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Section 503

Section 503 of the Rehabilitation Act of 1973 as amended in 1998 requires that any contract that the U.S. Federal Government enters into requires the contractor to take affirmative action to employ—and advance in employment—individuals with disabilities. The law applies to any prime contract or sub-contract over $10,000 in value. Enforcement is both active (with compliance audits) and reactive, based on complaints from individuals with disabilities. There are some narrow exceptions to the requirements but they are unlikely to apply to most modern contracting organizations.

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Section 503 applies to any contract in excess of $10,000 entered into by any Federal department or agency for the procurement of goods or services. Section 503 automatically flows down to any sub-contract awarded by a prime contractor that is in excess of $10,000.

The vast majority of Level Access clients have contract volumes that exceed these requirements. As such, Level Access clients should assume that Section 503 applies to their organization.

Organizations should note that Section 503 is binding on an entire organization and is not specific to the portion of the organization involved in the U.S. Federal government work. The organization as a whole must comply with the 503 requirements and cannot comply in part. In other words, if any part of the organization receives any U.S. government contract or sub-contract over $10,000, then the entire organization must conform to the Section 503 requirements.

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Enforcement activities for Section 503 are driven by complaints against contractors by individuals with disabilities and handled by the Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP). The OFCCP also actively audits contractors and sub-contractors. In this fashion, enforcement activities for Section 503 are funded and compliance enforcement is far more aggressive than other portions of the Rehabilitation Act, such as Section 508, where enforcement activities are unfunded. In practice, this means that Section 503 has more teeth than other portions of the Rehabilitation Act and is closer to the Americans with Disabilities Act (ADA) requirements in terms of non-compliance risk.

As part of the law, enforcement activities are required to be coordinated between the DOL and Department of Justice to ensure the activities enforcing the ADA avoid any duplication of effort associated with implementing the Section 503 requirements.

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Yes, there are some exceptions. No, they will not apply.

The first exception is provided to allow the President to waive the requirements if a contract’s non-conformance is found to be in the national interest. When this happens, the reason for waiving the requirements must be provided in writing in line with the requirements of the guidelines. A highly unscientific search online uncovered no documented instances of waivers that were publicly available. So while some exceptions likely have been provided it seems clear they are few and far between.

The second exception can be provided via a waiver from the Secretary of Labor for portions of an organization when the contractor or subcontractor’s facilities are operationally separate and distinct from the activities of the contract. In practice, this means both physical and operational separation, so the people on the government contract would need to be in a separate building and not e-mail back and forth with people outside the contract. Needless to say, this tends to be impractical for almost all organizations. The Secretary of Labor has wide latitude in restriction issuance of these waivers if they find such a waiver would interfere with the effect of Section 503 as a whole. Finally, these waivers are only provided if they are requested—they are not actively provided.

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Section 503 Updates

The updated Section 503 guidelines took effect on March 24, 2014.

The focus of the updates was ultimately to ensure that U.S. Federal Government contractors increased employment opportunities for qualified individuals with disabilities. These employment opportunities span all stages of the employment process, from recruiting and hiring to retaining and advancing people with disabilities.

Here are some of the major changes to Section 503 implemented in 2014:

  • Contractors must establish a goal to have individuals with disabilities comprise at least 7 percent of their workforce.
  • Contractors must collect data on the number of individuals with disabilities who apply for jobs and the number that ultimately get hired.
  • Applicants to jobs must be given the opportunity to self-identify as an individual with a disability.
  • Contractors must insert language into their subcontracts, requiring subcontractors to be equal opportunity employers.

Contractors must give OFCCP access to their records, upon request, to ensure compliance with Section 503.