burden for this
provision is 3,211,406 hours (171,275 contractors x 15 listings x 15
applicants x 5 minutes/60 = 3,211,406 hours). The minimum costs for
this provision is $96,695,442. OFCCP estimates that there will be a
maximum of approximately 33 applicants per job vacancy for on average
15 vacancies per year per establishment. OFCCP further estimates that
it will take applicants approximately 5 minutes to fill out the self-
identification form. The burden for this provision is 7,065,093 hours
(171,275 contractors x 15 listings x 33 applicants x 5 minutes/60 =
7,065,093 hours). The maximum costs for this provision would be
$212,729,213.
Assuming there were 251,300 establishments impacted by the final
rule, the minimum burden for this provision would be 4,711,875 hours
(251,300 contractors x 15 listings x 15 applicants x 5 minutes/60 =
4,711,875 hours). The minimum costs for this provision would be
$141,874,556. OFCCP estimates that there will be a maximum of
approximately 33 applicants per job vacancy for on average 15 vacancies
per year per establishment. OFCCP further estimates that it will take
applicants approximately 5 minutes to fill out the self-identification
form. The burden for this provision is 10,366,125 hours (251,300
contractors x 15 listings x 15 applicants x 5 minutes/60 = 10,366,125
hours). The maximum costs for this provision would be $312,124,024.
Several other changes to section 60-300.42 do not create new
burdens or costs to contractors. Section 60-300.42(b) of the final rule
carries forward the existing requirement that contractors invite
voluntary self-identification of all applicants post-offer. Section 60-
300.42(c) of the final rule revises paragraph (c) of this section by
deleting the second sentence of the parenthetical at the end of the
paragraph. Neither of these provisions includes a new substantive
requirement.
Section 60-300.42(d) of the final rule does not incorporate the
proposal in the NPRM that would have required contractors to ask
disabled veterans whether any necessary reasonable accommodation is
needed, and if so, engage in an ``interactive process'' regarding
reasonable accommodation. Instead, the final rule retains the language
in the existing rules which is permissive and also eliminates the
parenthetical text that provides an example of when a contractor could
make an inquiry about a reasonable accommodation. The text is
unnecessary and likely confusing. We note that several comments
suggested that the proposed change in the NPRM does not take into
account the administrative burden associated with ascertaining whether
an individual is legally entitled to an accommodation and to research
alternative sources of funding for requested accommodations when the
accommodation is financially burdensome. We are using the existing
regulatory language in the final rule and, therefore, are no longer
creating a new burden.
6. Section 60.300.43 Affirmative Action Policy
The final rule clarifies that the nondiscrimination requirements of
VEVRAA are limited to protected veterans and that claims of reverse
discrimination may not be brought by individuals who do not fall into
one of the ``protected veteran'' categories. No burden is incurred by
this clarification because the final rule merely deleted the phrase ``.
. . because of status as a . . .''
7. Section 60-300.44 Required Contents of the Affirmative Action
Program
Section 60-300.44(a) Policy Statement
Section 60-300.44(a) of the final rule clarifies the contractor's
duty to make the equal opportunity policy statement accessible to all
employees. The final rule revises the parenthetical at the end of the
sentence by replacing the outdated suggestion of ``hav[ing] the notice
read to a visually disabled person'' as an accommodation with the
suggestion to provide Braille, large print, or other versions that
allow persons with disabilities to read the notices themselves. It also
requires the policy statement to include the attitude of the top United
States executive, such as the Chief Executive Officer (CEO) or the
President of the United States Division of a foreign company, toward
[[Page 58650]]
the contractor's affirmative action program.
The NPRM estimated that it would take contractors 10 minutes to
receive the request, provide the document in an alternative format, and
maintain records of compliance. OFCCP determines that there is no
additional cost for this provision in the final rule. The
nondiscrimination requirements of OFCCP's regulations currently require
contractors to provide reasonable accommodation upon request. See 41
CFR 60-300.21(f). This modification simply updates the example of a
possible accommodation that contractors may provide to a visually
impaired person, and does not impose a new obligation on contractors.
Similarly, no burden is associated with requiring that the contractor
indicate the CEO's support for the affirmative action program rather
than his or her ``attitude on the subject matter.''
Section 60-300.44(b) Review of Personnel Processes
Section 60-300.44(b) currently outlines the requirements for
reviewing personnel processes to ensure that they provide for
consideration of protected veteran applicants. The NPRM proposed
requiring contractors to review their personnel processes on an annual
basis to ensure that their obligations are being met, and mandated
several steps that contractors must take as part of the review process,
including: (1) Identifying the vacancies and training programs for
which protected veteran applicants and employees were considered; (2)
providing a statement of reasons explaining the circumstances for
rejecting protected veterans for vacancies and training programs; and
(3) describing the nature and type of accommodations for special
disabled veterans who were selected for hire, promotion, or training
programs. The NPRM estimated that it would take contractors 15 minutes
per listing to identify vacancies; 15 minutes to identify training
programs; 30 minutes to provide a statement of the reasons for
rejecting protected veterans for vacancies and training programs; and
30 minutes per accommodation request. Commenters stated that the burden
for performing this review would be significantly higher than OFCCP
estimated since contractors would have to update human resources
information systems to track the relevant data.
In response to the comments received, the final rule does not adopt
the proposals in the NPRM but retains the existing language in 60-
300.42(b) and no new burden is created.
Section 60-300.44(c) Physical and Mental Qualifications
The current rule requires contractors to ``periodically'' review
physical and mental job qualification standards to ensure that, to the
extent the qualification standards screen out qualified, disabled
veterans, they are job-related for the position in question and are
consistent with business necessity. See 41 CFR 60-300.44(c)(1). The
NPRM proposed modifying this section to require the reviews annually
and contractors to document the methods used to complete the review,
the results of the review, and any actions taken in response to the
review.
We received several comments regarding this provision expressing
concern that the revision would require contractors to review every job
on an annual basis whether or not changes occurred, and that OFCCP
underestimated the burden. In order to minimize the burden, the final
rule retains the existing language in 41 CFR 60-300.44(c)(1).
Therefore, there is no new burden for this provision.
Section 60-300.44(c)(3) of the final rule requires contractors to
document the specific reasons behind its belief that the ``direct
threat'' defense applies and maintain this document as a confidential
medical record. The existing regulations allow contractors to use as a
defense to an allegation that a job qualification screened out a
disabled veteran that the disabled veteran poses a ``direct threat'' to
the health or safety of the individual or others in the workplace. See
41 CFR 60-300.22. A contractor seeking to establish such a defense
would have to document its rationale in order to do so. The final rule
requires that the contractor create and maintain a summary of the
statement of reasons for its direct threat finding. As contractors
would already normally document these instances, we assess no burden
for this provision.
Section 60-300.44(f) External Dissemination of Policy, Outreach and
Positive Recruitment
Section 300.44(f)(1) of the current rule suggests a number of
outreach and recruitment activities that a contractor can undertake in
order to increase employment opportunities for protected veterans. The
NPRM proposed requiring contractors to enter into linkage agreements
with three veterans' recruitment sources: (1) The Local Veterans'
Employment Representative (LVERs) in the local employment service
office nearest the contractor's establishment; (2) one of several other
listed organizations and agencies; and (3) one of the veterans' service
organizations listed in the National Resource Directory (NRD). The NPRM
estimated that it would take an average of 1.5 hours to establish one
new linkage agreement for contractors obtaining OFCCP Compliance
Officer assistance. The NPRM further estimated that it would take
contractors an average of 5.5 hours to establish a linkage agreement
without such assistance.
We received 12 comments regarding the potential burden of this
requirement. Commenters asserted that this requirement was more
burdensome than we had projected. Commenters also asserted that the
NPRM's requirement to enter into local agreements would not be
practical for many establishments, especially for contractors that
recruit in multiple states or nationally, and for contractors in remote
locations. In addition, commenters expressed concern about how the
proposed provision would impact existing linkages with organizations
that may not be included among OFCCP's listed resources. Others
objected to the five (5) year recordkeeping requirements.
In response to the comments, OFCCP revised the final rule in
several ways. First, OFCCP eliminated the requirement to establish
three linkage agreements. The final rule retains the existing language
of Sec. 60-300.44(f)(1)(i) which requires that the contractor
undertake ``appropriate outreach and positive recruitment activities,''
and then provides a number of suggested resources. No burden is created
in the final rule by this provision.
Section 60-300.44(f)(1)(ii) of the final rule requires contractors
to send written notification of the company's affirmative action
program policies to subcontractors, vendors, and suppliers. The NPRM
estimated that it would take contractors 5 minutes to prepare the
notification and provide it to its subcontractors via the Internet in a
group email and 1 minute to add or subtract any additions or deletions
to the email group. The final rule recalculates the estimated burden of
this provision. The existing regulations recommend that contractors
send written notification of the company's affirmative action policies
to subcontractors, vendors, and suppliers. See 41 CFR 60-300.44(f)(6).
OFCCP's consultation with field staff indicates that approximately 10
percent of contractors, or 17,128, currently implement this
recommendation so no additional burden is calculated for this
population. At a minimum, OFCCP estimates that the remaining 154,147
contractors will take 15 minutes to prepare the notification and send
it to
[[Page 58651]]
subcontractors, vendors, and suppliers, and an additional 15 minutes to
execute the email address changes in the company's email system. The
recurring burden for preparing the notice is 38,537 hours (154,147
contractor establishments x 15 minutes/60 = 38,537 hours). Likewise,
the IT burden is estimated at 38,537 hours (154,147 contractor
establishments x 15 minutes/60 = 38,537 hours). The minimum cost for
this provision is $4,328,771. Assuming that all 171,275 establishments
incurred the combined 45 minute burden, the maximum cost of this
provision is $4,809,762.
Assuming 251,300 establishments would be impacted by the final
rule, OFCCP estimates that 226,170 contractors will take 45 minutes to
prepare the notification and send it to subcontractors, vendors, and
suppliers. The burden for this provision would be 169,628 hours
(226,170 contractor establishments x 15 minutes/60 = 169,628 hours).
The minimum cost for this provision would be $6,351,328. Assuming that
all 251,300 establishments incurred the combined 45 minute burden, the
burden would be 188,475 hours (251,300 x 45 minutes/60 = 188,475 ours).
The maximum cost for the provision would be $7,057,032.
Section 60-300.44(f)(2)(ii) in the final rule sets forth additional
suggested outreach efforts that contractors could engage in to increase
its recruitment efforts. The final rule adds an additional resource to
paragraph (f)(2)(ii) that contractors are suggested to use, and that is
the Veterans Job Bank. No burden is created by this change.
Section 60-300.44(f)(2)(ii)(F) in the final rule is different than
in the NPRM, reverting back to the language in the existing regulation.
The NPRM stated that contractors ``must consider'' protected veteran
applicants for jobs other than the one for which they applied. The
final rule states that contractors ``should consider applicants . . .''
and the final rule amends the NPRM in that regard. No burden is created
by this provision.
Section 60-300.44(f)(3) of the final rule requires the contractor
to review the effectiveness of its outreach and recruitment efforts
annually. In response to comments that OFCCP underestimated the time
necessary to conduct the annual review, the final rule increases the
time to comply with this provision from 20 to 30 minutes. OFCCP expects
that contractors will conduct this assessment in conjunction with the
correlating assessments required under EO 11246 and section 503 of the
Rehabilitation Act (section 503). OFCCP believes that if a contractor
has been complying with its recruitment, outreach, data collection, and
recordkeeping responsibilities throughout the affirmative action
program year, as well as its general obligation under Sec. 60-
300.40(c) to review and update its affirmative action program on an
annual basis (which includes its outreach and recruitment efforts, see
Sec. 60-300.44(f)), it will take an average of 30 additional minutes
for the contractor to conduct the specific effectiveness assessment of
its outreach and recruitment efforts, which would include a simple
comparison of the annual raw data on applicants and hires that
contractors collect pursuant to Sec. 60-300.44(k) to previous years'
data, as well as their hiring benchmark, and determining in light of
these numbers and any other relevant circumstances whether adjustments
in their outreach efforts is necessary. OFCCP estimates that 1 percent
of contractors are first-time contractors during an abbreviated
affirmative action program year and will be unable to complete the
review. The recurring burden for this provision is 84,781 hours
(169,562 contractor establishments x 30 minutes/60 = 84,781 hours). The
estimated cost for this provision is $3,174,438.
Assuming that 251,300 establishments would be impacted by the final
rule, the burden for this provision would be 124,394 hours (248,787
contractor establishments x 30 minutes/60 = 124,394 hours). The cost
for this provision would be $4,657,641.
Section 60-300.44(f)(4) of the final rule is a recordkeeping
provision. In the final rule, this provision requires contractors to
document all the outreach and recruitment activities they undertake to
comply with the obligations of this paragraph, and retain these
documents for a period of 3 years. Under the existing regulations,
contractors are required to establish meaningful outreach and
recruitment contacts. Consequently, contractors' outreach and
recruitment should already be the subject of some documentation. This
documentation may take several forms. It may include, for example, the
numbers and types of outreach and recruitment events, the targeted
groups(s) or types of participants for each event, the dates or
timeframes, location of the events, and who conducted and participated
in the outreach and recruitment on behalf of the contractor. OFCCP
estimates that it will take contractors 15 minutes to maintain this
basic outreach and recruitment documentation, much of which would
typically be generated as a result of their obligations pursuant to
other provisions in the regulations. This includes IT time to make the
software configuration needed to tell the system to store the data for
an additional year. The recurring burden for this provision is 42,819
hours (171,275 contractor establishments x 15 minutes/60 = 42,819
hours). The estimated cost for this provision is $1,603,263. Assuming
there are 251,300 establishments impacted by the final rule, the burden
for this provision would be 62,825 hours (251,300 contractor
establishments x 15 minutes/60 = 62,825 hours). The cost for this
provision would be $2,352,344.
Section 60-300.44(g) Internal Dissemination of Policy
The final rule adopts the proposed language in section 60-
300.44(g)(1) without change. This section requires contractors to
develop the internal procedures listed in paragraph (g)(2) of this
section to communicate to employees its obligation to engage in
affirmative action efforts to employ and advance in employment
qualified protected veterans. No additional burden is assessed here
because the existing regulations require the development of internal
dissemination procedures.
The NPRM proposed, in paragraph (g)(2), making a number of
currently suggested actions in this section mandatory, including
incorporating the affirmative action policy in company policy manuals,
informing all applicants and employees of the contractor's affirmative
action obligations, and conducting meetings with management and company
leadership to ensure they are informed about the contractor's
obligations. The NPRM also proposed requiring contractors to hold
meetings with employees at least once a year to discuss the company's
affirmative action policy. The NPRM estimated that it would take
contractors 15 minutes to download an OFCCP training module or 10 hours
for contractors to develop their own training that communicates the
company's affirmative action obligations.
We received 12 comments concerning the potential burden associated
with this paragraph. Commenters asserted that the burden calculation
was too low because it did not account for the cost of materials, class
time and lost productivity. In order to decrease the cost of the
provision, commenters suggested: (1) Allowing contractors to conduct
the training during other existing meetings related to equal employment
opportunity; (2) training managers only, who can then disseminate the
information to their staff; or (3) specifically allowing
[[Page 58652]]
contractors to use Internet based training to satisfy the requirement.
