Bloomberg News

Hiring Targets for Disabled Protested by Contractors (Correct)

July 25, 2013

(Corrects 21st paragraph of story published July 24 to show Olsen was speaking as president of an advocacy group.)

Scott Moore, an economic statistician who uses a wheelchair, says he’d be more apt to get work from federal government contractors if the U.S. sets hiring targets for disabled people.

President Barack Obama’s administration is reviving a push to get contractors to hire more disabled people. Their jobless rate was 14.2 percent in June, almost twice the 7.6 percent for people without disabilities, according to the Labor Department.

Employers “will only choose to hire someone with a disability if there is a financial gain for them, like getting a government contract,” said Moore, 54, owner of Moore Data LLC, a data analysis company in Charleston, South Carolina.

The White House could make a final decision as early as this month on a Labor Department proposal first made 19 months ago directing contractors to target having 7 percent of disabled employees in each job group, an agency agenda said.

The outcome may alter hiring practices for more than 170,000 vendors, and companies that don’t comply with the potential regulation might lose federal work or have pay withheld.

Dozens of contractors, including Lockheed Martin Corp. (LMT:US) and Caterpillar Inc., and trade groups representing hundreds of federal vendors have filed objections with the department, saying the policy would increase costs and paperwork or make companies a target of lawsuits.

Contractors Concerns

“The federal contracting community is definitely holding its breath in anticipation of the release of this because it’s going to be a sea change,” said Cassandra Hanley Carroll, a senior associate at law firm Seyfarth Shaw LLP in San Francisco. Her work includes defending employers against discrimination lawsuits.

Contractors will have to do “more than double the work required” to comply, including revamping many human resources functions, such as recruiting, recordkeeping, promotions and training practices, she said in a phone interview.

“I’m hoping they concluded no rule is the right rule,” said Alan Chvotkin, executive vice president of the Professional Services Council, an Arlington, Virginia-based trade group that represents more than 300 contractors including SAIC Inc. (SAI:US) and Booz Allen Hamilton Holding Corp. (BAH:US), both based in McLean, Virginia.

Any hiring target set by the government may be impossible to reach in some industries, Chvotkin said in a phone interview.

“In some job areas, particularly those with highly specialized skills, you just may never find that kind of capable workforce,” he said. “I have no concerns about continuing to do outreach to people with disabilities. It’s just when you start setting quotas that it presents a significant challenge.”

Final Rule

The Obama administration effort is designed to reduce unemployment among people with disabilities.

A final draft is under review, Laura McGinnis, a Labor Department spokeswoman, said in an e-mail. She declined to discuss the content and said it’s “difficult to predict” when a rule will be published.

The proposal would ensure that “qualified workers with disabilities have meaningful opportunities to find, secure and keep good jobs,” Patricia Shiu, director of the Office of Federal Contract Compliance Programs, said in an e-mailed statement.

“We also want to provide clarity for contractors on how to comply with the law, to level the playing field so that they are all playing by the same set of rules,” she said.

Compliance Costs

Each contractor’s office would spend about $473 to comply with the rule in the first year it’s implemented, according to the government’s December 2011 proposal.

The U.S. “significantly” underestimated the cost and time required to meet the proposed obligations, John Lucas, senior vice president for human resources and communications at Lockheed Martin, the top federal contractor, said in an e-mailed statement.

The Bethesda, Maryland-based company spent about $20,000 to make “minor changes” to its job application website, Lucas said in a February 2012 letter to the Labor Department. Those tweaks were “nowhere near the scope of change required by the proposed rule,” he said.

In addition to the 7 percent target, the Labor Department’s 2011 proposal weighed mandating that vendors set a goal of having severely disabled people, such as the deaf, blind and paralyzed, make up 2 percent of their workforce.

Less than 1 percent of federal workers have such “targeted disabilities,” according to the most recent figures from an Equal Employment Opportunity Commission report published in July 2012.

“They’re setting higher standards for the private sector than we have in the federal government,” said Jason Olsen, president of Federal Employees With Disabilities Inc., an organization he helped start, and a government employee. “It seems to be another case of do as I say, not as I do.”

Proponents of contractor targets for the disabled point to the success of another government push: the hiring of veterans.

“Right now, if you are disabled from time in the military you are good to go because there are government incentives to hire disabled veterans,” said Moore, the South Carolina businessman who has sought subcontracting work from U.S. contractors. “As soon as they find out I’m not in the military, I never hear from them again.”

-- Editors: Stephanie Stoughton, Michael Shepard

To contact the reporter on this story: Kathleen Miller in Washington at Kmiller01@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • LMT
    (Lockheed Martin Corp)
    • $196.43 USD
    • 0.66
    • 0.34%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus