• The Implications for Employers of OFCCP’s Changes to Section 503 of the Rehabilitation Act

    Spotlight for Recruiting Professionals
    January 22, 2014

    New changes to Section 503 of the Rehabilitation Act of 1973 have implications for the hiring and employment of people with disabilities.

    Section 503 of the Rehabilitation Act of 1973 is focused on employment and has remained relatively unchanged for 40 years. This section applies to private-sector companies that have $10,000 or more in contracts with any federal agency and is overseen by the U.S. Department of Labor’s Office of Federal Contract Compliance and Policy (OFCCP).

    “Historically, there has only been slight encouragement of employers to hire people with disabilities by requiring a demonstration of best efforts to hire from this population,” explains Alan Muir, executive director and co-founder of Career Opportunities for Students With Disabilities (COSD). “There were no quotas or targets in the regulation that through non-compliance would endanger the continuance or renewal of a company’s federal contract.”

    As of late September, the changes to Section 503 Regulations now require a nationwide aspirational goal of the work force to have 7 percent representation of qualified individuals with disabilities (current employees, applicants, and new hires). A grace period until March 24, 2014, is intended to allow companies to develop and submit plans for outreach and compliance.

    “It is still unclear as to when the regulation will be fully in force, but the latest estimates are that an additional 12 to 18 months will be required to fully implement the regulation with all employers completing their plans and submitting their first round of results,” Muir says. “Once the regulation is fully in force, the penalty for non-compliance will be fully revealed; presumably it will consist of a series of fines with the ultimate penalty of cancellation or non-renewal of federal contracts for that company.”

    Muir points out that for employers with more than 100 employees, the 7 percent goal applies to broad job categories within the company. For employers with fewer than 100 employees, the 7 percent applies to the entire work force within that company.

    There is a series of compliance requirements to show the company’s progress toward attainment or surpassing of the 7 percent goal including outreach efforts and internal identification of existing employees with disabilities. For example, employers will be required to invite current employees to disclose a disability they may not have previously disclosed in order to be counted toward the 7 percent goal.

    “This invitation to disclose a disability will be provided to all employees within the company whether they have requested accommodations or not,” Muir explains. “Applicants with disabilities, including college students and recent graduates, will be invited to disclose in advance of the interview, on the application or at other opportunities, such as post-offer. This information will be used to track applicants with disabilities through the recruiting, employment decision, and hiring phases.”

    For employers, Muir says that identifying current employees with disabilities in the work force and counting them is a significant impact as it changes the roles and increases the importance of disability as an affirmative action category.

    “This is a step toward acceptance of disability in the workplace,” he says. “However, the challenge for employers is to maintain confidentiality of specific individuals and their disabilities, and to continually ensure that the encouragement of disclosing does not negatively impact employees who were initially not willing to disclose.

    “A disability—particularly certain non-apparent disabilities such as psychiatric disabilities—are far from accepted in society, including the workplace. Stigma, fear, and misunderstanding are still very much present against individuals who may have these disabilities, and are significant barriers to meaningful employment for many people with disabilities.”

    Muir says there are many different aspects of compliance with the new regulations. For example, outreach to organizations like COSD that can help employers be more connected to the disability community is a major component that counts toward compliance.

    “Over the next year or so, employers will become increasingly attuned to the change in Section 503, as it is a federal mandate and directly affects their level of success in obtaining and maintaining any federal contract,” he says. “This imperative will be transmitted to the recruiters and we should expect recruiters will be asking about options of meeting with potential candidates with disabilities.”

    This presents an opportunity for employers and career centers to work together to ensure compliance and identify employment opportunities for students. Career services offices, he points out, can distinguish themselves to their employers by being very open in their willingness to assist employers.

    “It should be noted that the changes to Section 503 are major paradigm shifts for employers, who have been instructed to expect disclosure of a disability later in the process or not at all,” he says. “Now with this mandate, employers are preparing the best methods of inviting candidates to disclose their disability early on in the process.”

    Here are several resources that address OFCCP’s changes to Section 503 of the Rehabilitation Act of 1973: