Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Individuals With Disabilities

SUMMARY: The Office of Federal Contract Compliance Programs of the

Department of Labor (OFCCP) is revising the regulations implementing

section 503 of the Rehabilitation Act of 1973, as amended (section 503

or the act), which requires Government contractors and subcontractors

to take affirmative action to employ and advance in employment

qualified individuals with disabilities. The final rule makes three

general types of revisions to the section 503 regulations. First, the

regulations' nondiscrimination provisions generally are conformed to

the regulations published by the Equal Employment Opportunity

Commission (EEOC) implementing title I of the Americans with

Disabilities Act of 1990 (ADA). Second, the regulations incorporate

recent amendments to section 503. Third, the regulations are revised to

strengthen and clarify various existing provisions relating to

affirmative action, recordkeeping, enforcement and other issues. In

addition, the term ``Director'' that appears in the current regulations

and the previous proposal has been replaced throughout the final rule

with the term ``Deputy Assistant Secretary.''

The final rule partially withdraws a final rule published by the

Department of Labor on December 30, 1980 (which was subsequently

suspended) concerning section 503, Executive Order 11246 and the

Vietnam Era Veterans' Readjustment Assistance Act of 1974, as amended.

The withdrawal applies only to those provisions of the rule which

pertain to section 503.

EFFECTIVE DATE: These regulations will take effect on August 29, 1996.

FOR FURTHER INFORMATION CONTACT: Joe N. Kennedy, Deputy Director,

OFCCP, 202-219-9475 (voice), 1-800-326-2577 (TDD). Copies of this final

rule, including copies in alternative formats, may be obtained by

calling OFCCP at 202-219-9430 (voice) or 1-800-326-2577 (TDD). The

alternative formats available are: Large print, electronic file on

computer disk, and audio-tape.

SUPPLEMENTARY INFORMATION:

Current Regulations and Rulemaking History

This final rule revises the current regulations (41 CFR part 60-

741) implementing section 503 of the Rehabilitation Act of 1973, as

amended (29 U.S.C. 793) (section 503 or the act), which requires

parties holding a Government contract or subcontract in excess of

$10,000 to ``take affirmative action to employ and advance in

employment qualified individuals with disabilities.'' These regulations

establish specific affirmative action obligations for contractors

(e.g., contractors are required to use effective practices to recruit

qualified individuals with disabilities). The duty to undertake

affirmative action encompasses a duty to refrain from discriminating

against qualified individuals with disabilities.

On October 21, 1992, the Department of Labor's Office of Federal

Contract Compliance Programs (OFCCP) published a notice of proposed

rulemaking (NPRM or the proposal), 57 FR 48084, proposing to revise the

regulations implementing section 503. A notice correcting certain

technical errors in the NPRM was issued on October 30, 1992. 57 FR

49160. The comment period ended November 20, 1992. Thirty-seven

comments were received. A number of comments were submitted on behalf

of several organizations and represented the views of various groups,

employers, or individuals with disabilities. The comments have been

analyzed and considered in the development of this final rule.

Regulatory Revisions

1. Conformance With Americans With Disabilities Act Standards

The final rule was precipitated, in part, by the passage of the

Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq. The

Americans with Disabilities Act provides comprehensive civil rights

protections to individuals with disabilities in the areas of

employment, public accommodations, State and local governmental

services, and telecommunications. Title I of the Americans with

Disabilities Act (ADA), which is enforced by the Equal Employment

Opportunity Commission (EEOC), prohibits private and State and local

governmental employers from discriminating against qualified

individuals with disabilities in all aspects of employment. The EEOC

published regulations implementing the ADA on July 26, 1991 (29 CFR

part 1630). The ADA regulations establish comprehensive, detailed

prohibitions regarding disability discrimination but do not address

issues regarding affirmative action. The ADA and its implementing

regulations became effective on July 26, 1992, with respect to

employers with 25 or more employees; on July 26, 1994, this coverage

was extended to employers with 15 or more employees.

This final rule conforms OFCCP's section 503 regulations to the

EEOC's ADA regulations. This action ensures that OFCCP and EEOC will

avoid the imposition of inconsistent legal standards when processing

complaints of discrimination that fall within the overlapping

jurisdiction of both section 503 and title I of the ADA, as is required

by section 107(b) of the ADA and by a recent amendment to section 503.

Section 107(b) of the ADA requires that OFCCP and EEOC establish

procedures to ensure that administrative complaints filed under both

laws are ``dealt with in a manner that avoids duplication of effort and

prevents imposition of inconsistent or conflicting standards.'' 1

Section 505(c) of the Rehabilitation Act Amendments of 1992 (Pub. L.

102-569, 106 Stat. 4344) (the 1992 amendments or the 1992 legislation)

amended section 503 by adding a new paragraph (e) which expressly

obligates the Secretary of Labor to develop these same procedures.

Also, the 1992 amendments added a new paragraph (d) to section 503,

which provides that ``The standards used to determine whether [section

503] has been violated in a complaint alleging nonaffirmative action

employment discrimination under [section 503] shall be the standards

applied under title I of the Americans with Disabilities Act of 1990.''

In conforming the section 503 regulations to the EEOC's ADA

regulations, this rule effectively implements these requirements.

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\1\ Pursuant to that section, OFCCP and EEOC published joint

regulations which set forth procedures governing the processing of

complaints that fall within the overlapping jurisdiction of both

title I of the ADA and section 503. 41 CFR part 60-742 (OFCCP) and

29 CFR part 1641 (EEOC). The joint rule requires, among other

things, that OFCCP (acting as EEOC's agent) process and resolve

complaints of employment discrimination based on disability for

purposes of title I of the ADA (as well as for section 503) when

there is jurisdiction under both statutes. OFCCP is required by the

rule to apply legal standards that are consistent with the

substantive legal standards applied under the ADA.

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One of the comments submitted in response to the publication of the

NPRM expressed the view that OFCCP's post-ADA role should be to focus

its enforcement efforts on affirmative action matters, as distinguished

from discrimination issues. The commenter's view is based on the

assertion that

[[Page 19337]]

OFCCP's authority to engage in compliance activities under section 503

relating to issues of discrimination was limited by the passage of the

ADA, which, the commenter contends, effectively transferred much of

OFCCP's authority in this area to EEOC. OFCCP disagrees. OFCCP's role

in the enforcement of the nondiscrimination requirements of section 503

was reaffirmed by the provisions of the ADA and the 1992 amendments

requiring coordination of enforcement under the ADA and section 503 and

the application of ADA standards in section 503 discrimination cases.

Nondiscrimination requirements are discussed in more detail in this

final rule than in the current regulations, because the final rule

incorporates the more expansive discussion of these requirements

contained in the ADA regulations. However, OFCCP views the expanded

discussion as a clarification of the general nondiscrimination

requirements under the current regulations, rather than as a

significant alteration of those requirements. Accordingly, in general,

this final rule does not affect the applicability of case law

(administrative and judicial) developed under section 503. (Thus,

section 503 case law continues in effect unless inconsistent or in

conflict with this rule.)

Because this final rule generally conforms the section 503

nondiscrimination regulations to the EEOC's ADA regulations, the

Interpretative Guidance on Title I of the Americans with Disabilities

Act set out as an appendix to the title I regulations--which provides

guidance about key provisions of the regulations--is equally applicable

with respect to the interpretation of the parallel provisions of these

regulations. Similarly, the Technical Assistance Manual on the

Employment Provisions (Title I) of the Americans with Disabilities Act

issued by the EEOC may also be relied upon for guidance.

As is discussed later in this preamble, however, there are a number

of differences, primarily of an editorial or technical nature, between

this rule and EEOC's regulations. For instance, the rule uses the term

``contractor,'' which is specific to the section 503 program, rather

than the analogous terms used by the ADA--``covered entity'' and

``employer.'' This final rule also contains a few explanatory

footnotes, which are intended for clarity only. OFCCP wishes to

reemphasize that it intends to apply its regulations consistently with

parallel provisions of the ADA regulations.

2. Implementation of the 1992 Statutory Amendments

This rule also implements a number of recent legislative amendments

to section 503, including--with one exception discussed below--the

amendments set forth in the 1992 legislation. The 1992 legislation was

signed into law on October 29, 1992, eight days after the issuance of

the NPRM, and thus the amendments to section 503 contained in that

legislation were not reflected in the proposal. The amendments to the

current section 503 regulations that are necessitated by the 1992

legislation and are ministerial and technical in nature have been

incorporated into this rule without substantive change. Publication in

proposed form would serve no useful purpose and is unnecessary under

the Administrative Procedure Act (5 U.S.C. 553(b)(B)). OFCCP,

therefore, finds good cause to waive notice of proposed rulemaking with

respect to the implementation of these amendments. The revisions to the

regulations necessitated by the legislative amendments are described

below.

The 1992 legislation amended the act's general jurisdictional

provisions in two respects. First, section 505(a) of the 1992

legislation amended section 503(a) by raising the contract dollar

amount threshold for covering a contractor from ``in excess of $2500''

to ``in excess of $10,000.'' Accordingly, this rule replaces all

references to $2500 contained in the current regulations with

references to $10,000.

Second, section 505(a) of the 1992 legislation also removed a

provision in section 503 of the act limiting its coverage to the

contractor's positions that are engaged in work related to Government

contracts. Prior to this amendment, section 503(a) provided that

Government contracts and subcontracts ``shall contain a provision

requiring that, in employing persons to carry out such contract, the

party contracting with the United States shall take affirmative action

to employ and advance in employment qualified individuals with

handicaps.'' The 1992 legislation struck out the phrase ``in employing

persons to carry out such contract.'' The effect of this amendment is

to apply the requirements of section 503 to all of a covered

contractor's or subcontractor's work force at all of its facilities.

In response to the coverage amendment, the few references to the

``carry out the contract'' language contained in the NPRM are omitted

from this final rule. Further, in order to reflect this amendment,

proposed Sec. 60-741.4(a)(2)--which expressly limited application of

the regulations to positions that are engaged in carrying out a

contract--has been revised in the final rule to clarify that such

limitation applies only to the contractor's employment decisions and

practices occurring before the amendment (see discussion in the

section-by-section analysis below).

Moreover, section 505(b) of the 1992 legislation codified the

``separate facility'' waiver provision contained in the current

regulations (Sec. 60-741.3(a)(5)) by expressly incorporating it (with

minor editorial changes) into section 503. The provision permits the

contractor to seek a waiver from the requirements of the regulations

for facilities that are not connected to a Government contract. (The

amendment added a new subsection (c)(2) to section 503 of the act; it

supplemented existing subsection (c), which the amendment redesignated

as subsection (c)(1), authorizing the granting of regulatory waivers in

the national interest.) The legislative history of the waiver amendment

indicates that it was included in the legislation in order to reaffirm

the long-standing ``separate facility'' waiver policy codified in the

regulations. S. Rep. 357, 102nd Cong., 2d Sess. 72 (1992).

This rule implements the waiver amendment by retaining the current

regulations' separate facility waiver provision (without change); the

final rule sets out the provision at Sec. 60-741.4(b)(3). As is

discussed above, the NPRM had replaced the current waiver provision

with proposed Sec. 60-741.4(a)(2), which is retained in this final rule

with modifications (see discussion below).2

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\2\ Section 505(b) of the 1992 amendments also requires OFCCP to

promulgate regulations that set forth the standards used for

granting separate facility waivers. This final rule does not

implement this requirement. OFCCP issued a separate proposed rule

setting out proposed regulatory standards for granting separate

facility waivers on February 14, 1996 (60 FR 5902).

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Also, the 1992 legislation (Sec. 102(f)(4)) clarified that

homosexuality and bisexuality are not disabilities under section 503,

and excluded from protection under section 503 certain conditions

(e.g., transvestism, transsexualism, pedophilia and compulsive

gambling) in order to conform the types of conditions protected from

discrimination under section 503 and the ADA. These provisions are

incorporated by the final rule in Secs. 60-741.3(d) and (e), and are

discussed in the section-by-section analysis below.

[[Page 19338]]

Finally, the 1992 legislation substituted the term ``disability''

for the term ``handicap'' throughout the Rehabilitation Act, including

section 503 (see, e.g., Sec. 102(f)(2) of the 1992 legislation). This

amendment, which did not affect the meaning or application of the term,

conforms the terminology used by the Rehabilitation Act to that used in

the ADA. The NPRM proposed a similar substitution in language

throughout the section 503 regulations, which is carried forward in

this final rule. (The proposed definition of ``individual with a

disability'' clarified, at Sec. 60-741.2(n)(2), that the regulations

refer to that term rather than to the term ``individual with

handicaps,'' which was then used in the Rehabilitation Act. This

statement is omitted from this final rule.)

3. Partial Withdrawal of the 1980 Final Rule

This final rule also partially withdraws a final rule published by

OFCCP on December 30, 1980 (45 FR 86215; corrected at 46 FR 7332,

January 23, 1981), and deferred indefinitely on August 25, 1981 (46 FR

42865). That 1980 rule would have revised the regulations at 41 CFR

chapter 60 implementing section 503 of the Rehabilitation Act as well

as two other laws enforced by OFCCP--Executive Order 11246 (30 FR

12319, September 28, 1965), as amended (the Executive Order), and the

affirmative action provisions of the Vietnam Era Veterans' Readjustment

Assistance Act of 1974, as amended (38 U.S.C. 4212) (section 4212). The

Executive Order requires Government contractors and subcontractors to

assure equal employment opportunity without regard to race, color,

religion, sex and national origin. Section 4212 mandates similar

requirements with regard to the employment of certain disabled veterans

and veterans of the Vietnam era.

The December 30, 1980, rule was to take effect on January 29, 1981.

On January 28, 1981, the Department of Labor published a notice (at 46

FR 9084) delaying the effective date of the final rule until April 29,

1981, to allow the Department time to review the regulation fully. The

Department published three subsequent deferrals of the rule in 1981 in

order to fully review the regulations in accordance with Executive

Order 12291, to permit consultation with interested groups, and to

comply with intergovernmental review and coordination procedures. The

Department again postponed the rule's effective date on August 25,

1981, until action could be taken on a proposed rule published on the

same date (46 FR 42968). The August 25, 1981, proposal would have

revised a number of provisions contained in the December 30, 1980,

final rule as well as a number of provisions in 41 CFR chapter 60 which

were not amended by that final rule. Final action has not been taken

with respect to the proposed regulations issued on August 25, 1981, or,

consequently, with respect to the 1980 final rule.

The substance of a number of the provisions contained in the 1980

final rule pertaining to the current section 503 regulations was

incorporated into the NPRM and is carried forward by this final rule.

However, as explained in the NPRM, OFCCP has determined not to go

forward with some of the other revisions to the regulations. In order

to avoid conflict with the 1980 final rule, this final rule withdraws

all provisions of the 1980 rule that pertain to section 503.

4. Impact on the 1980 Proposed Rule

On December 30, 1980, OFCCP published a proposed rule (45 FR

86206), the primary purpose of which was to conform the regulations

implementing section 503 and section 4212 (which were patterned after

those implementing section 503) to the employment provisions of the

Department of Labor's regulations implementing section 504 of the

Rehabilitation Act, which appear at 29 CFR part 32. Because this final

rule conforms the section 503 regulations to those implementing title I

of the ADA, it supersedes the 1980 proposal insofar as the 1980

proposal would conform section 503's regulations to those implementing

section 504.

Overview of Final Rule

This final rule consists of five subparts. Subpart A, ``Preliminary

Matters, Equal Opportunity Clause,'' explains the purpose, application

and construction of the regulations in general and contains an

extensive definitions section. The definitions section incorporates the

definitions contained in the EEOC regulations implementing title I of

the ADA which are relevant to the enforcement of section 503 and

contains a number of revisions to the current definitions as well.

