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New Hiring Requirements for Veterans, Disabled Workers

By Hawley Troxell,

Two new rules announced Aug. 27 by the U.S. Department of Labor aim to put more veterans and disabled Americans to work by imposing heightened hiring  requirements on federal contractors.

Administered by the DOL’s Office of Federal Contract Compliance Programs, the  rules will bolster affirmative action requirements under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 and Section 503 of the  Rehabilitation Act of 1973. Both longstanding laws already require federal  contractors to affirmatively recruit, hire, train, and promote qualified  veterans and disabled persons, respectively. But those laws will be given new teeth when the new rules go into effect 180 days following their imminent  publication in the Federal Register.

While not exactly adding a punitive stick, the rules do impose a measuring stick on federal contractors by requiring them to adopt annual benchmarks for hiring and employment of veterans and the disabled.

Under the VEVRA rule, contractors may establish a benchmark equal to the national percentage of veterans in the civilian labor force – currently 8  percent, according to the compliance programs office. Alternatively, contractors may establish their own benchmarks for veteran employment using data from other governmental sources, as well as other factors unique to each contractor’s hiring circumstances.

The Section 503 rule similarly establishes a 7 percent goal for hiring and employment of workers with disabilities. The DOL emphasizes that the rule is not a hard floor or ceiling for a contractor’s employment numbers, but rather a “management tool” aimed at informing employment decision-making. In other words, failing to meet the goal is not a violation and will not lead to a fine or penalty.

Coupled with heightened recordkeeping and reporting requirements for contractors, the focus of the VEVRA and Section 503 rules is on creating more accountability for contractors making employment decisions involving these  underutilized groups. Under both rules, contractors are required to document and  annually update records comparing the number of applications submitted by each  protected group with the number of those individuals hired. This data must be kept on file for three years with access provided to the compliance programs office, which will use it to spot trends.

Continued affirmative action accountability is made necessary, according to the DOL, by persistently disproportionate unemployment rates for both groups. Bureau of Labor Statistics data show that the unemployment rate for  post-September 2001 veterans – referred to as “Gulf War-era II veterans” – was 9.9 percent in 2012, compared to 7.9 percent for nonveterans. Likewise, the bureau reported an unemployment rate of 15 percent for working-age people with disabilities in 2012, compared to 8 percent for those without disabilities.

Supporters say the additional requirements will bolster “long languishing affirmative action requirements” that previously had little bite, according to a statement issued Aug. 29 by the National Council on Disability, an independent federal agency focused on policy matters affecting disabled Americans. But detractors point to “drastically” increased paperwork burdens on contractors, as the Associated Builders and Contractors emphasized in a statement issued Aug. 28. The construction industry trade association – which has an office in Boise – called the record-keeping and maintenance requirements unworkable, given the “fluid” and “transitory” nature of the construction industry and its workforce. The association predicted challenges to the rules in federal court.

Another controversial aspect of the rules is the requirement that contractors invite applicants to self-identify their protected veteran or disabled status during the application process. At least with regard to the disabled, this requirement seemingly conflicts with the Americans with Disabilities Act, which generally prohibits employers from making disability-related inquiries prior to making a job offer. However, the compliance programs office notes that employers are protected by the ADA exemption for employers attempting to comply with other federal laws, including the Rehabilitation Act. Still, contractors may have reason to be nervous.

For better or worse, the new rules add yet another potential tripwire to the minefield of employment law.

This article was featured on the Idaho Business Review’s blog.