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New labor rules rile contractors and business groups

Published: Wednesday, Aug. 28, 2013 4:27 p.m. CDT

(Continued from Page 1)

WASHINGTON – Veterans and disabled workers who often struggle to find work could have an easier time landing a job under new federal regulations.

The rules, announced by the Labor Department, will require most government contractors to set a goal of having disabled workers make up at least 7 percent of their employees. The benchmark for veterans would be 8 percent, a rate that could change from year to year depending on the overall number of former military members in the workforce.

The rules could benefit veterans, especially younger ones, said Alan Belcher, executive director of TLS Veterans, a McHenry-based nonprofit group that helps homeless veterans.

“I’m really encouraged by this. It puts hiring veterans in the front of contractors’ minds,” he said. “Younger veterans, those coming back from Iraq and Afghanistan, are behind the eight ball when it comes to jobs. Their peers have been out in the workforce for four or five years, but they are just starting out. They need a leg up.”

The new requirements could have a major affect on hiring since federal contractors and subcontractors account for about 16 million workers – more than 20 percent of the nation’s workforce. But some business groups have threatened legal action, complaining the rules conflict with federal laws that discourage employers from asking about a job applicant’s disability status.

In McHenry County, the effect of the new rules may be limited, said Pam Cumpata, president of the McHenry County Economic Development Corp. However, she said, additional government mandates often “add complexity” for local businesses seeking federal contracts.

Labor Secretary Thomas Perez called the new policy a “win-win” that will benefit workers “who belong in the economic mainstream and deserve a chance to work and opportunity to succeed.” He said it also would benefit employers by increasing their access to a diverse pool of new workers.

“To create opportunity, we need to strengthen our civil-rights laws and make sure they have the intended effect,” Perez told reporters in a conference call announcing the rules.

The unemployment rate for disabled workers is a staggering 14.7 percent, nearly twice the rate of 7.4 percent for the general population. The jobless rate for all veterans is 7.3 percent, but for veterans who served in the Iraq and Afghanistan wars, it’s 9.9 percent, according to the Bureau of Labor Statistics.

The rules are expected to affect about 171,000 companies doing business with the federal government, said Patricia A. Shiu, director of the Labor Department’s Office of Federal Contract Compliance Programs. Generally, the rules affect those contractors with at least 50 employees and $50,000 in government contracts.

Shiu estimated as many as 585,000 disabled workers and more than 200,000 veterans could get new jobs if all the companies meet the hiring goals within the first year of compliance.

Labor officials say the new benchmarks are only goals and not specific hiring quotas. But companies that can’t provide documents showing they tried to meet the goal could risk having their federal contracts revoked.

If a company can’t immediately meet the new goals, it is required to examine recruitment or outreach practices to decide how to improve. No fine, penalty or sanction would be imposed solely for failing to meet the goal, Shiu said.

The new metrics for the disabled and veterans are similar to those contractors have long used for women and minorities. They will take effect six months from now to give contractors enough time to process them. Under the rules, companies must keep detailed records of recruitment and hiring efforts taken to meet the new goals.

Daniel Yager, president of the HR Policy Association, which represents more than 350 large U.S. corporations, suggested his group may challenge the disability rules in court.

“Simply mandating a numerical ‘goal’ for all jobs in all contractors’ workplaces, and then requiring employers to invade the privacy of applicants and employees with questions about their physical and mental condition, destroys everything companies have done to integrate individuals with disabilities into the workforce in a sensitive, discreet manner,” Yager said.

Stephen Sandherr, CEO of the Associated General Contractors of America, said the new employment rules were unnecessary and would cost contractors billions of dollars.

“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,” he said in a statement. “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.”

Carol Glazer, president of the National Organization on Disability, praised the Obama administration for approving the new rules. She predicted that employers would not have a hard time meeting the new benchmarks for disabled workers.

“There are many organizations in the disability field who stand prepared to help companies meet these goals,” Glazer said.

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