Subpart A also contains provisions relating to coverage under section

503, and coverage exemptions and waivers, as well as the equal

opportunity clause, which delineates a covered contractor's general

duties under the act. Subpart B is a new subpart, which specifies the

employment actions that will be deemed to constitute prohibited

discrimination under section 503. In general, this subpart is identical

to the parallel provisions in the EEOC regulations. Some deletions and

modifications have been made with respect to the EEOC regulations to

conform to section 503 policies and procedures. Subpart C, which

governs the applicability of the affirmative action program

requirement, reorganizes, clarifies and strengthens the affirmative

action provisions in the current regulations. This subpart is not

paralleled in the ADA regulations, which mandate nondiscrimination

requirements only. As stated in Sec. 60-741.40(a) and discussed below,

the requirements of subpart C apply only to Government contractors with

50 or more employees and a contract of $50,000 or more. All other

subparts of the regulation are applicable to all contractors covered by

section 503.3 Subpart D covers general enforcement and complaint

procedures. To help ensure an enforcement approach consistent with that

used under the Executive Order, this subpart incorporates a number of

provisions from the regulations implementing the Executive Order.

Further, subpart D's provisions regarding complaint procedures are

conformed to the counterpart provisions contained in procedural

regulations applicable to the ADA. Subpart E, Ancillary Matters,

incorporates revised provisions on recordkeeping (e.g., it extends the

current one-year record retention period to two years for larger

contractors and conforms the scope of the retention obligation to that

applied by the EEOC under the ADA) and makes other revisions.

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\3\ The NPRM specifically requested public input on the topic of

affirmative action under section 503, including comment on the

appropriateness of the affirmative action obligations contained in

the proposal and suggestions regarding other obligations that might

be imposed. The public input on these issues was quite limited.

OFCCP is continuing to explore these issues and will consider

whether further revisions to the regulations' affirmative action

provisions would be appropriate.

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Finally, the rule contains two new appendices. One of the new

appendices sets out guidance on positions engaged in carrying out a

Government contract. This is an important concept in determining which

of the contractor's positions are subject to part 60-741 with respect

to its employment decisions and practices occurring before October 29,

1992. (As noted above, on that date, section 503, which had applied

only insofar as the contractor was employing persons to carry out a

contract, was amended to extend coverage thereunder to all of the

contractor's positions--irrespective of their relation to the

contract.) The second new appendix

[[Page 19339]]

sets out guidance on the duty to provide reasonable accommodation under

the act. The appendix is consistent with the discussion of this issue

contained in the Interpretative Guidance on Title I of the Americans

with Disabilities Act which is set out as an appendix to the EEOC's ADA

regulations.

A discussion of significant comments and an explanation of the

changes made from the NPRM to this final rule (other than those

discussed above) follows.

Section-by-Section Analysis of Comments and Revisions

Section 60-741.1 Purpose, Applicability and Construction

Section 60-741.1(b) Applicability

Proposed paragraph (b) stated in part that the regulations apply to

Government contracts which are performed within the United States. Upon

reconsideration, OFCCP believes that this statement is unnecessary in

this context, inasmuch as a similar clarification is made in Sec. 60-

741.4(a)(4) (which, as discussed below, has been revised for clarity).

Therefore, the statement is omitted in the final rule.

Section 60-741.2 Definitions

Section 60-741.2(a) Act

The citation of authority contained in the proposed definition has

been revised to make reference to the Rehabilitation Act Amendments of

1992.

Section 60-741.2(d) Deputy Assistant Secretary

The current regulation defines the term ``Director.'' The Director

has been given the new title of ``Deputy Assistant Secretary for

Federal Contract Compliance''; the final rule has been revised

accordingly.

Section 60-741.2(f) United States

The current regulation defines the United States as including the

Panama Canal Zone. The proposal deleted the Panama Canal Zone, which by

treaty is no longer part of the United States, and added the Northern

Mariana Islands. The final rule further updates the definition by

listing Wake Island and deleting the Trust Territory of the Pacific

Islands.

Section 60-741.2(i) Government Contract

Four commenters objected to the clarification set forth in the

definition of the term ``Government contract''--that contracts covered

under section 503 include those under which the Government is a seller

of goods or services as well as those under which it is a purchaser. In

relevant part, the definition provides that a ``Government contract''

is ``any agreement or modification thereof between any contracting

agency and any person for the purchase, sale or use of personal

property or nonpersonal services (including construction).'' The NPRM

proposed substitution of a reference to contracts for the ``purchase,

sale or use'' of goods or services for the existing reference (Sec. 60-

741.2) to the ``furnishing'' of goods or services. (The existing

regulation also states that the term ``services,'' as used in the

definition, applies irrespective of whether the Government is a

purchaser or seller. This statement is unnecessary in light of the

proposed revision, and thus was not carried forward in the NPRM.) The

commenters contended that this interpretation is inconsistent with

section 503(a), because the statute expressly or implicitly limits

coverage to those contracts in which the Federal Government is

procuring property or nonpersonal services, rather than those in which

it is the supplier. For the reasons discussed below, OFCCP believes

that the definition as proposed in the NPRM is consistent with the

statute, and thus declines to modify it.

In relevant part, section 503(a) provides that coverage under the

act applies to ``Any contract * * * entered into by any Federal

department or agency for the procurement of personal property and

nonpersonal services (including construction).'' OFCCP has long

interpreted the statute to cover both contracts in which the Government

is the seller of goods or services and those in which it is the

purchaser. This interpretation is supported by the statute's use of the

term ``any contract'' and by its broad remedial purpose. OFCCP believes

that the statute's use of the term ``procurement'' simply refers to the

subject matter of the contract, and does not restrict its application

to situations in which the Government, rather than the contractor, is

procuring goods or services. Further direct support is found in the

act's legislative history--which describes section 503 as applying to

``any contract * * * entered into by any Federal department or agency

for personal property or services'' (S. Rep. No. 318, 93rd Cong., 1st

Sess., reprinted in 1973 U.S. Code Cong. & Ad. News 2142 (emphasis

added)), and as ``a provision to ensure [that] any qualified

handicapped individual shall be given full and fair consideration for

employment by any contractor who seeks to contract with the Federal

Government'' (id., reprinted in 1973 U.S. Code Cong. & Ad. News 2123

(emphasis added)). There is nothing in this legislative history

suggesting that Congress intended to limit coverage under the act to

contracts in which the Government is a purchaser.

Moreover, at least one court has upheld a similar interpretation

under the Executive Order. Crown Central Petroleum Corp. v. Kleppe, 424

F. Supp. 744 (D. Md. 1976). In relevant part, the Executive Order (at

section 202) provides that (with the exception of certain specified

types of contracts), a provision obligating the contractor to comply

with the Order shall be included in ``every Government contract.'' In

Kleppe, the court held that the Executive Order is applicable to the

Government's lease to Crown Central of rights to mine on Federal lands.

The court ruled that the application of the Executive Order to this

situation is consistent with the Order's literal language, and that an

interpretation limiting the Order's application to only suppliers of

goods or services would be inconsistent with the national policy of

eliminating racial and other discrimination embodied in the Executive

Order. 424 F. Supp. at 427-28. An analogous rationale applies to

section 503 in view of Congress' clear intent that the contract

coverage provisions of section 503 parallel those of the Executive

Order. See S. Rep. No. 1297, 93rd Cong., 2d Sess., reprinted in 1974

U.S. Code Cong. & Ad. News 6427.

One commenter objected to the subdefinition of ``personal

property'' (Sec. 60-741.2(i)(6)) as inconsistent with OFCCP's statutory

authority. The definition states that the term, as used in connection

with the terms ``Government contract'' and ``subcontract'' (Sec. 60-

741.2(l)), ``includes supplies and contracts for the use of real

property (such as lease arrangements), unless the contract for the use

of real property itself constitutes real property (such as

easements).'' The commenter asserted that neither a plain reading of

section 503 itself--which states that the act applies to contracts

concerning personal property and nonpersonal services--nor its

legislative history supports an interpretation that leasehold interests

in real property are covered by the act.

The current definition of ``Government contract'' (at Sec. 60-

741.2) provides, in relevant part, that the term includes agreements

``for the furnishing of supplies or services or for the use of real or

personal property including lease arrangements.'' As stated in the

NPRM's preamble, the revision to the regulation was intended ``to make

clear, consistent with the language of the act, that only contracts

regarding personal property

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(including those for the use of real property where such use

constitutes personal property) and `nonpersonal' services are

covered.'' The subdefinition of ``personal property'' simply recognizes

that real property leases constitute personal property under the common

law, and applies that principle in defining the scope of coverage under

section 503. See, e.g., In re Wolverton Associates, Inc. v. Official

Creditors' Committee, 909 F.2d 1286 (9th Cir. 1990); United States v.

Dally, 165 F. Supp. 194 (S.D.N.Y. 1958); First National Bank of Kansas

City v. Nee, 85 F. Supp. 840 (W.D. Mo. 1949), aff'd, 190 F.2d 61 (8th

Cir. 1951). The subdefinition is retained in the final regulation

without modification.

Several commenters representing credit unions raised objections to

OFCCP's position, as stated in the NPRM's preamble, that Federal

deposit and share insurance constitutes a Government contract within

the meaning of section 503, and thus subjects financial institutions

with such insurance to coverage under the act. The statement in the

NPRM's preamble regarding coverage of Federal deposit and share

insurance as a Government contract did not reflect any change in the

regulations implementing section 503--indeed, the NPRM did not propose

any regulatory provisions regarding this issue. Rather, the preamble

discussion merely restated and clarified the agency's long-standing

position; it was noted that OFCCP stated this position in the purpose

and application section (Sec. 60-741.1) of its 1980 final rule.

(Similar opposition had been raised in response to the proposal

preceding the 1980 final rule.) The preamble also stated that OFCCP

continues to hold this view, and that OFCCP declined to incorporate

into the proposal a similar statement regarding coverage of Federal

deposit and share insurance, because OFCCP believed it is unnecessary

to single out this contractual relationship from any other covered by

the regulations. This statement, then, was merely intended to explain

why the proposal differed from the 1980 final rule, and simply echoed

OFCCP's long-standing policy on the issue. Nevertheless, OFCCP

conducted a careful and detailed reevaluation of its position in light

of changes in some of the statutes affecting the financial industry.

Based upon that review, OFCCP continues to believe in the soundness of

its position and does not modify it.

Additionally, these commenters asserted that coverage of Federal

deposit and share insurance under section 503 would improperly

interfere with the authority of the regulatory agencies of financial

institutions to regulate credit unions. Also, some commenters asserted

that such a position is invalid because to date OFCCP has failed to

issue a rule codifying it; relatedly, some commenters requested that

OFCCP seek public comment on the coverage issue, and others requested

that the comment period for the NPRM be extended to permit additional

public input on the issue. OFCCP believes that it need not expressly

incorporate its policy into a regulatory provision or seek public

comment, inasmuch as the policy merely reflects an interpretation of an

existing regulatory provision (i.e., the definition of ``Government

contract''); thus, it is exempt from the notice and comment procedures

of the Administrative Procedure Act. See 5 U.S.C. 553(b)(A).

OFCCP also wishes to reemphasize that it will continue to maintain

its long-standing policy of imposing sanctions other than debarment of

financial institutions from future deposit or share insurance, or

cancellation, termination or suspension of a financial institution's

deposit or share insurance for violations of section 503 (see Sec. 60-

741.66 Sanctions and penalties).

Section 60-741.2(l) ``Subcontract''

The final rule was revised slightly to correct a clerical error.

The proposed definition of ``subcontract'' had inadvertently omitted

the parenthetical phrase ``(including construction)''. The proposed and

final definitions of the term ``Government contract'' (Sec. 60-

741.2(i)(5)) confirm that the parenthetical phrase was intended to be

included in the definition of ``subcontract'' the same as it is

included in the definition of the term ``Government contract'' so that

the definitions are parallel.

Section 60-741.2(q) ``Substantially limits''

The final rule was revised slightly to mirror the corresponding

definition in the ADA regulations. The proposed rule had used the

phrase ``within the normal range of abilities of persons in the general

population'' in place of the ADA rule's reference to the ``average

person in the general population.'' The proposal stated that the

difference in language was intended for clarity only and that OFCCP

intended to apply the definition and subdefinition in the same manner

as they are applied under the ADA. However, in order to prevent any

misunderstanding regarding OFCCP's intent, the final rule repeats the

ADA language verbatim and includes a footnote further describing the

definition.

Additionally, the subdefinition relating to substantial limitation

in the major life activity of working has been revised slightly to

conform to the corresponding ADA provision at 29 CFR 1630.2(j)(3). As

revised, it refers to the average person in the general population

having comparable training, skills, and abilities.

Section 60-741.2(v) ``Reasonable accommodation''

The final rule incorporates a definition identical to the ADA

definition at 29 CFR 1630.2(o) (see appendix discussion related to

Sec. 1630.2(o)); the current section 503 regulations do not contain a

definition of the term. The definition states that a reasonable

accommodation is any change in the work environment or the way job

duties are customarily performed that enables individuals with

disabilities to perform the essential functions of the job in issue, or

that ensures equal opportunity for individuals with disabilities with

respect to the application process or the enjoyment of benefits and

privileges of employment.

The proposal had contained a slight modification of the ADA

definition. Paragraph (v)(1)(i) of the OFCCP proposal referred to

modifications to the job application process that enable ``an

applicant'' with a disability to be considered for a position, while

the ADA definition uses the term ``qualified applicant'' in this

context. However, the final rule repeats the ADA regulation verbatim,

in order to clarify that the interpretation is meant to be the same.

OFCCP now explains in a footnote that contractors should not draw the

erroneous inference that their duty to provide a reasonable

accommodation with respect to applicants with disabilities is limited

to those who ultimately can demonstrate that they are qualified to

perform the job in issue. Applicants with disabilities must be provided

a reasonable accommodation if they are qualified with respect to the

application process (e.g., if they present themselves at the correct

location and time to fill out an application). This is the same

approach used under the ADA's definition.

The proposal contained a similar departure from the ADA regulation

in paragraph (v)(3), which referenced an informal, interactive process

with ``the individual with a disability.'' To clarify that the

regulations are meant to be interpreted consistently, the final rule

mirrors the ADA regulation and refers to a ``qualified'' individual.

OFCCP now

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explains in a footnote that contractors must engage in such an

interactive process with individuals with disabilities because, until

they have done so, they may be unable to determine whether a reasonable

accommodation is available that will result in the person being

qualified.

Section 60-741.2(y) Direct Threat

Two disability rights groups objected to the reference to the

health or safety of the individual with a disability in the definition

of ``direct threat.'' One group expressed the concern that the

reference to the risk to the individual might result in direct threat

determinations that are based on paternalistic or stereotypical views

concerning persons with disabilities. The other group asserted that

contractors might exempt themselves from the requirements of section

503 simply by invoking this rationale with little or no evidence of an

actual threat. OFCCP believes that such concerns are unwarranted. The

definition is identical to the parallel definition contained in EEOC's

ADA regulations (Sec. 1630.2(r)), which, in turn, is based on the case

law interpreting the Rehabilitation Act. As noted in EEOC's

interpretative guidance, the employer's assessment of whether there is

a risk to the individual with a disability, like its assessment of risk

to others, must be based strictly on valid medical analyses or other

objective evidence. The assessment must be made on a case-by-case basis

relying on the factors set out in the definition, rather than on

subjective perceptions, irrational fears, patronizing attitudes or

stereotypes. See Mantolete v. Bolger, 767 F.2d 1416 (9th Cir. 1985);

Bentivegna v. U.S. Department of Labor, 694 F.2d 619 (9th Cir. 1982);

E.E. Black, Ltd. v. Marshall, 497 F.Supp. 1088 (D. Hi. 1980). OFCCP

intends to ensure that contractors comply with this requirement. The

final rule adopts the definition without change.

Section 60-741.3 Exceptions to the Definitions of ``Individual With a

Disability'' and ``Qualified Individual with a Disability''

Section 60-741.3(a)(4) Construction

Paragraph (a)(4)(ii) clarifies that an individual is not

necessarily protected by section 503 simply because he or she is a

recovered or recovering drug abuser or is erroneously regarded as a

current drug user. Such an individual must still satisfy the

requirements for protection as a ``qualified individual with a

disability.'' An individual erroneously regarded as illegally using

drugs, for example, would have to show that he or she was regarded as a

drug addict in order to demonstrate that he or she meets the definition

of a ``qualified individual with a disability.''

Section 60-741.3(a)(5) Current Illegal Use of Drugs--Drug Testing

One commenter expressed a concern that this provision conflicts

with the policy of the National Labor Relations Board (NLRB) relating

to an employer's obligation to engage in collective bargaining with its

employees' representatives regarding the imposition of a workplace drug

testing policy. Paragraph (a)(5) provides that a contractor may seek

reasonable assurances, through drug testing and other means, that a

recovered or recovering drug user is no longer engaging in the illegal

use of drugs. This paragraph merely clarifies that such drug testing

does not conflict with the regulations implementing section 503. It

does not require an employer to implement drug testing, and therefore

does not conflict with the above NLRB policy.

Section 60-741.3(d) Homosexuality and Bisexuality

This paragraph of the final rule, which clarifies that

homosexuality and bisexuality do not constitute disabilities under

section 503, incorporates (with minor editorial changes) an amendment

contained in the 1992 legislation (Sec. 102(f)(4)). (The amendment

added a new paragraph (E) to the definition of ``individual with a

disability'' set out at 29 U.S.C. 706(8).) The amendment parallels a

provision contained in the ADA (42 U.S.C. 12211(a)), which is

implemented in the EEOC's regulations at Sec. 1630.3(e). The amendment

was intended to facilitate the consistent application of section 503

and the ADA.

Section 60-741.3(e) Other Conditions

This paragraph, which specifies that section 503 does not apply to

certain specified conditions--for instance, transvestism,

transsexualism, pedophilia and compulsive gambling--incorporates (with

minor editorial changes) an amendment contained in the 1992 legislation

(Sec. 102(f)(4)). (The amendment added a new paragraph (F) to the

statutory definition of ``individual with a disability.'') The

paragraph parallels a provision contained in the EEOC's regulations

(Sec. 1630.3(d)). The amendment was intended to conform the types of

conditions excluded from protection under section 503 to those excluded

from protection under the ADA (see 42 U.S.C. 12211(b)). (Paragraph (d)

of the NPRM provided that the terms ``individual with a disability''

and ``disability'' do not apply to an individual solely because the

individual is a transvestite. That clarification is subsumed within

this paragraph of the final rule.)

Section 60-741.4 Coverage and Waivers

Section 60-741.4(a)(2) Coverage--Positions Engaged in Carrying out a

Contract

The NPRM, among other things, provided (at paragraph (a)(2)(i))

that the regulations cover only positions of the contractor that are

engaged in carrying out a Government contract, and (in paragraphs

(a)(2)(i) (A) and (B)) set forth standards defining the circumstances

under which a position shall be deemed to be engaged in carrying out a

contract. Further, the proposal (in paragraphs (a)(2)(iii) (A) and (B))

required the contractor to make a determination as to which of its

positions are covered by the regulations as well and a record of its

determination, and (in paragraph (a)(2)(iii)(C)) provided that if a

contractor fails to make this determination, it must extend the

protections of the act and the regulations to all of its positions

until such time as it makes the coverage determination for a particular

position. The final rule revises these provisions consistent with the

1992 amendment to section 503 extending coverage under the act to the

contractor's entire work force.

As stated in the preamble to the NPRM, the purpose of the provision

limiting application of the regulations to positions that are engaged

in carrying out a contract was to more closely conform the regulations

to the jurisdictional limitation then-contained in section 503(a) as

interpreted by the court in Washington Metropolitan Area Transit

Authority v. DeArment, 55 EPD para.40,507 (D.D.C. 1991). The 1992

legislation, by striking this jurisdictional limitation from section

503, amended the act to apply to all of a covered contractor's or

subcontractor's work force. This amendment had prospective effect only.

In order to reflect this statutory amendment, the coverage

limitation set forth in paragraph (a)(2)(i) of the NPRM has been

revised in the final rule to provide that the limitation applies only

to the contractor's employment decisions and practices occurring before

the amendment's effective date--October 29, 1992. The proposed

standards governing the determination whether a position is engaged in

carrying out a contract have been carried forward in the final rule

without

[[Page 19342]]

substantive change. (Stylistic revisions reflecting the jurisdictional

limitation's retroactive application have been incorporated throughout

paragraph (a)(2) as well as in appendix D, which sets out guidance

regarding positions engaged in carrying out a contract.) Thus, for

instance, in investigating whether a contractor covered by section 503

has discriminated against an individual with a disability in violation

of the act, the issue whether the discriminatee was employed in, or was

an applicant for, a position engaged in carrying out a Government

contract will be relevant only if the alleged discrimination occurred

before October 29, 1992. This section still has practical utility

because there are a number of pending section 503 complaints involving

alleged violations of the act which occurred before the amendment.

Moreover, the requirement contained in the NPRM that the contractor

determine which of its positions carry out contracts (and thus are

covered) and make a record of that determination has been eliminated in

the final rule. As explained in the preamble to the NPRM, this

determination was necessary in order to define the scope of the

contractor's affirmative action and nondiscrimination obligations under

the regulations. This determination, which was intended to be applied

prospectively only, is no longer needed inasmuch as the act has been

amended to extend those obligations to the contractor's entire work

force.

Three commenters objected to ``prong A'' of the coverage test

(paragraph (a)(2)(i)(A))--which provides that a position is engaged in

carrying out a contract if its duties include work that fulfills a

contractual obligation, or work that is necessary to, or that

facilitates, performance of the contract or a provision of the

contract. The commenters asserted that this provision is inconsistent

with the jurisdictional limitation that was contained in the statute in

that it would result in the coverage of positions with a tenuous

connection to the contract. Further, these commenters stated that the

regulation fails to provide sufficient guidance as to which positions

are engaged in carrying out a contract. Two of these commenters also

objected to the paperwork burdens associated with the coverage

determination requirement.

OFCCP disagrees with the assertion that prong A is inconsistent

with the jurisdictional limitation. As stated in the preamble to the

proposed rule, prong A reflects the practical reality that performance

of a contract generally requires the cooperation of a variety of

individuals engaged in auxiliary and related functions beyond direct

production of the goods or provision of the services that are the

object of the contract. Therefore, OFCCP believes it reasonable to

construe positions ``engaged in carrying out'' a contract as including

those which perform work that is necessary to, or that facilitates,

performance of the contract--even if the work is not directly required

by an express contractual term. OFCCP also disagrees that the

regulation fails to provide sufficient guidance on the application of

prong A; OFCCP has attempted to provide contractors with as much

guidance as possible on this issue in appendix D to the regulations.

Finally, the commenters' concerns regarding increased burdens have been

rendered moot in that the coverage determination requirement has been

omitted in the final rule.

Section 60-741.4(a)(3) Contracts and Subcontracts for Indefinite

Quantities

One commenter raised a concern that paragraph (a)(3) of this

section will result in undue burdens on contractors in that it would

require the incorporation of the equal opportunity clause (see Sec. 60-

741.5) into existing indefinite quantity contracts whenever an

individual order under such contracts meets the jurisdictional amount

for coverage. This concern is unwarranted. This provision does not

require that an existing contract be revised or reissued to incorporate

the clause physically in the contract in such a situation; it simply

provides that the requirements of the clause shall apply to the

contract (irrespective of whether the clause is physically incorporated

into the contract).

Section 60-741.4(a)(4) Work Within the United States (Proposed)

Proposed Sec. 60-741.4(a)(4) stated that the regulations apply only

to ``employment within the United States.'' (For the sake of clarity,

the final rule revises this section to substitute the phrase

``employment activities within the United States'' for the above

language.)

Under current Sec. 60-741.4(a)(3), the regulations are made

applicable to work performed abroad by employees recruited within the

United States. The final rule narrows the scope of that coverage. As

discussed in the NPRM, the proposed narrowing was a response to the

Supreme Court's decision in EEOC v. Aramco, 111 S. Ct. 1227 (1991),

which held that title VII of the Civil Rights Act of 1964 (title VII)

does not apply to United States citizens employed abroad by United

States employers. OFCCP concluded that a similar coverage limitation

applies to section 503. Upon reconsideration, OFCCP believes that

proposal failed to clearly reflect OFCCP's policy with respect to the

coverage of employment decisions made within the United States

affecting employment opportunities abroad (issues which were not

addressed by the Aramco decision). Accordingly, the final rule revises

this section to clarify that the regulations cover decisions of the

contractor made within the United States, pertaining to the

contractor's applicants and employees who are within the United States,

regarding employment opportunities abroad. OFCCP's established policy

is to treat these particular employment decisions as covered by section

503.

In the Civil Rights Act of 1991, Congress amended title VII and the

ADA to provide expressly for extraterritorial application of those

laws. We considered whether it is possible to apply a similar rule

under section 503, and concluded that it is not. Although the Civil

Rights Act of 1991 reversed the result of Aramco with respect to title

VII and the ADA, it did not erase the longstanding legal principle

repeated in that case that, absent contrary intent, legislation applies

only within the borders of the United States. We are unaware of any

such expressed intent regarding section 503.

Section 60-741.5 Equal Opportunity Clause

Section 60-741.5(a) Government Contracts

Proposed paragraph 4 of this section (one of the provisions of the

equal opportunity clause, which must be included in all covered

contracts and subcontracts) stated that the contractor agrees to post,

in a form to be prescribed by the Director (now the Deputy Assistant

Secretary for Federal Contract Compliance Programs), a notice regarding

the rights of applicants and employees under section 503. The final

rule revises this section to require the contractor to ensure that

applicants and employees with disabilities are informed of the contents

of the notice. In part, this revision responds to a suggestion by a

disability rights group that the regulations be revised to require that

the posting mandated by proposed Sec. 60-741.80 (the contractor's equal

opportunity policy statement) be accessible to persons with vision

impairments. (As discussed below, this posting requirement has been

transferred to Sec. 60-741.44(a).) OFCCP believes that such an

accessibility requirement should apply both to this

[[Page 19343]]

posting and the posting mandated by Sec. 60-741.5(a) (paragraph 4);

therefore, the final rule makes the requirement applicable to both

notices. OFCCP concludes that the contractor must ensure that these

notices are accessible to applicants and employees with disabilities to

satisfy its duty to provide a reasonable accommodation. A contractor

may make these notices accessible, for example, by having the notice

read to a visually disabled individual or by lowering the posted notice

so that it may be read by a person in a wheelchair.

Section 60-741.5(f) Duties of Contracting Agencies

The proposal provided in part that contracting agencies are

required to cooperate with the Director (now Deputy Assistant Secretary

for Federal Contract Compliance Programs) in the performance of his or

her responsibilities under the act, including taking such actions for

noncompliance as set forth in Sec. 60-741.66 (Sanctions and penalties)

as may be ordered by the Director (now Deputy Assistant Secretary). The

final rule revises this section by incorporating references to the

Secretary of Labor (in addition to the reference to the Deputy

Assistant Secretary for Federal Contract Compliance Programs); this

revision is intended to accurately reflect the role of the Secretary in

the enforcement of the act.

Section 60-741.21(g) Prohibitions

The text of this subsection has been altered slightly from the

proposal, to provide that exclusionary selection criteria that

``concern only marginal functions of the job,'' rather than those that

``do not concern an essential function of the job,'' would not be

consistent with business necessity. This subtle distinction allows for

the possibility that there may be selection criteria that do not relate

to either essential or marginal functions, which are consistent with

business necessity. Conforming changes have been made to Secs. 60-

741.44(c)(1) and (2).

Section 741.21(h) Administration of Tests

In the proposed rule this paragraph contained broader language than

the comparable ADA provision. The NPRM specified that contractors must

administer employment tests in an appropriate format to individuals

with impaired ``sensory, manual, speaking, mobility or other skills.''

The ADA rule does not reference ``mobility and other skills.'' Our

stated intent in including the additional language was to clarify that

individuals with disabilities may not be excluded from a job that they

can actually perform merely because they are hampered in the ability to

complete or succeed on a test as a result of their impaired skills

(resulting from their disability)--no matter what the impaired skills

may be. Upon further consideration, we have decided to track more

strictly the wording of the EEOC regulation, which in turn strictly

tracks the wording of the ADA. We have added to appendix A on

reasonable accommodation additional guidance on the administration of

tests that is consistent with our proposed rule.

Section 741.23 Medical Examinations and Inquiries

Section 60-741.23(b) Permitted Medical Examinations and Inquiries

One commenter suggested that the regulations clarify that OFCCP

will follow EEOC's interpretative guidance (relating to Sec. 1630.14(a)

of the ADA regulations) which provides that physical agility tests are

not medical examinations, and thus may be given at any point in the

application or employment process. OFCCP does indeed intend to follow

this interpretation. As stated earlier, the EEOC's interpretative

guidance is equally applicable with respect to the counterpart

provisions of this rule, and it may be relied upon for guidance. See

Sec. 60-741.1(c)(1). Further, a phrase was deleted from the final rule

as redundant.

Section 60-741.23(c) Invitation to Self-Identify

This paragraph of the NPRM stated that the contractor may invite

applicants and employees to self-identify as individuals with

disabilities as specified in Sec. 60-741.42. This paragraph has been

revised to reflect changes made by the final rule to Sec. 60-741.42

(see discussion below).

Section 60-741.23(d) Confidentiality and Use of Medical Information

One commenter raised the concern that the requirement contained in

proposed Sec. 60-741.23(d), that information regarding the medical

condition or history of an applicant or employee be treated as a

confidential record, conflicts with an employer's obligation under the

Railway Labor Act to provide such information to bargaining

representatives under specified circumstances. OFCCP has not yet taken

a position on this issue. The EEOC will be addressing similar issues

under the ADA in future Compliance Manual sections and policy guidance.

OFCCP intends to coordinate its policy under section 503 relating to

this issue with the EEOC at an appropriate time in the future.

Further, to ensure greater confidentiality OFCCP has narrowed the

scope of the requirement that confidential medical information be made

available to Government officials. As revised, the rule provides access

to Government officials enforcing the laws administered by OFCCP (i.e.,

section 503, Executive Order 11246, and the affirmative action

provisions of the Vietnam Era Veterans' Readjustment Assistance Act (38

U.S.C. Sec. 4212)), and those enforcing the ADA. A corresponding

revision has been made in appendix B, which contains a sample

invitation to self identify.

Section 60-741.25 Health Insurance, Life Insurance and Other Benefit

Plans

One commenter recommended that the regulations provide additional

clarification regarding permissible coverage restrictions under benefit

plans. OFCCP intends to develop future guidance on this and related

issues in coordination with EEOC.

Subsection (a) has been slightly revised to refer to ``[a]n insurer

* * *, or any agent or entity that administers benefit plans * * *.''

The proposal had erroneously deviated from the corresponding ADA

provision, using the word ``contractor'' rather than ``entity.''

Subpart C--Affirmative Action Program

Several commenters made observations concerning this subpart as a

whole. One, for example, recommended that the final rule clarify that

nondiscrimination and affirmative action are separate and distinct

concepts, and that affirmative action does not mean that an employer is

required to grant a preference. Affirmative action and

nondiscrimination are separate, but related, concepts. The duty to

undertake affirmative action subsumes the duty to refrain from

discrimination. Thus, for example, a contractor that is discriminating

is not fulfilling its affirmative action obligations to identify,

prevent and remedy discrimination. OFCCP also wishes to clarify that

section 503 and these implementing regulations do not require employers

to grant a preference to individuals with disabilities.