The final rule narrows the scope of the internal dissemination
efforts that will be required of contractors from that set forth in the
NPRM in section 60-300.44(g)(2)(i). Two of the five elements that the
NPRM proposed to require are maintained as requirements in paragraph
(g)(2) of the final rule. The two provisions require (1) including the
policy in the contractor's policy manual; and (2) notifying union
officials of the policy and requesting their cooperation, if the
contractor is party to a collecting bargaining agreement. We assume
that the majority of Federal contractors have employee manuals and
other information stored and available electronically, and thus we
believe no additional burden stems from this requirement. Further, the
EO Clause currently requires contractors to notify unions of their
affirmative action policy so there is no new burden associated with
this requirement. See Sec. 60-300.5, EO Clause paragraph 10 of the
final rule. Section 60-300.44(g)(3) of the final rule suggests, but
does not require, the elements that were proposed as requirements in
the NPRM. Elements that were suggested in the existing rule remain in
paragraph (g)(3) as suggestions in the final rule, with the exception
of the recordkeeping provision, which has been eliminated. The
provisions in the final rule are in the existing regulation so no new
burden is created.
Section 60-300.44(h) Audit and Reporting System
The proposals in the NPRM for Sec. 60-300.44(h) outline the
contractor's responsibility for designing and implementing an audit and
reporting system for the company's AAP. The only change proposed in the
NPRM was for the contractor to document the actions taken to comply
with the obligations set forth in this section and to maintain these
documents subject to the requirements of Sec. 60-300.80. This would
allow both the contractor and OFCCP to evaluate the effectiveness of
its audit and reporting system. The final rule adopts the proposal in
the NPRM. Under the existing rule, most contractors should document and
maintain their analysis of the AAPs as a normal part of their review
and assessment process. Compliance officers report that, on request,
they review or are provided a range of documents related to the
analysis including, for example, reports, summaries and data. In many
regards, this provision merely acknowledges and formalizes a current
contractor practice. OFCCP estimates that it will take contractors 10
minutes to document the actions taken to comply with section 60-
300.44(h) and retain those documents. The recurring burden for this
provision is 28,546 hours (171,275 contractor establishments x 10
minutes/60 = 28,546 hours). The estimated cost of this provision is
$1,068,842. Assuming there are 251,300 establishments impacted by the
final rule, the burden for this provision would be 41,833 hours
(251,300 establishments x 10 minutes/60 = 41,833 hours). The cost for
this provision would be $1,568,229.
Section 60-300.44(h)(2) requires contractors to undertake action
necessary for bringing the program into compliance. This is an existing
provision and generates no additional burden.
Section 60-300.44(i) Responsibility for Implementation
The final rule does not incorporate the proposal in the NPRM and
the language in the existing regulation that contractors should, but
are not required, to take this step is retained. Therefore, no burden
is created.
Section 60-300.44(j) Training
The final rule restores the existing regulatory requirements. The
final rule does not incorporate the portion of the proposed rule
listing specific training items that must be covered by contractors or
the specific recordkeeping requirement. However, it does retain the
existing rule's general requirement that ``[a]ll personnel involved in
the recruitment, screening, selection, promotion, disciplinary, and
related processes'' be trained to ensure that the contractor's
affirmative action commitments are implemented. Accordingly, no new
burden is created by this provision in the final rule.
Section 60-300.44(k) Data Collection and Analysis
The NPRM proposed adding a new section 60-300.44(k) that would
require contractors to maintain several quantitative measurements and
comparisons regarding protected veterans who have been referred by
state employment services, have applied for positions with the
contractor, and those that were hired by the contractor. The final rule
retains the NPRM's proposal for contractors to document and maintain
applicant and hire data, but eliminates from the final rule the
requirement for contractors to collect, maintain, and analyze
information on the number of referrals and the ratio of priority
referrals of veterans to total referrals, i.e., paragraphs (k)(1),
(k)(2), and (k)(3) in the NPRM. The final rule also does not require
contractors to calculate applicant, hiring, and job fill ratios in this
provision. This eliminates many of the concerns commenters had with
regard to this paragraph, and also serves to decrease the burden on
contractors. The other calculations mentioned in this section are
already required by other sections of part 60-300 or by EO 11246. In
response to the comments, OFCCP accounts for the costs of modifying
human resources information systems in the Initial Capital and Start-up
Costs section, infra.
Based on feedback received from public comments expressing concerns
about the costs of modifying human resources information systems, OFCCP
believes that most contractors will have the capability to conduct the
required calculations electronically. Therefore, OFCCP estimates that
it will, at a minimum, take contractors 25 minutes to tabulate the
applicant data using an electronic database that is integrated with the
contractors' human resources information database where the data is
typically stored. In addition, we estimate that an additional 10
minutes is required to electronically or otherwise store the records
(e.g., the report or other written documentation generated by the
calculations that explain the methodology, the data used, and the
findings and conclusions; the data used to conduct the calculations for
subsequent validation of the results; and other material used by the
contractor for the calculations). The recurring burden for this
provision is 99,910 hours (171,275 contractor establishments x 35
minutes/60 = 99,910 hours). The minimum cost for this provision is
approximately $3,740,926.
However, some commenters noted that companies may have to calculate
this information manually. Commenters stated that these calculations
could take more than 6 hours. OFCCP declines to adopt the 6 hour
estimate for manual calculations in large part because the estimate and
the requirements of this section are significantly scaled back from the
proposed rule, as the final rule does not require contractors to
tabulate referral data or applicant and hiring ratios. Accordingly,
starting with the 6 hour estimate and scaling it back given the reduced
burden of the final rule, OFCCP estimates that establishments without
web-based application systems would take approximately 3 hours to
tabulate the information required by this section. The burden for these
establishments would be 102,765 hours (34,255 contractor establishments
x 3 hours = 102,765). The remaining establishments would incur the 35
[[Page 58653]]
minute burden, for a total of 79,928 hours (137,020 contractor
establishments x 35 minutes/60 = 79,928 hours). The maximum cost for
this provision would be approximately $6,840,550.
Assuming there are 251,300 establishments impacted by the final
rule, OFCCP estimates that it will, at a minimum, take contractors 25
minutes to tabulate the applicant data using an electronic database and
an additional 10 minutes to electronically or otherwise store the
records (e.g., the report or other written documentation generated by
the calculations that explain the methodology, the data used, and the
findings and conclusions; the data used to conduct the calculations for
subsequent validation of the results; and other material used by the
contractor for the calculations). The recurring burden for this
provision would be 146,592 hours (251,300 contractor establishments x
35 minutes/60 = 146,592 hours). The minimum cost for this provision
would be approximately $5,488,802.
OFCCP estimates that establishments without web-based application
systems would take approximately 3 hours to tabulate the information
required by this section. The burden for these establishments would be
150,780 hours (50,260 contractor establishments x 3 hours = 150,780
hours). The remaining establishments would incur the 35 minute burden,
for a total of 117,273 hours (201,040 contractor establishments x 35
minutes/60 = 117,723 hours). The maximum cost for this provision would
be approximately $10,036,667.
The NPRM also proposed requiring contractors to maintain that data
for 5 years. In response to the comments, the final rule reduces the
record retention requirement for section 60-300.44(k) to 3 years. Since
some of the data calculations are already required by the implementing
regulations for EO 11246, the NPRM estimated that it would take
contractors 6 minutes to comply with the additional requirements of
this provision. We received nine comments concerning section 60-
300.44(k). Generally, these commenters asserted that OFCCP's burden
estimate was too low. More specifically, some commenters asserted that
OFCCP did not include the costs of new software to collect the data. No
new software needs are anticipated; however, a software switch or
configuration may be required to tell the system to retain the records
for the additional time period. According to an IT professional, this
is a simple configuration and should take about 15 minutes to execute.
No new burden is added because the change required by the Sec. 60-
300.44(f)(4) recordkeeping provision would include this IT change and
they would benefit from the economy of scale.
8. Section 60-300.45 Benchmarks for Hiring
The NPRM proposed requiring contractors to establish annual hiring
benchmarks, expressed as the percent of total hires who are protected
veterans that the contractor seeks to hire in the following year. The
NPRM proposed allowing contractors to consult a number of different
data sources to develop benchmarks that reflect the contractor's unique
hiring circumstances. It also required contractors to document the
annual hiring benchmark and detail the factors they considered when
establishing the benchmark and significance of each of the factors. The
NPRM proposed requiring that contractors retain these records for five
years.
The NPRM estimated a total of 1 hour per contractor establishment
for compliance with this requirement. The NPRM further estimated that
it would take contractors 30 minutes to maintain records of the
benchmark calculation. We received 10 comments on the proposed
requirement. Some commenters asserted that OFCCP significantly
underestimated the burden hours and dollar costs of this provision.
Commenters stated that OFCCP did not account for the number of openings
per contractor per year, costs for software, and data storage. One
commenter stated that the burden would be lower than for EO 11246
because OFCCP did not propose to require availability or utilization
analysis.
The final rule, in consideration of the comments received, requires
the contractor to establish benchmarks in one of two ways. A contractor
may use the national percentage of veterans in the civilian labor force
as the benchmark, or, the contractor may establish its own benchmark
using the method proposed in the NPRM that fits the company's specific
needs. OFCCP will provide, and periodically update on its public Web
site, the national percentage of veterans in the civilian labor force.
In light of the significant revisions to this section in the final
rule, we revised the burden estimate. OFCCP estimates that 90 percent
of contractors, or 154,147, will use the national benchmark provided on
the OFCCP Web site because it is the easiest approach. The remaining 10
percent of contractors, or 17,128, will likely opt to develop their own
benchmarks using the various data sources described in the final rule.
We estimate that it will take 5 minutes to access, view and print the
national benchmark we will make available on the OFCCP Web site, and
another 5 minutes to maintain the relevant documentation for the 90
percent of contractors that use the national average provided by OFCCP.
The relevant documentation could, for example, include but is not
limited to any information showing the official adoption of the
national benchmark by the appropriate officials and how that was
communicated to the appropriate staff. We propose creating a specific
Web page to make locating the information easy for contractors;
moreover, updating the information is the responsibility of OFCCP and
not the contractors.
The one-time burden for using the national benchmark is 12,846
hours (154,147 contractor establishments x 5 minutes/60 = 12,846
hours). The burden for maintaining the relevant documentation is 12,846
hours (154,147 contractor establishments x 5 minutes/60 = 12,846
hours).
OFCCP further estimates that it will take the remaining 10 percent
of contractors 2 hours to establish their own benchmark and 15 minutes
to maintain documentation demonstrating how the benchmark was
determined. We expect that this type of documentation would ordinarily
be generated during the process of establishing the contractor's
benchmark and obtaining its approval by the appropriate internal
officials. The amount of detail included in this documentation remains
in the discretion of the contractors, but OFCCP suggests that the
documentation provide adequate information as to how the benchmark was
developed, approved and communicated to the appropriate officials and
staff. The one-time burden for these contractors is 34,256 hours
(17,128 contractor establishments x 2 hours = 34,256 hours). The burden
for maintaining the associated documentation is 4,282 hours (17,128
contractor establishments x 15 minutes/60 = 4,282 hours). The total
cost for this provision is approximately $2,404,914.
Assuming that 251,300 establishments would be impacted by the final
rule, one-time burden for using the national benchmark would be 37,695
hours (226,170 contractor establishments x 10 minutes/60 = 37,695
hours). The burden for contractors that choose to establish their own
benchmarks would be 56,543 hours (25,130 contractor establishments x
2.25 hours = 34,256 hours). The total cost for this provision would be
$3,528,516.
[[Page 58654]]
Veterans make up 7.25 percent of the employed population.\35\ Under
the rule, contractors have the option of establishing their own
benchmark for employing protected veterans or meeting a benchmark set
by OFCCP, currently 8 percent. Assuming all contractors will choose to
meet the OFCCP benchmark, OFCCP estimates that Federal contractors
would need to hire an additional 205,500 protected veterans.\36\ This
amounts to approximately one veteran per establishment or three
veterans per company. According to research conducted by the Job
Accommodation Network (JAN), employers in the study reported that a
high percentage (57 percent) of accommodations cost absolutely nothing.
For the remaining 43 percent, the typical cost of providing a
reasonable accommodation was approximately $500.\37\ Assuming that
disabled veteran hiring will be consistent with their share of the
disabled labor force that consists of individuals with disabilities,
then we estimate that 36,330 veterans with disabilities may need
accommodations with a total cost of $19,010,209 in the year the target
is met and $8,037,516 in recurring costs. The cost of providing these
reasonable accommodations is included in the cost of this rule.
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\35\ Calculation based on unpublished table, Employment status
of persons 18 years and over by veteran status, period of service,
sex, race, Hispanic or Latino ethnicity, and disability status,
Annual Average 2012 (Source: Current Population Survey). (10,233/
141,050)*100=7.25%. The table is available on request from the
Bureau of Labor Statistics at the Department of Labor. BLS does not
release some tables for a variety of reasons, such as sample size or
possibility of confusion. Finally, this estimate includes all
veterans, not only the protected veterans.
\36\ Based on data from the Bureau of Labor Statistics Quarterly
Census of Employment and Wages, OFFCP estimates that approximately
27.4 million employees could be affected.
\37\ Job Accommodation Network, ``Workplace Accommodations: Low
Cost, High Impact,'' Sept. 1, 2012. Accommodation and Compliance
Series, http://askjan.org/media/lowcosthighimpact.html (last
accessed Aug. 9, 2013).
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9. Section 60-300.60 Compliance Evaluations
The proposed rule set forth several changes to the process the
contractor and OFCCP will follow in conducting compliance evaluations.
The NPRM added a sentence to paragraph 60-300.60 (a)(1)(i) regarding
the temporal scope of desk audits performed by OFCCP, stating that
OFCCP ``may extend the temporal scope of the desk audit beyond that set
forth in the scheduling letter if OFCCP deems it necessary to carry out
its investigation of potential violations of this part.'' The final
rule adopts this proposal. No burden is created by this provision, as
it merely clarifies existing agency policy to ensure that it is
understood and interpreted correctly.
The NPRM, in Sec. 60-300.60(a)(2), proposed correcting an error in
the existing regulations in this paragraph, changing the reference from
the ``requirements of the Executive Order'' to the ``requirements of
Section 4212.'' The final rule adopts this proposal and replaces the
reference to ``Section 4212'' with ``VEVRAA.'' No burden is created by
this change.
Sections 60-300.60(a)(3) and (a)(4) in the NPRM revised these two
paragraphs to allow OFCCP to review documents pursuant to a compliance
check and conduct focused reviews either on-site or off-site, at
OFCCP's option. The proposals are adopted in the final rule but no
burden is created.
The NPRM proposed adding a new paragraph (d) to Sec. 60-300.60
detailing a new procedure for pre-award compliance evaluations under
VEVRAA, much like the procedure that currently exists in the Executive
Order regulations (see 41 CFR 60-1.20(d)). This proposal is adopted in
the final rule without creation of additional burden.
10. Section 60-300.80 Recordkeeping
Section 60-300.80 describes the recordkeeping requirements that
apply to contractors under VEVRAA. The final rule also eliminates the
recordkeeping requirements for referral data under the proposed
paragraph 5 of the EO Clause and Sec. 60-300.44(k). Consequently, we
assess no burden for these provisions.
