SECTION 503 & VEVRAA: REGULATORY EFFECTIVE DATE VS. COMPLIANCE EFFECTIVE DATE

The new rules become effective 180 days from today (i.e., regulatory effective date); however, the date of compliance will differ for contractors depending on the subsection and the contractor’s affirmative action plan date. Contractors are expected to be in compliance with subparts A, B, D, and E on the regulatory effective date regardless of their plan date. For subpart C, contractors may delay their compliance until the start of their next AAP cycle, thus this (compliance) effective date is dependent on the contractor’s plan date.

Because the regulations have been published in the Federal Register today (September 24, 2013), they will go into effect on March 24, 2014 (i.e., regulatory effective date). As noted above, the effective date for all contractors to comply with subparts A, B, D, and E is March 24, 2014. Some of the major changes from these subparts include: (1) the addition of required text for Section 503 and VEVRAA Equal Opportunity clause in subcontracts and purchase orders, (2) requirements surrounding employment openings with the state workforce agency job bank or with the local employment service delivery system (ESDS), and (3) EO posting requirements for applicants and employees.

For subpart C, many of the changes require collection of new data points, including: (1) pre-offer invitation to self-identify, (2) utilization goals (503 only) and hiring benchmark (VEVRAA only), and (3) data collection and analysis. As noted above for subpart C, contractors may delay their compliance until the start of their next AAP cycle. Both the preamble and FAQs note:

Preamble “...contractors are required to update their affirmative action programs to come into compliance with the requirements of subpart C of this final rule at the start of their next standard 12-month AAP review and updating cycle.”

FAQs“Contractors with an AAP in place on the Final Rule’s effective date may maintain that AAP until the end of their AAP year and delay their compliance with the AAP requirements of subpart C of the Final Rule until the start of their next AAP cycle.”

Using the March 24, 2014 [regulatory] effective date, the compliance date for subpart C data collection would be the first plan cycle after the regulatory effective date. Further, the data collected for subpart C would be first reported in an AAP one year after the contractor’s compliance effective date (i.e., the following AAP). Given that the compliance effective plan date may be confusing to figure out, listed below are several example plans for compliance effective dates before, during and after the regulatory effective date:

  • January 1, 2014 plan date
    • Data collection begins January 1, 2015
    • Data analysis included in January 2016 AAP
  • March 1, 2014 plan date
    • Data collection begins March 1, 2015
    • Data analysis included in March 2016 AAP
  • April 1, 2014 plan date
    • Data collection begins April 1, 2014
    • Data analysis included in April 2015 AAP

Although compliance with the final regulations is being rolled out in phases, it is important to start considering now how these updates will affect your operating systems and/or procedures. If you have not yet started those crucial conversations, below are a couple of action items to consider:

  • Commence conversations with key stakeholders (HR/Compliance, Legal, Internal IT and external systems vendors, and Senior management)
  • Budget review
  • Plan staffing and training needs
  • Prepare for the above-mentioned requirements that will be effective on the ‘regulatory effective date

by Yevonessa Hall, M.P.S, Associate Consultant and Amanda Shapiro, M.S., Consultant, DCI Consulting Group

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