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They’re Here! OFCCP Issues “Game Changing” Veterans and Disabled Regulations

Matthew J. Camardella, Esq.Jackson Lewis LLP

September 11, 2013

Introductory Statement

THE MATERIALS CONTAINED IN THIS PRESENTATION WERE PREPARED BY THE LAW FIRM OF JACKSON LEWIS LLP FOR THE PARTICIPANTS’ OWN REFERENCE IN CONNECTION WITH EDUCATION SEMINARS PRESENTED BY JACKSON LEWIS LLP. ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT CONSIDER THESE MATERIALS OR DISCUSSIONS THEREABOUT TO BE LEGAL OR OTHER ADVICE.

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About Jackson Lewis

• Represents management exclusively in every aspect of employment, benefits, labor, and immigration law and related litigation.

• 750 attorneys in 54 locations nationwide.

• Current caseload of over 6,500 litigations and approximately 415 class actions.

• Founding member of L&E Global.

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About the Affirmative Action/OFCCP Practice Group

We have extensive experience preparing AAPs and defending them before the OFCCP in all industries and areas of the country. Our diverse team of 35 attorneys, paralegals, and support staff prepares approximately 2,500 AAPs a year.

Since 2011, we have defended over 350 OFCCP audits, including successful defense of Corporate Management (“Glass Ceiling”) Compliance Evaluations. As a law firm, we offer more than consulting services; we offer strategic thinking and sophisticated legal representation.

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About Matthew Camardella

Matt is a Partner in the Affirmative Action Practice Group at Jackson Lewis LLP, a national firm representing management exclusively in labor and employment matters. In this role, he regularly advises and counsels employers from all industries throughout the country about this legally specialized area of law. He directs the preparation of more than 400 AAPs each year and has defended hundreds of OFCCP audits, including Corporate Management Compliance Evaluations, for a broad range of employers across the country. Moreover, Matt serves as the Practice Group lead on responding to OFCCP allegations of systemic discrimination and has successfully resolved dozens of such claims.

Matt serves as General Counsel to the Executive Board of the American Association for Affirmative Action. In addition, he regularly presents to Industry Liaison Groups and other employer organizations around the country on EEO, affirmative action and diversity issues, including the Philadelphia “Liberty” ILG, for which he serves as Vice-Chair.

Matt received his B.A. from the College of the Holy Cross in 1993 and graduated with honors from Hofstra University School of Law in 1997. While at Hofstra, he was Editor-in-Chief of the Hofstra Labor Law Journal and received the Award for Outstanding Performance in Labor and Employment Law.

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SOMETHING BIG JUST HAPPENED

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VEVRAA

• Vietnam Era Veterans’ Readjustment Assistance Act of 1974o Regulations have been unchanged since 1976

o Increasing numbers of veterans from Iraq, Afghanistan, and other places around the world, face employment obstacles

o For example, in 2012:

• 9.9% unemployment rate for Gulf War-era II veterans, compared to nonveterans at 7.9%

• 20% for male Gulf War-era II veterans age 18 to 24, compared to 16.4% nonveterans of the same age group

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Section 503

• Section 503 of the Rehabilitation Act of 1973, as amended

o Regulations regarding Section 503 in place since the 1970s

o Higher unemployment rate for individuals with disabilities

o Higher percentage of working age individuals with disabilities not in the labor force

o Framework did not reflect the realities of today’s workplace or current disability rights laws (ADAAA)

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Background

• In late 2011, the OFCCP proposed regulations regarding veterans and individuals with disabilities

• Many employers strongly opposed the proposed regulations as striking an inappropriate balance between the utility of the regulations and the compliance burdens they would impose

• OFCCP considered the comments it received, delivered new regulations to the Office of Management and Budget in July 2013, and (now that OMB has approved the new regulations) released final versions on August 27, 2013

• The final regulations are not effective – yet . . .

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What Just Happened?

• The new regulations are “game-changers”

o Enhanced obligations to document employment decisions

o New data collection obligations

o Longer record keeping obligations

o More burdensome and expensive compliance obligations

o Increased number of “unknowns” during OFCCP audits

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What Didn’t Happen . . .

• No obligation to develop linkage agreements with specific recruitment sources

• Do not need to survey your workforce annually to determine the current utilization of individuals with disabilities

• No need to keep employee disability files to document every employment decision

• No specific required procedure to document every employment decision (but employers must have sufficiently documented decisions to facilitate compliance reviews)

Effective Date

• Both sets of regulations will be effective 180 days after the final rule is published in the Federal Register

• Phased in compliance for AAP requirements only – employers who have AAPs in place on effective date may wait until next annual AAP cycle to implement all of Subpart Co Open Question: What does the mean, exactly, regarding the

time you have to get into compliance?

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VEVRAA

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New Pre- and Post-Offer Invitations to Self-ID

• Must invite all “applicants” to voluntarily self-identify as a protected veteran (generally) at the pre-offer stage of hiring processo May use language provided by OFCCP

o Internet applicants may be invited post-screening for basic qualifications

• Must invite all “offers” to voluntarily self-identify as a specific category of protected veteran status post-offero Permits analysis by separate veteran categories – similar to that

performed on sub-minorities by OFCCP

New Data Collection Analyses

• Must document “computations or comparisons pertaining to applicants and hires”:

• Number of total applicants who self-identified as protected veterans

• Total number of job openings and number of jobs filled

• Total number of applicants for all jobs

• Total number of protected veteran hired

• Total number of applicants hired

• Must maintain data (and any “computations”) for 3 years

• Preamble: OFCCP will not use applicant and hire data to conduct underutilization or impact ratio analyses and enforcement actions will not be brought solely based on statistical disparities - ???

