Rehabilitation Act

Exempt employers

Contracts and subcontracts which are exempt from Section 503 include those:

• Not exceeding $10,000;
• For work that is performed outside the U.S.; and
• With state or local governments, except for the specific government entity that participates in work on or under the contract.

Employer requirements

Covered employers must take affirmative steps to employ qualified individuals with disabilities, including recruitment, hiring, rates of pay, upgrading, and selection for training. All covered contractors and subcontractors must also include a specific equal opportunity clause in each of their nonexempt contracts and subcontracts.

Reasonable accommodation

In addition, covered federal contractors and subcontractors must make reasonable accommodations for the known physical or mental limitations of qualified individuals with disabilities, unless providing an accommodation would create an undue hardship.

“Reasonable accommodation” might be as simple as providing a magnifying screen for a computer monitor, installing a wheelchair ramp, or may be more substantial.

Medical examinations and pre-employment inquiries

It is generally unlawful for the contractor to require pre-offer medical examinations 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.

The contractor, however, 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 the duties of the job.

The contractor may also require a medical examination or make an inquiry after making an offer of employment but before the applicant begins his duties, and may condition the employment offer on the results of such examination, if all entering employees into the same job category are subjected to such examination or inquiry. In addition, the contractor may require a medical examination or make an inquiry of an employee if it is job-related and consistent with business necessity.

Retaliation

Covered contractors and subcontractors are required to take all necessary actions to ensure that no one attempts to intimidate or discriminate against any individual for filing a complaint or participating in a proceeding under Section 503.

Affirmative action program

Under Section 503, each employer that has both a federal contract or subcontract of $50,000 or more, and 50 or more employees must prepare, implement, and maintain a written affirmative action program covering each of its establishments.

The employer must review and update the program annually and must make it available for inspection by any employee or applicant for employment, as well as by the Office of Federal Contract Compliance Programs (OFCCP).

Section 503 regulations apply to state and local government entities which have contracts with the federal government if the state or local government entity participates in work on or under the contract or subcontract. Unlike coverage of private sector employers, the government entity but not the government as a whole becomes subject to Section 503 and its regulations when it enters into the contract.

Waivers from Section 503

The Deputy Assistant Secretary may grant a waiver from the requirements of Section 503 in the following circumstances:

For specific contracts, subcontracts or purchase orders, if special circumstances in the national interest require such an exemption:

• For facilities not connected to performance of the federal contract, upon the written request of the contractor, if certain conditions listed in the regulations are met. This type of waiver will terminate, at the very latest, two years after the date on which the waiver is granted, and earlier under certain specific circumstances; and
• Contracts and subcontracts involving national security, if the head of the contracting agency determines both that (1) the contract is essential to national security, and (2) noncompliance with a particular requirement of the Executive Order or the regulations with respect to the process of awarding the contract is essential to national security.  

Relation to state, local, and other federal laws

Section 503 and its implementing regulations apply only to the specific state or local government entities that participate in work on or under a federal contract or subcontract. This coverage is narrower than that which applies to employers in the private sector.

Section 107(b) of the Americans With Disabilities Act of 1990 (ADA) required agencies with enforcement responsibilities under the Rehabilitation Act of 1973 (e.g., OFCCP) and under Title I of the ADA (i.e., the Equal Employment Opportunity Commission) to develop procedural regulations to ensure that complaints filed under these laws are addressed in a manner that avoids duplication of effort and prevents application of inconsistent or conflicting standards for the same requirements under the two laws. These regulations are found at 41 CFR Part 60-742.

Filing complaints

Employees of and applicants for employment with a covered contractor or subcontractor have the right to file a complaint with OFCCP if they believe that a Federal contractor or subcontractor has discriminated against them on the basis of a disability. Complaints may be filed with OFCCP within 300 days from the date of the alleged discrimination, unless the time for filing is extended by OFCCP. 

Disability discrimination complaints filed with OFCCP are considered charges filed simultaneously under the ADA whenever the complaints also fall within the ADA’s jurisdiction. OFCCP will act as EEOC’s agent in processing the ADA component of the charge. OFCCP will transfer to EEOC all disability discrimination complaints over which it does not, but EEOC may, have jurisdiction. OFCCP will investigate and process all of the Section 503/ADA complaints not transferred to EEOC. 

If OFCCP’s investigation reveals a violation, the agency will attempt to conciliate with the contractor, often entering into a conciliation agreement. A conciliation agreement may include a job offer, back pay, reinstatement, promotion or reasonable accommodation.

If the investigation results in a finding of no violation, OFCCP will issue both a finding of no violation and a right-to-sue letter under the ADA, and will close the complaint. Complainants may request a right-to-sue letter earlier in the process.

Penalties/Sanctions

The Office of Federal Contract Compliance Programs (OFCCP) investigates for violations of Section 503 either through compliance evaluations or in response to complaints. If a violation is found, OFCCP may ask the federal contractor or subcontractor to enter into conciliation negotiations. If conciliation efforts fail, OFCCP may initiate an administrative enforcement proceeding by issuing an administrative complaint against the contractor or subcontractor.

If OFCCP files an administrative complaint, the contractor or subcontractor has 20 days to request a review by an Administrative Law Judge (ALJ), who hears the case and recommends a decision. If the contractor or subcontractor is dissatisfied with the ALJ’s decision, it may appeal the decision to the Department of Labor’s Administrative Review Board. The Board issues the final decision, whether or not there is an appeal.

If the Board finds that a violation of Section 503 has occurred, it may order the contractor or subcontractor to provide appropriate relief, which may include back pay and benefits, and restoration of employment status, for the victim(s) of discrimination. Depending on the circumstances, violations also may result in cancellation, suspension, or termination of contracts, withholding of progress payments, and debarment.

If the contractor or subcontractor is dissatisfied with the Board’s decision, it may appeal that decision to the Federal courts.