VETS Issues Proposed Rule to Change Reporting Requirements for Federal Contractors...in a Good Way!

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The Department of Labor Veterans' Employment and Training Service (VETS) has issued a Notice of Proposed Rulemaking proposing revisions to the reporting requirements under the Vietnam Era Veterans' Readjustment Assistance Act. Unlike the recent OFCCP regulatory changes, this proposal would actually decrease the reporting burden for federal contractors.

Currently, government contractors with contracts or subcontracts of $25,000 or more that were entered into before December 1, 2003, are required to report, via the VETS-100 on an annual basis, the total number of employees and new hires during the reporting period, who identify as belonging to one of the veteran categories protected under the Act. In 2002, the VEVRAA was amended by the Jobs for Veterans Act, which redefined the categories of covered veterans and raised the threshold for coverage to $100,000 or more for contacts entered into, or modified, on or after December 1, 2003. Contractors covered by the JVA must annually file the VETS-100A Report.

The VETS is proposing two major changes to contractors' reporting requirements:

(1) The regulations governing reporting requirements for contracts or subcontracts entered into before December 1, 2003, would be rescinded. The VETS found, as did the OFCCP, that such contracts probably no longer exist.

(2) For government contracts and subcontracts entered into, or modified, on or after December 1, 2003, contractors would be allowed to report in the aggregate the number of employees and new hires who are protected veterans instead of breaking them down into the specific categories of protected veterans.

If this proposal is adopted, the VETS-100 and VETS-100A reports will be replaced by the new "VETS-4212 Report." (Section 4212 is the part of the VEVRAA that requires affirmative action and annual reporting on protected veterans.)

Why is the VETS proposing these changes? One reason is privacy. The existing regulations require contractors to disclose the number of employees who have identified as disabled veterans by specific job category at each hiring location. The VETS believes that the current format does not sufficiently protect the identities of disabled veterans. Second, the current reporting process allows for some individuals to be counted in more than one category, which the VETS says makes it impossible to calculate the total number of employees and new hires who are protected veterans.

Third, the VETS believes that allowing contractors to submit data showing the total number of protected veterans employed and hired during the reporting period will assist contractors in monitoring the success of recruitment and outreach efforts required under the OFCCP's Final Rule, effective March 24, 2014, modifying the VEVRAA in an effort to improve job opportunities for protected veterans.

Are there other proposed changes? The NPRM also proposes revisions to the regulations to address the following: (1) definitions of terms used in the regulations; (2) the text of the reporting requirements clause included in federal contracts and subcontracts; and (3) the methods for filing the new VETS-4212 annual report.

What will the new report look like? We don't know. The VETS declined to propose or include a sample of the VETS-4212 Report, saying that removing the form "from the regulations would make it easier for the agency to make future revisions to the annual report that do not require notice and comment rulemaking." (The Department of Labor did the same thing last year with the various forms required under the Family and Medical Leave Act.)

When will contractors have to comply with these changes? According to the proposed rule, one year after the date that a Final Rule is issued. The VETS acknowledges that contractors may have to make changes to their recordkeeping systems if this rule is adopted, and proposes the one-year period to ensure that contractors have enough time.

Can we submit comments to this proposal? Yes. The deadline for submitting comments to the Department of Labor is April 25, 2014.

As always, Constangy will monitor the regulatory process and will report when any Final Rule is issued by the VETS. If you have any questions, please contact any member of Constangy's Strategic Affirmative Action Practice Group, or the Constangy attorney of your choice.

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