Labor Dept. Sets Forth New Requirements for Government Contractors

By Carol L. O’Riordan

In late August 2013, the U.S. Department of Labor issued final rules that will have an effect on affirmative action obligations for all federal contractors and subcontractors in two areas: the recruitment, employment, promotion, training, and accommodation of (1) individuals with disabilities under the Rehabilitation Act of 1973, Section 503, and (2) identified categories of veterans, including disabled veterans and recently separated veterans under the Vietnam Era Veterans’ Readjustment Assistance Act, as amended (VEVRAA).

We will post here a series of blog items in which we will outline the key changes and amendments to these affirmative action requirements and will discuss compliance requirements that may require new or expanded action on the part of contractors. Here is a brief overview.

The new and expanded obligations for both Section 503 and VEVRAA will apply to federal government contracts and subcontracts that take the form of IDIQ (indefinite delivery/indefinite quantity) contracts, blanket purchase agreements, requirements contracts, and Federal Supply Schedule type contracts –unless those contracts are not expected to exceed, and never actually exceed, the applicable threshold amount. The applicability of these requirements will be assessed at the time of award (for the base year) and then annually thereafter, for all succeeding years. However, once the clause is deemed to apply to a contract, it will apply for that contract in all succeeding years, even if it is not expected that future orders will likely exceed the threshold.

For both Section 503 and VEVRAA, the term “government contract” does not include agreements in which the parties stand in the relationship of employer and employee, and does not apply to federally assisted contracts, such as those awarded, for example, by a state highway agency that includes some federal funding.

The new rules will go into effect 180 days after their publication in the Federal Register, a date that has not yet been announced.

Section 503 prohibits employment discrimination against individuals based on disability by federal contractors and subcontractors. It also requires that federal contractors and subcontractors take affirmative action to recruit, employ, train, and promote qualified individuals with disabilities.

On August 27, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a final rule that makes changes to the regulations implementing Section 503. You can view the final rule on OFCCP’s website or on the Federal Register site, when published. The OFCCP has not yet announced a date for publication of the final rule.

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