The final rule includes a three-year recordkeeping requirement,
rather than the proposed five-year requirement, for Sec. Sec. 60-
300.44(f)(4), 60-300.44(k), and 60-300.45(c). No new burden is assessed
under this section because it is carried under the burden assessed for
Sec. Sec. 60-300.44(f)(4) and 60-300.44(k) and the contractors benefit
from the economy of scale. In that section, we determined that no new
software needs are anticipated; however, a software switch or
configuration may be required to tell the system to retain the records
for the additional time period.
11. Section 60-300.81 Access to Records
Section 60-300.81 of the final rule requires contractors to specify
all available records formats and allow OFCCP to select preferred
record formats from those identified by the contractor during a
compliance evaluation. OFCCP completed 4,014 compliance evaluations in
Fiscal Year 2011. We estimate fewer evaluations for Fiscal Year 2012.
Upon request, the contractor must provide OFCCP information about all
format(s), including specific electronic formats, in which the
contractor maintains its records and other information. No burden is
assessed as there are no recordkeeping or document production
requirements.
Commenters criticized the proposal to allow OFCCP access to records
off-site, particularly as it relates to the security of confidential
records. The final rule retains the proposed requirement to provide
OFCCP off-site access to materials by request. However, OFCCP modified
Sec. 60-300.81 of the final rule in response to comments regarding
record confidentiality.
12. Appendix A, Guidelines on Reasonable Accommodation
We received one comment from an employer association that asserted
contractors would have a burden if they were to be assessed liability
and costs associated with accommodations to be determined by employees.
Although an individual's preference for a particular reasonable
accommodation should be given primary consideration, a contractor is
not obligated to provide an employee with the accommodation of his or
her choice, as long as the accommodation the contractor provides is
effective. Nor does a contractor have to provide an employee with an
accommodation that would impose an undue hardship on its operations,
create a ``direct threat'' for the employee or others, or result in a
violation of another Federal law. Accordingly, no additional burden is
created as asserted by the commenter.
Appendix A is incorporated into the final rule as proposed, with
small changes to update the references to specific accommodations to
reflect current technology and terminology (such as replacing the
reference to ``telecommunication devices for the deaf (TDD)'' with the
more current ``text telephones (TTYs),'' and including modern
technology such as speech activated software, and as set forth in the
discussion of paragraph 9 of the EO Clause in Sec. 60-300.5).
Consistent with the change to Sec. 60-300.42(c), we also deleted the
words ``and wish to benefit under the contractor's affirmative action
program'' from paragraph 1. Because it does not contain new
requirements there is no burden associated with Appendix A.
13. Initial Capital or Start-up Costs
Human Resource Information Systems
Several commenters noted that the new data collection requirements
in the
[[Page 58655]]
proposed rule would require modifications to existing human resources
information systems (HRIS). In order to estimate the start-up costs for
the final rule, OFCCP considered what would be required to modify
existing HRIS to track the number of protected veteran applicants and
hires. Because contractors must already maintain information on their
employees by race/ethnicity and sex, contractors should have some
mechanism in place to track the newly required information.
OFCCP assumes that modifications to contractor HRIS will be done at
the parent company level. The minimum cost for modifying HRIS is based
on the estimate that 72 percent of contractors utilize this kind of
electronic system.\38\ Based on information from IT professionals,
OFCCP estimates it would take each contractor company on average 20
hours to make the needed systems modifications to track applicant and
hiring information for protected veterans. This includes IT and
administrative professionals to make the changes. The estimated costs
for these modifications are based on data from the Bureau of Labor
Statistics in the publication ``Employer Costs for Employee
Compensation'' (September 2011), which lists total compensation for a
professional of $47.21 per hour. Therefore, the minimum estimated
burden for the capital and start-up costs is 666,340 hours (33,317
contractor companies x 20 hours = 666,340 hours). We calculate the
total minimum estimated start-up costs as $31,457,911.40 (666,340 hours
x $47.21/hour = $31,457,911.40) or $944 per parent company. Assuming
all contractor companies utilize HRIS, the maximum burden would be
919,920 hours (45,996 contractor companies x 20 hours = 919,920 hours).
We calculate the total maximum estimated start-up costs as $43,429,423
(919,920 hours x $47.21/hour = $43,429,423) or $944 per parent company.
---------------------------------------------------------------------------
\38\ Utilizing EEO-1 data, OFCCP estimates that 72 percent of
regulated contractor companies have greater than 100 employees and
will likely use an electronic human resources system.
---------------------------------------------------------------------------
Assuming there are 251,300 establishments in OFCCP's jurisdiction,
or 67,919 companies, the minimum estimated burden for the capital and
start-up costs would be 978,020 hours (48,901 contractor companies x 20
hours = 978,020 hours). The total minimum estimated start-up costs
would be $46,172,324 (978,020 hours x $47.21/hour = $46,172,324) or
$944 per parent company. Assuming all contractor companies utilize
HRIS, the maximum burden would be 1,358,380 hours (67,919 contractor
companies x 20 hours = 1,358,380 hours). We calculate the total maximum
estimated start-up costs as $64,129,120 (1,358,380 hours x $47.21/hour
= $64,129,120) or $944 per parent company.
5 CFR 1320.3(b)(1)(i)--Reviewing Instructions
Several commenters noted that the proposed rule did not quantify
the burden of reading and understanding the VEVRAA revisions on
contractors. OFCCP acknowledges that 5 CFR 1320.3(b)(1)(i) requires
agencies to include in the burden analysis for new information
collection requirements the estimated time it takes for contractors to
review and understand the instructions for compliance. In order to
minimize the burden, OFCCP will publish several compliance assistance
materials including factsheets and ``Frequently Asked Questions.''
OFCCP will also host webinars for the contractor community that will
describe the key provisions in the final rule.
OFCCP estimates it will take, at a minimum, 1 hour to have a
management professional at each establishment either read compliance
assistance materials provided by OFCCP or participate in an OFCCP
webinar to learn about the new requirements of the final rule. OFCCP
believes that this is a reasonable estimate since there are
substantially fewer new requirements in the final rule than proposed in
the NPRM. The estimated cost of this burden is based on data from the
Bureau of Labor Statistics in the publication ``Employer Costs for
Employee Compensation'' (September 2011), which lists total
compensation for a management professional at $50.11. Therefore, the
estimated burden for rule familiarization is 171,275 hours (171,275
contractor establishments x 1 hour = 171,275 hours). We calculate the
total estimated minimum start-up costs as $8,582,590 (171,275 hours x
$50.11/hour = $8,582,590) or $50 per establishment.
Commenters suggested that reviewing the requirements of the final
rule would take up to 6 hours. OFCCP declines to adopt this calculation
since it is based reviewing the proposed rule which included a
significant number of additional requirements that are not in the final
rule. Therefore, OFCCP estimates the maximum for reviewing the rule
would be 4 hours for a total of 685,100 (171,275 contractor
establishments x 4 hour = 685,100 hours). We calculate the total
maximum estimated start-up costs as $34,330,361 (685,100 x $50.11/hour
= $34,330,361) or $200 per establishment.
Assuming there are 251,300 establishments impacted by the final
rule, the estimated minimum burden for the capital and start-up costs
would be 251,300 hours (251,300 contractor establishments x 1 hour =
251,300 hours). The total estimated minimum costs would be $12,592,643
(251,300 hours x $50.11/hour = $12,592,643) or $50 per establishment.
OFCCP estimates the maximum for reviewing the rule would be 4 hours for
a total of 1,005,200 hours (251,300 contractor establishments x 4 hour
= 1,005,200 hours). The total maximum estimated maximum costs would be
$50,370,572 (1,005,200 hours x $50.11/hour = $50,370,572) or $200 per
establishment.
Operations and Maintenance Costs
OFCCP estimates that the contractor will have some operations and
maintenance costs in addition to the burden calculated above.
60-300.42 Invitation to Self Identify
OFCCP estimates that the contractor will have some operations and
maintenance costs associated with the invitations to self-identify. The
contractor must invite all applicants to self-identify at both the pre-
offer and post-offer stage of the employment process. Given the
increasingly widespread use of electronic applications, any contractor
that uses such applications to invite self-identification would not
incur copy costs. However, to account for contractors who may still
choose to use paper applications, we are including printing and/or
copying costs. Therefore, we estimate a single one page form for both
the pre- and post-offer invitation. The final rule reduced the number
of forms to one instead of two to make the self-identification process
less paperwork intensive and to reduce costs. We also estimate an
average copying cost of $.08 per page. Assuming contractors using a
paper-based application system, used 15 applications for an average of
15 listings per establishment, the minimum estimated total cost to
contractors will be $616,590 (34,255 establishments x 225 copies x $.08
= $616,590). Assuming contractors using a paper-based application
system, used 33 applications for an average of 15 listings per
establishment, the maximum estimated cost to contractors will be
$1,356,498 (34,255 establishments x 495 copies x $.08 = $1,356,498).
Assuming that 50,260 of 251,300 establishments with a paper-based
application system, used 15 applications for an average of 15 listings
per establishment, the minimum
[[Page 58656]]
estimated total cost to contractors will be $904,680 (50,260 contractor
establishments x 225 copies x $.08 = $904,680). Assuming contractors
using a paper-based application system, used 33 applications for an
average of 15 listings per establishment, the maximum estimated cost to
contractors will be $1,990,296 (50,260 contractor establishments x 495
copies x $.08 = $1,990,296).
D. Summary of Benefits
OFCCP's analysis of the benefits of this proposal emphasizes the
non-monetary benefits. Pursuant to Executive Order 13563, agencies
``may consider (and discuss qualitatively) values that are difficult or
impossible to quantify, including equity* * *'' in their analysis of
the costs and benefits of a proposed regulation. E.O. 13563 Sec. 1(c).
As revised, the final rule creates a number of benefits that will
further the equal employment opportunity and affirmative action
objectives of VEVRAA. First, the final rule will facilitate the
connection of job-seeking veterans with contractors looking to hire.
The final rule clarifies the mandatory job listing requirements and
requires the contractor to provide additional, regularly updated
information to employment service delivery systems to ensure its job
openings are listed accurately. This clarification will help to ensure
that veterans can easily learn about all available jobs with Federal
contractors in their state.
Second, the final rule will ensure that the contractor understands
and effectively communicates its affirmative action obligations to its
workforce and the other entities with which it does business. This, in
turn, will facilitate a greater understanding of the purpose of the
affirmative action policies among the contractor's employees and
business associates and promote their active support for the
contractor's affirmative action efforts.
The final rule also provides increased tools with which the
contractor can assess its affirmative action efforts. Until now, the
contractor had few objective criteria by which it could measure the
effectiveness of its affirmative action efforts. To that end, the final
rule requires the contractor to collect data that will enable the
contractor and OFCCP to more accurately assess the contractor's
efforts. This includes collecting data about applicants so the
contractor knows how many protected veterans it is reaching. The final
rule also calls for the establishment of a benchmark that can serve as
a tool to help the contractor objectively evaluate its recruitment
efforts and determine which ones are fruitful in attracting qualified
protected veteran candidates, and which ones need to be changed.
Finally, the final rule modifies requirements regarding the manner
in which OFCCP conducts its compliance reviews of contractor
establishments. These changes include a greater emphasis on OFCCP
review of available electronic data, greater flexibility in where
reviews take place, and a new procedure for a pre-award compliance
review like that currently contained in the EO 11246 regulations. These
revisions will allow OFCCP to conduct contractor compliance reviews far
more efficiently.
E. Conclusion
OFCCP concludes in the final regulatory impact analysis that the
costs of the final rule will range and likely exceed $100 million
annually. The variations in costs depend on the number of
establishments impacted by the final rule and applicants who respond to
the pre-offer invitation to self-identify. Costs will also vary by
company depending on their existing infrastructure. We estimate that
the lower end costs would be $177,296,772 assuming that there are
approximately 171,275 establishments impacted by the final rule. The
lower end estimate also relies on the assumption that many of these
establishments have some form of electronic application and human
resources information systems that would make complying with the rules
requirements more efficient. The higher end estimate of $483,560,138
assumes that there are 251,300 establishments impacted by the final
rule. The higher end further assumes that a portion of those
contractors, primarily smaller ones with fewer employees, would have to
expend more personnel time complying with the rules requirements.
Therefore, the rule will have a significant economic impact. However,
OFCCP believes that the final rule will have extensive benefits for
veterans who are prospective and current employees of Federal
contractors and Federal contractors. As such, OFCCP concludes that the
benefits of the rule justify the costs.
Regulatory Flexibility Act and Executive Order 13272 (Consideration of
Small Entities)
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
requires agencies promulgating rules to consider the impact they are
likely to have on small entities. More specifically, the RFA requires
agencies to ``review rules to assess and take appropriate account of
the potential impact on small businesses, small governmental
jurisdictions, and small organizations.'' If a rule is expected to have
a ``significant economic impact on a substantial number of small
entities,'' the agency must prepare an initial regulatory flexibility
analysis (IRFA). If, however, a rule is not expected to have a
significant economic impact on a substantial number of small entities,
the agency may so certify, and need not perform an IRFA.
Based on the analysis below, in which OFCCP has estimated the
impact on small entities that are covered contractors of complying with
the requirements contained in this rule, OFCCP certifies that this rule
will not have a significant economic impact on a substantial number of
small entities.
In making this certification, OFCCP first determined the
approximate number of small regulated entities that would be subject to
the rule. OFCCP's review of the FY 2009 EEO-1 data revealed that the
final rule directly impacts 20,490 Federal contractors with between 50
and 500 employees.\39\ OFCCP also analyzed the number of small entities
impacted by the rule as compared to the agency's entire universe of
regulated entities of approximately 45,996 Federal contractors.\40\
OFCCP estimates that approximately 44 percent of the total number of
Federal contractors, or 20,490, are small entities with between 50 and
500 employees. OFCCP further refined the analysis to compare the
impacted small entities to just the universe of 21,541 small entities
in OFCCP's jurisdiction. Under this scenario, approximately 95 percent
of small entities would be impacted by the requirements of the rule.
Utilizing these comparisons, the final rule may have an impact on a
substantial number of small entities.
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\39\ The Small Business Administration (SBA) Office of Advocacy
reports that there are 27.4 million small entities in the United
States. Since Federal contracts are not limited to specific
industries, OFCCP assessed the impact of this final rule on small
entities overall. If OFCCP used this approach, the final rule will
impact less than .07% of non-employer firms and .34% of employer
firms nationwide.
\40\ The EEO-1 data base separately identifies contractor
entities (companies) and the facilities that comprise them. The
FPDS-NG data base, by contrast, identifies contractor facilities,
but does not identify the larger entities of which they are a part.
OFCCP utilized the ratio (approximately 3.7) of parent companies to
number of establishments from the EEO-1 data to determine that among
the universe of 171,275 establishments there are approximately
45,996 Federal contractor companies.
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OFCCP has determined, though, that the impact on entities affected
by the
[[Page 58657]]
final rule would not be significant. In order to further inform our
analysis of the economic impact of this rule on small entities, we
considered the cost impact of the rule on 2 sizes of entities. We
estimated the compliance costs of the final rule on Federal contractors
with 50 to 100 employees and 100 to 500 employees. Contractors with
less than 50 employees will not be subject to the new affirmative
action requirements in subpart C of the final rule. OFCCP's analysis of
the impact on small entities compared the estimated cost of compliance
with the final rule for small entities to the estimated annual receipts
of these entities as provided by the SBA. If the estimated compliance
costs are less than 1 percent of the estimated revenues, OFCCP
considers it appropriate to conclude that there is no significant
economic impact.\41\
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\41\ Id. at 18: ``The impact could be significant if the costs
of compliance with the rule ``exceeds 1% of the gross revenues of
the entities in a particular sector.''
