Section 503 Final Rule

Section 503 Final RuleThe unemployment rate of working age individuals with disabilities and the percentage of working age individuals with disabilities that are not in the labor force remain significantly higher than for those without disabilities. For this reason, The Department of Labor Office of Federal Contract Compliance (OFCCP) for the first time since 1970 has strengthened Section 503 of The Rehabilitation Act of 1973. This is an important step toward reducing barriers to equal employment opportunities for individuals with disabilities.

The Section 503 new regulations are right around the corner and take effect March 24, 2014!  AJE is coordinating with OFCCP experts to educate federal contractors on the new changes.

Are you ready for the new regulations? DO you understand the intricacies and demands of the new regulations and what do you need to know to comply?

Highlights of the New Section 503 Final Rule:

  • Utilization goal: The Final Rule establishes a nationwide 7% utilization goal for qualified Individuals with Disabilities (IWDs). Contractors will apply the goal to each of their job groups or to their entire workforce if the contractor has 100 or fewer employees. Contractors must conduct an annual utilization analysis and assessment of problem areas, and establish specific action-oriented programs to address any identified problems.
  • Data collection: The Final Rule requires that contractors document and update annually several quantitative comparisons for the number of IWDs who apply for jobs and the number of IWDs they hire. Having this data will assist contractors in measuring the effectiveness of their outreach and recruitment efforts. The data must be maintained for three years to be used to spot trends.
  • Invitation to Self-Identify: The Final Rule requires that contractors invite applicants to self-identify as IWDs at both the pre-offer and post-offer phases of the application process, using language prescribed by OFCCP. The Final Rule also requires that contractors invite their employees to self-identify as IWDs every five years, using the prescribed language. This language will be posted on the OFCCP website (coming soon).
  • Incorporation of the EO Clause: The Final Rule requires that specific language be used when incorporating the equal opportunity clause into a subcontract by reference. The mandated language, though brief, will alert subcontractors to their responsibilities as federal contractors.
  • Records Access: The Final Rule clarifies that contractors must allow OFCCP to review documents related to a compliance check or focused review, either on-site or off-site, at OFCCP’s option. In addition, the Final Rule requires contractors, upon request, to inform OFCCP of all formats in which it maintains its records and provide them to OFCCP in whichever of those formats OFCCP requests.
  • ADAAA: The Final Rule implements changes necessitated by the passage of the ADA Amendments Act (ADAAA) of 2008 by revising the definition of “disability” and certain nondiscrimination provisions of the regulations.


Next Steps to Comply!

  • Invite applicants to voluntarily self-identify as a person with a disability, at the pre- and post-offer stages, using the OFCCP form
  • Conduct an initial self-identification survey of employees
  • Include an EO policy statement in the AAP that shows top executive support for their AAPs
  • Ensure that applicants and employees with disabilities have equal access to the contractors’ personnel processes, including those implemented, using electronic means
  • Assess and document the effectiveness of their outreach and recruitment efforts annually
  • Ensure that outreach and recruitment efforts are documented and retained
  • Document actions taken to comply with the audit and reporting system obligations
  • Train employees engaged in key personnel activities
  • Conduct data analysis by calculating data related to applicants and hires
  • Conduct an annual workforce assessment and apply the 7 percent goal to each job group or to the workforce as a whole for contractors with 100 employees or fewer
  • Develop action plans for resolving any problems identified in the contractor’s utilization of individuals with disabilities

How can I get more information? 

This content is provided with the understanding that America’s Job Exchange is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable law in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this advisory please contact Gary Cowan at America’s Job Exchange at 978-946-7928 or e-mail

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