Affirmative action and nondiscrimination obligations of contractors and subcontractors: Individuals with disabilities; special disabled veterans,

[Federal Register: November 4, 1998 (Volume 63, Number 213)]

[Rules and Regulations]

[Page 59657-59659]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr04no98-11]

DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs 41 CFR Part 60-741 RIN 1215-AB19

Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals With Disabilities

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Final rule.

SUMMARY: This final rule amends Appendix C to the regulations implementing Section 503 of the Rehabilitation Act of 1973, as amended (Section 503). Appendix C contains procedures that Government contractors may use to review their personnel processes to ensure that the processes are fair to disabled applicants and employees. The existing Appendix recommends that contractors attach or include a description of accommodations considered or used for special disabled veterans to application forms or personnel records. As amended, the Appendix recommends that the description of accommodations be maintained in separate confidential medical files. The amendments make Appendix C to the Rehabilitation Act rules consistent with Appendix C to OFCCP's rules implementing the Vietnam Era Veterans' Readjustment Assistance Act, which also are published elsewhere in this issue of the Federal Register.

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EFFECTIVE DATE: These regulations are effective January 4, 1999.

FOR FURTHER INFORMATION CONTACT: James I. Melvin, Director, Division of Policy, Planning and Program Development, 202-693-0102 (voice), 1-800- 326-2577 (TDD). Copies of this final rule, including copies in alternative formats, may be obtained by calling OFCCP at 202-693-0102 (voice) or 1-800-326-2577 (TDD). The alternative formats available are: Large print, electronic file on computer disk, and audio-tape. The rule also is available on the Internet at http://www.dol.gov/dol/esa.

SUPPLEMENTARY INFORMATION:

Rulemaking History

This final rule amends the regulations implementing Section 503. The Act, and OFCCP's implementing regulations, 41 CFR Part 60-741, require parties holding a Federal Government contract or subcontract in excess of $10,000 to ``take affirmative action to employ and advance in employment qualified individuals with disabilities.'' The Section 503 Rules last were revised on May 1, 1996, 61 FR 19336.

On September 24, 1996, OFCCP published a notice of proposed rulemaking (NPRM), 61 FR 50080, proposing to revise the regulations implementing the Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended (VEVRAA). VEVRAA, and OFCCP's regulations at 41 CFR Part 60-250, require Government contractors and subcontractors to take affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam era.

OFCCP has modeled its regulations implementing VEVRAA on those implementing Section 503. This reflects the close similarity between the statutes in terms of their substantive protections and jurisdictional requirements. The September 24, 1996, VEVRAA NPRM was modeled after the May 1, 1996, Section 503 final rule.

Appendix C, Review of Personnel Processes, in the VEVRAA NPRM proposed a set of procedures that contractors could use to facilitate a review by the contractor and the Government of the contractor's personnel processes. The review is required by Sec. 60-250.44(b), and is intended to ensure that the contractor's personnel processes provide for careful consideration of the qualifications of applicants and employees who are known to be special disabled veterans or veterans of the Vietnam era, for all employment and training opportunities. Paragraphs 3 and 4 of Appendix C proposed to recommend that contractors attach or include a description of accommodations considered or used for special disabled veterans to application forms or personnel records. Appendix C to the VEVRAA NPRM repeated the substance of Appendix C to the May 1, 1996, Section 503 final rule.

The Equal Employment Opportunity Commission (EEOC) submitted a comment in which it asserted that in most instances descriptions of accommodations considered or used for special disabled veterans constitute medical information that must be maintained in separate files and treated as confidential medical records. Accordingly, the EEOC recommended that Appendix C be revised by changing paragraphs 3 and 4 to indicate that contractors should maintain descriptions of accommodations considered or used in separate confidential medical files. OFCCP agreed with the EEOC's recommendation and, in its VEVRAA final rule published elsewhere in this issue of the Federal Register, revised paragraphs 3 and 4 of Appendix C.

The EEOC's comment applies equally to Appendix C to the Section 503 rules. Just as descriptions of accommodations considered or used for special disabled veterans often constitute medical information, so, too, do descriptions of accommodations considered or used for individuals with disabilities often constitute medical information. Accordingly, OFCCP has decided to revise paragraphs 3 and 4 of the corresponding Appendix C to 41 CFR Part 60-741.