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Contractors with 50-100 Employees
We estimate the first year cost of this rule to a contractor with
50 to 100 employees to be approximately $1536. The first year cost of
the rule is the year with the highest compliance cost as the contractor
is incurring the start-up costs of the rule. This primarily includes
the time contractors will expend reviewing the new requirements of the
rule and the costs of any reasonable accommodations provided to newly
hired disabled veterans.
In order to estimate the cost of this rule on an entity with 50 to
100 employees, we are applying the same type of compliance cost
structure previously described in the above cost analysis. However, for
this small contractor, we assume they would have a manual application
process and not require costly human resources information systems
changes. We further assume these contractors would expend: 3 hours
manually conducting the data analysis required by the new 41 CFR 60-
300.44(k); 2 hours establishing their own benchmark; 4 hours having a
manager review the new requirements of the rule; and incur
approximately $40 in copying costs in order to print out the newly
required pre-offer invitation to self-identify for applicants. This
also includes a cost of approximately $1,000 for providing reasonable
accommodation to two newly hired disabled veterans.\42\
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\42\ To close the current gap that exists between the target
rate of employment as proposed in VEVRAA for veterans and the actual
rate, firms would need to hire an additional 205,000 veterans. This
amounts to approximately 1 veteran per establishment or 3 veterans
per company, assuming 251,300 establishments and 67,919 companies.
Moreover, 14.21% of disabled workers in the labor force are
veterans. According to research conducted by the Job Accommodation
Network (JAN), employers in the study reported that a high
percentage (57%) of accommodations cost absolutely nothing. For the
remaining 43%, the typical cost of providing a reasonable
accommodation was approximately $500.
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Utilizing data from the SBA Office of Advocacy regarding average
receipts for firms, OFCCP determined that entities with 50 to 100
employees average receipts of approximately $14,079,844 per year.\43\
The $1,536 costs of compliance with the final rule in the first year
would be approximately .01 percent of the average value of receipts for
these entities. Therefore, there is not a significant economic impact
on contractors with 50 to 100 employees.
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\43\ In order to calculate this figure, OFCCP averaged the total
receipts of firms with 50 to 99 employees provided by the SBA,
Office of Advocacy. See Firm Size Data, available at www.sba.gov/advo/research/data.html#us. Since the data was issued in 2007, OFCCP
utilized a compound 2007-2008 Consumer Price Index inflation rate
equaling 6.8% (1.0285 x 1.0385) to calculate the 2009 average
receipts of $14,079,844 per year.
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Contractors with 100-500 Employees
We estimate the first year cost of this rule to contractors with
100 to 500 employees to be approximately $2,518. The first year cost is
the year with the highest compliance cost as the contractor is
incurring the start-up costs of the rule. The start-up for contractors
with 100 to 500 employees primarily includes modifying any existing
web-based application and human resources information systems to
include the pre-offer invitation to self-identify, becoming familiar
with the new requirements of the rule, and providing reasonable
accommodations to any newly hired disabled veterans.
In order to estimate the cost of this rule on contractors with 100
to 500 employees, we are applying the same type of compliance cost
structure previously described in the above cost analysis. However, for
this small contractor, we assume they may incur more costs analyzing
data, establishing benchmarks, and modifying human resources
information systems. Specifically, we assume these contractors would
expend: 3 hours manually conducting the data analysis required by the
new 41 CFR 60-300.44(k); 2 hours establishing their own benchmark; 4
hours having a manager review the new requirements of the rule; and
incur approximately $40 in copying costs in order to print out the
newly required pre-offer invitation to self-identify for applicants. We
further assume these contractors will spend approximately $994
modifying their human resources information systems to accommodate the
new pre-offer invitation to self-identify. OFCCP estimates that these
contractors would spend approximately $1,000 providing reasonable
accommodations to approximately two newly hired disabled veterans.
Utilizing data from the SBA Office of Advocacy regarding average
receipts for firms, OFCCP determined that entities with 100 to 500
employees average receipts of approximately $43,547,170 per year.\44\
The $2,518 costs of compliance with the final rule in the first year
would be approximately .005 percent of the average value of receipts
for these entities. Therefore, there is not a significant economic
impact on contractors with 50 to 500 employees.
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\44\ In order to calculate this figure, OFCCP averaged the total
receipts of firms with 100 to 499 employees provided by the SBA,
Office of Advocacy. See Firm Size Data, available at www.sba.gov/advo/research/data.html#us. Since the data was issued in 2007, OFCCP
utilized a compound 2007-2008 Consumer Price Index inflation rate
equaling 6.8% (1.0285 x 1.0385) to calculate the 2009 average
receipts of $43,547,170 per year.
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Notwithstanding our determination that there is not a significant
impact as a result of this rule, OFCCP considered and implemented a
number of alternatives in the final rule as compared to what was
proposed in the NPRM. As noted in the preamble, the final rule no
longer requires linkage agreements, increased review of personnel
processes, increased review of physical and mental job qualifications,
and prescribed training on the nondiscrimination and affirmative action
obligations for veterans. These changes were made in large part to
substantially decrease the burden on small entities.
The significant benefits to covered veterans, as well as to
contractors, are discussed extensively in the Section-by-Section and
Executive Order 12866 analyses of the final rule. Although the primary
objective of the final rule is to strengthen the affirmative action
requirements of VEVRAA to employ and advance in employment protected
veterans, the rule will benefit both veterans and contractors. As
modified, the final rule provides contractors mechanisms for collecting
data on protected veteran applicants and employees and promotes
accountability by requiring contractors to review the effectiveness of
their affirmative action efforts. The benefits of proactive recruitment
particularly will accrue to veterans who may face significant barriers
in returning to civilian employment. The revisions will also
[[Page 58658]]
promote access to a well-trained, job-ready employment pool for
contractors.
Paperwork Reduction Act
DATES: Effective Date: This final rule is effective ------.
Compliance Dates: Affected parties do not have to comply with the
new information collection requirements in Sec. Sec. 60-300.5(a)(4);
60-300.42; 60-300.44(f)(4); 60-300.44(g)(3); 60-300.44(k); 60.300.45;
and 60-300.80(a) (requirement to maintain records under sections 60-
300.44(f)(4), 60-300.44(k), and 60-300.45(c)) until the Department
publishes a Notice in the Federal Register stating that the Office of
Management and Budget (OMB) has approved these information collection
requirements under the Paperwork Reduction Act of 1995 (PRA), or until
this rule otherwise takes effect, whichever date is later.
The Department notes that no person is required to respond to a
collection of information request unless the collection of information
has a valid OMB Control Number. The new collections of information
contained in this rulemaking have been submitted for review to OMB, in
accordance with the PRA, under Control Number 1250-0004. That review is
ongoing; consequently, the Control Number has not been activated. OFCCP
will publish a Notice in the Federal Register announcing the results of
OMB's review and the date the information collection requirements will
take effect.
The information collection requirements in this final rule relate
to the information required to be maintained by contractors regarding
their nondiscrimination and affirmative action obligations concerning
protected veterans and disclosures workers may make to their employers.
Sections 60-300.40 through 60-300.44 contain currently approved
collections of information. Section 60-300.40 requires contractors with
50 or more employees (and contracts of $100,000 or more entered into or
modified after December 1, 2003, as set forth in Sec. 60-300.1(b)) to
develop a VEVRAA affirmative action program. An affirmative action
program is a written program in which contractors annually outline the
steps the contractor will take and has already taken to ensure equal
employment opportunity for protected veterans. Section 60-300.41
describes a contractor's responsibility to make the affirmative action
program available to all employees. Section 60-300.42 outlines the
contractor's responsibilities and the process through which applicants
are invited to self-identify as a veteran protected under the part 60-
300 regulations. Section 60-300.43 describes the breadth of the
contractor's affirmative action obligation required by VEVRAA.
Section 60-300.44 outlines the required contents of the affirmative
action program. Contractors must develop and include an equal
opportunity policy statement in the program. Contractors must also
periodically review their personnel processes to ensure that qualified,
protected veterans are provided equal opportunity and that the
contractor is engaged in outreach to recruitment sources. Further,
contractors must develop procedures for disseminating the policy
internally and externally and establish an audit and reporting system
to measure the effectiveness of the affirmative action program.
The currently approved collections of information for these
sections are OMB Control Numbers 1250-0001 (construction) and 1250-0003
(supply and service).\45\ Information collection package 1250-0001
covers the construction aspects of OFCCP's EO 11246, VEVRAA, and
section 503 programs. The construction information collection package
estimates that first-time contractors will take 18 hours to develop and
document a joint section 503/VEVRAA written affirmative action program.
It estimates that existing contractors take 7.5 hours to document and
maintain material evidence of annually updating the affirmative action
program. These estimates are based on previously approved information
collection requests that quantified the estimated time to develop and
maintain a joint section 503/VEVRAA written affirmative action program.
Information collection 1250-0003 covers the supply and service aspects
of OFCCP's program. This package outlines the burden required for
contractors to develop and maintain an affirmative action program for
women and minorities based on the contractor's number of employees, and
also references the current VEVRAA requirements. The burden for first-
time contractors to develop a written affirmative action program is
between 73 and 186 hours. The burden for all other contractors to
maintain documentation of annually updating the affirmative action
program is between 18 and 105 hours. The VEVRAA portion of these
information collections will be eliminated from these control numbers
once the final rule becomes effective.
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\45\ OMB Control Number 1250-0001 for construction is approved
through December 31, 2014. OMB Control Number 1250-0003 is currently
on a month-to-month renewal and is approved through April 30, 2012.
---------------------------------------------------------------------------
Paperwork Burden Hours and Related Costs
OFCCP's new information collection request under Control Number
1250-0004 for VEVRAA includes the burden hours and costs for the
existing regulations and the new information collection requirements
outlined in the final rule. This presentation separately states
existing requirements currently approved under other OMB Control
Numbers that will now be included under the 1250-0004 Control Number.
A. Number of Respondents
In light of the comments received on the VERAA NPRM regarding the
``Federal contractor establishment universe, OFCCP reexamined the
original number of 108,288 contractor establishments it used in the
NPRM. For the final rule and this information collection request, we
combined Equal Employment Data System (EEDS) data with several other
information sources.\46\ We used FY 2009 EEDS data to determine the
number of Federal contractor establishments with 50 or more employees;
this resulted in a total of 87,013 Federal contractor
establishments.\47\ An additional 10,518 establishments were identified
through a cross-check of other contractor databases for a total of
97,531 establishments. Covered Federal contractors must develop AAPs
for all of their establishments, even those with fewer than 50
employees. Therefore, OFCCP added an additional 73,744 establishments,
using EEO-1 and FPDS data, for an adjusted total of 171,275 Federal
contractor establishments affected by the final rule. This adjustment
to the methodology for calculating the number of contractors and
contractor establishments results in a 58 percent increase over the
earlier estimate used in the NPRM.
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\46\ OFCCP determined that the VET-100 database is not the most
appropriate resource for calculating the number of federal
contractors and contractor establishments. Among the concerns
surrounding this data source are the use of contractor established
12-month reporting timeframes, the degree to which there is overlap
or duplication in the VETS-100 and VETS-100A reports, and the
absence of an employee threshold for reporting purposes.
\47\ A single firm, business, or ``entity'' may have multiple
establishments or facilities. Thus, the number of contractor
establishments or facilities is significantly greater than the
number of parent contractor firms or companies.
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However, OFCCP received comments on the estimated number of
contractor establishments as well, including recommending an
establishment count of 285,390 using the Veterans
[[Page 58659]]
Employment Training Services (VETS) annual report. While OFCCP declines
to exclusively rely on the VETS report number, we present an estimated
high end for the range of the cost of the rule based on a contractor
establishment number of 251,300. This number is based on 2010 VETS data
from their pending information collection request.\48\
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\48\ OMB Control Number 1293-0005, Federal Contractor Veterans'
Employment Report, VETS-100/VETS-100A, http://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201104-1293-003 (last accessed
Aug. 13, 2013).
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For the purposes of this information collection request, OFCCP
averaged the 171,275 and 251,300 establishment figures to come up with
a total of 211,287 establishments that will have to respond to the
information collection requirements. All costs and hours in the burden
analysis of this final rule are calculated using this adjusted number
of Federal contractor establishments. Further, the burden for several
information collection requirements in the final rule is presented in
ranges. These estimates are also averaged for this information
collection request.
B. Information Collections
Section 60-300.5 Equal Opportunity Clause
Paragraph 2 of the Equal Opportunity Clause (EO Clause) requires
contractors to list their job openings with the state or local
employment service delivery system (employment service). OFCCP
estimates that gathering records and providing the job listing to the
employment service will take 25 minutes for approximately 15 listings
per year. The burden for this third-party disclosure is 1,320,544 hours
(211,287 contractor establishments x 25 minutes x 15 listings/60 =
1,320,544 hours). This is a third-party disclosure.
Paragraph 4 of the EO Clause requires contractors to provide the
appropriate employment service with the name and location of each of
the contractor's hiring locations, a statement of its status as a
Federal contractor, the contact information for the hiring official at
each location in the state, and a request for priority referrals of
protected veterans. Paragraph 4 also requires contractors that use job
search organizations to provide the employment service with the contact
information for each job search organization. OFCCP estimates a total
of 15 minutes to ensure that the information newly required by this
regulation is provided to the employment service. The annual burden for
this provision is 52,822 hours (211,287 contractor establishments x 15
minutes/60 = 52,822 hours). OFCCP further estimates that 25 percent of
contractors, or 52,821, will use outside job search organizations and
incur an additional 5-minute burden to notify the employment service of
the contact information for its outside job search organizations. The
annual burden for this provision is 4,402 hours (52,821 contractor
establishments x 5 minutes/60 = 4,402 hours). This is a third-party
disclosure.
Section 60-300.42 Invitation to Self-Identify
Section 60-300.42(a) requires contractors to extend a pre-offer
invitation to self-identify as a ``protected veteran.'' OFCCP estimates
that contractors working at the company level will take 1.5 hours to
review and retrieve existing sample invitations to self-identify, adopt
the sample ``as is'' or make revisions to their existing form, save the
invitation to self-identify and incorporate the document in the
contractor's application form. The burden for this provision is 85,656
hours (57,104 contractor companies x 1.5 hours = 85,656 hours).
Applicants for available positions with covered Federal contractors
will have a minimal burden complying with Sec. 60-300.42(a) in the
course of completing their application for employment with the
contractor. Section 60-300.42(a), on pre-offer self- identification,
requires contractors to invite all applicants to self-identify whether
or not they are a protected veteran. OFCCP estimates that there will be
an average of 24 applicants per job vacancy for on average 15 vacancies
per year. OFCCP further estimates that it will take applicants
approximately 5 minutes to complete the form. The burden for this
provision is 6,388,610 hours (211,287 contractor establishments x 15
listings x 15 applicants x 5 minutes/60 = 6,388,610 hours). This a
third-party disclosure.
Section 60-300.44 Required Contents of the Affirmative Action Program
OFCCP estimates that it takes existing contractors, or 209,174,
approximately 7.5 hours to document and maintain material evidence of
annually updating a joint section 503 and VEVRAA affirmative action
program. The burden for this requirement is 1,568,805 hours (209,174
contractor establishments x 7.5 hours = 1,568,805 hours).
