Compliance and beyond: Have Section 503 rule changes changed the playing field?

Northeast ADA Center Staff April 26, 2020

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It’s been nearly two years since the rule changes of the Section 503 of the Rehabilitation Act took effect, holding employers who are federal contractors more accountable for hiring and retaining individuals with disabilities. These Section 503 rule changes can be summarized with the phrase, “What gets measured gets done.” Under the rule changes, covered employers (those with at least $10,000 in federal contracts) must show progress toward attaining a workforce that consists of at least 7% of people with disabilities. To do this, the Section 503 rule changes put into place several new requirements. Covered employers must collect data on the percent of individuals with disabilities among their job applicants, offerees, and current employees. They must reach out to form partnerships with agencies who can provide a pipeline of qualified job applicants with disabilities. Finally, they must align their policies and practices with the ADA Amendments Act of 2008, including the requirement to accommodate applicants and employees with disabilities. Additionally, employers who have at least 50 employees and $50,000 in government contracts must have in place an affirmative action plan which is periodically updated to ensure that HR processes and job qualification requirements do not automatically screen out individuals with disabilities. 

Nearly two years later, where are we with respect to implementing the RA Section 503 rule changes? What impact has the Section 503 had on the employment of individuals with disabilities? What have employers, disability service providers and the disability community done differently because of Section 503 rule changes? Are there areas where there is still confusion? Has anything really changed as a result of these rule changes?

The short answer is: It’s still too early to tell. Currently, little research exists on the current concerns and actions taken by stakeholders as Section 503 has unfolded. However, at the Northeast ADA Center, our own preliminary research (Peterson & Rudstam, 2015), technical assistance and training efforts have revealed some basic observations. RA Section 503 can be seen to have unfolded in three phases: Phase 1. The mechanistic phase; Phase 2. The deeper questions phase; and 3. The human issues phase. 

In the first phase when the Section 503 rule changes initially took effect, employers and service providers mainly had mechanistic concerns focusing on putting into place the required communication and data collection systems. Examples of questions posed at this stage were: How can we integrate the invitation to self-identify with our current communications with applicants and employees? Can we include this with our other EEO data collections? Can this form be integrated into our current technology platform? Is there any other way we can deliver this form? 

During the mechanistic phase, disability service providers also had questions around what their role could be to assist employers in collecting this data from job applicants they were working with. Also, service providers were challenged by understanding how they could make their employment services available to employers needing to find recruiting partners. To help with these concerns, the Office of Federal Contract Compliance Programs (OFCCP) has created a resources page to give clear, concise guidelines for RA Section 503 compliance.

Also, a Checklist for Compliance was created, giving an easy-to-use “to do” list for employers coming into compliance. 

In the second phase of Section 503 implementation, deeper questions around compliance and policy-intent emerged. Many of these questions had to do with the invitation to voluntarily self-identify as a person with a disability and centered on concerns about communicating the purpose and intent of the self-identification form.

For example, larger employers with many remote offices or operations wondered how they could ensure that applicants and employees would not give their self-identification forms directly to their managers, thereby compromising the confidentiality of the information. Similarly, employers were challenged by getting all their managers/supervisors on board with the basics of Section 503 compliance. Managers were having difficulty fielding questions from their employees such as, “Will my health insurance rates go up if I disclose a disability on this form?” Employers were also concerned about what communications could accompany the voluntary self-identification form provided by OFCCP. It seemed that applicants and employees were using a very narrow concept of “disability” when responding to this form. For example, one employer heard a job applicant say, “I guess I don’t have a disability because I don’t use a wheelchair.” Finally, employers were unsure about how far they could go to get applicants and employees to respond to the self-identification form. One employer, for example, wondered if they could direct all job applicants and employees to a private computer kiosk (located in a high traffic place in the workplace, such as the lunch room) where they could respond to the self-identification form. 

During Phase 2, disability employment service providers have also had deeper questions about Section 503 rule changes. Their concerns seem to revolve around four key issues. First, they have been challenged by how to find covered employers with whom they can partner as the employers attempt to comply with Section 503. Currently, it can be difficult to find which employers are federal contractors or subcontractors in any particular region. Some links for this purpose. Second, employment service providers often did not seem to know how to make their services known to potential employers trying to find recruitment partnerships to comply with Section 503. OFCCP does have an Employment Referral Resource Directory where providers can list their agencies, but community- or regionally-based agencies are sometimes unaware of this list. Third, service providers have been concerned about what employers could demand as part of this partnership. Specifically, could partnering employers demand that all job applicants coming from the service providers’ agency submit a self-identification form or could job counselors fill out and submit forms on behalf of the job applicant? Since these practices could compromise the voluntary nature of the self-identification form as well as its confidentiality, they should be avoided. Fourth, employment service providers who have work-training (or similar) centers have struggled with the question of whether work-center workers who are paid subminimum wage under a FLSA certificate can be “counted” as employees for a partnering employers’ Section 503 data collection. OFCCP does not have jurisdiction in this area and could not prohibit paying “special” workers sub minimum wage under a FLSA certificate. However, these workers cannot be counted for the employers Section 503 numbers if they are contract workers; they must be directly employed internally in the federal contractor’s workplace.

This blog post was written by Hannah Rudstam at Northeast ADA Center's Director of Training. After completing her Ph.D. at the University of Wisconsin–Madison, Hannah worked as a program planner and evaluator at the Royal Adult Learning Academy in Stockholm, Sweden. Back in the U.S., she became a Senior Research Scientist at the University of Wisconsin, researching a state-wide health risk prevention program in Wisconsin. After re-locating in the upstate New York area, she took a position as a Senior Organizational Development Consultant at United Technologies and then at Eagle Consultants in Syracuse. In this capacity, she designed tools for hiring, performance management and employee development systems. Also, she developed a turnover prevention program that has been adopted by a number of national and global organizations. In 2005, she took a position as Senior Extension Faculty with the Yang-Tan Institute at Cornell University in Ithaca, NY. She has primarily worked for the Northeast ADA Center (formerly known as DBTAC) project and has designed and implemented programs on a broad range of topics related to disability and employment. Most recently, she has focused her work on researching the role of face-to-face leaders in disability inclusive workplaces and on preparing employers for a workforce that includes veterans with disabilities.