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Contractors Fail to Upend Disabled Worker Rules

WASHINGTON (CN) - A construction trade group failed to undermine new regulations advancing employees with disabilities, a federal judge ruled.

The new rule, which went into effect today, requires that government contractors "take affirmative action to employ and advance in employment of qualified individuals with disabilities."

It stems from concerns held by the Department of Labor's Office of Federal Contract Compliance Programs that prior regulations implementing Section 503 of the Rehabilitation Act had not sufficiently advanced the employment of qualified individuals with disabilities.

The agency says that, as of March 2010, the percentage of individuals with disabilities in the labor force stood at 22.5 percent, compared with 70.2 percent for individuals without disabilities.

Among three significant changes the OFCCP proposed to the Section 503 regulations is a requirement that contractors gather information on the disability status of job applicants. They must also compile that data and related data on new employees, along with the total number of job openings, job applicants, and jobs filled.

The third change requires a utilization goal to provide a benchmark against which contractors can measure the efficacy of their affirmative-action steps. For employers with 100 or fewer employees, the goal is 7 percent of the employer's entire workforce.

Associated Builders and Contractors Inc. challenged the validity of the new requirements this past November, complaining that they require contractors to gather substantial amounts of information and set goals for employing larger numbers of qualified individuals with disabilities.

Deferring to the agency, U.S. District judge Emmet Sullivan granted the OFCCP defendants summary judgment Friday.

"The term 'affirmative action' encompasses the use of benchmarks to gauge progress and tools to gather and analyze data to track such progress," he wrote.

There is also no evidence that the data-collection requirement exceeds the intent of the Rehabilitation Act, according to the ruling.

"The data-collection and data-analysis requirements are not limited to qualified individuals with disabilities, but this is not because they seek to promote the employment of unqualified workers," Sullivan wrote. "OFCCP write the regulations this way to 'enable the contractors and OFCCP to better monitor and evaluate the contractor's hiring and selection practices' and to 'provide the contractors and OFCCP with valuable information regarding the number of individuals with disabilities who apply for jobs with contractors.'"

Likewise the contractors failed to show that the data-collection requirement is an "unjustified departure" from past practice.

"This argument ignores the current regulations implementing Section 503, which already require all contractors to invite newly hired employees to disclose whether they are individuals with disabilities," the 42-page opinion states.

As to the contractor's final argument, that the new rule does not comply with the Regulatory Flexibility Act, which requires agencies to analyze the impact of their regulations on small businesses, Sullivan said the OFCCP had analyzed the impact and fulfilled its obligation to certify the proposed change would not have a significant impact on a substantial number of small businesses.

The agency concluded that contractors with 50 to 100 employees would expend $3,318, or 0.2 percent of their average receipts, while contractors with 100 to 500 employees would spend $5,197, which is 0.01 percent of their average receipts, according to the ruling.

The contractors tried to argue these estimates were flawed because they did not take into account the creation of new systems to perform the new tasks, but Sullivan remained unconvinced.

"As discussed above, construction contractors are required under the regulations implementing Executive Order 11,246 to group their employees by construction trade, use those groups to meet benchmarks for workforce diversity, and take various actions - including reviewing employment processes - to meet these benchmarks ... the new Rule requires them to use the same groups for similar purposes," Sullivan wrote.

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