OFCCP estimates that 1 percent of all contractors, or 2,112, are
new contractors that will need to initially develop a joint section 503
and VEVRAA affirmative action program. OFCCP estimates that it takes
approximately 18 hours to document and maintain material evidence of
developing the program. Therefore, the recordkeeping burden for this
provision is 38,016 hours (2,112 contractor establishments x 18 hours =
38,016 hours).
Section 60-300.44(f) External Dissemination of Policy, Outreach and
Positive Recruitment
Section 60-300.44(f)(1)(ii) of the final rule requires contractors
to send written notification of the company's affirmative action
program policies to subcontractors, vendors, and suppliers. The
existing regulations recommend that contractors send written
notification of the company's affirmative action policies to
subcontractors, vendors, and suppliers. See 41 CFR 60-300.44(f)(6).
OFCCP estimates that contractors will take 15 minutes to prepare the
notification and send it to subcontractors, vendors, and suppliers, and
an additional 15 minutes to execute the email address changes in the
company's email system. Likewise, the burden for any information
technology assistance needed to send the written communication is
estimated at 15 minutes. The burden for this request is 158,465 hours
(211,287 contractor establishments x 45 minutes/60 = 158,465 hours).
Section 60-300.44(f)(4) of the final rule requires contractors to
document all activities it undertakes to comply with the obligations of
this paragraph, and retain these documents for a period of 3 years.
OFCCP estimates that it will take contractors 15 minutes to retain the
required documentation. Retaining these records means storing the
records generated either electronically or in hardcopy, consistent with
the contractor's existing business practices for how to store records.
The annual recordkeeping burden for this provision is 52,822 hours
(211,287 contractor establishments x 15 minutes/60 = 52,822 hour).
Section 60-300.44(h) Audit and Reporting System
Section 60-300.44(h)(1)(vi) requires contractors to document the
actions taken to meet the requirements of 60-300.44(h), as mandated in
the current regulations. OFCCP estimates that it will take contractors
10 minutes to document compliance with this existing provision to
create an audit and reporting system. Documentation may include, as an
example, the standard operating procedure of the system including roles
and responsibilities, and audit and reporting timeframes and
[[Page 58660]]
lifecycles. Because contractors are currently required to have an audit
and reporting system, it is expected that some documentation of the
process and operation of the system audit already exists. The annual
recordkeeping burden of this provision is 35,215 hours (211,287
contractor establishments x 10 minutes/60 = 35,215 hours).
Section 60-300.44(k) Data Collection and Analysis
Section 60-300(k) of the final rule requires contractors to collect
and analyze certain categories of data.
Based on feedback received from public comments expressing concerns
about the costs of modifying human resources information systems, OFCCP
believes that most contractors will have the capability to conduct the
required calculations electronically. However, some companies may have
to calculate this information manually. Therefore, OFCCP estimates that
the average time to conduct the analysis and maintain the relevant
documentation would be 1 hour 25 minutes. Relevant documentation could
include the report or other written documentation generated by the
calculations that explain the methodology, the data used, and the
findings and conclusions; the data used to conduct the calculations for
subsequent validation of the results; and other material used by the
contractor for the calculations. The recurring burden for this
provision is 299,233 hours (251,300 contractor establishments x 85
minutes/60 = 299,233 hours).
No new software needs are anticipated for compliance with section
60-300.44(k); however, a software switch or configuration may be
required to tell the system to retain the records for the additional
required time period. The estimated time needed for making this switch
is included with the burden estimate for section 60-300.44(f)(4).
Section 60-300.45 Benchmarks for Hiring
The final rule requires the contractor to establish benchmarks in
one of two ways. A contractor may use as its benchmark the national
average number of veterans in the civilian labor force, which OFCCP
will provide (and periodically update) on its public Web site. Or,
alternatively, the contractor may establish its own individual
benchmark using the five-factor method proposed in the NPRM (and
retained in the final rule) to develop a benchmark that fits the
company's specific needs. OFCCP estimates that it will take contractors
on average 10 minutes to maintain material evidence of compliance with
this provision. The burden of this provision would be 35,215 hours
(211,287 establishments x 10 minutes/60 = 35,215 hours).
Section 60-300.81 Access to Records
Section 60-300.81 of the final rule requires contractors who are
the subject of a compliance evaluation or complaint investigation to
specify all available record formats and allow OFCCP to select
preferred record formats from those identified by the contractor during
a compliance evaluation. Pursuant to 5 CFR 1320.4(a)(2), this
information collection is excluded from the PRA requirements because it
is related to an ``administrative action, investigation, or audit
involving an agency against specific individuals or entities.''
C. Summary of Costs
The estimated cost to contractors is based on Bureau of Labor
Statistics data in the publication ``Employer Costs for Employee
Compensation'' (September 2011), which lists total compensation for
management, professional, and related occupations as $50.11 per hour
and administrative support as $23.72 per hour. OFCCP estimates that 52
percent of the burden hours will be management, professional, and
related occupations and 48 percent will be administrative support.
Table 1--Total Burden for Sec. Sec. 60-300.5; 60-300.42; 60-300.44;
and 60-300.45
------------------------------------------------------------------------
------------------------------------------------------------------------
Recordkeeping Burden Hours................................. 2,029,395
Reporting Burden Hours..................................... 0
Third Party Disclosure Burden Hours........................ 7,960,499
------------
Total Burden Hours..................................... 9,989,894
------------------------------------------------------------------------
Table 2--Summary of Burden Hours and Costs for Contractors
------------------------------------------------------------------------
Existing requirements Burden hours Total
------------------------------------------------------------------------
EO Clause, Parag 2 (Mandatory 1,320,544 $49,444,855.52
Job Listing)...................
Current Existing Contractors 1,568,805 58,740,451.85
(Written Affirmative Action
Program).......................
Current New Contractors (Written 38,016 1,423,425.48
Affirmative Action Program)....
---------------------------------------
Total....................... 2,927,365 109,608,732.86
------------------------------------------------------------------------
New requirements Burden hours Burden costs
------------------------------------------------------------------------
EO Clause, Parag 4 (Mandatory 52,822 1,977,794.22
Job Listing)...................
EO Clause, Parag 4 (Mandatory 4,402 164,813.84
Job Listing)...................
300.42 (Invitation to Self- 85,656 2,342,234.35
Identify)......................
300.44(f)(1) (Notice to 158,465 5,933,382.66
Subcontractors, etc.)..........
300.44(f)(4) (Outreach and 52,822 1,977,794.22
Recruitment Recordkeeping).....
300.44(h) (Affirmative Action 35,215 1,318,529.48
Program Audit Recordkeeping)...
300.44(k) (Data Collection 299,323 11,207,500.59
Analysis)......................
300.45 (Benchmarks 35,215 1,318,529.48
Recordkeeping).................
---------------------------------------
Total....................... 3,651,284 135,849,311.71
------------------------------------------------------------------------
Table 3--Summary of Non-Contractor Burden Hours and Costs
------------------------------------------------------------------------
Existing requirement Burden hours Burden costs
------------------------------------------------------------------------
Section 60-300.42 (Self- 6,338,610 $190,855,547
Identification)......................
------------------------------------------------------------------------
[[Page 58661]]
The total estimated cost for applicants to fill out the self-
identification form is based on Bureau of Labor Statistics data in the
publication ``Employer Costs for Employee Compensation'' (September
2011), which lists an average total compensation for all civilian
workers as $30.11.
D. Initial Capital or Start-up Costs
Human Resources Information Systems
OFCCP estimates on average it will take each contractor, working at
the company level, on average 20 hours to have a professional make the
needed systems modifications to track applicant and hiring information
for protected veterans. This includes IT and administrative
professionals to make any necessary changes. The estimated costs for
these modifications are based on data from the Bureau of Labor
Statistics in the publication ``Employer Costs for Employee
Compensation'' (September 2011), which lists total compensation for a
professional of $47.21 per hour. The cost for these modifications is
$53,917,597 (57,104 contractor companies x $47.21 = $53,917,597).
5 CFR 1320.3(b)(1)(i)--Reviewing Instructions
Several commenters noted that the proposed rule did not quantify
the burden of reading and understanding the VEVRAA revisions on
contractors. OFCCP acknowledges that 5 CFR 1320.3(b)(1)(i) requires
agencies to include in the burden analysis for new information
collection requirements the estimated time it takes for contractors to
review and understand the instructions for compliance. In order to
minimize the burden, OFCCP will publish several compliance assistance
materials including factsheets and ``Frequently Asked Questions.''
OFCCP will also host webinars for the contractor community that will
describe the key provisions in the final rule.
OFCCP estimates it will take, on average, 2.5 hours to have a
management professional at each establishment either read compliance
assistance materials provided by OFCCP or participate in an OFCCP
webinar to learn about the new requirements of the final rule. The
estimated cost of this burden is based on data from the Bureau of Labor
Statistics in the publication ``Employer Costs for Employee
Compensation'' (September 2011), which lists total compensation for a
management professional at $50.11. Therefore, the estimated burden for
rule familiarization is 528,217 hours (211,287 contractor
establishments x 2.5 hours = 528,217 hours). We calculate the total
estimated cost for rule familiarization as $26,468,979 (528,217 hours x
$50.11/hour = $26,468,979).
Operations and Maintenance Costs
OFCCP estimates that the contractor will have some operations and
maintenance costs in addition to the burden calculated above.
60-300.42 Invitation to Self Identify
OFCCP estimates that the contractor will have some operations and
maintenance cost associated with the invitations to self-identify. The
contractor must invite all applicants to self-identify at both the pre-
offer and post-offer stage of the employment process. Given the
increasingly widespread use of electronic applications, any contractor
that uses such applications would not incur copy costs. However, to
account for contractors who may still choose to use paper applications,
we are including printing and/or copying costs. Therefore, we estimate
a single one page form for both the pre- and post-offer invitation.
Assuming contractors using a paper-based application system, used 24
applications for an average of 15 listings per establishment, the
minimum estimated total cost to contractors will be $1,217,002 (42,257
establishments x 360 copies x $.08 = $1,217,002).
E. Transfer of Burden From OMB Control Numbers 1250-0001 and 1250-0003
to 1250-0004
As a result of the final rule, the information collection
requirements of VEVRAA will be placed under a separate information
collection package. OMB Control Numbers 1250-0001 for the agency's
construction enforcement program and 1250-0003 for its supply and
service program currently include the annual burden hours and related
costs for the time contractors take to document the contents of the
written affirmative action program under VEVRAA. When the information
collection requirements in this Final Rule become effective, the
Department will submit non-substantive change requests for Control
Numbers 1250-0001 and 1250-0003 to reflect the fact that the VEVRAA
portions of burden hours and costs are included in this separate
information collection package, OMB Control Number 1250-0004.
These paperwork burden estimates are summarized as follows:
Type of Review: New collection.
Agency: Office of Federal Contract Compliance Programs, Department
of Labor.
Title: Vietnam Era Veterans' Readjustment Assistance Act of 1974,
as amended by the Jobs for Veterans Act of 2002, 38 U.S.C. 4212
(VEVRAA).
OMB ICR Reference Number: 1250-0004.
Affected Public: Business or other for-profit; individuals.
Estimated Number of Annual Responses: xxxx.
Frequency of Response: On occasion.
Estimated Total Annual Burden Hours: 9,989,894.
Estimated Total Initial and Other Costs: $408,308,436.
The estimated $408,308,436 is the total of the PRA costs resulting
from the existing requirements of part 60-300 and the new requirements
of this final rule.
Small Business Regulatory Enforcement Fairness Act of 1996
This rule is a major rule as defined by Section 804 of the Small
Business Regulatory Enforcement Fairness Act of 1996. This rule may
result in an annual effect on the economy of $100 million or more; a
major increase in costs or prices; or significant adverse effects on
competition, employment, investment, productivity, innovation, or on
the ability of the United States-based companies to compete with
foreign-based companies in domestic and export markets.
Unfunded Mandates Reform Act of 1995
For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532, this final rule includes a Federal mandate that may result in
excess of $100 million in expenditures in the private sector in any one
year. Accordingly, in compliance with 2 U.S.C. 1532, OFCCP provides the
following written statement. All references to other sections of this
final rule are incorporated by reference pursuant to 2 U.S.C. 1532(c).
(1) The final rule is authorized by the Vietnam Era Veterans'
Readjustment Assistance Act, as amended, 38 U.S.C. 4212.
(2) A qualitative and quantitative assessment of the anticipated
costs and benefits of this rule, including the costs and benefits to
the private sector, are set forth in the Regulatory Procedures section
of the final rule (specifically the sections describing Executive
Orders 12866 and 13563, the Regulatory Flexibility Act, and the
Paperwork Reduction Act) and the Section-by-Section Analysis in the
preamble to the final rule. OFCCP anticipates no effect of the final
rule on health, safety, and the natural environment not otherwise
[[Page 58662]]
discussed in the sections set forth above.
(3) Estimates of future compliance costs are set forth in the
Regulatory Procedures section of the final rule (specifically the
sections describing Executive Orders 12866 and 13563, the Regulatory
Flexibility Act, and the Paperwork Reduction Act). OFCCP anticipates
none of the disproportionate budgetary effects of the rule set forth in
2 U.S.C. 1532(a)(3)(B).
(4) To the extent feasible and relevant, OFCCP has estimated the
effect of the rule on the national economy in the Regulatory Procedures
section of the final rule (specifically the sections describing
Executive Orders 12866 and 13563, the Regulatory Flexibility Act, and
the Paperwork Reduction Act).
(5) The provisions of 2 U.S.C. 1532(a)(5) do not apply to this
final rule.
Finally, OFCCP identified, considered, and implemented a reasonable
number of regulatory alternatives that were the least burdensome
alternative. In those cases where OFCCP did not select the least
burdensome alternative, it has provided an explanation of the reasons
these suggestions were not adopted in the corresponding section of the
Section-by-Section Analysis in the preamble to the final rule and/or
the Regulatory Procedures section of the final rule (specifically the
sections describing Executive Orders 12866 and 13563, the Regulatory
Flexibility Act, and the Paperwork Reduction Act).
Executive Order 13132 (Federalism)
OFCCP has reviewed this final rule in accordance with Executive
Order 13132 regarding federalism, and has determined that it does not
have ``federalism implications.'' This rule will not ``have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
Executive Order 13175 (Consultation and Coordination With Indian Tribal
Governments)
This final rule does not have tribal implications under Executive
Order 13175 that requires a tribal summary impact statement. The final
rule does not have substantial direct effects on one or more Indian
tribes, on the relationship between the Federal government and Indian
tribes or on the distribution of power and responsibilities between the
Federal government and Indian tribes.
Effects on Families
The undersigned hereby certifies that the final rule would not
adversely affect the well-being of families, as discussed under section
654 of the Treasury and General Government Appropriations Act, 1999.
Executive Order 13045 (Protection of Children)
This final rule would have no environmental health risk or safety
risk that may disproportionately affect children.
Environmental Impact Assessment
A review of this final rule in accordance with the requirements of
the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et
seq.; the regulations of the Council on Environmental Quality, 40 CFR
1500 et seq.; and DOL NEPA procedures, 29 CFR part 11, indicates the
final rule would not have a significant impact on the quality of the
human environment. There is, thus, no corresponding environmental
assessment or an environmental impact statement.
Executive Order 13211 (Energy Supply)
This final rule is not subject to Executive Order 13211. It will
not have a significant adverse effect on the supply, distribution, or
use of energy.