Subpart C requires covered contractors to institute a system of

proactive measures designed to ensure equal employment opportunity for

individuals with disabilities. For example, contractors are required to

ensure that their personnel processes provide for careful consideration

of the

[[Page 19344]]

job qualifications of known disabled individuals (Sec. 60-741.44(b));

periodically review job qualification standards to ensure that, to the

extent they tend to screen out qualified persons with disabilities,

such requirements are consistent with business necessity (Sec. 60-

741.44(c)); and take appropriate efforts to effectively recruit workers

with disabilities (Sec. 60-741.44(f)). These measures do not require

the contractor to extend a preference for individuals with

disabilities; rather, they are designed to create a working environment

that actively welcomes qualified persons with disabilities at all

levels in the contractor's work force.

Section 60-741.40 Applicability of the Affirmative Action Program

Requirement

The NPRM contained a proposal (in paragraph (a)) to raise the

threshold for the application of the written affirmative action program

(AAP) requirement from the current (Sec. 60-741.5(a)) 50 or more

employees and a Government contract of $50,000 or more, to 150 or more

employees and a contract of $150,000 or more. Several commenters

expressed approval of the NPRM proposal, one expressed disapproval, and

two favored a higher threshold--250 employees and a Federal contract of

$250,000 or more.

Upon further consideration, OFCCP believes it is in the public

interest to maintain the threshold requirements imposed at current

Sec. 60-741.5(a). Raising the threshold as proposed would remove nearly

two million workers from the protection of a Section 503 affirmative

action program. Further, since a large proportion of new jobs are

created in companies with fewer than 150 employees, relieving such

companies from the affirmative action program requirement would have a

significant impact on the employment opportunities of individuals with

disabilities. Finally, OFCCP wishes to maintain consistency in its

affirmative action program threshold among its three programs, and that

threshold under both its Executive Order 11246 program (Secs. 60-

1.40(a), 60-2.1(a)) and 38 U.S.C. 4212 program (Sec. 60-250.5(a)) is 50

or more employees and a Government contract of $50,000 or more.

Accordingly, the corresponding threshold in the current Section 503

regulations is carried forward in this final rule without change.

A number of commenters expressed concern regarding proposed

paragraph (b) insofar as it requires contractors to prepare and

maintain an AAP at each establishment. These commenters asserted that

it would be overly burdensome to comply with this requirement at

establishments which employ very few people. Although this paragraph,

which is virtually identical to current Sec. 60-741.5(a), does not

define ``establishment,'' OFCCP has applied that term flexibly in order

to accommodate small establishment issues. The Secretary of Labor's

decision in OFCCP v. Coldwell, Banker and Co., 78-OFCCP-12 (August 14,

1987), an Executive Order 11246 case, recognized that the term

``establishment'' generally means a physically distinct place of

business or location. However, he also recognized that there may be

circumstances where it is appropriate for OFCCP to approve the grouping

of separate facilities for AAP purposes. Factors that may be relevant

include whether there is centralized authority for personnel decisions,

whether the facilities are in the same labor market or recruiting area,

and the number of employees at the facilities. Contractors may request

that OFCCP approve the grouping of particular facilities for AAP

purposes.

Section 60-741.42 Invitation to Self-Identify

This section addresses a contractor's obligation to invite

applicants and employees with disabilities to self-identify in order to

benefit from the contractor's affirmative action program. Under the

current regulations (41 CFR 60-741.5(c)(1)) contractors are required to

invite employees and applicants to self-identify. Under paragraph (a)

of the NPRM contractors would be permitted, but not required, to invite

self-identification. The final rule differs from the proposed version,

and is similar to the current rule, in that it makes the obligation to

extend the invitation mandatory. The final rule takes a different

approach from the current rule, however, in that it specifies that

except in limited circumstances the invitation is to be extended after

an employment offer has been made and before the applicant begins work.

OFCCP had explained in the preamble to the NPRM that it believed

the invitation to self-identify should be permissive, rather than

mandatory, in light of other proposed provisions (Secs. 60-741.44(b)

and (d)) which provide comparable protections. However, upon

reconsideration, OFCCP believes that these provisions (which are

carried forward in the final rule) do not provide protections

comparable to a mandatory invitation to self-identify. Sections 60-

741.44(b) and (d) are intended to ensure that the contractor will

afford individuals with a known disability proper consideration for

employment opportunities and reasonable accommodations. In contrast,

the mandatory invitation to self-identify is designed to afford persons

whose disabilities may not be known to the contractor a full

opportunity to come forward to request an accommodation. Further, the

mandatory invitation ensures that notice is provided of the

contractor's obligations with respect to individuals with disabilities.

Accordingly, the final rule carries forward the mandatory requirement

from the current regulations.

Further, the proposed permissive invitation provision was based in

part on the concern that a mandatory requirement might result in

inadvertent violations of the ADA regulatory prohibitions regarding

medical inquiries by employers subject to both laws. Those regulations

generally prohibit inquiries (such as those required by Sec. 60-741.42)

whether an applicant or employee is an individual with a disability or

as to the nature or severity of the disability but specify that such

inquiries are permitted if required to satisfy the affirmative action

requirements of section 503 (see Sec. 1630.13 of the ADA regulations

and the interpretative guidance relating to Sec. 1630.14). At the time

the NPRM was published, OFCCP was concerned that a contractor might

inadvertently extend the invitation to workers who are not covered by

section 503--and thus, such an invitation arguably would not fall

within this exception to the medical inquiries prohibition. (As is

discussed above, prior to the act's amendment by the 1992 legislation

only employees who were employed in, or applicants for, positions that

are engaged in carrying out a Government contract were covered.) OFCCP

believed that a permissive invitation would permit the contractor to

avoid extending the invitation where an applicant's or employee's

coverage under section 503 was unclear. In view of the amendment

extending coverage under the act to all of the contractor's positions,

this issue no longer presents a significant concern.

The revised provision is intended to comport with EEOC regulations

and guidance on pre-employment inquiries. Paragraph (a) of the rule

requires the contractor to issue the invitation after making an offer

of employment and before the applicant begins his or her employment

duties. This approach is consistent with Sec. 1630.14(b) of the EEOC's

regulations, which provides that an employer may require a medical

inquiry after making an offer of employment to a job applicant and

[[Page 19345]]

before the applicant begins his or her job duties, if all entering

employees in the same job category are subjected to such an inquiry

regardless of disability. Inviting an applicant to self-identify before

an offer of employment has been made is permitted only in two limited

circumstances: If the invitation is made when the contractor actually

is undertaking affirmative action at the pre-offer stage; and if the

invitation is made pursuant to a Federal, state or local law requiring

affirmative action for individuals with disabilities. EEOC's October

10, 1995, ``ADA Enforcement Guidance: Preemployment Disability-Related

Questions and Medical Examinations'' authorizes pre-employment

inquiries in these circumstances. Furthermore, in order to ensure

consistency between the requirements of section 503 and the Vietnam Era

Veterans' Readjustment Assistance Act (VEVRAA), OFCCP plans to issue an

Interim Final Rule conforming the invitation to self-identify provision

of VEVRAA with that in this rule.

Further, the rule has been revised (paragraph (b) of the final

rule; paragraph (a) of the proposal) to require that the invitation

inform the individual that the request to benefit under the

contractor's affirmative action program may be made immediately or at

any time in the future. This revision is intended to help ensure that

the individual is aware that he or she is not precluded from making the

request at any time in the future merely because an initial request was

made or because he or she failed to make the request immediately in

response to the invitation. For example, an individual with a

disability simply may not choose to self-identify before beginning

work, but may wish to do so later; after beginning work an individual

may develop a disability; or a pre-existing minor disability may become

more severe. Proposed paragraph (b), which set forth a similar

clarification--but did not require that it be included in the

invitation itself--has been omitted in the final rule.

Section 60-741.44 Required Contents of Affirmative Action Programs

Section 60-741.44(a) Policy Statement

Paragraph (a) of the proposal, which provided that the contractor

shall include its equal opportunity policy statement in its affirmative

action program, has been revised for clarity. As revised, this section

states that the contractor shall post the policy statement on company

bulletin boards, and specifies the type of information that should be

included in the policy statement--both suggested (relevant information

about the contractor's policy) and required (notification that the

contractor is obligated, as specified in Sec. 60-741.69, to refrain

from harassment or intimidation). In this part, OFCCP uses the term

``shall'' when material is mandatory and ``should'' when the material

is encouraged but not required. This revision largely conforms the

provision to the counterpart Executive Order regulation (41 CFR 60-

2.20(a)). The notice posting requirement was set out in proposed

subpart E (Ancillary Matters) at Sec. 60-741.80; that section also

provided that the posting shall include a notification regarding the

contractor's obligation to refrain from harassment or intimidation. For

the sake of clarity, the substance of these provisions has been

transferred to Sec. 60-741.44(a). (Proposed Secs. 60-741.81 through 60-

741.85 have been redesignated as Secs. 60-741.80 through 60-741.84,

respectively.) OFCCP believes that the revisions establishing suggested

guidance on the contents of equal opportunity notices, will simplify

the process of preparing such notices. Additionally, as discussed in

connection with Sec. 60-741.5(a), the final rule revises this section

to require the contractor to ensure that applicants and employees with

disabilities are informed of the contents of the policy statement.

Section 60-741.44(d) Reasonable Accommodation to Physical and Mental

Limitations

A few commenters objected to paragraph (d) of the proposal insofar

as it provides that where an employee with a known disability is having

difficulty performing his or her job, the contractor shall

confidentially inquire whether the employee is in need of a reasonable

accommodation. The preamble to the proposal stated that the contractor

is required to make the inquiry only in situations where it is

reasonable to conclude that a performance problem may be related to a

disability. These commenters asserted that it may be difficult to

determine with certainty whether the employee's performance problem is

the result of a disability. Consequently, the commenters argued, the

requirement may compel some contractors to make potentially offensive

inquiries regarding needed accommodations (i.e., inquiries based on

unfounded and stereotypical assumptions).

In order to address this concern, paragraph (d) has been revised in

the final rule to require the contractor to make an initial inquiry as

to whether the performance problem has any connection to the employee's

disability, and that a second inquiry about needed accommodations only

be made where the individual indicates that the problem does have such

a connection. Moreover, paragraph (d) has been revised to require the

contractor to make the initial inquiry only where the employee is

having significant difficulty performing the job and it is reasonable

to conclude that the performance problem may be related to the known

disability.

The revision requiring the contractor to make the initial inquiry

only where the employee is having a significant job performance problem

is intended to minimize the burden placed on the contractor while also

helping to ensure that the accommodation issue is fully explored by

both the employee and the contractor before the employee may be subject

to adverse action.

One commenter suggested that, rather than imposing a requirement on

contractors to inquire about the need for a reasonable accommodation

where an individual with a known disability is having a job performance

problem, OFCCP should encourage contractors to ensure that individuals

with disabilities are aware of their rights under section 503,

including their right to request a reasonable accommodation. The

difficulty with this approach is that, notwithstanding a contractor's

efforts to disseminate this information, some individuals with

disabilities may remain unaware of their right to request a reasonable

accommodation. Moreover, many individuals with disabilities may not

perceive the need for an accommodation (for instance, a person with

narcolepsy might fail to recognize the fact that his or her disability

is so severe as to interfere with the performance of the job).

Section 60-741.44(f) External Dissemination of Policy, Outreach and

Positive Recruitment

Some commenters viewed paragraph (f) as imposing too many

burdensome requirements. OFCCP disagrees. Proposed paragraph (f), which

is generally consistent with current Sec. 60-741.6(f), does not impose

any new appreciable obligations. It simply specifies that a contractor

is required to engage in such outreach and recruitment activities--as

appropriate to its circumstances (such as size, resources, and the

adequacy of current procedures)--that are reasonably designed to

effectively recruit qualified individuals with disabilities. The

methods for doing so that are specified in paragraphs (f)(1) through

(f)(7) are

[[Page 19346]]

suggested, rather than mandatory. This provision is carried forward in

the final rule without change.

Section 60-741.60 Compliance Reviews

OFCCP did not receive any comments during the comment period

regarding the proposed provision relating to compliance reviews.

However, questions subsequently have arisen regarding whether this

provision gives OFCCP new authority to conduct reviews or simply

clarifies existing authority under section 503 and the present

regulations. This provision simply reaffirms more clearly OFCCP's

existing authority under the act and the regulations (see current

Sec. 60-741.25) to conduct compliance reviews to evaluate contractors'

compliance with the law.

Section 60-741.61 Complaint Procedures

Section 60-741.61(b) Place and Time of Filing

OFCCP's paragraph (b) proposal to extend the current 180 day

complaint filing period to 300 days is adopted in this final rule. The

final rule provides a uniform national standard which will not be

shorter than the complaint filing period under the ADA. Section 107(a)

of the ADA, which incorporates the procedural requirements of section

706 of title VII, requires the EEOC to defer for 60 days to State or

local agency processing of an ADA complaint if a State or local law

prohibits the employment practice alleged to be unlawful, and the

agency is authorized to grant or seek relief. In such jurisdictions, an

ADA complaint may be filed with the EEOC within 30 days of the

conclusion of the State or local agency processing or within 300 days

of the date of the alleged violation, whichever occurs earlier.

However, where there is no deferral (no State or local law prohibits

the employment practice at issue, or no State or local agency is

authorized to grant or seek relief), an ADA complaint must be filed

with the EEOC within 180 days of the alleged violation.

The proposed 300 day filing period under section 503 thus ensured

that in deferral jurisdictions a complaint covered by both section 503

and the ADA would be timely under both statutes. As discussed in the

preamble to the NPRM, however, the 300 day section 503 period also

would mean that in nondeferral jurisdictions complaints covered by both

statutes and filed between 181 and 300 days of the alleged violation

would be timely under section 503 but not under ADA. In such cases, the

complainant would lose rights unique to ADA (such as the private right

to file a law suit).

Some commenters objected to a blanket 300 day period because

witnesses may not still be available, and if available, may no longer

have a fresh recollection of pertinent events--particularly in the

construction industry, where many projects are completed within 300

days. However, inasmuch as the ADA 300 day filing period in deferral

jurisdictions is a statutory requirement (as it has been under title

VII), contractors would encounter any such problem under the ADA

irrespective of the time period adopted under section 503.

Another commenter objected to the proposal because, in its view,

the 300 day period was developed for the convenience of the states

rather than the Federal enforcement agencies, and thus it offers no

support for extension of the filing period under section 503. However,

OFCCP does not rely on the ADA filing period as legal support for

extending the section 503 period to 300 days. Rather, OFCCP's decision

to extend the period is based upon a desire to establish a uniform

national standard which will be at least as long as the complaint

filing period under the ADA. Because no frequently updated list of

deferral jurisdictions is published and readily available, complainants

and contractors may not know whether they are in a deferral

jurisdiction. Therefore, a uniform national standard will result in

ease of administration and public certainty regarding the filing

deadline.

Section 60-741.61(c)(2) Contents of Complaints--Third Party Complaints

Five commenters objected to this paragraph, which provides in part

that a complaint filed by an authorized representative need not

identify by name the person on whose behalf the complaint is filed. The

purpose of this provision, which is derived from the analogous ADA

regulation (29 CFR 1601.7(a)), is to help prevent retaliation against

persons seeking to exercise their rights under the act. The commenters

asserted that in some cases contractors would have difficulty

responding to the allegations of a complaint without knowing the

identity of the person on whose behalf it is filed. OFCCP wishes to

emphasize that in many cases it would not be necessary to disclose the

individual's identity to enable the contractor to respond effectively.

