Section 503 and VEVRAA - Affirmative Action Program Requirements
Section 503 of the Rehabilitation Act of 1973 requires all federal contractors (construction or non-construction) with 50 or more employees and that hold a single contract valued at $50,000 or more to develop and implement formal affirmative action programs for individuals with disabilities (IWDs) at each establishment (or function, for those with a functional AAP agreement).
Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) requires all contractors with 50 or more employees that hold a single contract valued at $150,000 or more to develop and implement a written AAP for veterans that fall into one of four “protected” categories under the act.
Unlike the affirmative action requirements for women and people of color (POC) under Executive Order (E.O. 11246), contractors are required to allow applicants and/or employees to review the non-confidential portions of the affirmative action plans (AAPs) for IWDs and veterans.
Because of the similarities and overlap of requirements between IWD and veteran AAPs, the OFCCP allows contractors to prepare combined AAPs for both, and most contractors do. Accordingly, we cover both sets of requirements here.
Contractors are only required to prepare veteran and/or IWD AAPs if they meet the contract dollar (and headcount) thresholds, and the thresholds each are actually are quite different. For IWD AAPs the threshold is relatively low at $50,000, while the veteran AAP threshold is three times that at $150,000 (the headcount threshold, 50, is the same for both).
Note that the contract threshold for preparing IWD AAPs is the same for preparing female and POC AAPs, so if you prepare the latter, you prepare the former.
Unless the company does is not likely to do $150,000 or more in government contracting work, most contractors will prepare female and POC AAPs, IWD AAPs, and veteran AAPs. If a contractor does not hold a qualifying federal contract requiring veteran AAPs, those AAPs are prepared "voluntarily" and are not subject to review by the OFCCP.
Note, however, that if you nonetheless submit veteran AAPs to the OFCCP in response to an audit scheduling letter without noting that the veteran portions are prepared voluntarily and not subject to review, you consent to their jurisdiction and the agency can proceed with the review. So if you are unsure whether or not the VEVRAA portion is required, consult with legal counsel.
Note also that the OFCCP's regulations state clearly that the contract dollar threshold for VEVRAA AAPs is $100,000, not $150,000. However, Congress passed legislation requiring the Federal Acquisition Regulation (FAR) to update these types of thresholds to account for inflation. The FAR tells federal agencies whether or not the EO clauses that bind federal contractors to the equal employment opportunity and affirmative action obligations have to be included in federal prime contracts. The FAR threshold for VEVRAA AAPs has been updated to $150,000 and, rather than go through the hassle of updating their regulations accordingly, the OFCCP is exercising its enforcement discretion to effectively "follow the FAR" and typically will not audit the VEVRAA AAP unless the FAR threshold is met.
The OFCCP's regulations require federal contractors to implement AAPs no later than 120 days after becoming subject to these requirements.
For new contractors, this is likely calculated from the date that the qualifying federal contract or subcontract is executed (signed by both parties), or an effective date specified in the contract.
For exisitng contractors, this provision applies to newly created or acquired facilities and the date the clock starts is situation-specific. Unfortunately, the OFCCP does not provide specific guidance for determining the AAP deadline for such facilities. For a new facility, the clock likely starts from the date the facility opens. For acquired facilities, the clock likely starts when operations are substantially assumed by the acquiring organization.
Contractors that are subject to the affirmative action program requirements must develop and maintain a written affirmative action program (AAP) for each of their establishments. Unlike the female and POC AAP, there is no provision in either the Section 503 or the VEVRAA regulations for reporting employees in AAPs at establishments that are different from where the employee physically works. Nor is there a provision regarding locations with fewer than 50 employees that would allow contractors to "roll up" smaller locations into larger AAPs.
So technically, contractors are required to prepare Section 503 and VEVRAA AAPs for every single physical location. However, the OFCCP has long allowed the Section 503 and VEVRAA AAP structure to mirror the AAP structure developed for the female and POC AAP. In fact, the OFCCP expects it. For instance, in a Section 503 focused review, the OFCCP requires contractors to submit the Job Group Analysis from the female and POC AAP because the agency assumes that the job group structures are the same (and there is no separate Job Group Analysis requirement in the Section 503 or VEVRAA regulations).
Accordingly, the process for determining which employees must be included in the Section 503 and VEVRAA AAPs is the same as for the female and POC AAP.
Availability of AAP for Review
The OFCCP's regulations require contractors to make the Section 503 and VEVRAA AAPs available to any employee or applicant for inspection upon request. The AAPs you show to employees or applicants do not have to include the "data collection analysis" (total job openings, jobs filled, applicants, hires, disabled applicants, disabled hires, veteran applicants, veteran hires) required by 41 C.F.R. §§ 60-300.44(k) and 60-741.44(k) (external links).