Regulatory Revision

Pursuant to this revision, paragraphs 3 and 4 to Appendix C specify:

3. Where the contractor prepares a statement of the reason why an individual with a disability was rejected and a description of accommodations considered, those materials should be treated as confidential medical records.

4. Where the contractor makes a record of accommodations undertaken in order to place an individual with a disability on the job, the record should be treated as a confidential medical record.

   Regulatory Procedures

   Executive Order 12866

   The Department is issuing this rule in conformance with Executive Order 12866. This rule has been determined not to be significant for purposes of Executive Order 12866 and therefore need not be reviewed by OMB. This rule does not meet the criteria of Section 3(f)(1) of Executive Order 12866 and therefore the information enumerated in Section 6(a)(3)(C) of that Order is not required.

   This conclusion is based on the fact that this rule does not substantively change the existing obligation of Federal contractors to apply a policy of nondiscrimination and affirmative action in their employment of qualified individuals with disabilities. As discussed in more detail below, the rule is interpretive in nature and does not require particular actions by contractors.

   Regulatory Flexibility Act

   The rule is interpretive and does not substantively change existing obligations for Federal contractors. Accordingly, we certify that the rule will not have a significant economic impact on a substantial number of small business entities. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act, 5 U.S.C. 605(b), is not required.

   Unfunded Mandates Reform

   Executive Order 12875

   This rule will not create an unfunded Federal mandate upon any State, local or tribal government. Unfunded Mandates Reform Act of 1995

   This rule will not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, in the aggregate, of $100 million or more, or increased expenditures by the private sector of $100 million or more.

   Paperwork Reduction Act

   We have reviewed this rule and we have not identified any changes in paperwork under the Paperwork Reduction Act.

   Notice and Comment Rulemaking

   The Department believes that notice and comment rulemaking are not required under the Administrative Procedure Act, 5 U.S.C. 553(b)(A), because this rule is interpretive rather than substantive in nature. The Section 503 regulations specifically provide as follows:

   Appendix C of this part is an example of an appropriate set of procedures. The procedures in Appendix C of this part are not required and contractors may develop other procedures appropriate to their circumstances. 41 CFR 60-741.44(b) (emphasis added).

   Because contractors are not required to follow Appendix C, no penalty can attach for failure to follow the

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   Appendix. Accordingly, the rule is not substantive in nature and notice and comment rulemaking is not required. See, e.g., American President Lines, Ltd. v. FMC, 316 F.2d 419 (DC Cir. 1963).

   List of Subjects in 41 CFR Part 60-741

   Administrative practice and procedure, Civil rights, Employment, Equal employment opportunity, Government contracts, Government procurement, Individuals with disabilities, Investigations, and Reporting and recordkeeping requirements.

   Signed at Washington, D.C., this 26th day of October, 1998. Alexis M. Herman, Secretary of Labor. Bernard E. Anderson, Assistant Secretary for Employment Standards. Shirley J. Wilcher, Deputy Assistant Secretary for Federal Contract Compliance.

   For the reasons set forth above, 41 CFR Part 60-741 is amended as follows:

   PART 60-741--[AMENDED]

1. The authority citation for part 60-741 continues to read as follows:

   Authority: 29 U.S.C. 706 and 793; E.O. 11758 (3 CFR, 1971-1975 Comp., p. 841).

2. In Appendix C to part 60-741, the introductory text is republished and paragraphs 3 and 4 are revised to read as follows:

   Appendix C to Part 60-741--Review of Personnel Processes

   The following is a set of procedures which contractors may use to meet the requirements of Sec. 60-741.44(b): * * * * *

3. In each case where an employee or applicant who is an individual with a disability is rejected for employment, promotion, or training, the contractor should prepare a statement of the reason as well as a description of the accommodations considered. The statement of the reason for rejection (if the reason is medically related), and the description of the accommodations considered, should be treated as confidential medical records in accordance with Sec. 60-741.23(d). These materials should be available to the applicant or employee concerned upon request.

4. Where applicants or employees are selected for hire, promotion, or training and the contractor undertakes any accommodation which makes it possible for him or her to place an individual with a disability on the job, the contractor should make a record containing a description of the accommodation. The record should be treated as a confidential medical record in accordance with Sec. 60-741.23(d).

   [FR Doc. 98-29042Filed11-3-98; 8:45 am]

   BILLING CODE 4510-27-P