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Contractors chief takes Labor Department to task on new employment rules

Associated General Contractors of America CEO Stephen Sandherr weighed in last month on two final rules the U.S. Department of Labor claims will improve hiring and employment of veterans and for people with disabilities:

“The [Obama] administration’s decision to finalize two new oppressive employment regulations for federal contractors forces us to object to measures whose goals we support and objectives our members already meet. These rules will force federal contractors to spend an estimated $6 billion a year to produce reams of new paperwork proving they are doing what the federal government already knows they are doing.

“Administration officials claim these rules are necessary to address higher rates of unemployment among veterans and the disabled. Yet federal employment data shows that the annual average unemployment rate was lower for every category of veteran covered by this rule compared to the nonveteran unemployment rate. The only exception was that the unemployment rate for ‘Gulf War era II’ veterans was slightly higher than for nonveterans (9.9 percent vs. 9.0 percent), likely because they returned to the work force during a protracted economic downturn. Federal data also shows that veterans of all ages are already more likely to be employed by construction firms than are non-veterans. Federal data also indicates that people with disabilities are as likely to be employed in construction as people without disabilities.”

“In their effort to counter non-existent employment challenges, the administration has developed two rules that require federal contractors to take extensive measures to combat discriminatory practices the federal government already knows barely exist,” Sandherr explained. “A 2012 analysis of eight years of the most recent federal enforcement data found that only 0.02 percent of all federal contractors could be seriously suspected of discriminating against veterans or the disabled.

“Given the lack of justification for these new measures, we will closely review all appropriate legal options available to protect employers—who have already made sure veterans and the disabled are well represented in the workforce—from billions in unneeded new regulatory costs.”

Labor Department officials report that one rule updates requirements under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA); the other those under Section 503 of the Rehabilitation Act of 1973. For more than 40 years these laws have required federal contractors and subcontractors to affirmatively recruit, hire, train and promote qualified veterans and people with disabilities respectively.

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

“Strengthening these regulations is an important step toward reducing barriers to real opportunities for veterans and individuals with disabilities,” added Patricia A. Shiu, director of the department’s Office of Federal Contract Compliance Programs, which enforces both laws.

The VEVRAA rule provides contractors with a quantifiable metric to measure their success in recruiting and employing veterans by requiring they annually adopt a benchmark either based on the national percentage of veterans in the workforce (currently 8 percent), or their own benchmark based on the best available data. The rule strengthens accountability and record-keeping requirements, Labor officials contend, enabling contractors to assess the effectiveness of their recruitment efforts. It also clarifies job listing and subcontract requirements to facilitate compliance.

The Section 503 rule introduces a hiring goal for federal contractors and subcontractors that 7 percent of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination—similar to those that have long been required to promote workplace equality for women and minorities. The rules are to become effective 180 days after their publication in the Federal Register. More information is available at and