For example, where the complaint alleges a broad contractor policy or

practice (such as the rejection of all applicants who have had a back

injury or the use of an application form that requests pre-offer

medical information), the contractor will be able to respond fully

without knowing the name of the person(s) on whose behalf the complaint

was filed. However, OFCCP acknowledges that where the complaint

involves practices with limited applicability (such as a failure to

provide reasonable accommodation for a specific disability in a

specific job), it may not be possible to protect the individual's

confidentiality. Therefore, the final rule reflects that

confidentiality will be protected where possible, given the facts and

circumstances in the complaint.

Additionally, the proposal stated that ``during the investigation''

of a third-party complaint OFCCP shall verify the authorization of the

complaint by the person on whose behalf the complaint is made. The

phrase ``during the investigation'' is omitted in the final rule. This

revision is intended to permit OFCCP to verify the complaint's

authorization at an earlier stage of its processing of the complaint--

that is, before the contractor is provided notice that the complaint

has been filed.

Section 60-741.61(f) Resolution of Matters

Paragraph (f)(1) has been revised to clarify that the notification

required thereunder shall be provided to the contractor as well as to

the complainant. This reflects current OFCCP practice.

Section 60-741.66 Sanctions and Penalties

Section 60-741.66(c) Debarment

The proposed paragraph authorizes OFCCP to impose fixed-term

debarments. A few commenters objected to the fixed-term debarment

concept. These commenters were concerned that fixed-term debarment is

too harsh a measure, especially if it is used in response to what the

commenters termed ``paper'' violations, that is, violations of

recordkeeping or affirmative action requirements which do not involve

discrimination. OFCCP does not view fixed-term debarments as too harsh

a measure, and OFCCP does not intend to seek a fixed term debarment for

minor, technical violations of the law. Explicit regulatory authority

to impose debarment for a minimum fixed-term is necessary to ensure the

continued future compliance of some contractors.

OFCCP believes the fixed-term debarment sanction will be

particularly effective in encouraging compliance among the recalcitrant

contractors who repeatedly break their promises of future compliance

with respect to affirmative action and recordkeeping

[[Page 19347]]

requirements. OFCCP views affirmative action and recordkeeping

requirements as fundamental to section 503 compliance. These

requirements provide the foundation for the contractor's affirmative

action efforts and provide the basis for monitoring the contractor's

compliance by both the contractor and OFCCP.

The current regulations (at Sec. 60-741.50) require a showing that

a debarred contractor will carry out employment policies and practices

in compliance with section 503 and its regulations as one of the

conditions of reinstatement. OFCCP has traditionally accepted a

contractor's promise of future compliance as sufficient to meet this

requirement. Unfortunately, OFCCP has found that, for some contractors,

a promise is not enough. The sanction of debarment for a fixed-term of

not less than six months but no more than three years establishes a

minimum trial period during which a contractor can demonstrate its

commitment and ability to establish personnel practices that will

ensure continuing compliance with its section 503 obligations. See,

e.g., OFCCP v. Disposable Safety Wear, 92-OFC-11 (Decision and Final

Administrative Order of the Secretary of Labor, September 29, 1992).

The express recognition of fixed-term debarment in the regulations is

designed to put contractors on notice that an empty promise of future

compliance will not be a sufficient premise for continued contracting

with the Federal Government. Express regulatory recognition of the

sanction of fixed-term debarment will strengthen the section 503

enforcement scheme by deterring contractors from engaging in violations

``based on a cold weighing of the costs and benefits of

noncompliance.'' Janik Paving & Construction v. Brock, 828 F.2d 84 (2d

Cir. 1987).

Accordingly, OFCCP has determined to retain in this final rule the

authority to impose fixed-term debarments. However, after further

consideration, OFCCP has decided to remove reference to willful or

aggravated from the fixed-term debarment provision. Although a few

commenters expressed concern that the proposal would fail to provide

sufficient guidance as to the types of violations that would trigger

the sanction, OFCCP believes that it is neither practicable nor

necessary to precisely define the types of violations for which it

would impose a fixed-term debarment, and declines to do so. Rather,

OFCCP will retain discretion to make determinations on a case-by-case

basis. In making such determinations, OFCCP will consider, among other

factors, the severity of the violation, whether the violation can be

fully remedied in the absence of a fixed-term debarment and the

contractor's compliance history.

Section 60-741.69 Intimidation and Interference

One commenter objected to the references to state and local laws in

paragraph (a) as exceeding OFCCP's jurisdiction. The objective of this

provision is not, as the commenter suggests, to enforce a state or

local law, but to proscribe activities which interfere with a person's

exercise of his or her rights under a state or local law. OFCCP may

seek the same range of sanctions for a violation of this provision

(such as debarment and/or back pay) as it does for other violations of

section 503.

Section 60-741.80 Posting of Notices (Proposed)

As discussed in connection with Sec. 60-741.44(a), proposed

Sec. 60-741.80 is not carried forward in the final rule. Subsequent

sections have been redesignated accordingly.

Section 60-741.80 Recordkeeping

Section 60-741.80(a) General Requirements

A number of commenters raised concerns regarding paragraph (a) of

this section. This paragraph revises the current record retention

obligation--which at Sec. 60-741.52(a) provides that contractors are

required to maintain for one year records relating to complaints

against the contractor--by making it applicable to any personnel or

employment record made or kept by the contractor. This revision

conforms the obligation to the analogous requirement under EEOC's

recordkeeping regulations (29 CFR 1602.14(a)) issued pursuant to title

VII and the ADA. Paragraph (a) also specifies that when a contractor

has been notified that a complaint has been filed, that a compliance

review has been initiated or that an enforcement action has commenced,

the contractor shall preserve all relevant personnel records until the

final disposition of the action. Again, this requirement parallels the

corresponding EEOC regulation issued pursuant to title VII and the ADA.

Paragraph (a) of the final rule varies slightly from the

corresponding provision contained in the NPRM. The final rule does not

carry forward the reference to records regarding coverage

determinations contained in the provision's listing of examples of the

types of records that must be preserved, inasmuch as contractors are no

longer required to make such coverage determinations (see discussion

regarding Sec. 60-741.4(a)(2)). Further, the recordkeeping obligation

in the final rule remains at one year for smaller contractors, instead

of being increased to two years for all contractors as had been

proposed. In order to provide regulatory relief for smaller

contractors, only contractors that have 150 or more employees and a

Government contract of $150,000 or more are required to maintain

records for two years.

One commenter was concerned that paragraph (a) unjustifiably

expands the types of records that must be kept beyond those required by

EEOC. This concern is misplaced and was apparently based on the fact

that the listing in paragraph (a) of examples of the types of personnel

records that must be maintained varies somewhat from the corresponding

listing contained in the EEOC regulation. OFCCP intends that this

requirement apply to the same records as does the EEOC regulation--that

is, to any personnel or employment record made or kept by the employer.

A number of commenters objected to the extension of the retention

period on the grounds that it is inconsistent with the one-year

retention period under EEOC's regulations applicable to title VII and

the ADA. Some commenters objected that it would impose unreasonable

record storage burdens on large companies that have many thousands of

applicants and employees, and others stated that it would burden small

and medium size contractors that have fewer personnel department

resources, including small construction firms that have a fluid

workforce and high turnover. With respect to the first concern, the

longer retention period is justified by differences between the

enforcement activities of OFCCP and EEOC. As explained in the proposal,

a two year retention period provides greater assurance that relevant

records will be available during OFCCP compliance reviews (during which

the agency generally reviews employment practices and activity going

back two years). In contrast, EEOC's enforcement of title VII and the

ADA is triggered exclusively by charges--which must be filed within 180

days (or, in deferral jurisdictions, 300 days) of an alleged violation.

Thus, EEOC's one-year retention period is adequate to ensure that

relevant records are not discarded before the expiration of the filing

period.

Turning to the second concern, OFCCP believes that overall there

will be only a minimal increase in burden imposed on the larger

contractors as a result of the extended record retention period. (EEOC

reached a similar conclusion in 1991 (see 56 FR 35753

[[Page 19348]]

(July 26, 1991)) when it doubled its existing six-month retention

period under title VII to one year--an obligation that applies to a

significantly larger universe of employers than does the obligation

under section 503, which applies only to contractors that have 150 or

more employees and a Government contract of $150,000 or more.) Many

large employers, and some small employers as well, are increasingly

maintaining electronic records. Where this is the case, compliance with

the requirement will impose little or no additional burden. Moreover,

the decision to reduce the record retention period for small

contractors to one year--the same period required by EEOC--will provide

relief to small companies that are less likely to maintain electronic

records.

Section 60-741.80(b) Failure to Preserve Records

Proposed paragraph (b) provided in part that where a contractor has

destroyed or failed to preserve the records that it is required to

preserve under paragraph (a), there shall be a presumption that such

records would have been unfavorable to the contractor. However,

proposed paragraph (b) contained a proviso which stated that the

presumption shall not apply where the contractor shows that the

destruction or failure to preserve records results from circumstances

that are outside of its control. A number of commenters objected to

this adverse inference provision on the grounds that it would deny due

process and would be unduly harsh, especially, they asserted, because

records are frequently misplaced or destroyed inadvertently through

clerical error. One commenter requested that OFCCP clarify that the

failure to preserve records must be willful.

OFCCP believes that this requirement is necessary to prevent

OFCCP's compliance monitoring and enforcement efforts from being

frustrated by the destruction or failure to preserve records. OFCCP

intends to invoke the presumption selectively where the facts warrant

(and reserves the right to do so, when warranted, even in cases where

the contractor claims but cannot substantiate that the destruction or

failure to preserve records was inadvertent). In recognition of this

discretionary approach, the final rule revises this section to state

that the presumption ``may'' be invoked. Contractors will have a full

opportunity to submit evidence to rebut the inference.

Section 60-741.80(c)

The final rule changes the effective date of this section from the

proposed 30 days after the date of publication to 120 days after the

date of publication. This change in the effective date is due to

amendments that altered the requirements of the Paperwork Reduction Act

after OFCCP published the NPRM. OFCCP anticipates obtaining and

publishing an OMB control number during the 120 day period.

Section 60-741.82 Labor Organizations and Recruiting and Training

Agencies

One commenter expressed concern that this section may authorize

OFCCP to compel the parties to a collective bargaining agreement to

make modifications to the agreement. The commenter contended that such

a position may be inconsistent with that of the EEOC under its

regulations implementing the ADA. Section 60-741.82 does not make any

substantive changes to the section 503 regulation that it replaces, and

that regulation has been in effect since the first section 503

regulations were promulgated in 1976. Moreover, the regulation

parallels an Executive Order 11246 regulation (Sec. 60-1.9) that has

been in effect since 1968. Section 60-741.82 does not on its face

require such modifications to collective bargaining agreements, and

OFCCP normally does not have jurisdiction over the union.

The EEOC will be addressing various issues under the ADA related to

collective bargaining agreements in future Compliance Manual sections

and policy guidance. OFCCP, to the extent possible, intends to

coordinate its policy under section 503 relating to collective

bargaining agreements with the EEOC at an appropriate time in the

future.

Section 60-741.84 Effective Date

The final rule was modified slightly to clarify that contractors

presently holding Government contracts are required to update their

affirmative action programs within 120 days of the effective date of

these regulations only as required to comply with the changes made by

the final rule. A complete annual updating of the programs is not

required within 120 days. The proposal also had stated that the

effective date would be 30 days after publication. However, OFCCP must

display a valid OMB control number before the recordkeeping provisions

in the final rule can become effective. Therefore, the effective date

of the rule will be when OFCCP publishes the OMB control number in the

Federal Register, which OFCCP anticipates will be between 90 and 120

days after publication of this final rule.

Appendix D to Part 60-741--Guidelines Regarding Positions Engaged in

Carrying Out a Contract (Proposed as Appendix A)

Proposed appendix A was included in the NPRM to provide guidance on

the application of proposed Sec. 60-741.4(a)(2)(i)(A)--prong A of the

regulatory test for determining which of the contractor's positions are

engaged in ``carrying out'' a Government contract--and to assist

contractors in making the coverage determinations required under

proposed Sec. 60-741.4(a)(2)(iii) (see discussion regarding Sec. 60-

741.4(a)(2) above). As noted above, as a result of an amendment to

section 503, the issue whether the contractor's positions were engaged

in carrying out a Government contract is relevant only with respect to

the contractor's employment decisions and practices which occurred

before October 29, 1992. On that date, the act, which had applied only

insofar as the contractor was employing persons to carry out a

contract, was amended to extend coverage thereunder to all of the

contractor's positions--irrespective of their relation to the contract.

Consequently, the proposed coverage determination requirement, which

was intended to be applied prospectively to define the scope of the

contractor's obligations under section 503, is omitted from the final

rule as unnecessary. OFCCP has nevertheless determined to retain the

appendix in the final rule to provide guidance on its policy relating

to coverage with respect to the contractor's employment decisions and

practices occurring before the act's amendment, and has revised the

appendix to make this clarification.

This appendix still has practical utility because, as noted above,

there are a number of pending section 503 complaints involving alleged

violations of the act which occurred before the amendment. Moreover, it

is OFCCP's general practice during its compliance reviews to examine

the contractor's employment practices dating back two years immediately

preceding the compliance review and, as applicable, to assess liability

for violations occurring during that period. Once all matters involving

employment practices and decisions occurring before October 29, 1992,

are finally resolved, OFCCP will withdraw this appendix. In order to

preserve the continuity of the letter designations for the appendices

to the regulations at the time of the withdrawal, proposed appendix A

has been redesignated as appendix D, and

[[Page 19349]]

proposed appendices B, C, and D have been redesignated as appendices A,

B and C, respectively.

Proposed appendix A stated that a contract is not deemed covered

unless, among other things, it is performed within the United States.

This statement is omitted from the final rule to reflect the revision

to Sec. 60-741.1(b) (see discussion above). Also, the paragraphs of the

appendix have been numbered for ease of reference.

Appendix A to Part 60-741--Guidelines on a Contractor's Duty To Provide

Reasonable Accommodation (Proposed as Appendix B)

The discussions of Secs. 60-741.42 and 741.44(d) contained in

paragraph 2 of proposed appendix B have been revised to reflect the

revisions to those sections in the final rule (see discussion above

regarding those sections). Additionally, the appendix has been renamed,

and a paragraph of introductory text has been added, to clarify the

differences between reasonable accommodation and affirmative action

under section 503. As discussed above, this final rule redesignates

this appendix as appendix A.

Appendix B to Part 60-741--Invitation to Self-Identify (Proposed as

Appendix C)

Paragraph 1 has been revised to incorporate a clarification that

the individual may make a request--immediately in response to the

invitation or at any time in the future--to benefit under the

contractor's affirmative action program (see discussion above regarding

Sec. 60-741.42). As discussed above, this final rule redesignates this

appendix as appendix B. The appendix is renamed to clarify that it is a

``sample'' invitation. Finally, a note has been added at the beginning

of the appendix to state that when the invitation to self-identify is

being extended prior to an offer of employment, sample text relating to

identification of reasonable accommodations should be omitted. This

will avoid a conflict with the EEOC's ADA Guidance, which generally

precludes asking a job applicant (prior to a job offer being made)

about potential reasonable accommodations.

Appendix C to Part 60-741--Review of Personnel Processes (Proposed as

Appendix D)

As discussed above, this final rule redesignates this appendix as

appendix C.

Regulatory Procedures

Executive Order 12866

The Department is issuing this rule in conformance with Executive

Order 12866. This rule has been determined to be significant for

purposes of Executive Order 12866 and therefore has been reviewed by

OMB. This rule does not meet the criteria of section 3(f)(1) of

Executive Order 12866 and therefore the information enumerated in

section 6(a)(3)(C) of that Order is not required.