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New Workforce Utilization Benchmark

• 8% “hiring benchmark” for protected veterans (based on national percentage of veterans), OR

• Employer can establish own benchmark based on:o Percentage of veterans in the labor force in the state over the last

three years

o Number of veterans who participated in the employment delivery system

o Applicant and hiring ratios from the prior year

o Recent assessment of outreach efforts

o Any other factors (such as location) that would affect recruitment

• Must maintain for three years

Other Changes

• Must document all activities associated with good faith efforts, including job postings, communications, and annual analyses of effectiveness

• New required EEO tagline in job listings

• Must submit job postings with state agencies in specific formats that may vary by agency

• Changes to the way an employer may incorporate the EEO Clause into its purchase orders

• New obligations regarding disclosing and providing OFCCP access to company records

• New rules regarding electronic EEO notices to employers

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SECTION 503

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New Pre-Offer Invitation to Self-ID

• Must invite all “applicants” to voluntarily self-identify as an individual with a disability at the pre-offer stage of hiring processo Must use language prescribed by OFCCP (forthcoming)

o Internet applicants may be invited post-screening for basic qualifications

o EEOC’s Office of Legal Counsel provided written opinion stating that these pre-offer inquiries do not violate the ADA

o “Fills large data gap” for the OFCCP - Allows OFCCP to see if (and when) individuals with a disability has been screened out of selection process

New Post-Offer Invitation to Self-ID

• Post-Offer: Must also invite self-identification after offer is extended, but before work is started using OFCCP standardized form

• Ongoing Obligation: Must survey (i.e. invite to self-ID) all incumbent employees during the first year the contractor becomes subject to Subpart C, and at 5-year intervals thereafter, using OFCCP standardized form o In between 5 year intervals, must remind employees at least

once of right to update information

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New Data Collection Analyses

• Must document “computations or comparisons pertaining to applicants and hires:”o Number of total applicants who self-identified as disabled

o Total number of job openings and number of jobs filled

o Total number of applicants for all jobs

o Total number of disabled hired

o Total number of applicants hired

• Must maintain data (and any “computations”) for 3 years

• Preamble: OFCCP will not use applicant and hire data to conduct underutilization or impact ratio analyses and enforcement actions will not be brought solely on statistical disparities - ???

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New Workforce Utilization Goal

• 7% “utilization goal” for individuals with disabilitieso Applies to each job group in workforce (to prevent “steering”)

o Contractors with less than 100 employees may apply the goal to entire workforce, not by job group

• OFCCP: “not a quota or ceiling … a management tool that informs decision-making and provides real accountability”

• Failing to meet goal, alone, is not a violationo But contractor must develop action-oriented programs to remove

identified barriers to EEO for individuals with disabilities

Other Changes

• New definition of “disability”

• Must document all activities associated with good faith efforts, including job postings, communications, and analyze effectiveness of sources

• New required EEO tagline in job listings

• Changes to the way an employer may incorporate the EEO Clause into its purchase orders

• New obligations regarding disclosing and providing OFCCP access to company records

• New rules regarding electronic EEO notices to employees

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WHAT DOES THIS MEAN FOR EMPLOYERS?

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Veterans’ Benchmarks

• A custom “benchmark” may be more nuanced, accurate, and appropriate for your workforce. But:

o What additional data will you need to gather and maintain (for 3 years) to calculate the custom benchmark?

o Do you want to justify its reasonableness to OFCCP?

o Do you want to be among the early “test cases” to see how OFCCP will enforce this requirement?

When to Begin Collecting Disability Status Data

• Invitation to self-id as an individual with a disability is in subpart C of regulations

• Preamble states that contractors “are required to update their AAP to come into compliance with the requirements of [subpart C] at the start of their next standard 12-month AAP review and updating cycle”

• Agency officials stated that contractors do not need to begin collecting disability status data until next full AAP cycle

• How will employer conduct the applicant/hire data collection analyses or the utilization analyses?

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Budgeting

• The new regulations effectively double your AAP statistical / analytics obligations and add substantially to your record keeping burdens.

• The cost of compliance will increase – get stakeholders input and management buy-in for the impact on your 2014 budget, and beyond.

• Is your organization staffed properly to handle the increased time and resources necessary?

• Should you outsource certain compliance functions?

180 Days Sounds Like A Long Time, BUT . . .

• How long does it take to organize the right stakeholders to get into compliance?o Senior Management

o HR/Compliance

o Legal

o Internal IT and external vendors – AAP, HRIS, ATS

o Purchasing (to update purchase orders)

• What new training programs must you plan for recruiters, HR, Legal, and managers? What is the timing of that training?

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Questions?

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Matthew J. Camardellacamardem@jacksonlewis.com

(631) 247-4639

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Thank You!

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