Proposed Rule Changes Will Create Sticky Situations for Federal Contractors Later This Year

Written by: Christopher J. Pyles, Esq.

This article was written for publication in the February, 2013 issue of the New Hampshire Employment Law Letter, a newsletter written for New Hampshire employers by the labor and employment attorneys at Sulloway & Hollis and published by BLR® – Business & Legal Resources.

Changes to regulations impacting federal contractors were proposed by the Office of Federal Contract Compliance Programs (OFCCP) in December 2011. It appears that those changes will go into effect later this year, perhaps as early as April. The amended regulations will impose some significant administrative, reporting and record-keeping burdens on federal contractors, as the OFCCP strives to create an employment environment in which seven percent of the workforce is made up of individuals with disabilities.

PROCESS MAY UNDERMINE PROGRAM

The OFCCP will try to achieve that goal in a number of ways. First, it will require stronger recruitment efforts by qualifying contractors to employ people with disabilities. That means extra job posting requirements. Covered employers will be obligated to list all employment opportunities with the closest employment One-Stop Career Center, operated by the United States Department of Labor, in addition to entering into agreements with at least three other outreach programs operated by local agencies and organizations dedicated to employment efforts on behalf of disabled individuals.

Second, under the new regulations, covered employers will have an obligation to track information about applicants and new hires. This means employers have to not only keep additional records but also develop and maintain comparative statistics showing the number of new hires with disabilities and those without disabilities. Problematically, this system will rely upon self-identification by the applicants and/or new hires. The OFCCP will encourage federal contractors to have those applicants and new hires engage in a voluntary and anonymous system under which those workers may self-identify themselves as individuals with a disability.

Employer must give applicants opportunities both before and after any job offer and, if hired, annually thereafter. Reports, records and that comparative information will need to be reported, and maintained for five years. The voluntary nature of the program, however, may undermine the accuracy of the data collection reports if some applicants or employees decline the invitation to self-identify themselves. In addition to other record-keeping requirements, the new regulations will also force employers to maintain written procedures for accommodation requests.

“DISABILITY” DEFINED EVEN MORE BROADLY THAN BEFORE

Finally, the OFCCP is adopting the same definition of “disability” as set forth in the Americans with Disabilities Amendments Act (ADAAA), meaning the term will be defined more broadly than it was in the past.

The new regulations impose significant new burdens on federal contractors. Concerns range from whether the seven percent goal represents a quota to the increased cost and administrative burdens the recruiting, record-keeping and reporting requirements will impose. The voluntary self-reporting also could lead to complications serving as the basis for claims of unlawful discrimination based upon inadvertent disclosure or identification of a disability.

READY OR NOT

Despite these problems, it appears that the regulations are on the way and will be enacted later this year. Covered employers and federal contractors affected by these regulations should begin preparing for these changes now.

If you have any questions concerning the impact on your company, please contact Christopher J. Pyles, Esq., member of the firm’s Labor and Employment Practice Area.