Regulatory Flexibility Act

The final rule clarifies existing requirements for Federal

contractors. In view of this fact and because the final rule does not

substantively change existing obligations for Federal contractors, the

rule will not have a significant economic impact on a substantial

number of small business entities. The Secretary has certified to the

Chief Counsel for Advocacy of the Small Business Administration to this

effect. Therefore, a regulatory flexibility analysis under the

Regulatory Flexibility Act is not required.

Unfunded Mandates Reform Act

This final rule does not include any Federal mandate that may

result in the expenditure by state, local and tribal governments in the

aggregate, or by the private sector, of $100,000,000 or more in any one

year.

Paperwork Reduction Act

This final rule establishes new recordkeeping provisions that did

not previously exist. The rule extends the current one-year record

retention period to two years for those larger contractors that have

150 or more employees and a Government contract of $150,000 or more,

and it makes this retention obligation applicable to a broader range of

records. It requires that, for purposes of confidentiality, information

obtained by contractors regarding the medical condition or history of

any applicant or employee be collected and maintained on separate forms

and in separate medical files. Lastly, it requires contractors to

maintain a separate file regarding applicants who have identified

themselves as individuals with disabilities.

The NPRM projected an increase of 1.1 million paperwork burden

hours associated with contractors determining which positions carry out

Government contracts. As discussed above, the 1992 legislation, by

striking this jurisdictional limitation from Section 503, eliminates

the need for contractors to determine which positions are covered.

Therefore, contractors will not need to incur the estimated 1.1 million

paperwork burden hours mentioned in the proposal. As stated in the

NPRM, OFCCP does not believe the other recordkeeping requirements

created by this rule will result in a net increase in burden hours as

compared to the current regulation.

These recordkeeping requirements have been submitted to the Office

of Management and Budget for clearance under the Paperwork Reduction

Act (44 U.S.C. 3501 et seq.). OFCCP solicits comments concerning these

recordkeeping requirements to: (i) evaluate whether the proposed

collection of information is necessary for the proper performance of

the functions of the agency, including whether the information will

have practical utility; (ii) evaluate the accuracy of the agency's

estimate of the burden of the proposed collection of information,

including the validity of the methodology and assumptions used; (iii)

enhance the quality, utility, and clarity of the information to be

collected; and (iv) minimize the burden of the collection of

information on those who are to respond, including through the use of

appropriate automated, electronic, mechanical, or other technological

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

Written comments on the recordkeeping requirements should be sent

to Joe N. Kennedy, Deputy Director, OFCCP, Room C-3325, 200

Constitution Ave., N.W., Washington, D.C. 20210. To be assured of

consideration, comments must be in writing and must be received on or

before July 1, 1996. As a convenience to commenters, OFCCP will accept

public comments transmitted by facsimile (FAX) machine. The telephone

number of the FAX receiver is (202) 219-6195. To assure access to the

FAX equipment, only public comments of six or fewer pages will be

accepted via FAX transmittal. Receipts of FAX transmittals will not be

acknowledged, except that the sender may request confirmation of

receipt by calling OFCCP at (202) 219-9430 (voice), 1(800) 326-2577

(TDD).

These new recordkeeping requirements are not effective until OFCCP

displays a currently valid OMB control number. Upon receipt of that

number, which OFCCP anticipates will take between 90 and 120 days,

OFCCP will publish a document in the Federal Register.

List of Subjects in 41 CFR Part 60-741

Administrative practice and procedure, Civil rights, Employment,

Equal employment opportunity,

[[Page 19350]]

Government contracts, Government procurement, Individuals with

disabilities, Investigations, Reporting and recordkeeping requirements.

Signed at Washington, D.C., this 12th day of April, 1996.

Robert B. Reich,

Secretary of Labor.

Bernard E. Anderson,

Assistant Secretary for Employment Standards.

Shirley J. Wilcher,

Deputy Assistant Secretary for Federal Contract Compliance.

Accordingly, with respect to the rule amending 41 CFR chapter 60

published on December 30, 1980 (45 FR 86216), which was suspended

indefinitely at 46 FR 42865, the revision of part 60-741 is withdrawn,

and in parts 60-1 and 60-30, all references to section 503 of the

Rehabilitation Act are withdrawn; with respect to title 41 of the Code

of Federal Regulations, chapter 60 is amended as set forth below.

Part 60-741 is revised to read as follows:

PART 60-741--AFFIRMATIVE ACTION AND NONDISCRIMINATION OBLIGATIONS

OF CONTRACTORS AND SUBCONTRACTORS REGARDING INDIVIDUALS WITH

DISABILITIES

Subpart A--Preliminary Matters, Equal Opportunity Clause

Sec.

60-741.1 Purpose, applicability and construction.

60-741.2 Definitions.

60-741.3 Exceptions to the definitions of ``individual with a

disability'' and ``qualified individual with a disability.''

60-741.4 Coverage and waivers.

60-741.5 Equal opportunity clause.

Subpart B--Discrimination Prohibited

60-741.20 Covered employment activities.

60-741.21 Prohibitions.

60-741.22 Direct threat defense.

60-741.23 Medical examinations and inquiries.

60-741.24 Drugs and alcohol.

60-741.25 Health insurance, life insurance and other benefit plans.

Subpart C--Affirmative Action Program

60-741.40 Applicability of the affirmative action program

requirement.

60-741.41 Availability of affirmative action program.

60-741.42 Invitation to self-identify.

60-741.43 Affirmative action policy.

60-741.44 Required contents of affirmative action programs.

60-741.45 Sheltered workshops.

Subpart D--General Enforcement and Complaint Procedures

60-741.60 Compliance reviews.

60-741.61 Complaint procedures.

60-741.62 Conciliation agreements and letters of commitment.

60-741.63 Violation of conciliation agreements and letters of

commitment.

60-741.64 Show cause notices.

60-741.65 Enforcement proceedings.

60-741.66 Sanctions and penalties.

60-741.67 Notification of agencies.

60-741.68 Reinstatement of ineligible contractors.

60-741.69 Intimidation and interference.

60-741.70 Disputed matters related to compliance with the act.

Subpart E--Ancillary Matters

60-741.80 Recordkeeping.

60-741.81 Access to records.

60-741.82 Labor organizations and recruiting and training agencies.

60-741.83 Rulings and interpretations.

60-741.84 Effective date.

Appendix A To Part 60-741--Guidelines on a Contractor's Duty To

Provide Reasonable Accommodation

Appendix B To Part 60-741--Sample Invitation to Self-Identify

Appendix C To Part 60-741--Review of Personnel Processes

Appendix D To Part 60-741--Guidelines Regarding Positions Engaged in

Carrying Out a Contract

Authority: 29 U.S.C. 706 and 793; and E.O. 11758 (3 CFR, 1971-

1975 Comp., p. 841).

Subpart A--Preliminary Matters, Equal Opportunity Clause

Sec. 60-741.1 Purpose, applicability, and construction.

(a) Purpose. The purpose of this part is to set forth the standards

for compliance with section 503 of the Rehabilitation Act of 1973, as

amended (29 U.S.C. 793), which requires Government contractors and

subcontractors to take affirmative action to employ and advance in

employment qualified individuals with disabilities.

(b) Applicability. This part applies to all Government contracts

and subcontracts in excess of $10,000 for the purchase, sale or use of

personal property or nonpersonal services (including construction):

Provided, That subpart C of this part applies only as described in

Sec. 60-741.40(a). Compliance by the contractor with the provisions of

this part will not necessarily determine its compliance with other

statutes, and compliance with other statutes will not necessarily

determine its compliance with this part: Provided, That compliance

shall also satisfy the employment provisions of the Department of

Labor's regulations implementing section 504 of the Rehabilitation Act

of 1973 (see 29 CFR 32.2(b)) when the contractor is also subject to

those requirements.

(c) Construction--(1) In general. Except as otherwise provided in

this part, this part does not apply a lesser standard than the

standards applied under title I of the Americans with Disabilities Act

of 1990 (42 U.S.C. 12101 et seq.), or the regulations issued by the

Equal Employment Opportunity Commission pursuant to that title (29 CFR

part 1630). The Interpretive Guidance on Title I of the Americans with

Disabilities Act set out as an appendix to 29 CFR part 1630 issued

pursuant to that title may be relied upon for guidance in interpreting

the parallel provisions of this part.

(2) Relationship to other laws. This part does not invalidate or

limit the remedies, rights, and procedures under any Federal law or the

law of any State or political subdivision that provides greater or

equal protection for the rights of individuals with disabilities as

compared to the protection afforded by this part. It may be a defense

to a charge of violation of this part that a challenged action is

required or necessitated by another Federal law or regulation, or that

another Federal law or regulation prohibits an action (including the

provision of a particular reasonable accommodation) that would

otherwise be required by this part.

Sec. 60-741.2 Definitions.

(a) Act means the Rehabilitation Act of 1973, Pub. L. 93-112 (29

U.S.C 706 and 793), as amended by sec. 111, Pub. L. 93-516; sec.

103(d)(2)(B), Pub. L. 99-506; sec. 9, Pub. L. 100-259; sec. 512, Pub.

L. 101-336 ; and secs. 102 and 505, Pub. L. 102-569.

(b) Equal opportunity clause means the contract provisions set

forth in Sec. 60-741.5, ``Equal opportunity clause.''

(c) Secretary means the Secretary of Labor, United States

Department of Labor, or his or her designee.

(d) Deputy Assistant Secretary means the Deputy Assistant Secretary

for Federal Contract Compliance of the United States Department of

Labor, or his or her designee.

(e) Government means the Government of the United States of

America.

(f) United States, as used herein, shall include the several

States, the District of Columbia, the Virgin Islands, the Commonwealth

of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern

Mariana Islands, and Wake Island.

(g) Recruiting and training agency means any person who refers

workers to any contractor, or who provides or supervises apprenticeship

or training for employment by any contractor.

(h) Contract means any Government contract or subcontract.

(i) Government contract means any agreement or modification thereof

[[Page 19351]]

between any contracting agency and any person for the purchase, sale or

use of personal property or nonpersonal services (including

construction). The term Government contract does not include agreements

in which the parties stand in the relationship of employer and

employee, and federally assisted contracts.

(1) Modification means any alteration in the terms and conditions

of a contract, including supplemental agreements, amendments and

extensions.

(2) Contracting agency means any department, agency, establishment

or instrumentality of the United States, including any wholly owned

Government corporation, which enters into contracts.

(3) Person, as used in paragraphs (i) and (l) of this section,

means any natural person, corporation, partnership or joint venture,

unincorporated association, State or local government, and any agency,

instrumentality, or subdivision of such a government.

(4) Nonpersonal services, as used in paragraphs (i) and (l) of this

section, includes, but is not limited to, the following: Utility,

construction, transportation, research, insurance, and fund depository.

(5) Construction, as used in paragraphs (i) and (l) of this

section, means the construction, rehabilitation, alteration,

conversion, extension, demolition, or repair of buildings, highways, or

other changes or improvements to real property, including facilities

providing utility services. The term also includes the supervision,

inspection, and other on-site functions incidental to the actual

construction.

(6) Personal property, as used in paragraphs (i) and (l) of this

section, includes supplies and contracts for the use of real property

(such as lease arrangements), unless the contract for the use of real

property itself constitutes real property (such as easements).

(j) Contractor means, unless otherwise indicated, a prime

contractor or subcontractor holding a contract in excess of $10,000.

(k) Prime contractor means any person holding a contract in excess

of $10,000, and, for the purposes of subpart D of this part, ``General

Enforcement and Complaint Procedures,'' includes any person who has

held a contract subject to the act.

(l) Subcontract means any agreement or arrangement between a

contractor and any person (in which the parties do not stand in the

relationship of an employer and an employee):

(1) For the purchase, sale or use of personal property or

nonpersonal services (including construction) which, in whole or in

part, is necessary to the performance of any one or more contracts; or

(2) Under which any portion of the contractor's obligation under

any one or more contracts is performed, undertaken, or assumed.

(m) Subcontractor means any person holding a subcontract in excess

of $10,000 and, for the purposes of subpart D of this part, ``General

Enforcement and Complaint Procedures,'' any person who has held a

subcontract subject to the act.

(n)(1) Individual with a disability means any person who:

(i) Has a physical or mental impairment which substantially limits

one or more of such person's major life activities;

(ii) Has a record of such an impairment; or

(iii) Is regarded as having such an impairment.

(2) See Sec. 60-741.3 for exceptions to the definition in paragraph

(n)(1) of this section.

(o) Physical or mental impairment means:

(1) Any physiological disorder, or condition, cosmetic

disfigurement, or anatomical loss affecting one or more of the

following body systems: neurological, musculoskeletal, special sense

organs, respiratory (including speech organs), cardiovascular,

reproductive, digestive, genito-urinary, hemic and lymphatic, skin, and

endocrine; or

(2) Any mental or psychological disorder, such as mental

retardation, organic brain syndrome, emotional or mental illness, and

specific learning disabilities.

(p) Major life activities means functions such as caring for

oneself, performing manual tasks, walking, seeing, hearing, speaking,

breathing, learning, and working.

(q) Substantially limits--(1) The term substantially limits means:

(i) Unable to perform a major life activity that the average person

in the general population can perform; \1\ or

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\1\ People have a range of abilities with regard to many major

life activities such as walking, lifting, and bending, and a range

of such abilities may be considered average. Thus, the term

``average'' person in the general population does not indicate a

need to determine a precise average ability, but rather reflects

that a range of abilities may be considered average.

---------------------------------------------------------------------------

(ii) Significantly restricted as to the condition, manner or

duration under which an individual can perform a particular major life

activity as compared to the condition, manner, or duration under which

the average person in the general population can perform that same

major life activity.

(2) The following factors should be considered in determining

whether an individual is substantially limited in a major life

activity:

(i) The nature and severity of the impairment;

(ii) The duration or expected duration of the impairment; and

(iii) The permanent or long term impact, or the expected permanent

or long term impact of or resulting from the impairment.

(3) With respect to the major life activity of working--

(i) The term substantially limits means significantly restricted in

the ability to perform either a class of jobs or a broad range of jobs

in various classes as compared to the average person having comparable

training, skills, and abilities. The inability to perform a single,

particular job does not constitute a substantial limitation in the

major life activity of working.

(ii) In addition to the factors listed in paragraph (q)(2) of this

section, the following factors may be considered in determining whether

an individual is substantially limited in the major life activity of

working:

(A) The geographic area to which the individual has reasonable

access;

(B) The job from which the individual has been disqualified because

of an impairment, and the number and types of jobs utilizing similar

training, knowledge, skills or abilities, within that geographic area,

from which the individual is also disqualified because of the

impairment (class of jobs); and/or

(C) The job from which the individual has been disqualified because

of an impairment, and the number and types of other jobs not utilizing

similar training, knowledge, skills or abilities, within that

geographic area, from which the individual is also disqualified because

of the impairment (broad range of jobs in various classes).

(r) Has a record of such impairment means has a history of, or has

been misclassified as having, a mental or physical impairment that

substantially limits one or more major life activities.

(s) Is regarded as having such an impairment means:

(1) Has a physical or mental impairment that does not substantially

limit major life activities but is treated by the contractor as

constituting such limitation;

(2) Has a physical or mental impairment that substantially limits

major life activities only as a result of

[[Page 19352]]

the attitudes of others toward such impairment; or

(3) Has none of the impairments defined in paragraph (o)(1) or (2)

of this section, but is treated by the contractor as having a

substantially limiting impairment.

(t) Qualified individual with a disability means an individual with

a disability who satisfies the requisite skill, experience, education

and other job-related requirements of the employment position such

individual holds or desires, and who, with or without reasonable

accommodation, can perform the essential functions of such position.