Contractors are also required to provide employees and applicants with notice of the availability of the Section 503 and VEVRAA AAPs. Most contractors simply include this notice in the required EEO policy statement (see below). Note that there is no such requirement for the female and POC AAP. Regardless many contractors choose to make that AAP available for inspection as well on a voluntary basis, in which case only the AAP narrative is provided, absent the required reports and analyses. Otherwise, it becomes difficult for the company to argue in other circumstances that those reports and analyses are confidential.
Note that the regulations do not require contractors to allow employees or applicants to photograph, photocopy, scan, or otherwise reproduce the AAPs. Nor are contractors required to provide copies for removal.
If an employee or applicant asks to view your AAPs, allow them to do so in accordance with the regulations and your company's policy, and then inform those in your organization who handle employee complaints. If someone asks to view the AAPs, it is likely that they either already have or are preparing to lodge a complaint either internally or with the OFCCP or the EEOC.
Self-identification of sex and race/ethnicity is a practical requirement of complying with the OFCCP's AAP requirements for women and POC (and compliance with the Uniform Guidelines), but here, the self-identification requirements are explicit.
Since the Americans with Disabilities Act (ADA) was passed in 1990, it has been rare for employees to be asked to self-identify their disability status, and even more rare for the question to be legally asked of job applicants. But in 2014, the OFCCP revised their regulations and began requiring federal contractors to solicit disability self-identification from:
- Applicants prior to making an offer of employment (pre-offer);
- Prospective employees after receiving an offer of employment but before they begin their job duties (post-offer/pre-employment); and
- Existing employees at least once every five years.
The OFCCP requires contractors to use a disability self-identification form developed by the agency whenever soliciting disability self-identification under these requirements. Unfortunately, the form, designated "Form CC-305," can be confusing, meleading, and intimidating, and in its paper form can create quite a recordkeeping headache.
Contractors are not allowed to alter the contents of Form CC-305 in any way, though the OFCCP has recently allowed contractors to substitute the actual company name for the words "the contractor" on the form.
There are rules for re-creating Form CC-305 in electronic environments such as online application systems and employee self-service portals. Among other things, the OFCCP actually prescribes minimum font sizes for different portions of the form.
Most importantly, however, contractors are not required to store copies of completed electronic forms. Rather, contractors' systems are allowed to display the form and simply record users' answers in a database. Note that contractors are expected to "lock-down" that portion of the database, restricting access only to users who are required to have access, in order to satisfy confidentiality requirements.
Note also that Form CC-305 must not only be diplayed, but must be the actual instrument used to collect the self-identification information. In other words, it is not compliant to show the user the form and then take them to a separate form to collect their answer.
As noted above, paper versions of Form CC-305 can create a number of headaches.
For one, the OFCCP's regulations require that the disability self-ID forms be stored separately from the regular "personnel files," but cannot be stored as confidential medical files (because of more strict confidentiality rules pertaining to medical information).
The paper form contains a three-colum list of conditions that the OFCCP believes are commonly considered to be qualifying disabilities. Unfortunately, users might think that if their particular condition is not listed, they should check "no." Accordingly, personnel who administer the form should be prepared to answer questions about the form and should inform users that the list of conditions is not exclusive.
This list of conditions also tends to prompt users to circle their particular condition(s) or otherwise indicate their specific disability on the form itself. So personnel who administer the form should instruct users not to do these things and simply fill out the required fields. And personnel who receive the forms on behalf of the company need to be trained to handle when those instructions are not followed. If a form comes back indicating the user's particular disability, best practices is to transpose just the name, date, and self-identification answer to a blank form and file that with the rest of the self-ID forms. Then the original should be stored as a confidential medical file because it contains medical information.
Form CC-305 runs two pages, and the second page contains a footnote, followed by an accommodation notice, followed by a large blank space. Users might think that the blank space is an appropriate place to write and request an accommodation. Again, users should be advised against this and informed of the company's actual accommodation request process. Personnel who receive a form with an accommodation request must ensure that the request makes it to the right place and is not simply filed away. And if the accommodation request includes information about the person's condition(s), the form must be stored as a confidential medical file and best practice would be to transpose the name, date, and self-ID answer (presumably "yes") to a blank form for storage with the rest of the self_ID forms.
Employee Self-Service Portals
Note that the OFCCP's definition of an individual with a disability includes people who are currently disabled and those with a history of disability. So the secret that you don't tell applicants and employees is that, for reporting purposes anyway, "once disabled, always disabled." Obvously, we don't advertise that because we don't want to discourage people from self-identifying. However, it can create some headaches with regard to employee self-service portals or other instances in which an employee might have access to their own disability self-identification information.
