By: Victoria Ungvary
Contract and Employee Thresholds
Federal contractors and subcontractors meeting the contract and employee thresholds below are required to develop and maintain written AAPs for each establishment or approved Functional Affirmative Action Plan:
- Section 503 – Employers with 50 or more employees that have a single federal contract or subcontract of $50,000 or more
- VEVRAA – Employers with 50 or more employees that have a single federal contract or subcontract of $150,000 (Federal Acquisition Regulation Council's inflationary adjustment)
Developing AAPs
New federal contractors and subcontractors meeting the thresholds are required to develop their AAPs within 120 days from the start of the covered contract or subcontract. Contractors subject to both Section 503 and VEVRAA have the option of preparing separate AAPs, or a combined Section 503 and VEVRAA AAP since the regulations are so similar and many of the requirements mirror each other.
Section 503 Utilization Goal & VEVRAA Hiring Benchmark
One of the key differences between Section 503 and VEVRAA requirements is how contractors set targets for the employment of qualified individuals with disabilities and protected veterans. The Section 503 regulations require contractors to establish a utilization goal for the current workforce, while the VEVRAA regulations require the establishment of a hiring benchmark.
Section 503 Utilization Goal
OFCCP established a utilization goal of 7% employment of individuals with disabilities for all contractors subject to the written AAP requirements under Section 503. OFCCP is able to update this goal but has not done so since the revised regulations were released over 10 years ago. As with female or minority goals established under EO 11246, this is not a quota.
The Utilization Goal is applied to each establishment. The TAG explains contractors with more than 100 total employees must apply the goal to each job group in each AAP (established by the EO 11246 AAP), while contractors with 100 or fewer total employees can choose to apply the goal to their entire workforce.
If the utilization goal is not met, the TAG states “contractors need to take steps to determine whether and where impediments to equal employment opportunity exist.” This must include identifying any problem areas by examining the AAP components and the development of action-oriented programs to correct any issues. The TAG includes some examples of action-oriented programs, such as alternative or additional outreach and recruitment activities.
VEVRAA Hiring Benchmark
Contractors subject to the written VEVRAA requirements must annually establish a hiring benchmark for protected veterans or use the national benchmark provided by OFCCP.
The TAG includes the 5 factors that contractors must consider when establishing a custom benchmark. They are:
- The average percentage of veterans in the civilian labor force in the state where the contractor is located over the preceding three years, as posted in the Benchmark Database on the OFCCP Web site;
- The number of veterans, over the previous four quarters, who participated in the employment service delivery system in the state where the contractor is located, as posted in the Benchmark Database on the OFCCP Web site;
- The applicant and hiring ratios for the previous year;
- The contractor’s recent assessments of the effectiveness of its outreach and recruitment efforts; and
- Any other factors, such as the nature of the job or its location, that would affect qualified protected veterans' availability.
The TAG reminds contractors that benchmarks and supporting documentation for calculations are subject to the three-year record retention requirement.
Invitation to Self-Identify
To be compliant with Section 503 and VEVRAA, contractors are required to solicit protected veteran status and disability status from each individual seeking employment. This information is used to complete various components of the AAPs, including the Disability Utilization Goal, Hiring Benchmark, and the evaluation of the effectiveness of outreach and recruitment. [In the next part of the series, we will cover the written AAP requirements to undertake outreach and positive recruitment, which include an obligation to analyze outreach and recruitment effectiveness for individuals with disabilities and protected veterans. Self-identification figures can assist contractors with determining whether the outreach and recruitment efforts they’re making have had a positive impact.]
As the invitation is voluntary, contractors cannot use refusal to self-identify against the individual. Contractors must also ensure the information is maintained confidentially and in a separate data analysis file, rather than the personnel or medical files of individual employees.
Access should be limited, and the information should not be available to anyone making selection decisions.
Contractors may choose to provide the invitations at the same point they solicit race, ethnicity, and sex information during the application process. VEVRAA and Section 503 require applicants to self-identify at the pre- and post-offer stage of the hiring process.
While the general requirements are similar under Section 503 and VEVRAA, there are several key differences. Under Section 503, contractors are required to use Form CC-305, Voluntary Self-Identification of Disability Form. The TAG includes the requirements contractors must follow when creating their own electronically fillable version of the form, including font size and type requirements. New contractors must survey their existing workforce within the first year of being subject to Section 503, and again once every five years. Within the intervening five years, contractors must remind their employees they may update their disability status at any time.
Conversely, under VEVRAA, while there are required components of the self-identification form, OFCCP doesn’t require the use of a specific form. The TAG lists the 6 required components and directs contractors to Appendix S of the TAG for a more recent sample than the one included in the VEVRAA regulations.
Documentation of Compliance with the Invitation Requirements
Contractors have options for documenting compliance with the invitation requirements. The TAG lists the various options for record retention when using either paper or electronic invitations. Most include retaining a log, spreadsheet, or database created to track responses in addition to a copy of the completed form.
In the next installment of DCI’s series on the Supply and Service TAG, we’ll continue our discussion on Section 503 and VEVRAA with a focus on the written AAP component.