(See Sec. 60-741.3 for exceptions to this definition.)

(u) Essential functions--(1) In general. The term essential

functions means fundamental job duties of the employment position the

individual with a disability holds or desires. The term essential

functions does not include the marginal functions of the position.

(2) A job function may be considered essential for any of several

reasons, including but not limited to the following:

(i) The function may be essential because the reason the position

exists is to perform that function;

(ii) The function may be essential because of the limited number of

employees available among whom the performance of that job function can

be distributed; and/or

(iii) The function may be highly specialized so that the incumbent

in the position is hired for his or her expertise or ability to perform

the particular function.

(3) Evidence of whether a particular function is essential

includes, but is not limited to:

(i) The contractor's judgment as to which functions are essential;

(ii) Written job descriptions prepared before advertising or

interviewing applicants for the job;

(iii) The amount of time spent on the job performing the function;

(iv) The consequences of not requiring the incumbent to perform the

function;

(v) The terms of a collective bargaining agreement;

(vi) The work experience of past incumbents in the job; and/or

(vii) The current work experience of incumbents in similar jobs.

(v) Reasonable accommodation--(1) The term reasonable accommodation

means:

(i) Modifications or adjustments to a job application process that

enable a qualified applicant with a disability to be considered for the

position such applicant desires; \2\ or

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\2\ A contractor's duty to provide a reasonable accommodation

with respect to applicants with disabilities is not limited to those

who ultimately demonstrate that they are qualified to perform the

job in issue. Applicants with disabilities must be provided a

reasonable accommodation with respect to the application process if

they are qualified with respect to that process (e.g., if they

present themselves at the correct location and time to fill out an

application).

---------------------------------------------------------------------------

(ii) Modifications or adjustments to the work environment, or to

the manner or circumstances under which the position held or desired is

customarily performed, that enable a qualified individual with a

disability to perform the essential functions of that position; or

(iii) Modifications or adjustments that enable the contractor's

employee with a disability to enjoy equal benefits and privileges of

employment as are enjoyed by the contractor's other similarly situated

employees without disabilities.

(2) Reasonable accommodation may include but is not limited to:

(i) Making existing facilities used by employees readily accessible

to and usable by individuals with disabilities; and

(ii) Job restructuring; part-time or modified work schedules;

reassignment to a vacant position; acquisition or modifications of

equipment or devices; appropriate adjustment or modifications of

examinations, training materials, or policies; the provision of

qualified readers or interpreters; and other similar accommodations for

individuals with disabilities.

(3) To determine the appropriate reasonable accommodation it may be

necessary for the contractor to initiate an informal, interactive

process with the qualified individual with a disability in need of the

accommodation.\3\ This process should identify the precise limitations

resulting from the disability and potential reasonable accommodations

that could overcome those limitations. (Appendix A of this part

provides guidance on a contractor's duty to provide reasonable

accommodation.)

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\3\ Contractors must engage in such an interactive process with

an individual with disabilities whether or not a reasonable

accommodation ultimately is identified. Contractors must engage in

the interactive process because, until they have done so, they may

be unable to determine whether a reasonable accommodation exists

that will result in the person being qualified.

---------------------------------------------------------------------------

(w) Undue hardship--(1) In general. Undue hardship means, with

respect to the provision of an accommodation, significant difficulty or

expense incurred by the contractor, when considered in light of the

factors set forth in paragraph (w)(2) of this section.

(2) Factors to be considered. In determining whether an

accommodation would impose an undue hardship on the contractor, factors

to be considered include:

(i) The nature and net cost of the accommodation needed, taking

into consideration the availability of tax credits and deductions, and/

or outside funding;

(ii) The overall financial resources of the facility or facilities

involved in the provision of the reasonable accommodation, the number

of persons employed at such facility, and the effect on expenses and

resources;

(iii) The overall financial resources of the contractor, the

overall size of the business of the contractor with respect to the

number of its employees, and the number, type and location of its

facilities;

(iv) The type of operation or operations of the contractor,

including the composition, structure and functions of the work force of

such contractor, and the geographic separateness and administrative or

fiscal relationship of the facility or facilities in question to the

contractor; and

(v) The impact of the accommodation upon the operation of the

facility, including the impact on the ability of other employees to

perform their duties and the impact on the facility's ability to

conduct business.

(x) Qualification standards means the personal and professional

attributes including the skill, experience, education, physical,

medical, safety and other requirements established by the contractor as

requirements which an individual must meet in order to be eligible for

the position held or desired.

(y) Direct threat means a significant risk of substantial harm to

the health or safety of the individual or others that cannot be

eliminated or reduced by reasonable accommodation. The determination

that an individual with a disability poses a ``direct threat'' shall be

based on an individualized assessment of the individual's present

ability to perform safely the essential functions of the job. This

assessment shall be based on a reasonable medical judgment that relies

on the most current medical knowledge and/or on the best available

objective evidence. In determining whether an individual would pose a

direct threat, the factors to be considered include:

(1) The duration of the risk;

(2) The nature and severity of the potential harm;

(3) The likelihood that the potential harm will occur; and

(4) The imminence of the potential harm.

[[Page 19353]]

Sec. 60-741.3 Exceptions to the definitions of ``individual with a

disability'' and ``qualified individual with a disability.''

(a) Current illegal use of drugs--(1) In general. The terms

individual with a disability and qualified individual with a disability

do not include individuals currently engaging in the illegal use of

drugs, when the contractor acts on the basis of such use.

(2) ``Drug'' defined. The term drug means a controlled substance,

as defined in schedules I through V of section 202 of the Controlled

Substances Act (21 U.S.C. 812).

(3) ``Illegal use of drugs'' defined. The term illegal use of drugs

means the use of drugs, the possession or distribution of which is

unlawful under the Controlled Substances Act, as updated pursuant to

that act. Such term does not include the use of a drug taken under

supervision by a licensed health care professional, or other uses

authorized by the Controlled Substances Act or other provisions of

Federal law.

(4) Construction. (i) Nothing in paragraph (a)(1) of this section

shall be construed to exclude as an ``individual with a disability'' or

as a ``qualified individual with a disability'' an individual who:

(A) Has successfully completed a supervised drug rehabilitation

program and is no longer engaging in the illegal use of drugs, or has

otherwise been rehabilitated successfully and is no longer engaging in

the illegal use of drugs;

(B) Is participating in a supervised rehabilitation program and is

no longer engaging in such use; or

(C) Is erroneously regarded as engaging in such use, but is not

engaging in such use.

(ii) In order to be protected by section 503 and this part, an

individual described in paragraph (a)(4)(i) of this section must

satisfy the requirements of the definition of qualified individual with

a disability.

(5) Drug testing. It shall not be a violation of this part for the

contractor to adopt or administer reasonable policies or procedures,

including but not limited to drug testing, designed to ensure that an

individual described in paragraphs (a)(4)(i)(A) and (B) of this section

is no longer engaging in the illegal use of drugs. (See Sec. 60-

741.24(b)(1).)

(b) Alcoholics--(1) In general. The terms individual with a

disability and qualified individual with a disability do not include an

individual who is an alcoholic whose current use of alcohol prevents

such individual from performing the essential functions of the

employment position such individual holds or desires or whose

employment, by reason of such current alcohol abuse, would constitute a

direct threat to property or to the health or safety of the individual

or others.

(2) Duty to provide reasonable accommodation. Nothing in paragraph

(b)(1) of this section shall relieve the contractor of its obligation

to provide a reasonable accommodation for an individual described in

paragraph (b)(1) of this section when such an accommodation will enable

the individual to perform the essential functions of the employment

position such individual holds or desires, or when the accommodation

will eliminate or reduce the direct threat to property or the health or

safety of the individual or others posed by such individual, provided

that such individual satisfies the requisite skill, experience,

education and other job-related requirements of such position.

(c) Contagious disease or infection--(1) In general. The terms

individual with a disability and qualified individual with a disability

do not include an individual who has a currently contagious disease or

infection and who, by reason of such disease or infection, would

constitute a direct threat to the health or safety of the individual or

others or who, by reason of the currently contagious disease or

infection, is unable to perform the essential functions of the

employment position such individual holds or desires.

(2) Duty to provide reasonable accommodation. Nothing in paragraph

(c)(1) of this section shall relieve the contractor of its obligation

to provide a reasonable accommodation for an individual described in

paragraph (c)(1) of this section when such an accommodation will enable

the individual to perform the essential functions of the employment

position such individual holds or desires, or when the accommodation

will eliminate or reduce the direct threat to the health or safety of

the individual or others posed by such individual, provided that such

individual satisfies the requisite skill, experience, education and

other job-related requirements of such position.

(d) Homosexuality or bisexuality. The term impairment as defined in

this part does not include homosexuality or bisexuality, and therefore

the term individual with a disability as defined in this part does not

include an individual on the basis of homosexuality or bisexuality.

(e) Other conditions. The term individual with a disability does

not include an individual on the basis of:

(1) Transvestism, transsexualism, pedophilia, exhibitionism,

voyeurism, gender identity disorders not resulting from physical

impairments, or other sexual behavior disorders;

(2) Compulsive gambling, kleptomania, or pyromania; or

(3) Psychoactive substance use disorders resulting from current

illegal use of drugs.

Sec. 60-741.4 Coverage and waivers.

(a) Coverage--(1) Contracts and subcontracts in excess of $10,000.

Contracts and subcontracts in excess of $10,000 are covered by this

part. No contracting agency or contractor shall procure supplies or

services in less than usual quantities to avoid the applicability of

the equal opportunity clause.

(2) Positions engaged in carrying out a contract. (i) With respect

to the contractor's employment decisions and practices occurring before

October 29, 1992, this part applies only to employees who were employed

in, and applicants for, positions that were engaged in carrying out a

Government contract; with respect to employment decisions and practices

occurring on or after October 29, 1992, this part applies to all of the

contractor's positions irrespective of whether the positions are or

were engaged in carrying out a Government contract. A position shall be

considered to have been engaged in carrying out a contract if:

(A) The duties of the position included work that fulfilled a

contractual obligation, or work that was necessary to, or that

facilitated, performance of the contract or a provision of the

contract; or

(B) The cost or a portion of the cost of the position was allowable

as a cost of the contract under the principles set forth in the Federal

Acquisition Regulation at 48 CFR Ch. 1, part 31: Provided, That a

position shall not be considered to have been covered by this part by

virtue of this provision if the cost of the position was not allocable

in whole or in part as a direct cost to any Government contract, and

only a de minimis (less than 2%) portion of the cost of the position

was allocable as an indirect cost to Government contracts, considered

as a group.

(ii) Application. Where a contractor or a division or establishment

of a contractor was devoted exclusively to Government contract work,

all positions within the contractor, division, or establishment shall

be considered to have been covered by this part. (Appendix D of this

part provides guidance on positions engaged in carrying out a

contract.)

[[Page 19354]]

(3) Contracts and subcontracts for indefinite quantities. With

respect to indefinite delivery-type contracts and subcontracts

(including, but not limited to, open end contracts, requirement-type

contracts, Federal Supply Schedule contracts, ``call-type'' contracts,

and purchase notice agreements), the equal opportunity clause shall be

included unless the contracting agency has reason to believe that the

amount to be ordered in any year under such contract will not be in

excess of $10,000. The applicability of the equal opportunity clause

shall be determined at the time of award for the first year, and

annually thereafter for succeeding years, if any. Notwithstanding the

above, the equal opportunity clause shall be applied to such contract

whenever the amount of a single order exceeds $10,000. Once the equal

opportunity clause is determined to be applicable, the contract shall

continue to be subject to such clause for its duration, regardless of

the amounts ordered, or reasonably expected to be ordered in any year.

(4) Employment activities within the United States. This part

applies only to employment activities within the United States and not

to employment activities abroad. The term employment activities within

the United States includes actual employment within the United States,

and decisions of the contractor made within the United States,

pertaining to the contractor's applicants and employees who are within

the United States, regarding employment opportunities abroad (such as

recruiting and hiring within the United States for employment abroad,

or transfer of persons employed in the United States to contractor

establishments abroad).

(5) Contracts with State or local governments. The requirements of

the equal opportunity clause in any contract or subcontract with a

State or local government (or any agency, instrumentality or

subdivision thereof) shall not be applicable to any agency,

instrumentality or subdivision of such government which does not

participate in work on or under the contract or subcontract.

(b) Waivers--(1) Specific contracts and classes of contracts. The

Deputy Assistant Secretary may waive the application to any contract of

the equal opportunity clause in whole or part when he or she deems that

special circumstances in the national interest so require. The Deputy

Assistant Secretary may also grant such waivers to groups or categories

of contracts: where it is in the national interest; where it is found

impracticable to act upon each request individually; and where such

waiver will substantially contribute to convenience in administration

of the act. When a waiver has been granted for any class of contracts,

the Deputy Assistant Secretary may withdraw the waiver for a specific

contract or group of contracts to be awarded, when in his or her

judgment such action is necessary or appropriate to achieve the

purposes of the act. The withdrawal shall not apply to contracts

awarded prior to the withdrawal, except that in procurements entered

into by formal advertising, or the various forms of restricted formal

advertising, such withdrawal shall not apply unless the withdrawal is

made more than 10 calendar days before the date set for the opening of

the bids.

(2) National security. Any requirement set forth in the regulations

of this part shall not apply to any contract whenever the head of the

contracting agency determines that such contract is essential to the

national security and that its award without complying with such

requirements is necessary to the national security. Upon making such a

determination, the head of the contracting agency will notify the

Deputy Assistant Secretary in writing within 30 days.

(3) Facilities not connected with contracts. The Deputy Assistant

Secretary may waive the requirements of the equal opportunity clause

with respect to any of a contractor's facilities which he or she finds

to be in all respects separate and distinct from activities of the

contractor related to the performance of the contract, provided that he

or she also finds that such a waiver will not interfere with or impede

the effectuation of the act. Such waivers shall be considered only upon

the request of the contractor.

Sec. 60-741.5 Equal opportunity clause.

(a) Government contracts. Each contracting agency and each

contractor shall include the following equal opportunity clause in each

of its covered Government contracts or subcontracts (and modifications,

renewals, or extensions thereof if not included in the original

contract):

Equal Opportunity for Workers With Disabilities

1. The contractor will not discriminate against any employee or

applicant for employment because of physical or mental disability in

regard to any position for which the employee or applicant for

employment is qualified. The contractor agrees to take affirmative

action to employ, advance in employment and otherwise treat

qualified individuals with disabilities without discrimination based

on their physical or mental disability in all employment practices,

including the following:

i. Recruitment, advertising, and job application procedures;

ii. Hiring, upgrading, promotion, award of tenure, demotion,

transfer, layoff, termination, right of return from layoff and

rehiring;

iii. Rates of pay or any other form of compensation and changes

in compensation;

iv. Job assignments, job classifications, organizational

structures, position descriptions, lines of progression, and

seniority lists;

v. Leaves of absence, sick leave, or any other leave;

vi. Fringe benefits available by virtue of employment, whether

or not administered by the contractor;

vii. Selection and financial support for training, including

apprenticeship, professional meetings, conferences, and other

related activities, and selection for leaves of absence to pursue

training;

viii. Activities sponsored by the contractor including social or

recreational programs; and

ix. Any other term, condition, or privilege of employment.

2. The contractor agrees to comply with the rules, regulations,

and relevant orders of the Secretary of Labor issued pursuant to the

act.

3. In the event of the contractor's noncompliance with the

requirements of this clause, actions for noncompliance may be taken

in accordance with the rules, regulations, and relevant orders of

the Secretary of Labor issued pursuant to the act.

