Section 503 of the Rehabilitation Act of 1973, as amended ("Section 503"), prohibits employment discrimination by federal government contractor and subcontractor employers against individuals with disabilities. It also includes affirmative action provisions that relate to both hiring and advancement of disabled individuals by those same employers. The provisions of Section 503 apply to government contractors with contracts/subcontracts of over $10,000 for the purchase, sale, or use of personal property or non-personal services, specifically including construction services. Contractors/subcontractors that have a contract/subcontract of at least $50,000 and at least 50 employees are required to prepare and maintain an Affirmative Action Program (AAP) to document efforts to comply with Section 503.

The federal government’s Office of Federal Contract Compliance Programs (OFCCP) has proposed revisions to regulations that implement and enforce Section 503. Those revisions set forth certain data collection obligations and establish utilization goals to be met by contractors to assure the effectiveness of affirmative action efforts. The major points included in the proposed revisions are: (1) increased contractor obligations for data collection and AAP content related to disabled employees; (2) expansion of requirements regarding outreach agreements and specific affirmative methods for hiring the disabled; (3) addition of written reasonable accommodation procedures.

Under the proposed rule, contractors will be required to document and annually update calculations of referral data, applicant data, hiring data (including the "hiring ratio" of disabled employees to total hires), and "job fill ratio" (job openings to job hires). Contractors must conduct ongoing analyses of the data to assure effectiveness of affirmative action policies. Part of the data will be obtained through contractors’ solicitation – under the provisions of the new regs – of voluntary self-identification of disabled status from employees and applicants. The OFCCP asserts that such self-identification does not violate the provisions of the ADA, because both the ADA and Section 503 permit contractors to conduct a pre-offer inquiry into disability if it is made pursuant to a law requiring affirmative action for individuals with disabilities (i.e., the Vietnam Era Veterans’ Readjustment Assistance Act).

The revised regs also would require contractors to list all employment opportunities in specific outreach and recruitment efforts, including "linkage" agreements with the nearest State Vocational Rehabilitation Agency office, or with other organizations in a network specified in the regs. The proposed revisions specifically require contractors to send written notification of the company’s affirmative action efforts to subcontractors and subcontractor vendors/suppliers to request similar action on their parts to assist individuals with disabilities.

An added section of the proposed regulations require each contractor with an AAP to develop and implement a written policy outlining procedures for processing requests for reasonable accommodation. The provision lists the specific elements that must be included in such policy, including contact information, a description of the process, a timeframe for the processing of such requests, and a mention of the confidentiality of the process. This is in addition to revised AAP content requirements that include a mandatory statement from the contractor’s CEO indicating support for the AAP, a comprehensive annual review (revised from "periodic") of related processes, external and internal dissemination of the AAP, and the development and maintenance of an audit and reporting system that will be used to evaluate the company’s affirmative action efforts.

The OFCCP has concluded that the establishment of a national goal for hiring individuals with disabilities is warranted. Therefore, the proposed regulations include a specific "utilization goal" of seven percent for all federal contractors. That percentage will apply for each EO 11246 job group in a contractor’s workforce. The OFCCP also is considering the establishment of a sub-goal of two percent for the hiring of individuals with certain severe disabilities, including blindness, total deafness, paralysis, and intellectual and psychological disabilities.

While the proposed regulations do not include any requirement for "priority consideration" of individuals with disabilities in recruitment or hiring, the proposal does include a section encouraging contractors to voluntarily develop and implement programs that provide such consideration. Contractors choosing to use such a program must include a description and a report of outcomes in its AAP.

On November 30, 2011, the Office of Management and Budget (OMB) approved the OFCCP’s Notice of Proposed Rule Making, in which the OFCCP outlined its proposed revisions to strength the affirmative actions provisions of Section 503. (The OMB evaluates the effectiveness of various agency programs and policies, and sets funding priorities for them. It also ensures that proposed legislation is consistent with the federal budget and policies.) The approval means that the proposed rule changes are now published in the Federal Register, and a final opportunity for comment is open until February 7, 2012. Comments can be submitted through, or in writing to Debra Carr, Room C-3325, 200 Constitution Avenue NW, Washington, D.C. 20210. The reference number, which should be included with comments, is (RIN) 1250-AA02.


The proposed Section 503 regulations expand both the scope of recruitment and hiring of disabled individuals, and data collection/reporting requirements for contractors. One of the most critical provisions, however, is one requiring contractors to provide training to personnel involved in recruitment, hiring, promotion, and disciplining. That training should include the contractor’s affirmative obligations under the regs and should outline the benefits of employing individuals with disabilities, as well as informing such personnel of the contractor’s legal obligations in this area. Comprehensive, objective training in this area can help to alleviate some of the burden that the new regulations are perceived to impose.