Ideally, contractors should record employee disability self-identification answers as a history file, much like they do for pay history, job history, etc. That way, the contractor can count all employees who ever self-identified as an IWD. And that way, if employees have access to their own disability self-identification information, the system can show them whatever their last self-identification designation was. Otherwise, a potential employee relations issue is created if the contractor "overrides" an employee's "no" answer with a previous "yes."
Note that if you use an employee self-service portal for any of the required solicitations of disability self-identification, the portal must use Form CC-305. Many portals are designed to simply allow users to view and change information, which is fine in the normal course of things. But if, for instance, employees are directed to the portal as part of the required five-year survey, the portal must present the user with Form CC-305.
Federal contractors that prepare VEVRAA AAPs are required to solicit protected veteran self-identification from:
- Applicants prior to making an offer of employment (pre-offer);
- Prospective employees after receiving an offer of employment but before they begin their job duties (post-offer/pre-employment).
Note that there is no requirement to resurvey existing employees on a five year (or any other) basis as there is for IWDs (see above).
The OFCCP, in conjunction with the Department of Labor's Veterans' Education and Training Service (DOL-VETS), has acutally made veteran self-identification easier than it has been in the past.
For one thing, contractors are not required to use a veteran self-identification form prescribed by the OFCCP. Rather, they are free to develop their own veteran self-ID forms.
For another, until recently users were required to check all categories of protected veteran that might apply, potentially requiring people to look up obscure information and lists to determine whether or not they qualify (making self-identification less likely). But the OFCCP did a clever thing in 2014 when they revised their veteran regulations. Instead of requiring contractors to solicit the specific protectede veteran categories listed in the OFCCP's regulations, contractors are now simply required to solicit the protected veteran categories on which they are required to report annually to DOL-VETS (then the VETS-100a report).
Then DOL-VETS revised the annual veteran report and now only requires employers to report the number of employees and hires who fall into any of the specific veteran categories, not headcounts in each category. As a result, contractors now only have to ask if someone is a protected veteran and do not have to ask veterans to identify the specific veteran category or categories.
Asking veterans to identify in their specific categories is still allowed, just not required, and BCGi advises against it for a number of reasons.
First, it is simpler to present users with the protected veteran categories and their definitions and then ask if they fall into one or more of those categories. The resulting self-identification information is easier to store because there is less of it, and if a veteran is unsure about one category but sure about another, they can check "yes" and move on, making self-identification more likely.
Second, one of the protected veteran categories is "disabled veteran," which is not the same as an individual with a disability under Section 503 and the ADA. Information about disabilities is often considered to be more sensitive to individuals and not having to reveal one's military disability status on the self-ID form might also make self-identification more likely.
Third, one of the protected veteran categories is for "recently separated" veterans (within three years). Contractors were previously ill-advised to also solicit veterans' military separation dates if they chose the recentlly separated category, presumably so that contractors could "sunset" the protected veteran status when the only category an individual checked was recently separated. But that was never a requirement. Both the OFCCP and DOL-VETS recognize that not doing so could result in a certain level of over-counting, but both agencies are comfortable with that. If you do collect the separation date, you arguably create an obligation to sunset recently separated veterans after the three-year mark because you have an obligation to not knowingly provide false information on the now VETS-4212 report (which replaced the VETS-100a).
Finally, the OFCCP did another clever thing. They realized that the "active duty wartime or campaign badge" veteran category did not define "wartime." Previously, everyone assumed that "wartime" referred to participation in a war declared by Congress, which hasn't happened since World War II. OFCCP lifted a definition of "wartime" from anothe rpart of VEVRAA that includes the Korean conflict, the Vietnam conflict (which, ironically, was no longer an automatic qualifier for protected veteran status under VEVRAA), and the "Persian Gulf War" (which is ongoing). As a result, most veterans in the civilian labor force today will qualify under this category alone, significantly narrowing the difference between "protected" veterans and "non-protected" veterans.
AAP Required Contents
There are fourteen required elements for the disability and veteran AAPs. Click the links to be taken to the specific BCGi Resources page for each:
Designation of responsibility
Equal Opportunity policy statement
Employee notification of policy
Subcontractor/vendor notification of policy
Union notification of policy (if applicable)
Schedule for and periodic review of physical and mental qualifications
Basic external outreach and recruitment
Evaluation of outreach and recruiting efforts
Disability Utilization Goals
Although not technically a required element of the AAP, all contractors that prepare disability AAPs are required to evaluate the "utilization" if IWDs each year by compapring the percentage of employees who have self-identified as an IWD in each AAP job group to the disability utilization goal prescribed by the OFCCP.
