Aug. 27 (Bloomberg) -- President Barack Obama’s administration will require U.S. government contractors to set targets for hiring veterans and people with disabilities.
While companies have protested the proposals because of their costs, the Labor Department says the rules announced today would help curb unemployment in the two groups.
“The need is clear,” said Patricia Shiu, director of the agency’s Office of Federal Contract Compliance Programs, which will enforce both regulations. “What gets measured gets done.”
Vendors would be required to set a goal of having 7 percent of employees in each job category be people with disabilities. The rules won’t take effect for at least six months, according to the department.
“It’s very much what we hoped for,” Carol Glazer, president of the New York-based National Organization on Disability, said in a phone interview.
For veterans, vendors can set annual hiring benchmarks based on the percentage of former troops in the U.S. workforce. Today, that target would be 8 percent, according to a Labor Department press release. Companies may also use alternative veteran employment benchmarks based on hiring, applicant and recruitment data.
Marty Callaghan, a spokesman for the Indianapolis-based American Legion, didn’t immediately respond to an e-mail seeking comment on the rule.
The regulations will “force federal contractors to spend an estimated $6 billion a year to produce reams of new paperwork proving they are doing what the federal government already knows they are doing,” Stephen E. Sandherr, chief executive officer of the Arlington, Virginia-based Associated General Contractors of America, said in a statement.
Contracts won’t be revoked if the companies fail to meet the goals, Shiu said in a conference call with reporters. Vendors would risk losing work if they denied the government access to records or refused to provide documentation, she said.
The U.S. jobless rate for people with disabilities was 14.7 percent in July, compared with 7.4 percent for people without disabilities.
Former troops in certain age groups, such as those ages 18 to 24, have higher unemployment rates than non-veterans. For all veterans, the jobless rate was 6.4 percent in July, compared with 7.3 percent for non-veterans. The Labor Department data wasn’t seasonally adjusted.
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