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On March 24, 2014 the Office of Federal Contract Compliance Programs ‘OFCCP’ updated several regulations relative to protected veterans and individuals with disabilities which are having effect on FDIC insured Bank’s with 50 or more employees, regardless of employment status. These regulatory changes are broken down into two different phases, Phase I changes which are effective March 24, 2014 and Phase II changes which are effective the next time a Bank updates its’ Affirmative Action Plan (AAP) after March 24, 2014.

The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), prohibits employment discrimination against ‘protected veterans’ by covered Federal contractors and subcontractors which requires affirmative action be taken to employ such veterans.  Relative to individuals with disabilities, Section 503 of the Rehabilitation Act of 1973 prohibits discrimination on the basis of disability by Federal government contractors and subcontractors which requires affirmative action be taken to employ and advance individuals with disabilities. Guidance reveals as banks are insured by the FDIC, which is a government entity, banks in turn, must comply with the new requirements as Bank’s are considered a federal government contractor of the FDIC.

There are PHASE 1 obligations which FDIC insured Banks with 50 or more employees must comply with effective March 24, 2014.

• All job solicitations and advertisements must state that it is, “an equal opportunity employer of protected veterans and individuals with disabilities’.
• OFCCP notices of employee rights and contractor obligations must be posted in ‘conspicuous places’ in view of BOTH applicants and employees both in physical locations and electronically. A new poster is to be released by the OFCCP to comply with the new updates
• Mandatory language requirements in contracts between the Bank and suppliers or service providers that meet specific dollar value thresholds.
• At date of first job posting after March 24, 2014, Bank’s must disclose the federal contractor status to state employment agencies, request priority referrals of protected veterans, provide location and name of personnel at each hiring location within the Bank and disclose any third party agency utilized to assist in employment positions.
• Banks must list external job vacancies with state employment agencies.
• There are also PHASE 2 obligations which FDIC insured Banks with 50 or more employees must comply with effective the next time a Bank updates its’ Affirmative Action Plan (AAP) after March 24, 2014.
• Invitation for applicants and post-offer candidates, respectively to ‘self-identify’ status as a ‘protected veteran’ and/or ‘individual with disability’.
• Annual statistical analysis requirement of notating ‘veteran status’ and ‘Individual with Disability’ status on both an applicant log and new hire log.
• During the first year of new OFCCP Regulations, the Bank must invite all current employees to self-identify ‘protected veteran’ and/or ‘individual with disability’ status and invitations in subsequent years
• Enhance outreach and recruitment efforts relative to protected veterans and individuals with disabilities and document such efforts in compliance with new OFCCP regulations and established record retention requirements.
• Enhance data collection and analysis standards and establish an annual hiring benchmark standard using either national percentage of veterans or the ‘five factor’ analysis method
• Make the appropriate and required updates to the Affirmative Action Plan narrative sections to reflect such regulatory changes.

While these changes to the Bank’s recruiting and Affirmative Action Plans may appear to be cumbersome – it appears to be necessary as many of our troops returning from home and individuals with disability are experiencing difficulties in obtaining employment. As Banks are federal government contractors of the FDIC, it is an important step to require Banks to publicize external job postings with state employment agencies to ensure vacancies are appropriately communicated through the appropriate employment channels and adhere to the requirements to ensure Banks are hiring such persons in accordance with VEVRAA and Section 503 Regulations.

From a regulatory review perspective, it has been advised that regulators are reviewing certain aspects of the ‘OFCCP’ regulatory updates as part of its’ Safety and Soundness Examination to satisfy FDIC obligations of federal government contracting. For further assistance on this recent regulatory update, please visit the Department of Labor Regulations webpage at: http://www.dol.gov/ofccp/regs/compliance/vevraa.html for Protected Veterans; http://www.dol.gov/ofccp/regs/compliance/section503.html for Individuals with Disabilities; and Department of Labor Frequently Asked Questions webpage at http://www.dol.gov/ofccp/regs/compliance/faqs/juristn.htm#Q1 for questions relative to financial institutions.

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