Attorney Authored

Federal contractors may face new compliance burdens

January 05, 2012


On Dec. 9, the Office of Federal Contract Compliance Programs (OFCCP) issued proposed regulations to implement Section 503 of the Rehabilitation Act of 1973, as amended. Section 503 prohibits discrimination by federal contractors against individuals with disabilities and requires them to take affirmative action in the employment of such individuals.

The non-discrimination and affirmative action obligations apply to all federal contractors (and subcontractors) with contracts in excess of $10,000. The requirement to prepare and maintain an affirmative action program applies only to contractors with both 50 or more employees and contracts of $50,000 or more. Failure to abide by these requirements can result in substantial sanctions against the contractor, including the withholding of progress payments under the contracts, the termination of contracts, and the loss of eligibility for receiving future contracts.

The thrust behind the proposed regulations is the concern by the Department of Labor that, even after 40 years since the passage of the Rehabilitation Act, there still exists stark disparities facing working-age individuals with disabilities. According to the department, this group suffers a 13 percent unemployment rate one and one-half times the rate of those without disabilities.

OFCCP Director Patricia A. Shiu commented that the current regulations, requiring only a good faith effort to recruit and hire people with disabilities, simply are not working. The proposed regulations, she said, would require real accountability and provide the clearest possible guidance for complying with the law.

The 60-day comment period for the proposed regulations ends on Feb. 7, 2012.

The proposed regulations represent a sea change in the OFCCPs approach to compliance under Section 503. In addition to bringing the regulations into harmony with the Americans with Disabilities Act Amendments Act of 2008, they expand the obligations of contractors in seven primary areas.

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