OFCCP Proposes Onerous Veteran Affirmative Action Rules for Contractors

On April 26, 2011, the Office of Federal Contract Compliance Programs ("OFCCP") published proposed new rules that would significantly broaden federal contractors' affirmative action obligations with respect to "protected veterans."  The proposed rules, 262 pages in length with accompanying commentary, would revise the OFCCP's Regulations at 41 C.F.R. Parts 60-250 and 60-300.  The existing regulations pertain to pre-December 1, 2003 contracts of $25,000 or more; the proposed rules would apply to post-December 1, 2003 contracts of $100,000 or more.  Among other things, the proposed rules would increase contractors' affirmative action obligations, increase data collection requirements, and mandate that federal contractors and subcontractors establish hiring "benchmarks."

The proposed rules dealing with data collection, analysis and record-keeping add significant requirements to contractors' current obligations.  Under the proposed rules, the following measurements and comparisons would have to be made every year, and retained for five years: 

• the total number of referrals from state employment services;
• the number of such referrals who are known, protected veterans;
• the total number of applicants for employment;
• the total number of applicants who are known, protected veterans;
• the total number of job openings; and
• the total number of hires who are protected veterans. 

From these data, contractors would be required to compute

• a "referral ratio" of protected veteran referrals to total referrals;
• an "applicant ratio" of known, protected veteran applicants to the total number of applicants; and
• a "hiring ratio" of known, protected veterans who are hired to the total number of hires.

The reason for this is clear - it will be easy for the OFCCP to review the ratios in question to determine whether veterans are hired at a rate above, below or at some "expected" level. 

Perhaps the most significant change is the proposed requirement to establish "hiring benchmarks."  Essentially, a "hiring benchmark" is the percentage of protected veterans, with respect to total hires, that the contractor will strive to hire in the next year.  In establishing these "benchmarks," contractors will need to consult various databases to determine the percentage of veterans in the relevant labor force and the number of veterans who affiliate with the state employment service.  Whether "benchmark" will merely become a euphemism for "quota" or "goal" remains to be seen.

Another significant, proposed change relates to the mandatory review of various personnel actions.  Again, the proposed rule mandates an annual review, and contractors must perform the following, which were only recommendations under the existing regulations:  (1) contractors must identify vacancies and training programs, for each protected veteran applicant, for which that applicant was considered; (2) contractors must identify each promotion and training program, for each protected veteran employee, for which that employee was considered; and (3) contractors must provide a statement of the reasons for rejecting proposed veterans for employment, training, or promotion.  If the rejected veteran is disabled, the contractor must also describe accommodations it considered before rejecting the disabled veteran.  Finally, the contractor must describe the nature of any accommodations for disabled veterans who were selected for hire, promotion or training.

The proposed rules would also redefine veteran categories and change the previously-used term, "covered veteran," to "protected veteran."  Furthermore, under the proposed rules, contractors would be required to provide information on job openings to state employment service systems and enter "linkage agreements" with such service systems and other recruitment sources.  Finally, contractors will be required to make a minimum number of outreach efforts to hire protected veterans, in addition to entering the "linkage agreements."

And those are just the "high" points!  The comment period ends on June 27, 2011.  These proposed rules add significant responsibilities to covered federal contractors.  Interested contractors should immediately access the rules at 76 Fed. Reg. 23,358 (April 26, 2011).  The rules can also be easily accessed from the OFCCP web-site http://www.dol.gov/OFCCP/OFCCPNews/LatestNews.htm#news1.

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