Executive Order 12630 (Constitutionally Protected Property Rights)
This final rule is not subject to Executive Order 12630 because it
does not involve implementation of a policy that has takings
implications or that could impose limitations on private property use.
Executive Order 12988 (Civil Justice Reform Analysis)
This final rule was drafted and reviewed in accordance with
Executive Order 12988 and will not unduly burden the Federal court
system. The final rule was: (1) Reviewed to eliminate drafting errors
and ambiguities; (2) written to minimize litigation; and (3) written to
provide a clear legal standard for affected conduct and to promote
burden reduction.
List of Subjects in 41 CFR Part 60-300
Administrative practice and procedure, Civil rights, Employment,
Equal employment opportunity, Government contracts, Government
procurement, Individuals with disabilities, Investigations, Reporting
and recordkeeping requirements, and Veterans.
Patricia A. Shiu,
Director, Office of Federal Contract Compliance Programs.
Accordingly, under authority of 38 U.S.C. 4212, Title 41 of the
Code of Federal Regulations, Chapter 60, is amended to read as follows:
PART 60-250 [REMOVED]
0
1. Remove Part 60-250
0
2. Revise Part 60-300 to read as follows:
PART 60-300--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS
OF FEDERAL CONTRACTORS AND SUBCONTRACTORS REGARDING DISABLED
VETERANS, RECENTLY SEPARATED VETERANS, ACTIVE DUTY WARTIME OR
CAMPAIGN BADGE VETERANS, AND ARMED FORCES SERVICE MEDAL VETERANS
Subpart A--Preliminary Matters, Equal Opportunity Clause
Sec.
60-300.1 Purpose, applicability and construction.
60-300.2 Definitions.
60-300.3 [Reserved].
60-300.4 Coverage and waivers.
60-300.5 Equal opportunity clause.
Subpart B--Discrimination Prohibited
60-300.20 Covered employment activities.
60-300.21 Prohibitions.
60-300.22 Direct threat defense.
60-300.23 Medical examinations and inquiries.
60-300.24 Drugs and alcohol.
60-300.25 Health insurance, life insurance and other benefit plans.
Subpart C--Affirmative Action Program
60-300.40 Applicability of the affirmative action program
requirement.
60-300.41 Availability of affirmative action program.
60-300.42 Invitation to self-identify.
60-300.43 Affirmative action policy.
60-300.44 Required contents of affirmative action programs.
60-300.45 Benchmarks for hiring.
Subpart D--General Enforcement and Complaint Procedures
60-300.60 Compliance evaluations.
60-300.61 Complaint procedures.
60-300.62 Conciliation agreements.
60-300.63 Violation of conciliation agreements.
60-300.64 Show cause notices.
60-300.65 Enforcement proceedings.
60-300.66 Sanctions and penalties.
60-300.67 Notification of agencies.
60-300.68 Reinstatement of ineligible contractors.
60-300.69 Intimidation and interference.
60-300.70 Disputed matters related to compliance with the Act.
[[Page 58663]]
Subpart E--Ancillary Matters
60-300.80 Recordkeeping.
60-300.81 Access to records.
60-300.82 Labor organizations and recruiting and training agencies.
60-300.83 Rulings and interpretations.
60-300.84 Responsibilities of appropriate employment service
delivery system.
Appendix A to Part 60-300--Guidelines on a Contractor's Duty to
Provide Reasonable Accommodation
Appendix B to Part 60-300--Sample Invitation to Self-Identify
Appendix C to Part 60-300--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. 60-300.1 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,
(VEVRAA), which prohibits discrimination against protected veterans and
pre-JVA veterans as defined in this part, and requires Government
contractors and subcontractors to take affirmative action to employ and
advance in employment qualified protected veterans.
Disabled veterans, recently separated veterans, active duty wartime
or campaign badge veterans, and Armed Forces service medal veterans are
protected veterans under VEVRAA.
(b) Applicability. This part applies to any Government contract or
subcontract of $100,000 or more, entered into or modified on or after
December 1, 2003, 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. 60-300.40(a); and that
the non-discrimination protections in Sec. 60-300.21 and the right to
file complaints alleging discriminatory conduct set forth in Sec. 60-
300.61 also apply to ``pre-JVA veterans'' as defined in Sec. 60-300.2,
who are applicants or employees of a contractor with a Government
contract of $25,000 or more entered into prior to December 1, 2003, and
unmodified since to a contract amount of $100,000. 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 disabled veterans, recently
separated veterans, active duty wartime or campaign badge veterans, or
Armed Forces service medal protected veterans 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.
(i) Uniformed Services Employment and Reemployment Rights Act. This
part does not invalidate or limit the obligations, responsibilities,
and requirements of the contractor pursuant to the Uniformed Services
Employment and Reemployment Rights Act (USERRA) (38 U.S.C. 4301, et
seq.). This includes the obligation under USERRA to reemploy employees
of the contractor following qualifying service in the uniformed
services in the position the employee would have obtained with
reasonable certainty had the employee been continuously employed during
the period of uniformed service. Compliance by the contractor with the
provisions of this part will not necessarily determine its compliance
with USERRA, and compliance with USERRA will not necessarily determine
its compliance with this part.
Sec. 60-300.2 Definitions.
For the purpose of this part:
(a) Act means the Vietnam Era Veterans' Readjustment Assistance Act
of 1974, as amended, 38 U.S.C. 4212, also referred to throughout this
regulation as ``VEVRAA.''
(b) Active duty wartime or campaign badge veteran means a veteran
who served on active duty in the U.S. military, ground, naval or air
service during a war or in a campaign or expedition for which a
campaign badge has been authorized, under the laws administered by the
Department of Defense.
(c) Armed Forces service medal veteran means any veteran who, while
serving on active duty in the U.S. military, ground, naval or air
service, participated in a United States military operation for which
an Armed Forces service medal was awarded pursuant to Executive Order
12985 (61 FR 1209).
(d) Compliance evaluation means any one or combination of actions
OFCCP may take to examine a Federal contractor's or subcontractor's
compliance with one or more of the requirements of the Act.
(e) Contract means any Government contract or subcontract.
(f) Contractor means, unless otherwise indicated, a prime
contractor or subcontractor holding a contract of $100,000 or more.
(g) 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 an individual 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.
(h) Director means the Director, Office of Federal Contract
Compliance Programs of the United States Department of Labor, or his or
her designee.
(i) Disabled veteran means:
(1) A veteran of the U.S. military, ground, naval or air service
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 Secretary of Veterans Affairs, or
(2) A person who was discharged or released from active duty
because of a service-connected disability.
(j) Employment service delivery system means a service delivery
system at which or through which labor exchange services, including
employment, training, and placement services, are offered in accordance
with the Wagner-Peyser Act. The Wagner-Peyser Act requires that these
services be provided as part of the One-Stop delivery system
established by the
[[Page 58664]]
States under Section 134 of the Workforce Investment Act of 1998.
(k) Equal opportunity clause means the contract provisions set
forth in Sec. 60-300.5, ``Equal opportunity clause.''
(l) Essential functions--(1) In general. The term essential
functions means fundamental job duties of the employment position the
disabled veteran holds or is seeking. 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.
(m) Government means the Government of the United States of
America.
(n) 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) Construction, as used in the definition of Government contract
and subcontract 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.
(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) Modification means any alteration in the terms and conditions
of a contract, including supplemental agreements, amendments and
extensions.
(4) Nonpersonal services, as used in the definition of Government
contract and subcontract of this section, includes, but is not limited
to, the following: Utility, construction, transportation, research,
insurance, and fund depository.
(5) Person, as used in the definition of Government contract and
subcontract 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.
(6) Personal property, as used in the definition of Government
contract and subcontract 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).
(o) Pre-JVA veteran means an individual who is an employee of or
applicant to a contractor with a contract of $25,000 or more entered
into prior to December 1, 2003 and unmodified since to $100,000 or
more, and who is a special disabled veteran, veteran of the Vietnam
era, pre-JVA recently separated veteran, or other protected veteran, as
defined below:
(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) Veteran of the Vietnam Era means a person who:
(i) 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:
(A) In the Republic of Vietnam between February 28, 1961, and May
7, 1975; or
(B) Between August 5, 1964, and May 7, 1975, in all other cases; or
(ii) Was discharged or released from active duty for a service-
connected disability if any part of such active duty was performed:
(A) In the Republic of Vietnam between February 28, 1961, and May
7, 1975; or
(B) Between August 5, 1964, and May 7, 1975, in all other cases.
(3) Pre-JVA recently separated veteran means a pre-JVA veteran
during the one-year period beginning on the date of the pre-JVA
veteran's discharge or release from active duty.
(4) Other protected veteran means a person who served on active
duty during a war or in a campaign or expedition for which a campaign
badge has been authorized, under the laws administered by the
Department of Defense.
(p) Prime contractor means any person holding a contract of
$100,000 or more, and, for the purposes of subpart D of this part,
``General Enforcement and Complaint Procedures,'' includes any person
who has held a contract subject to the Act.
(q) Protected veteran means a veteran who is protected under the
non-discrimination and affirmative action provisions of the Act;
specifically, a veteran who may be classified as a ``disabled
veteran,'' ``recently separated veteran,'' ``active duty wartime or
campaign badge veteran,'' or an ``Armed Forces service medal veteran,''
as defined by this section.
(r) 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.
(s) Qualified disabled veteran means a disabled veteran who has the
ability to perform the essential functions of the employment position
with or without reasonable accommodation.
(t) 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 disabled veteran to be considered
for the position such applicant desires; \1\ or
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\1\ A contractor's duty to provide a reasonable accommodation
with respect to applicants who are disabled veterans is not limited
to those who ultimately demonstrate that they are qualified to
perform the job in issue. 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).
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[[Page 58665]]
(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 disabled veteran to
perform the essential functions of that position; or
(iii) Modifications or adjustments that enable the contractor's
employee who is a disabled veteran to enjoy equal benefits and
privileges of employment as are enjoyed by the contractor's other
similarly situated employees who are not 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 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
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 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.)
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\2\ Contractors must engage in such an interactive process with
a 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.
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(u) Recently separated veteran means any veteran during the three-
year period beginning on the date of such veteran's discharge or
release from active duty in the U.S. military, ground, naval or air
service.
(v) 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.
(w) Secretary means the Secretary of Labor, United States
Department of Labor, or his or her designee.
(x) 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.
(y) Subcontractor means any person holding a subcontract of
$100,000 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.
(z) TAP means the Department of Defense's Transition Assistance
Program, or any successor programs thereto. The TAP was designed to
smooth the transition of military personnel and family members leaving
active duty via employment workshops and individualized employment
assistance and training.
(aa) 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 (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 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.
(bb) 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.
(cc) Veteran means a person who served in the active military,
naval, or air service of the United States, and who was discharged or
released therefrom under conditions other than dishonorable.
Sec. 60-300.3 [Reserved]
Sec. 60-300.4 Coverage and waivers.
(a) General--(1) Contracts and subcontracts of $100,000 or more.
Contracts and subcontracts of $100,000 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 $100,000. 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
$100,000 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
[[Page 58666]]
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
Director 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 Director 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 Director
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
Director in writing within 30 days.
(3) Facilities not connected with contracts. The Director 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. 60-300.5 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 VEVRAA PROTECTED VETERANS \3\
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\3\ The definitions set forth in 41 CFR 60-300.2 apply to the
terms used throughout this Clause, and they are incorporated herein
by reference.
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1. The contractor will not discriminate against any employee or
applicant for employment because he or she is a disabled veteran,
recently separated veteran, active duty wartime or campaign badge
veteran, or Armed Forces service medal veteran (hereinafter
collectively referred to as ``protected veteran(s)'') in regard to
any position for which the employee or applicant for employment is
qualified. The contractor agrees to take affirmative action to
employ, advance in employment and otherwise treat qualified
individuals without discrimination based on their status as a
protected veteran 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.
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
where the contract is being performed, but excluding those of
independently operated corporate affiliates, with the appropriate
employment service delivery system where the opening occurs. Listing
employment openings with the state workforce agency job bank or with
the local employment service delivery system where the opening
occurs will satisfy the requirement to list jobs with the
appropriate employment service delivery system. In order to satisfy
the listing requirement described herein, contractors must provide
information about the job vacancy in any manner and format permitted
by the appropriate employment service delivery system which will
allow that system to provide priority referral of veterans protected
by VEVRAA for that job vacancy. Providing information on employment
openings to a privately run job service or exchange will satisfy the
contractor's listing obligation if the privately run job service or
exchange provides the information to the appropriate employment
service delivery system in any manner and format that the employment
service delivery system permits which will allow that system to
provide priority referral of protected veterans.
3. Listing of employment openings with the appropriate
employment service delivery system pursuant to this clause shall be
made at least concurrently with the use of any other recruitment
source or effort and shall involve the normal obligations which
attach to the placing of a bona fide job order, including the
acceptance of referrals of veterans and nonveterans. The listing of
employment openings does not require the hiring of any particular
job applicants or from any particular group of job applicants, and
nothing herein is intended to relieve the contractor from any
requirements in Executive orders or regulations regarding
nondiscrimination in employment.
4. Whenever a contractor, other than a state or local
governmental contractor, becomes contractually bound to the listing
provisions in paragraphs 2 and 3 of this clause, it shall advise the
employment service delivery system in each state where it has
establishments that: (a) It is a Federal contractor, so that the
employment service delivery systems are able to identify them as
such; and (b) it desires priority referrals from the state of
protected veterans for job openings at all locations within the
state. The contractor shall also provide to the employment service
delivery system the name and location of each hiring location within
the state and the contact information for the contractor official
responsible for hiring at each location. The ``contractor official''
may be a chief hiring official, a Human Resources contact, a senior
management contact, or any other manager for the contractor that can
verify the information set forth in the job listing and receive
priority referrals from employment service delivery systems. In the
event that the contractor uses any external job search organizations
to assist in its hiring, the contractor shall also provide to the
employment service delivery system the contact information for the
job search organization(s). The disclosures required by this
paragraph shall be made simultaneously
[[Page 58667]]
with the contractor's first job listing at each employment service
delivery system location after the effective date of this final
rule. Should any of the information in the disclosures change since
it was last reported to the employment service delivery system
location, the contractor shall provide updated information
simultaneously with its next job listing. As long as the contractor
is contractually bound to these provisions and has so advised the
employment service delivery system, there is no need to advise the
employment service delivery system of subsequent contracts. The
contractor may advise the employment service delivery system when it
is no longer bound by this contract clause.
5. The provisions of paragraphs 2 and 3 of this clause do not
apply to the listing of employment openings which occur and are
filled outside of the 50 states, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, the Virgin Islands, American
Samoa, the Commonwealth of the Northern Mariana Islands, Wake
Island, and the Trust Territories of the Pacific Islands.
6. As used in this clause: i. All employment openings includes
all positions except executive and senior 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 senior management means: (1) Any employee (a)
compensated on a salary basis at a rate of not less than $455 per
week (or $380 per week, if employed in American Samoa by employers
other than the Federal Government), exclusive of board, lodging or
other facilities; (b) whose primary duty is management of the
enterprise in which the employee is employed or of a customarily
recognized department or subdivision thereof; (c) who customarily
and regularly directs the work of two or more other employees; and
(d) who has the authority to hire or fire other employees or whose
suggestions and recommendations as to the hiring, firing,
advancement, promotion or any other change of status of other
employees are given particular weight; or (2) any employee who owns
at least a bona fide 20-percent equity interest in the enterprise in
which the employee is employed, regardless of whether the business
is a corporate or other type of organization, and who is actively
engaged in its management.
