DATE: September 9, 2013
Subject: A Kairos Briefing (Part 3 of 6) – Changes to Section 503 of the Rehabilitation Act of 1973
Significant changes have occurred with the release of the Section 503 Final Rule. Part three of this series highlights the most significant changes that have occurred in the following areas.
(5) Outreach and Recruitment Efforts
(6) Audit and Reporting System
(7) The 7% Utilization Goal
(8) Affirmative Action Policies
(9) Data, Data and More Data
*(See Part 2 of the series for areas 1-4)
We will identify what is required, recommended and what is considered a best practice in the Final Rule.
Outreach and Recruitment Efforts
As a part of the affirmative action obligations in the Final Rule, Federal contractors are required to undertake reasonably designed outreach and recruitment activities to recruit qualified individuals with disabilities. One very important requirement is the contractor’s obligation to 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. Although the Final Rule offers a number of activities from which Federal contractors may choose, the rule does not limit or explicitly require a contractor to engage in all the recommended activities. The scope of the contractor’s efforts shall depend upon the circumstances including the contractor’s size and resources and the extent to which existing employment practices are adequate. With some exceptions, the ultimate measure regarding the effectiveness of a contractor’s outreach and recruitment efforts is the proportion of individuals with disabilities who apply and are hired into the contractor’s workforce. Examples of outreach and positive recruitment activities include those listed as an attachment to this briefing paper (See Attachment § 60-741.44(f) (2) at the end of this brief).
The Final Rule requires self-assessments regarding the effectiveness of a contractor’s outreach and recruitment efforts to identify and recruit qualified individuals with disabilities. Self-assessments are to be completed annually and must at a minimum include (1) the criteria used to evaluate the contractor’s effectiveness of each effort and (2) the contractor’s conclusion as to whether its efforts were effective. If efforts were not effective, the contractor shall identify and implement alternative efforts. The results of self-assessments must be kept on file for a period of three years.
The required data that must be collected to perform self-assessments of a contractor’s outreach and recruitment efforts, including calculations and comparisons pertaining to applicants and hires, must be maintained for a period of three years and must include:
(1) The total number of applicants who self-identified as individuals with disabilities or who were otherwise known to be individuals with disabilities.
(2) The total number of applicants for all jobs
(3) The total number of job openings and jobs filled
(4) The number of individuals with disabilities hired
(5) The total number of applicants hired
The Final Rule also requires internal dissemination of policies which show a contractor’s commitment to engage in affirmative action efforts to employ and advance in employment qualified individuals with disabilities. The required policy of dissemination must be made available to employees and if part of a collective bargaining agreement, the contractor must notify union officials and/or representatives of the contractor’s policy and request their cooperation. Additional recommendations are also made for implementing and disseminating policy but are not required, such as informing all employees and prospective employees of its affirmative action commitment, scheduling meetings with all employees to discuss its affirmative action policies, and conducting special meetings with management personnel about these policies.
Audit and Reporting System
Another very important requirement under the Final Rule is the auditing and reporting system. Specifically, a contractor must implement an audit and reporting system that will:
(1) Measure the effectiveness of the contractor’s affirmative action program for IWD
(2) Indicate any need for remedial action
(3) Determine the degree to which the contractor’s objectives have been attained
(4) Determine whether known individuals with disabilities have been provided the opportunity to participate in all company sponsored educational, training, recreational, and social activities
(5) Measure the contractor’s compliance with the affirmative action program’s specific obligations
(6) Document actions taken to comply with the obligations listed above and retain these documents as employment records subject to the requirements of one year or two years (based on the threshold of 100 employees/$150,000 contract; see Section “Data, Data and More Data below).
The 7% Utilization Goal
The Final Rule establishes a 7% utilization goal for employment of qualified individuals with disabilities for each job group in the contractor’s workforce orfor the contractor’s entire workforce. Contractors who establish utilization goals by job group must use the same job groups established for utilization analyses under Executive Order 11246. However, contractors with 100 or fewer employees have the option to measure utilization of individuals with disabilities based on the contractor’s entire workforce.
Contractors must annually evaluate the utilization of individuals with disabilities in their workforce and take steps to correct impediments to equal opportunity where utilization is found to be less than availability. In the event utilization is found to be less than availability, contractors must assess their (a) personnel processes, (b) the effectiveness of outreach and recruitment efforts, (c) the results of their affirmative action program audit, and (d) “any other areas that might affect the success of the affirmative action program.” Additionally, contractors must develop and execute “action-oriented programs” to correct problem areas identified above. However, the Final Rule allows contractors flexibility with regard to the specifics of the actions they undertake such as modification of personnel processes to ensure equal employment opportunity, alternative or additional outreach and recruitment efforts and/or other actions designed to correct the identified problem areas and attain the established goal.
Affirmative Action Policies
Pursuant to the Final Rule, Federal contractors must undertake affirmative action policies to advance the employment opportunities for individuals with disabilities in their workforce. Detailed in the preceding paragraphs and previous brief, these policies were significantly strengthened, requiring additional action and record keeping requirements for which contractors must assess the effectiveness of their policies and programs. Ultimately, the required affirmative action policies detailed in the Final Rule allow contractors significant flexibility in the development of their policies, procedures and remedial actions to correct deficiencies should they exist.
Data, Data and More Data
In Subpart E-Ancillary Matters, 60-741.80(a) of the Section 503 Final Rule, the general requirements for recordkeeping are detailed in addition to those previously discussed, using a ‘catch all’ which states that “any personnel or employment record made or kept by the contactor shall be preserved” by one of two standards depending on contractor size or award amount. According to the Final Rule “records” include but are not 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.”
The Final Rule allows a shorter record keeping requirement of only one year for contractors with fewer than 150 employees or does not have a Government contract of at least $150,000. Contractors who employ 150 employees or more or have a Government contract of $150,000 or more must preserve personnel and employment records for a period of two years. Regardless of the contractor’s size, the record period begins from either the “making of the record or the personnel action involved, whichever occurs later.” Additionally, when a contractor receives notice of a complaint, compliance evaluation, or enforcement action, the contractor must preserve all records relevant to the complaint, compliance evaluation, or action until “final disposition of the complaint, compliance evaluation or action.”
Although providing contractors significant flexibility in the establishment of their policies and procedures, in the Final Rule may result in significant findings of non-compliance for contractors who do not establish:
(1) Robust procedures for collecting data pursuant to the provisions of the Final Rule and
(2) Effective programs for advancing the employment of individuals with disabilities
Previously, the provisions detailed in Section 503 were little more than an annual exercise in paperwork. However, the redesigned Final Rule establishes concrete metrics and mandatory data collection requirements for assessing the effectiveness of affirmative action policies for individuals with disabilities. Therefore, contractors who repeatedly find themselves underutilized may likely end up in conciliation agreements when audited due to their inability or failure to design and implement effective affirmative action programs to advance the employment of individuals with disabilities.
Note: The 180 day countdown for the effective date of the Final Rule does NOT begin until the Rule has been published in the Federal Register.