4. The contractor agrees to post in conspicuous places,

available to employees and applicants for employment, notices in a

form to be prescribed by the Deputy Assistant Secretary for Federal

Contract Compliance Programs, provided by or through the contracting

officer. Such notices shall state the rights of applicants and

employees as well as the contractor's obligation under the law to

take affirmative action to employ and advance in employment

qualified employees and applicants with disabilities. The contractor

must ensure that applicants and employees with disabilities are

informed of the contents of the notice (e.g., the contractor may

have the notice read to a visually disabled individual, or may lower

the posted notice so that it might be read by a person in a

wheelchair).

5. The contractor will notify each labor organization or

representative of workers with which it has a collective bargaining

agreement or other contract understanding, that the contractor is

bound by the terms of section 503 of the Rehabilitation Act of 1973,

as amended, and is committed to take affirmative action to employ

and advance in employment individuals with physical or mental

disabilities.

6. The contractor will include the provisions of this clause in

every subcontract or purchase order in excess of $10,000, unless

exempted by the rules, regulations, or orders of the Secretary

issued pursuant to section 503 of the act, as amended, so that such

provisions will be binding upon each subcontractor or vendor. The

contractor will take such action with respect to any subcontract or

purchase order as the Deputy Assistant Secretary for Federal

Contract

[[Page 19355]]

Compliance Programs may direct to enforce such provisions, including

action for noncompliance.

[End of Clause]

(b) Subcontracts. Each contractor shall include the equal

opportunity clause in each of its subcontracts subject to this part.

(c) Adaption of language. Such necessary changes in language may be

made to the equal opportunity clause as shall be appropriate to

identify properly the parties and their undertakings.

(d) Inclusion of the equal opportunity clause in the contract. It

is not necessary that the equal opportunity clause be quoted verbatim

in the contract. The clause may be made a part of the contract by

citation to 41 CFR 60-741.5(a).

(e) Incorporation by operation of the act. By operation of the act,

the equal opportunity clause shall be considered to be a part of every

contract and subcontract required by the act and the regulations in

this part to include such a clause, whether or not it is physically

incorporated in such contract and whether or not there is a written

contract between the agency and the contractor.

(f) Duties of contracting agencies. Each contracting agency shall

cooperate with the Deputy Assistant Secretary and the Secretary in the

performance of their responsibilities under the act. Such cooperation

shall include insuring that the equal opportunity clause is included in

all covered Government contracts and that contractors are fully

informed of their obligations under the act and this part, providing

the Deputy Assistant Secretary with any information which comes to the

agency's attention that a contractor is not in compliance with the act

or this part, responding to requests for information from the Deputy

Assistant Secretary, and taking such actions for noncompliance as are

set forth in Sec. 60-741.66 as may be ordered by the Secretary or the

Deputy Assistant Secretary.

Subpart B--Discrimination Prohibited

Sec. 60-741.20 Covered employment activities.

The prohibition against discrimination in this part applies to the

following employment activities:

(a) Recruitment, advertising, and job application procedures;

(b) Hiring, upgrading, promotion, award of tenure, demotion,

transfer, layoff, termination, right of return from layoff, and

rehiring;

(c) Rates of pay or any other form of compensation and changes in

compensation;

(d) Job assignments, job classifications, organizational

structures, position descriptions, lines of progression, and seniority

lists;

(e) Leaves of absence, sick leave, or any other leave;

(f) Fringe benefits available by virtue of employment, whether or

not administered by the contractor;

(g) Selection and financial support for training, including

apprenticeships, professional meetings, conferences and other related

activities, and selection for leaves of absence to pursue training;

(h) Activities sponsored by the contractor including social and

recreational programs; and

(i) Any other term, condition, or privilege of employment.

Sec. 60-741.21 Prohibitions.

The term discrimination includes, but is not limited to, the acts

described in this section and Sec. 60-741.23.

(a) Disparate treatment. It is unlawful for the contractor to deny

an employment opportunity or benefit or otherwise to discriminate

against a qualified individual with a disability because of that

individual's disability.

(b) Limiting, segregating and classifying. Unless otherwise

permitted by this part, it is unlawful for the contractor to limit,

segregate, or classify a job applicant or employee in a way that

adversely affects his or her employment opportunities or status on the

basis of disability. For example, the contractor may not segregate

qualified employees with disabilities into separate work areas or into

separate lines of advancement.

(c) Contractual or other arrangements--(1) In general. It is

unlawful for the contractor to participate in a contractual or other

arrangement or relationship that has the effect of subjecting the

contractor's own qualified applicant or employee with a disability to

the discrimination prohibited by this part.

(2) Contractual or other arrangement defined. The phrase

contractual or other arrangement or relationship includes, but is not

limited to, a relationship with: an employment or referral agency; a

labor organization, including a collective bargaining agreement; an

organization providing fringe benefits to an employee of the

contractor; or an organization providing training and apprenticeship

programs.

(3) Application. This paragraph (c) applies to the contractor, with

respect to its own applicants or employees, whether the contractor

offered the contract or initiated the relationship, or whether the

contractor accepted the contract or acceded to the relationship. The

contractor is not liable for the actions of the other party or parties

to the contract which only affect that other party's employees or

applicants.

(d) Standards, criteria or methods of administration. It is

unlawful for the contractor to use standards, criteria, or methods of

administration, that are not job-related and consistent with business

necessity, and that:

(1) Have the effect of discriminating on the basis of disability;

or

(2) Perpetuate the discrimination of others who are subject to

common administrative control.

(e) Relationship or association with an individual with a

disability. It is unlawful for the contractor to exclude or deny equal

jobs or benefits to, or otherwise discriminate against, a qualified

individual because of the known disability of an individual with whom

the qualified individual is known to have a family, business, social or

other relationship or association.

(f) Not making reasonable accommodation. (1) It is unlawful for the

contractor to fail to make reasonable accommodation to the known

physical or mental limitations of an otherwise qualified applicant or

employee with a disability, unless such contractor can demonstrate that

the accommodation would impose an undue hardship on the operation of

its business.

(2) It is unlawful for the contractor to deny employment

opportunities to an otherwise qualified job applicant or employee with

a disability based on the need of such contractor to make reasonable

accommodation to such an individual's physical or mental impairments.

(3) A qualified individual with a disability is not required to

accept an accommodation, aid, service, opportunity or benefit which

such qualified individual chooses not to accept. However, if such

individual rejects a reasonable accommodation, aid, service,

opportunity or benefit that is necessary to enable the individual to

perform the essential functions of the position held or desired, and

cannot, as a result of that rejection, perform the essential functions

of the position, the individual will not be considered a qualified

individual with a disability.

(g) Qualification standards, tests and other selection criteria--

(1) In general. It is unlawful for the contractor to use qualification

standards, employment tests or other selection criteria that screen out

or tend to screen out an individual with a disability or a class of

individuals with disabilities, on the basis of disability, unless the

standard, test or other selection criterion, as used by the contractor,

is shown to be job-

[[Page 19356]]

related for the position in question and is consistent with business

necessity. Selection criteria that concern an essential function may

not be used to exclude an individual with a disability if that

individual could satisfy the criteria with provision of a reasonable

accommodation. Selection criteria that exclude or tend to exclude an

individual with a disability or a class of individuals with

disabilities because of disability but concern only marginal functions

of the job would not be consistent with business necessity. The

contractor may not refuse to hire an applicant with a disability

because the applicant's disability prevents him or her from performing

marginal functions.

(2) The Uniform Guidelines on Employee Selection Procedures, 41 CFR

part 60-3, do not apply to the Rehabilitation Act and are similarly

inapplicable to this part.

(h) Administration of tests. It is unlawful for the contractor to

fail to select and administer tests concerning employment in the most

effective manner to ensure that, when a test is administered to a job

applicant or employee who has a disability that impairs sensory,

manual, or speaking skills, the test results accurately reflect the

skills, aptitude, or whatever other factor of the applicant or employee

that the test purports to measure, rather than reflecting the impaired

sensory, manual, or speaking skills of such employee or applicant,

except where such skills are the factors that the test purports to

measure.

(i) Compensation. In offering employment or promotions to

individuals with disabilities, it is unlawful for the contractor to

reduce the amount of compensation offered because of any income based

upon a disability-related pension or other disability-related benefit

the applicant or employee receives from another source.

Sec. 60-741.22 Direct threat defense.

The contractor may use as a qualification standard the requirement

that an individual be able to perform the essential functions of the

position held or desired without posing a direct threat to the health

or safety of the individual or others in the workplace. (See Sec. 60-

741.2(y) defining direct threat.)

Sec. 60-741.23 Medical examinations and inquiries.

(a) Prohibited medical examinations or inquiries. Except as stated

in paragraphs (b) and (c) of this section, it is unlawful for the

contractor to require a medical examination of an applicant or employee

or to make inquiries as to whether an applicant or employee is an

individual with a disability or as to the nature or severity of such

disability.

(b) Permitted medical examinations and inquiries--(1) Acceptable

pre-employment inquiry. The contractor may make pre-employment

inquiries into the ability of an applicant to perform job-related

functions, and/or may ask an applicant to describe or to demonstrate

how, with or without reasonable accommodation, the applicant will be

able to perform job-related functions.

(2) Employment entrance examination. The contractor may require a

medical examination (and/or inquiry) after making an offer of

employment to a job applicant and before the applicant begins his or

her employment duties, and may condition an offer of employment on the

results of such examination (and/or inquiry), if all entering employees

in the same job category are subjected to such an examination (and/or

inquiry) regardless of disability.

(3) Examination of employees. The contractor may require a medical

examination (and/or inquiry) of an employee that is job-related and

consistent with business necessity. The contractor may make inquiries

into the ability of an employee to perform job-related functions.

(4) Other acceptable examinations and inquiries. The contractor may

conduct voluntary medical examinations and activities, including

voluntary medical histories, which are part of an employee health

program available to employees at the work site.

(5) Medical examinations conducted in accordance with paragraphs

(b)(2) and (b)(4) of this section do not have to be job-related and

consistent with business necessity. However, if certain criteria are

used to screen out an applicant or applicants or an employee or

employees with disabilities as a result of such examinations or

inquiries, the contractor must demonstrate that the exclusionary

criteria are job-related and consistent with business necessity, and

that performance of the essential job functions cannot be accomplished

with reasonable accommodations as required in this part.

(c) Invitation to self-identify. The contractor shall invite the

applicant to self-identify as an individual with a disability as

specified in Sec. 60-741.42.

(d) Confidentiality and use of medical information. (1) Information

obtained under this section regarding the medical condition or history

of any applicant or employee shall be collected and maintained on

separate forms and in separate medical files and treated as a

confidential medical record, except that:

(i) Supervisors and managers may be informed regarding necessary

restrictions on the work or duties of the applicant or employee and

necessary accommodations;

(ii) First aid and safety personnel may be informed, when

appropriate, if the disability might require emergency treatment; and

(iii) Government officials engaged in enforcing the laws

administered by OFCCP, including this part, or enforcing the Americans

with Disabilities Act, shall be provided relevant information on

request.

(2) Information obtained under this section regarding the medical

condition or history of any applicant or employee shall not be used for

any purpose inconsistent with this part.

Sec. 60-741.24 Drugs and alcohol.

(a) Specific activities permitted. The contractor:

(1) May prohibit the illegal use of drugs and the use of alcohol at

the workplace by all employees;

(2) May require that employees not be under the influence of

alcohol or be engaging in the illegal use of drugs at the workplace;

(3) May require that all employees behave in conformance with the

requirements established under the Drug-Free Workplace Act of 1988 (41

U.S.C. 701 et seq.);

(4) May hold an employee who engages in the illegal use of drugs or

who is an alcoholic to the same qualification standards for employment

or job performance and behavior to which the contractor holds its other

employees, even if any unsatisfactory performance or behavior is

related to the employee's drug use or alcoholism;

(5) May require that its employees employed in an industry subject

to such regulations comply with the standards established in the

regulations (if any) of the Departments of Defense and Transportation,

and of the Nuclear Regulatory Commission, and other Federal agencies

regarding alcohol and the illegal use of drugs; and

(6) May require that employees employed in sensitive positions

comply with the regulations (if any) of the Departments of Defense and

Transportation, and of the Nuclear Regulatory Commission, and other

Federal agencies that apply to employment in sensitive positions

subject to such regulations.

(b) Drug testing--(1) General policy. For purposes of this part, a

test to determine the illegal use of drugs is not considered a medical

examination.

[[Page 19357]]

Thus, the administration of such drug tests by the contractor to its

job applicants or employees is not a violation of Sec. 60-741.23.

Nothing in this part shall be construed to encourage, prohibit, or

authorize the contractor to conduct drug tests of job applicants or

employees to determine the illegal use of drugs or to make employment

decisions based on such test results.

(2) Transportation employees. Nothing in this part shall be

construed to encourage, prohibit, or authorize the otherwise lawful

exercise by contractors subject to the jurisdiction of the Department

of Transportation of authority to test employees in, and applicants

for, positions involving safety-sensitive duties for the illegal use of

drugs or for on-duty impairment by alcohol; and remove from safety-

sensitive positions persons who test positive for illegal use of drugs

or on-duty impairment by alcohol pursuant to paragraph (b)(1) of this

section.

(3) Any information regarding the medical condition or history of

any employee or applicant obtained from a test to determine the illegal

use of drugs, except information regarding the illegal use of drugs, is

subject to the requirements of Secs. 60-741.23(b)(5) and (c).

Sec. 60-741.25 Health insurance, life insurance and other benefit

plans.

(a) An insurer, hospital, or medical service company, health

maintenance organization, or any agent or entity that administers

benefit plans, or similar organizations may underwrite risks, classify

risks, or administer such risks that are based on or not inconsistent

with State law.

(b) The contractor may establish, sponsor, observe or administer

the terms of a bona fide benefit plan that are based on underwriting

risks, classifying risks, or administering such risks that are based on

or not inconsistent with State law.

(c) The contractor may establish, sponsor, observe, or administer

the terms of a bona fide benefit plan that is not subject to State laws

that regulate insurance.

(d) The contractor may not deny a qualified individual with a

disability equal access to insurance or subject a qualified individual

with a disability to different terms or conditions of insurance based

on disability alone, if the disability does not pose increased risks.

(e) The activities described in paragraphs (a), (b) and (c) of this

section are permitted unless these activities are used as a subterfuge

to evade the purposes of this part.

Subpart C--Affirmative Action Program

Sec. 60-741.40 Applicability of the affirmative action program

requirement.

(a) The requirements of this subpart apply to every Government

contractor that has 50 or more employees and a contract of $50,000 or

more.

(b) Contractors described in paragraph (a) of this section shall,

within 120 days of the commencement of a contract, prepare and maintain

an affirmative action program at each establishment. The affirmative

action program shall set forth the contractor's policies and procedures

in accordance with this part. This program may be integrated into or

kept separate from other affirmative action programs.

(c) The affirmative action program shall be reviewed and updated

annually.

(d) The contractor shall submit the affirmative action program

within 30 days of a request from OFCCP, unless the request provides for

a different time. The contractor also shall make the affirmative action

program promptly available on-site upon OFCCP's request.

Sec. 60-741.41 Availability of affirmative action program.

The full affirmative action program shall be available to any

employee or applicant for employment for inspection upon request. The

location and hours during which the program may be obtained shall be

posted at each establishment.

Sec. 60-741.42 Invitation to self-identify.

(a) The contractor shall, after making an offer of employment to a

job applicant and before the applicant begins his or her employment

duties, invite the applicant to inform the contractor whether the

applicant believes that he or she may be covered by the act and wishes

to benefit under the affirmative action program. The contractor may

invite self-identification prior to making a job offer only when:

(1) The invitation is made when the contractor actually is

undertaking affirmative action for individuals with disabilities at the

pre-offer stage; or

(2) The invitation is made pursuant to a Federal, state or local

law requiring affirmative action for individuals with disabilities.

(b) The invitation referenced in paragraph (a) of this section

shall

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