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 Director, Office of 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 protected veterans. The contractor
must ensure that applicants or employees who are disabled veterans
are provided the notice in a form that is accessible and
understandable to the disabled veteran (e.g., providing Braille or
large print versions of the notice, posting the notice for visual
accessibility to persons in wheelchairs, providing the notice
electronically or on computer disc, or other versions). With respect
to employees who do not work at a physical location of the
contractor, a contractor will satisfy its posting obligations by
posting such notices in an electronic format, provided that the
contractor provides computers that can access the electronic posting
to such employees, or the contractor has actual knowledge that such
employees otherwise are able to access the electronically posted
notices. Electronic notices for employees must be posted in a
conspicuous location and format on the company's intranet or sent by
electronic mail to employees. An electronic posting must be used by
the contractor to notify job applicants of their rights if the
contractor utilizes an electronic application process. Such
electronic applicant notice must be conspicuously stored with, or as
part of, the electronic application.
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 VEVRAA, and is committed to take affirmative
action to employ and advance in employment, and shall not
discriminate against, protected veterans.
11. The contractor will include the provisions of this clause in
every subcontract or purchase order of $100,000 or more, unless
exempted by the rules, regulations, or orders of the Secretary
issued pursuant to VEVRAA 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
Director, Office of Federal Contract Compliance Programs, may direct
to enforce such provisions, including action for noncompliance.
12. The contractor must, in all solicitations or advertisements
for employees placed by or on behalf of the contractor, state that
all qualified applicants will receive consideration for employment
without regard to their protected veteran status.
[End of Clause]
(b) Subcontracts. Each contractor shall include the equal
opportunity clause in each of its subcontracts subject to this part.
(c) Adaptation of language. Such necessary changes in language may
be made to the equal opportunity clause as must be appropriate to
identify properly the parties and their undertakings.
(d) Inclusion of the equal opportunity clause in the contract. It
is not necessary to include the equal opportunity clause verbatim in
the contract. The clause shall be made a part of the contract by
citation to 41 CFR 60-300.5(a) and inclusion of the following language,
in bold text, after the citation: ``This contractor and subcontractor
shall abide by the requirements of 41 CFR 60-300.5(a). This regulation
prohibits discrimination against qualified protected veterans, and
requires affirmative action by covered prime contractors and
subcontractors to employ and advance in employment qualified protected
veterans.''
(e) Incorporation by operation of the Act. By operation of the Act,
the equal opportunity clause shall be considered to be a part of every
contract and subcontract required by the Act and the regulations in
this part to include such a clause, whether or not it is physically
incorporated in such contract and whether or not there is a written
contract between the agency and the contractor.
(f) Duties of contracting agencies. Each contracting agency shall
cooperate with the Director 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 Director 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 Director, and taking such actions for
noncompliance as are set forth in Sec. 60-300.66 as may be ordered by
the Secretary or the Director.
Subpart B--Discrimination Prohibited
Sec. 60-300.20 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;
[[Page 58668]]
(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. 60-300.21 Prohibitions.
The term discrimination includes, but is not limited to, the acts
described in this section and Sec. 60-300.23.
(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
protected veteran or pre-JVA veteran.
(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 protected veteran or pre-JVA
veteran. For example, the contractor may not segregate protected
veterans as a whole, or any classification of protected veterans or
pre-JVA veterans, 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 protected
veteran or pre-JVA veteran 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
protected veteran or pre-JVA veteran; or
(2) Perpetuate the discrimination of others who are subject to
common administrative control.
(e) Relationship or association with a protected veteran. 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 protected veteran or pre-JVA 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 applicant or employee who is a
qualified disabled veteran or pre-JVA 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 applicant or employee who is a qualified disabled
veteran or pre-JVA 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 disabled veteran or pre-JVA 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 disabled veteran or pre-JVA 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
protected veterans or pre-JVA veterans 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 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 protected veterans or pre-
JVA veterans 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 disabled veteran or pre-JVA special disabled
veteran because the applicant's disability prevents him or her from
performing marginal functions. When considering a protected veteran or
pre-JVA veteran for an employment opportunity, the contractor may not
rely on portions of such veteran's military record, including his or
her discharge papers, which are not relevant to the qualification
requirements of the opportunity in issue.
(2) The Uniform Guidelines on Employee Selection Procedures, 41 CFR
part 60-3, do not apply to 38 U.S.C. 4212 and are similarly
inapplicable to this part.
(h) Administration of tests. It is unlawful for the contractor to
fail to select and administer tests concerning employment in the most
effective manner to ensure that, when a test is administered to a job
applicant or employee who is a disabled veteran or pre-JVA 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 protected
veterans or pre-JVA veterans, it is unlawful for the contractor to
reduce the amount of compensation offered
[[Page 58669]]
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. 60-300.22 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-
300.2(g) defining direct threat.).
Sec. 60-300.23 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
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 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 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. 60-300.42.
(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. 60-300.24 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. 60-300.23. Nothing in this part shall be construed to encourage,
prohibit, or authorize the contractor to conduct drug tests of job
applicants or employees to determine the illegal use of drugs or to
make employment decisions based on such test results.
(2) Transportation employees. Nothing in this part shall be
construed to encourage, prohibit, or authorize the otherwise lawful
exercise by contractors subject to the jurisdiction of the Department
of Transportation of authority to test employees in, and applicants
for, positions involving safety-sensitive duties for the illegal use of
drugs or for on-duty impairment by alcohol; and remove from safety-
sensitive positions persons who test positive for illegal use of drugs
or on-duty impairment by alcohol pursuant to paragraph (b)(1) of this
section.
(3) Any information regarding the medical condition or history of
any employee or applicant obtained from a test to determine the illegal
use of drugs, except information regarding the illegal use of drugs, is
subject to the requirements of Sec. Sec. 60-300.23(b)(5) and 60-
300.23(d)(2).
Sec. 60-300.25 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.
[[Page 58670]]
(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 shall not deny a qualified disabled veteran
equal access to insurance or subject a qualified 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. 60-300.40 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 $100,000 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 by the official designated by the contractor pursuant to Sec.
60-300.44(i).
(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. 60-300.41 Availability of affirmative action program.
The full affirmative action program, absent the data metrics
required by Sec. 60-300.44(k), shall be made 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. 60-300.42 Invitation to self-identify.
(a) Pre-offer. The contractor shall invite applicants to inform the
contractor whether the applicant believes that he or she is a protected
veteran who may be covered by the Act. This invitation may be included
in the application materials for the position, but in any circumstance
shall be provided to applicants prior to making an offer of employment
to a job applicant.
(b) Post-offer. In addition to the invitation in paragraph (a) of
this section, the contractor shall invite applicants to inform the
contractor whether the applicant believes that he or she belongs to one
or more of the specific categories of protected veteran for which the
contractor is required to report pursuant to 41 CFR part 61-300. Such
an invitation shall be made at any time after the offer of employment
but before the applicant begins his or her job duties.
(c) The invitations referenced in paragraphs (a) and (b) of this
section shall state that the contractor is a Federal contractor
required to take affirmative action to employ and advance in employment
protected veterans pursuant to the Act. 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.)
(d) If an applicant identifies himself or herself as a disabled
veteran in the post-offer self-identification detailed in paragraph (b)
of this section, the contractor should inquire of the applicant whether
an accommodation is necessary, and if so, should engage with the
applicant regarding reasonable accommodation. The contractor may make
such inquiries to the extent they are consistent with the Americans
with Disabilities Act of 1990 (ADA), 42 U.S.C. 12101, et seq. The
contractor shall maintain a separate file in accordance with Sec. 60-
300.23(d) on persons who have self-identified as 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 relieves the contractor of its
obligation to take affirmative action with respect to those applicants
or employees who are known to the contractor to be protected veterans.
(g) Nothing in this section relieves the contractor from liability
for discrimination under the Act.
Sec. 60-300.43 Affirmative action policy.
Under the affirmative action obligations imposed by the Act,
contractors shall not discriminate against protected veterans, and
shall take affirmative action to employ and advance in employment
qualified protected veterans at all levels of employment, including the
executive level. Such action shall apply to all employment activities
set forth in Sec. 60-300.20.
Sec. 60-300.44 Required contents of affirmative action programs.
Acceptable affirmative action programs shall contain, but not
necessarily be limited to, the following elements:
(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 disabled
veterans are provided the notice in a form that is accessible and
understandable to the disabled veteran (e.g., providing Braille or
large print versions of the notice, or posting the notice for visual
accessibility to persons in wheelchairs). The policy statement shall
indicate the top United States executive's (such as the Chief Executive
Officer or the President of the United States Division of a foreign
company) support for the contractor's affirmative action program,
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 shall 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 protected 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:
[[Page 58671]]
(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 VEVRAA or any
other Federal, state or local law requiring equal opportunity for
protected veterans;
(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 protected veterans; 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 protected veterans for job vacancies filled either by hiring
or promotion, and for all training opportunities offered or available.
The contractor shall ensure that when a protected veteran is considered
for employment opportunities, the contractor relies only on that
portion of the individual's military record, including his or her
discharge papers, relevant to the requirements of the opportunity in
issue. The contractor shall ensure that its personnel processes do not
stereotype protected veterans 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 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 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 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 has
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. 60-300.2(g) defining direct threat.) (d)
Reasonable accommodation to physical and mental limitations. As is
provided in Sec. 60-300.21(f), as a matter of nondiscrimination the
contractor must make reasonable accommodation to the known physical or
mental limitations of an otherwise qualified 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 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 protected veteran.
(f) External dissemination of policy, outreach and positive
recruitment.
(1) Required outreach efforts.
(i) The contractor shall undertake appropriate outreach and
positive recruitment activities such as those listed in paragraph
(f)(2) of this section that are reasonably designed to effectively
recruit protected veterans. It is not contemplated that the contractor
will necessarily undertake all the activities listed in paragraph
(f)(2) 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.
(ii) The contractor must send written notification of company
policy related to its affirmative action efforts to all subcontractors,
including subcontracting vendors and suppliers, requesting appropriate
action on their part.
(2) Examples of outreach and recruitment activities . Below are
examples of outreach and positive recruitment activities referred to in
paragraph (f)(1) of this section. This is an illustrative list, and
contractors may choose from these or other activities, as appropriate
to their circumstances.
(i) Enlisting the assistance and support of the following persons
and organizations in recruiting, and developing on-the-job training
opportunities for veterans, in order to fulfill its commitment to
provide meaningful employment opportunities for such veterans:
(A) The Local Veterans' Employment Representative in the local
employment service office (i.e., the One-Stop) nearest the contractor's
establishment;
(B) The Department of Veterans Affairs Regional Office nearest the
contractor's establishment;
(C) The veterans' counselors and coordinators (``Vet-Reps'') on
college campuses;
(D) The service officers of the national veterans' groups active in
the area of the contractor's establishment;
(E) Local veterans' groups and veterans' service centers near the
contractor's establishment;
(F) The Department of Defense Transition Assistance Program (TAP),
or any subsequent program that, in whole or in part, might replace TAP;
and
(G) Any organization listed in the Employer Resources section of
the National Resource Directory (http://www.nationalresourcedirectory.gov/), or any future service that
replaces or complements it.
(ii) The contractor should also consider taking the actions listed
below, as appropriate, to fulfill its commitment to provide meaningful
employment opportunities to protected veterans:
(A) Formal briefing sessions should be held, preferably on company
premises, with representatives from recruiting sources. Contractor
facility 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. At any
[[Page 58672]]
such briefing sessions, the company official in charge of the
contractor's affirmative action program should be in attendance when
possible. Formal arrangements should be made for referral of
applicants, follow up with sources, and feedback on disposition of
applicants.
(B) The contractor's recruitment efforts at all educational
institutions should incorporate special efforts to reach students who
are protected veterans.
(C) 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.
(D) Protected veterans should be made available for participation
in career days, youth motivation programs, and related activities in
their communities.
(E) The contractor should take any other positive steps it deems
necessary to attract qualified protected veterans 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 any of the classifications
of protected veterans.
(F) The contractor, in making hiring decisions, should consider
applicants who are known protected veterans for all available positions
for which they may be qualified when the position(s) applied for is
unavailable.
(G) The contractor should consider listing its job openings with
the National Resource Directory's Veterans Job Bank, or any future
service that replaces or complements it.
(3) Assessment of external outreach and recruitment efforts. The
contractor shall, on an annual basis, review the outreach and
recruitment efforts it has taken over the previous twelve months to
evaluate their effectiveness in identifying and recruiting qualified
protected veterans. The contractor shall document each evaluation,
including at a minimum the criteria it used to evaluate the
effectiveness of each effort and the contractor's conclusion as to
whether each effort was effective. Among these criteria shall be the
data collected pursuant to paragraph (k) of this section for the
current year and the two most recent previous years. The contractor's
conclusion as to the effectiveness of its outreach efforts must be
reasonable as determined by OFCCP in light of these regulations. If the
contractor concludes the totality of its efforts were not effective in
identifying and recruiting qualified protected veterans, it shall
identify and implement alternative efforts listed in paragraphs (f)(1)
or (f)(2) of this section in order to fulfill its obligations.
(4) Recordkeeping obligation. The contractor shall document all
activities it undertakes to comply with the obligations of this
section, and retain these documents for a period of three (3) years.
(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 the internal procedures 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 protected veterans. It is not contemplated that
the contractor's 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.
(2) The contractor shall implement and disseminate this policy
internally as follows:
(i) Include it in the contractor's policy manual or otherwise make
the policy available to employees;
(ii) If the contractor is party to a collective bargaining
agreement, it shall notify union officials and/or employee
representatives to inform them of the contractor's policy, and request
their cooperation;
(3) The contractor is encouraged to additionally implement and
disseminate this policy internally as follows:
(i) Inform all employees and prospective employees of its
commitment to engage in affirmative action to increase employment
opportunities for protected veterans;
(ii) Publicize it in the company newspaper, magazine, annual report
and other media;
(iii) 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 support for the affirmative action
policy;
(iv) Discuss the policy thoroughly in both employee orientation and
management training programs;
(v) When employees are featured in employee handbooks or similar
publications for employees, include 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 protected veterans have had the
opportunity to participate in all company sponsored educational,
training, recreational and social activities;
(v) Measure the contractor's compliance with the affirmative action
program's specific obligations; and
(vi) Document the actions taken to comply with the obligations of
paragraphs (i) through (v) above, and retain these documents as
employment records subject to the recordkeeping requirements of Sec.
60-300.80.
(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 senior management support and staff to manage the
implementation of this program.
(j) Training. All personnel involved in the recruitment, screening,
selection, promotion, disciplinary, and related processes shall be
trained to ensure that the commitments in the contractor's affirmative
action program are implemented.
(k) Data collection analysis. The contractor shall document the
following computations or comparisons pertaining to applicants and
hires on an annual basis and maintain them for a period of three (3)
years:
(1) The number of applicants who self-identified as protected
veterans pursuant to Sec. 60-300.42(a), or who are otherwise known as
protected veterans;
(2) The total number of job openings and total number of jobs
filled;
(3) The total number of applicants for all jobs;
(4) The number of protected veteran applicants hired; and
[[Page 58673]]
(5) The total number of applicants hired.
Sec. 60-300.45 Benchmarks for hiring.
