New rules set veteran, disability hiring benchmarks for federal contractors

Tuesday - 8/27/2013, 7:12pm EDT

Updated 8/28/13 at 10:45 a.m to include comments from the Associated General Contractors of America

The Labor Department unveiled two final rules Tuesday requiring federal contractors to establish clear-cut annual benchmarks for hiring veterans and people with disabilities.

Under the first of the new rules, contractors will be required to set annual yearly benchmarks for hiring veterans, an update to requirements first established by the 1974 Vietnam Era Veterans' Readjustment Assistance Act.

The benchmarks will be based on the national percentage of veterans in the workforce — currently 8 percent. The rule, however, also allows contractors to use an alternative set of metrics based on data from the Bureau of Labor Statistics and the Veterans' Employment and Training Service.

Contractors will also be required to collect data on the number of veterans who apply for jobs as well as the number of veterans that they ultimately hire.

"Having this data will assist contractors in measuring the effectiveness of their outreach and recruitment efforts," a Labor fact sheet stated. "The data must be maintained for three years to be used to spot trends."

The second rule updates the section of the 1973 Rehabilitation Act that requires federal contractors to take action to recruit and hire people with disabilities.

The new rule calls on federal contractors and subcontractors to ensure that people with disabilities make up 7 percent of the hires in each of their job groups.

For contractors with fewer than 100 employees, the 7 percent goal will apply to their entire workforce.

Contractors will also be required to keep records on the number of people with disabilities who apply for jobs and the number that are hired.

"In a competitive job market, employers need access to the best possible employees," Labor Secretary Tom Perez said in a statement. "These rules make it easier for employers to tap into a large, diverse pool of qualified candidates."

Industry group decries rules as unnecessary

The rules are expected to be published in the Federal Register shortly and will be become effective 180 days after publication. However, contractors with written affirmative action programs already in place will have additional time to fully comply with the new rules, Labor stated.

But at least one industry group says the new rules are unnecessary and burdensome because contractors have already taken steps to ensure veterans and people with disabilities don't face hiring discrimination.

In a statement, Associated General Contractors of America CEO Stephen Sandherr said the new rules mean the industry will have to spend as much a total of $6 billion "to produce reams of new paperwork proving they are doing what the federal government already knows they are doing."

The Labor Department's Office of Federal Contracts Compliance Programs has estimated the cost of the new regulations to contractors will be much smaller — $81.1 million, or $473 per contractor.

Sandherr said his group is reviewing legal options to block the the new regulations.

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