New Rules Coming for Federal Contractors

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Associated Builders and Contractors (ABC) filed a request for an injunction in the U.S. District Court for the District of Columbia against an Aug. 27 rule from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) that  alters federal contractors’ existing affirmative action and nondiscrimination obligations for individuals with disabilities.  “When it issued this rule, OFCCP exceeded its statutory authority, altered longstanding precedent, and imposed wasteful and burdensome data collection and reporting requirements on government contractors without any supporting evidence from the agency that contractors weren’t meeting the previous requirements,” said ABC Vice President of Federal Affairs Geoff Burr.

The U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) will soon issue two new rules which will require federal contractors and subcontractors to establish benchmarks for hiring veterans and employing individuals with disabilities.  These two new rules will apply to federal construction contractors and subcontractors.  The rules will become effective 180 days after they are published.

One rule will prohibit federal contractors and subcontractors from discriminating in employment against protected veterans.  The rule will require federal construction contractors and subcontractors to take affirmative action to recruit, hire, promote, and retain these veterans.  The rule allows construction contractors and subcontractors to choose from two alternatives to establish annual hiring benchmarks for protected veterans.  Contractors may choose to establish a benchmark equal to the national percentage of veterans in the civilian labor force (which is currently 8%), which will be published and updated annually by OFCCP.  Alternatively, contractors may establish their own benchmarks using certain data from the Bureau of Labor Statistics and Veterans’ Employment and Training Service/Employment and Training Administration that will also be published by OFCCP, as well as other factors that reflect the contractor’s unique hiring circumstances.  The data will be posted in a Benchmark Database. For prime contractors, the rule also includes contract language that must be used in subcontracts for federal projects.

The other rule prohibits federal construction contractors and subcontractors from discriminating in employment against individuals with disabilities.  A nationwide 7% goal is established by the rule.  Contractors with less than 100 employees must apply the goal to their entire workforce.  Larger firms must apply the goal to each of their job groups.  Contractors must conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems.  The final rule also provides the language that prime federal contractors must use in their subcontracts concerning their responsibilities. Highlights of the rules here.

The OFCCP also posted to its website its updated Federal Contract Compliance Manual (FCCM), which provides internal guidance to the agency’s compliance officers on evaluating federal contractors’ adherence to their affirmative action and equal opportunity obligations and investigating discrimination complaints.  This manual had not been updated in almost a decade, so now the almost 800 field agents will have a common set of standards to follow when conducting desk audits, complaint investigations and determining resolution for contractor non-compliance.