The benchmark is not a rigid and inflexible quota which must be
met, nor is it to be considered either a ceiling or a floor for the
employment of particular groups. Quotas are expressly forbidden.
(a) Purpose: The purpose of establishing benchmarks is to create a
quantifiable method by which the contractor can measure its progress
toward achieving equal employment opportunity for protected veterans.
(b) Hiring benchmarks shall be set by the contractor on an annual
basis. Benchmarks shall be set using one of the two mechanisms
described below:
(1) Establish a benchmark equaling the national percentage of
veterans in the civilian labor force, which will be published and
updated annually on the OFCCP Web site; or
(2) Establish a benchmark by taking into account:
(i) The average percentage of veterans in the civilian labor force
in the State(s) where the contractor is located over the preceding
three years, as calculated by the Bureau of Labor Statistics and
published on the OFCCP Web site;
(ii) The number of veterans, over the previous four quarters, who
were participants in the employment service delivery system in the
State where the contractor is located, as tabulated by the Veterans'
Employment and Training Service and published on the OFCCP Web site;
(iii) The applicant ratio and hiring ratio for the previous year,
based on the data collected pursuant to Sec. 60-300.44(k);
(iv) The contractor's recent assessments of the effectiveness of
its external outreach and recruitment efforts, as set forth in Sec.
60-300.44(f)(3); and
(v) Any other factors, including but not limited to the nature of
the contractor's job openings and/or its location, which would tend to
affect the availability of qualified protected veterans.
(c) The contractor shall document the hiring benchmark it has
established each year. If the contractor sets its benchmark using the
procedure in paragraph (b)(2) of this section, it shall document each
of the factors that it considered in establishing the hiring benchmark
and the relative significance of each of these factors. The contractor
shall retain these records for a period of three (3) years.
Subpart D--General Enforcement and Complaint Procedures
Sec. 60-300.60 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 protected veteran 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. OFCCP may extend the temporal scope
of the desk audit beyond that set forth in the scheduling letter if
OFCCP deems it necessary to carry out its investigation of potential
violations of this part. 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 VEVRAA and its regulations;
(3) Compliance check. A determination of whether the contractor has
maintained records consistent with Sec. 60-300.80; OFCCP may request
the documents be provided either on-site or off-site; or
(4) Focused review. A 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. 60-300.62.
(c) Reporting requirements. During a compliance evaluation, OFCCP
may verify whether the contractor has complied with applicable
reporting requirements required under regulations promulgated by the
Veterans' Employment and Training Service (VETS). If the contractor has
not complied with any such reporting requirement, OFCCP will notify
VETS.
(d) Pre-award compliance evaluations. Each agency will include in
the invitation for bids for each formally advertised nonconstruction
contract or state at the outset of negotiations for each negotiated
contract, that if the award, when let, should total $10 million or
more, the prospective contractor and its known first-tier
subcontractors with subcontracts of $10 million or more will be subject
to a compliance evaluation before the award of the contract unless
OFCCP has conducted an evaluation and found them to be in compliance
with VEVRAA within the preceding 24 months. The awarding agency will
notify OFCCP and request appropriate action and findings in accordance
with this subsection. Within 15 days of the notice OFCCP will inform
the awarding agency of its intention to conduct a pre-award compliance
evaluation. If OFCCP does not inform the awarding agency within that
period of its intention to conduct a pre-award compliance evaluation,
clearance shall be presumed and the awarding agency is authorized to
proceed with the award. If OFCCP informs the awarding agency of its
intention to conduct a pre-award compliance evaluation, OFCCP will be
allowed an additional 20 days after the date that it so informs the
awarding agency to provide its conclusions. If OFCCP does not provide
the awarding agency with its conclusions within that
[[Page 58674]]
period, clearance will be presumed and the awarding agency is
authorized to proceed with the award.
Sec. 60-300.61 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 OFCCP, 200 Constitution Avenue NW., Washington, DC
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) 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 service delivery system shall
cooperate with the Director 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 protected
veteran or pre-JVA veteran. 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;
(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
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 Director decides not to
refer the matter to the Solicitor of Labor for enforcement proceedings
against the contractor pursuant to Sec. 60-300.65(a)(1), the
complainant and contractor shall be so notified. The Director, 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 Director 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 Director decides to reconsider the
determination of a Notification of Results of Investigation, the
Director 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. 60-300.62.
Sec. 60-300.62 Conciliation agreements.
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.
Sec. 60-300.63 Violation of conciliation agreements.
(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.
Sec. 60-300.64 Show cause notices.
When the Director 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
[[Page 58675]]
is not a prerequisite to instituting enforcement proceedings (see Sec.
60-300.65).
Sec. 60-300.65 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 Director may, within the limitations of applicable law,
seek appropriate judicial action to enforce the contractual provisions
set forth in Sec. 60-300.5, 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 and Labor-Management, 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;
references to ``equal opportunity clause'' shall mean the equal
opportunity clause published at Sec. 60-300.5; and references to
``regulations'' shall mean the regulations contained in this part.
Sec. 60-300.66 Sanctions and penalties.
(a) Withholding progress payments. With the prior approval of the
Director, 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. 60-300.68. 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. 60-300.67 Notification of agencies.
The Director shall ensure that the heads of all agencies are
notified of any debarments taken against any contractor.
Sec. 60-300.68 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 Director 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 Director 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 Director may
conduct a compliance evaluation of the contractor and may require the
contractor to supply additional information regarding the request for
reinstatement. The Director 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
Director's decision. The petition shall be served on the Director and
the Associate Solicitor for Civil Rights and Labor-Management and shall
include the decision as an appendix. The Director 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. 60-300.69 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 protected veterans;
(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 protected veterans, 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
[[Page 58676]]
Director against any contractor who violates this obligation.
Sec. 60-300.70 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. 60-300.80 Recordkeeping.
(a) General requirements. Except as set forth in paragraph (b) of
this section, 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 will be one year from the
date of the making of the record or the personnel action involved,
whichever occurs later, except as set forth in paragraph (b) of this
section. 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 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) Records with three-year retention requirement. Records required
by Sec. Sec. 60-300.44(f)(4), 60-300.44(k), and 60-300.45(c) shall be
maintained by all contractors for a period of three years from the date
of the making of the record.
(c) Failure to preserve records. Failure to preserve complete and
accurate records as required by this part 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.
(d) 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. 60-300.81 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, accounts, and records, including electronic records, and
any other material OFCCP deems relevant to the matter under
investigation and pertinent to compliance with the Act or this part.
Contractors must also provide OFCCP access to these materials,
including electronic records, off-site for purposes of conducting
compliance evaluations and complaint investigations. Upon request, the
contractor must provide OFCCP information about all format(s),
including specific electronic formats, in which the contractor
maintains its records and other information. The contractor must
provide records and other information in any of the formats in which
they are maintained, as selected by OFCCP. 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. OFCCP will treat
records provided by the contractor to OFCCP under this section as
confidential to the maximum extent the information is exempt from
public disclosure under the Freedom of Information Act, 5 U.S.C. 552.
Sec. 60-300.82 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. 60-300.83 Rulings and interpretations.
Rulings under or interpretations of the Act and this part shall be
made by the Director.
Sec. 60-300.84 Responsibilities of appropriate employment service
delivery system.
By statute, appropriate employment service delivery systems are
required to refer qualified protected veterans to fill employment
openings listed by contractors with such appropriate employment
delivery systems pursuant to the mandatory job listing requirements of
the equal opportunity clause and are required to give priority to
protected veterans in making such referrals. The employment service
delivery systems shall provide OFCCP, upon request, information
pertinent to whether the contractor is in compliance with the mandatory
job listing requirements of the equal opportunity clause.
Appendix A to Part 60-300--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
[[Page 58677]]
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. 60-300.1(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 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'' 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. 60-300.2(s), a
disabled veteran is qualified if he or she has the ability to
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 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 disabled veterans. As
stated in Sec. 60-300.42(b) (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 a disabled veteran who may be
protected by the Act. Section 60-300.42(d) further provides that the
contractor must seek the advice of disabled veterans who ``self-
identify'' in this way as to reasonable accommodation. Moreover,
Sec. 60-300.44(d) provides that if an employee who is a known
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 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 disabled veteran in the
performance of his or her job must be adequate to enable the
individual to perform the essential functions of the position. The
accommodation, however, does not have to be the ``best''
accommodation possible, so long as it is sufficient to meet the job-
related needs of the individual being accommodated. There are three
areas in which reasonable accommodations may be necessary: (1)
accommodations in the application process; (2) accommodations that
enable employees who are disabled veterans to perform the essential
functions of the position held or desired; and (3) accommodations
that enable employees who are 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 disabled veteran
must 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. The definition for ``reasonable accommodation'' in Sec. 60-
300.2(t) 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 must consult
with the disabled veteran in deciding on the reasonable
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 (1-800-669-4000 (voice), 1-800-669-6820
(TTY)), the Job Accommodation Network (JAN) operated by the Office
of Disability Employment Policy in the U.S. Department of Labor (1-
800-526-7234 or 1-800-232-9675), private disability organizations
(including those that serve veterans), and other employers.
6. With respect to accommodations that can permit an employee
who is a 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 text telephones (TTYs). For persons with limited physical
dexterity, the obligation may require the provision of telephone
headsets, speech activated software and raised or lowered furniture.
7. Other reasonable accommodations of this type may include
providing personal assistants such as a reader, sign language
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 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-
300.2(t) is job restructuring. This may involve reallocating or
redistributing those nonessential, marginal job functions which a
qualified disabled veteran cannot perform to another position.
Accordingly, if a clerical employee who is a 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
[[Page 58678]]
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 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 disabled
veteran. Job restructuring may also involve allowing part-time or
modified work schedules. For instance, flexible or adjusted work
schedules could benefit disabled veterans who cannot work a standard
schedule because of the need to obtain medical treatment, or
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 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 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 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'' must 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 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 disabled veterans. It should also be noted
that the contractor is not required to promote a disabled veteran as
an accommodation.
11. With respect to the application process, reasonable
accommodations may include the following: (1) providing information
regarding job vacancies in a form accessible to disabled veterans
who are vision or hearing impaired, e.g., by making an announcement
available in braille, in large print, or on computer disc, or by
responding to job inquiries via TTYs; (2) providing readers, sign
language 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 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 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 60-300--Sample Invitation to Self-Identify
[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 by the Jobs for Veterans Act of 2002, 38 U.S.C. 4212
(VEVRAA), which requires Government contractors to take affirmative
action to employ and advance in employment: (1) disabled veterans;
(2) recently separated veterans; (3) active duty wartime or campaign
badge veterans; and (4) Armed Forces service medal veterans. These
classifications are defined as follows:
A ``disabled veteran'' is one of the following:
a veteran of the U.S. military, ground, naval or air
service 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 Secretary of Veterans Affairs; or
a person who was discharged or released from active
duty because of a service-connected disability.
A ``recently separated veteran'' means any veteran
during the three-year period beginning on the date of such veteran's
discharge or release from active duty in the U.S. military, ground,
naval, or air service.
An ``active duty wartime or campaign badge veteran''
means a veteran who served on active duty in the U.S. military,
ground, naval or air service during a war, or in a campaign or
expedition for which a campaign badge has been authorized under the
laws administered by the Department of Defense.
An ``Armed forces service medal veteran'' means a
veteran who, while serving on active duty in the U.S. military,
ground, naval or air service, participated in a United States
military operation for which an Armed Forces service medal was
awarded pursuant to Executive Order 12985.
Protected veterans may have additional rights under USERRA--the
Uniformed Services Employment and Reemployment Rights Act. In
particular, if you were absent from employment in order to perform
service in the uniformed service, you may be entitled to be
reemployed by your employer in the position you would have obtained
with reasonable certainty if not for the absence due to service. For
more information, call the U.S. Department of Labor's Veterans
Employment and Training Service (VETS), toll-free, at 1-866-4-USA-
DOL.
2. [THE FOLLOWING TEXT SHOULD BE USED WHEN EXTENDING THE ``PRE-
OFFER'' INVITATION AS REQUIRED BY 41 CFR 60-300.42(a). THE
DEFINITIONS OF THE SEPARATE CLASSIFICATIONS OF PROTECTED VETERANS
SET FORTH IN PARAGRAPH 1 MUST ACCOMPANY THIS SELF-IDENTIFICATION
REQUEST.] If you believe you belong to any of the categories of
protected veterans listed above, please indicate by checking the
appropriate box below. As a Government contractor subject to VEVRAA,
we request this information in order to measure the effectiveness of
the outreach and positive recruitment efforts we undertake pursuant
to VEVRAA.
[ ] I IDENTIFY AS ONE OR MORE OF THE CLASSIFICATIONS OF PROTECTED
VETERAN LISTED ABOVE
[ ] I AM NOT A PROTECTED VETERAN
[THE FOLLOWING TEXT SHOULD BE USED IF REQUIRED TO EXTEND THE
``POST-OFFER'' INVITATION DESCRIBED IN 41 CFR 60-300.42(b). THE
DEFINITIONS OF THE SEPARATE CLASSIFICATIONS OF PROTECTED VETERAN
INCLUDED IN THE POST-OFFER INVITATION MUST ACCOMPANY THIS SELF-
IDENTIFICATION REQUEST.]
As a Government contractor subject to VEVRAA, we are required to
submit a report to the United States Department of Labor each year
identifying the number of our employees belonging to each specified
``protected veteran'' category. If you believe you belong to any of
the categories of protected veterans listed above, please indicate
by checking the appropriate box below.
I BELONG TO THE FOLLOWING CLASSIFICATIONS OF PROTECTED VETERANS
(CHOOSE ALL THAT APPLY):
[ ] DISABLED VETERAN
[ ] RECENTLY SEPARATED VETERAN
[ ] ACTIVE WARTIME OR CAMPAIGN BADGE VETERAN
[ ] ARMED FORCES SERVICE MEDAL VETERAN
--------------------
[ ] I am a protected veteran, but I choose not to self-identify
the classifications to which I belong.
[ ] I am NOT a protected veteran.
If you are a disabled veteran it would assist us if you tell us
whether there are accommodations we could make that would enable you
to perform the essential functions of the job, including special
equipment, changes in the physical layout of the job, changes in the
way the job is customarily performed, provision of personal
assistance services or other accommodations. This information will
assist us in making reasonable accommodations for your disability.
3. 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.
4. 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 disabled veterans, and
regarding necessary accommodations; (ii) first aid and safety
personnel may be informed, when and to the
[[Page 58679]]
extent appropriate, if you have a condition that might require
emergency treatment; and (iii) Government officials engaged in
enforcing laws administered by the Office of Federal Contract
Compliance Programs, or enforcing the Americans with Disabilities
Act, may be informed.
5. [The contractor should here insert a brief provision
summarizing the relevant portion of its affirmative action program.]
Appendix C to Part 60-300--Review of Personnel Processes
The following is a set of procedures which contractors may use
to meet the requirements of Sec. 60-300.44(b):
1. The application or personnel form of each known applicant who
is a protected veteran 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 protected
veteran should include (i) the identification of each promotion for
which the protected veteran was considered, and (ii) the
identification of each training program for which the protected
veteran was considered.
3. In each case where an employee or applicant who is a
protected veteran 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 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. 60-300.23(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
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.
60-300.23(d).
[FR Doc. 2013-21227 Filed 9-23-13; 8:45 am]
BILLING CODE 4510-45-P