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Sunday, April 20, 2014

Contractors Face New Federal Hiring Rules in 2014

DOLProcurement managers at companies that do business with the federal government should consult with their human resources directors about changes to affirmative action hiring rules that could take effect as soon as early 2014.

The U.S. Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) released Final Rules on Aug. 27 that establish hiring goals for veterans and disabled workers. OFCCP plans to soon publish these rules in the Federal Register, after which they will become law in 180 days.

The rules apply to federal contractors, a sweeping term that includes aircraft manufacturers, auto OEMs, electronics suppliers — just about any business (and its vendors) that sells products to the government. Hence, they could end up being mainstreamed as part of the hiring policies by many companies.

Both rules amend previous regulations. I will discuss one today, and the other in a subsequent posting.

The Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) is being strengthened to “[address] the alarming rates of veterans’ unemployment,” primarily among those who served in Iraq and Afghanistan (Gulf War-era II veterans), many of whom “face substantial obstacles in finding employment,” OFCCP says.

In 2012, for example, the unemployment rate for these veterans was 9.9 percent compared with 7.9 percent for non-veterans,  according to the Bureau of Labor Statistics (BLS). The unemployment rate for male veterans aged 18-24, however, was 20 percent, substantially higher than the 16.4 percent rate for non-veterans in the same age group.

[Manufacturing could be an opportunity for this latter group. According to the newly released 2013 ThomasNet Industry Market Barometer, workers 18-30 years old are only 25 percent or less of the workforce of manufacturers responding to the annual survey. Seventy-eight percent of respondents are 45-65 or older, while 35 percent are 55-64, near retirement age.]

Moreover, male veterans in general earned 2.7 percent less than male non-veterans, reports BLS, while male Gulf War-era II veterans earned 1.4 percent less than non-veterans, and male Vietnam-era veterans earned 6.9 percent less.

Female veterans, interestingly, earned 6.3 percent more than non-veterans in 2012.

OFCCP is requiring federal contractors to implement benchmarks that “measure their progress toward achieving equal opportunity for protected veterans.” Among the actions this entails is:

  • Requiring, for the first time, that benchmarks be based on the national percentage of veterans in the workforce (8 percent) or developed from “the best available data.”
  • Maintaining quantitative measurements and comparisons for the number of veterans who apply for jobs and the number hired.
  • Alerting subcontractors to their hiring obligations through the use of specific language (e.g., an Equal Employment Opportunity clause) in contracts.
  • Establishing relationships with organizations that recruit or train veterans, and with state employment services that provide priority referrals of them. The VEVRAA Final Rule is designed to make it easier for veterans to find and apply for jobs that contractors list with employment agencies.

Based on comments from legal experts who have reviewed the rule, contractors must also provide opportunities for veterans to self-identify their military status, collect data about the hiring process and retain it for three years, and make records available to the OFCCP.

The VEVRAA Final Rule is another regulatory requirement for employers, but should not be onerous. In fact, considering the experience that many veterans have with logistics management, singling them out for consideration could widen the pool of capable candidates for procurement jobs.

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