Monday, 10 February 2014 09:56
By Chase Fisher
While this article simply cannot cover the multitude of changes being implemented by the OFCCP, it will highlight an ongoing lawsuit filed by the Associated Builders and Contractors (“ABC”), which seeks to stop the implementation of several aspects of section 503.
What is section 503?
The new section 503 regulations address recruiting and hiring of persons with disabilities, with a focus on increased data-collection requirements and a newly established 7% workforce utilization goal for individuals with disabilities. Section 503 has two purposes: 1) to prohibit employment discrimination on the basis of disability by federal contractors/subcontractors; and 2) to require such covered entities to take affirmative actions to employ, and advance in employment, qualified individuals with disabilities. While the basic nondiscrimination requirements apply to federal contractors/subcontractors with a single contract or subcontract in excess of $10,000, the more stringent affirmative action requirements only apply to federal contractors/subcontractors with a single contract or subcontract of $50,000 or more and 50 or more employees.
Federal construction contractors/subcontractors beware!
ABC is a national trade association representing 22,000 members from more than 19,000 construction and industry-related firms. ABC filed suit to stop enforcement of the changes to section 503, as they relate to affirmative action requirements for the hiring of individuals with disabilities. Particularly, ABC’s lawsuit is intended to protect federal contractors/subcontractors in the construction industry because the construction industry will now be required to comply, for the first time, with burdensome affirmative action requirements. These requirements include data collection and analysis with regard to the hiring and employment of disabled workers.
While similar affirmative action requirements were previously required for federal supply and service contractors, federal construction contractors/subcontractors were exempt from many of the requirements. ABC’s lawsuit notes that such requirements did not exist for the construction industry because of its uniqueness. The lawsuit notes that the construction industry is much more ‘fluid and temporary’ in terms of its workforce, and ABC argues the OFCCP did not properly factor their uniqueness into its new final rules.
Federal construction contractors/subcontractors would be wise to track the outcome of ABC’s case, as it may provide a reprieve from the significant changes that are set to take effect this year. All federal contractors/subcontractors should already be planning to implement the OFCCP’s changes to VEVRAA and section 503, as there are many additional steps, costs and parties that will need to be involved to transition into the new affirmative action requirements.
The OFCCP has mailed over 2,100 advance audit notification letters to over 830 employers as of January 31, 2014, just two months prior to the changes to section 503 and VEVRAA. As such, it is a very important time for federal contractors and subcontractors to verify compliance with the current regulations and to make all necessary preparations to begin implementing the new regulations on March 24, 2014.