Unlike the female and POC placement goal requirement where contractors determine whether or not a goal must be set and, if so, what that goal is, the OFCCP's regulations set the disability utilization goal for all contractors at 7%. At the start of each AAP cycle, contractors are expected to prepare a report showing the percentage of IWDs in each AAP job group. If that percentage is less than 7% then the goal is not met and the OFCCP will expect to see the company make additional efforts to recruit, hire, and advance IWDs.
The OFCCP's regulations do not prescribe any particular format for the disability utilization analysis report, so it can be as simple as a listing of AAP job groups at each AAP location and the corresponding percentage of IWDs. Consider, for discussion purposes in case of an audit, including the overall response rate to the disability self-identification form and the percentages of "yes" answers, "no" answers, and "I choose not to self-identify" answers. The OFCCP's scheme depends on robust self-identification, but society in general might not be there quite yet. After all, the ADA has been telling applicants and employees that their disability status is none of their employers' business for thirty years or so. Reversing course and getting people to disclose their disability status to employers does not happen overnight, and your disability self-ID response rates should inform whether or not it can be determined that any particular disability utilization goal was not met.
Nonetheless, when there are unmet disability utilization goals, the OFCCP's regulations require contractors to determine whether and to what extent there are artificial and/or impermissible impediments to equal employment opportunity for IWDs. In other words, is the company doing anything that is preventing IWDs from joining the workforce and being successful?
When making this determination, contractors must consider:
- Their assessment of personnel processes;
- Their evaluation of outreach and recruiting efforts;
- The "results" of the company's internal audit; and
- "Any other areas" that might affect the success of the affirmative action program.
Whatever you determine is causing or contributing to your unmet disability utilization goals, the OFCCP requires contractors to develop and execute "action-oriented programs" designed to correct the issue(s), much like in response to female and POC placement goals. Those action-oriented programs, or "action plans," are likely to include additional targeted outreach and recruiting efforts, but might also include "inreach" efforts such as disability self-identification education for existing employees, self-ID campaigns, development and support of disability employee resource groups, and other initiatives designed to ensure that IWDs are valued and supported in the workplace.
Veteran Hiring Benchmark
Again, this is not a required element of the VEVRAA AAP, but every contractor that prepares a veteran AAP must establish a benchmark for hiring "protected veterans" at each AAP establishment each year. Unlike the disability utilization goal discussed above, the veteran hiring benchmark is not set for each AAP job group, but for the AAP location as a whole.
Contractors technically have two options for setting the veteran hiring benchmark. COntractors can simply adopt the national percentage of veterans in the civilian labor force as published on the OFCCP's website (external link), or conduct a five-factor analysis in which the benchmark is set by taking into account:
- The average percentage of veterans in the civilian labor force over the prior three years in each state where the contractor is located, as calculated by the Bureau of Labor Statistics and published on the OFCCP's website;
- The number of veterans, over the previous four quarters, who were participants in the employment service delivery system (state job boards) in the states where the contractor is located, as tabulated by DOL-VETS and published on the OFCCP's website;
- The applicant and hiring ratios for the previous year based on the data collected pursuant to the OFCCP's "data collection analysis" requirement (often referred to as the "data metrics");
- The contractor's recent assessments of the effectiveness of its external outreach and recruitment efforts for veterans; and
- Any other factors, including but not limited to the nature of the contractor's job openings and/or its location, which would tend to affect the availability of qualified protected veterans.
Perhaps not surprisingly, most contractors choose to simply adopt the national percentage of veterans in the civilian labor force as published on OFCCP's website. The OFCCP updates this figure each Spring, typically in April or May. Since the inception of this requirement in 2014 when the national percentage was 7.2%, this figure has declined slightly each yar by one or two tenths of a percent. For instance, by 2019 the percentage was 5.9%.
The OFCCP has been silent on whether or not contractors may or should "re-set" their veteran hiring benchmark in the course of their AAP cycle if/when the OFCCP updates the figures on the agency's website. Currently, this would be allowed, but not recommended, primarily because that adds unnecessary complexity.
Veteran Hiring Benchmark Analysis?
Interestingly, there is actually no explicit requirement in the OFCCP's regulation requiring any sort of analysis of contractors' veteran hiring benchmark. Accordingly, this is a potential "set it and forget it" scenario, though it is doubtful that is what the OFCCP intends.
In every compliance review of the VEVRAA AAP, the OFCCP requests the "data collection analysis" which will show the overall and veteran selection rates, and the agency will use those figures to determine whether or not the veteran hiring benchmark was met. If not, the OFCCP will expect that the contractor will have engaged in a process much like developing and executing "action-oriented programs" as with female and POC placement goals and the disability utilization goals.