Client Alerts & Publications

Federal Regulatory Update

Recently, the Federal Government issued a number of final and proposed regulations that will have a significant impact on government contractors. Below is a summary of some of the key regulations.

I. Affirmative Action Goals for Veterans and Disabled Workers Final Regulations
Most federal government contractors and subcontractors are familiar with the requirement to take affirmative action to recruit, hire, and promote qualified protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”) and disabled workers under Section 503 of the Rehabilitation Act. Recently the Federal Government issued new regulations expanding federal government contractors’ and subcontractors’ obligations with regard to recruiting, hiring, and promoting protected veterans and disabled workers.
A. VEVRAA
VEVRAA applies to contractors and subcontractors with federal contracts or subcontracts in excess of $100,000. It prohibits discrimination against covered veterans in employment and requires contractors and subcontractors to take affirmative action to employ qualified covered veterans. The new regulations, which take effect on March 24, 2014, among other things, require federal government contractors and subcontractors to:

Set annual hiring benchmarks for protected veterans.4 While the new regulations specifically state that quotas are expressly forbidden, contractors must create a quantifiable method (i.e., benchmark) by which they can measure their progress toward achieving equal employment opportunities for protected veterans. Contractors may either: (1) use a benchmark equaling the national percentage of veterans in the civilian labor force as published by the Office of Federal Contract Compliance Programs (OFCCP) (currently 8%); or (2) set their own benchmark based on data from the Bureau of Labor Statistics and Veterans’ Employment and Training Service/Employment and Training Administration. Contractors must document the hiring benchmark and the factors considered in establishing the benchmark, and retain these records for three years.

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