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A Breakdown of Section 503 of the Rehabilitation Act

By Anna McDevitt on May 26, 2017


Many employers look at titles of federal regulation, such as Section 503 under the Rehabilitation Act of 1973, and worry that workforce compliance will be a headache. But that doesn’t have to be the case! Regulations like Section 503 were instated to positively diversify the workforce and open the eyes of employers to new pools of qualified applicants. To make Section 503 less intimidating, here’s a quick breakdown of the regulations and what they mean for you if you’re a federal contractor.


What is Section 503?

In September 2013, the federal government made a historical final ruling on hiring individuals with disabilities (also known as IWDs) in the workplace, requiring that all federal contractors implement a 7% hiring goal under Section 503 of the Rehabilitation Act of 1973. In the 40 years prior to the final ruling, The Rehabilitation Act just generally prohibited federal contractors from discriminating against IWDs. Specifically, it required employers to “actively recruit, hire, promote, and retain individuals with disabilities.”

The updated regulations became effective in March 2014, and since then the regulation has required federal contractors to realize a hiring goal of 7% within each job group of their company. Examples of job groups include managers, technicians, sales workers, laborers, and administrators. An exception applies to employers with less than 100 employees, in which case the 7% hiring goal applies to the entire company, instead of each separate job group.


Identifying IWDs

Individuals with disabilities live with a wide range of conditions that fall under the umbrella of disabilities. Rather than imposing disability status on individuals, Section 503 requires that federal contractors invite applicants to self-identify as IWDs. An invitation to self-identify as an IWD must be offered both in the pre-offer and the post-offer phase of the hiring process, and OFCCP provides mandated language to be used for this in the self-identification form on its website. Under the regulations, contractors must remember to invite their employees to self-identify every 5 years.



To help federal contractors effectively recruit and retain individuals with disabilities, the regulations require employers to track the number of IWDs who apply for their jobs as well as the number hired. The data has to be maintained for 3 years for compliance reasons. If this data brings attention to potential problem areas, employers are required to address them with formal action-oriented programs to meet the 7% hiring goal. In 2015, OFCCP posted new Sample Affirmative Action Plans that contractors could use for this.

The idea behind this kind of tracking and data analysis is to provide employers with quantitative data that can be used to gauge the effectiveness of their recruitment and retention strategies. To further promote accountability, Section 503 requires federal contractors to provide OFCCP with these compliance documents upon request. This part of the regulations allows OFCCP to conduct on or off-site reviews if deemed necessary.


The Takeaway

So, if you’re a federal contractor, hopefully this breakdown helps you to better understand your responsibilities as an employer under Section 503 of the Rehabilitation Act. There have been some additional amendments to Section 503 more recently, but the basics remain unchanged. While some see OFCCP compliance as a form of government overreach, the benefits of diversifying the workforce and accessing more qualified pools of employees with IWDs is undeniable.


For more information on how to foster an inclusive work environment under Section 503, check out these resources that OFCCP provides for federal contractors on their website.

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