On Aug. 27, during the reporter-vacation lull before Labor Day, the Department of Labor’s Office of Federal Contract Compliance Programs finalized its controversial rules requiring federal contractors to adopt “benchmarks” of 7 percent disabled employees in their workforce, a higher percentage than apparently prevails in the workforce at large. [Earlier here and here] OFCCP director Patricia Shiu insists the initiative should not be described as quotas, since contractors falling short will not suffer automatic penalty. Instead, they’ll be thrown into a process of auditing and having their internal procedures put under review and having to demonstrate progress and that sort of thing. Nothing penalty-like about that! Also, if their willingness to go along with this process doesn’t please the federal overseers, they can eventually be debarred from any future contract work, a devastating economic sanction for many firms. [Cleveland Plain Dealer, OFCCP, Government Executive, Federal News Radio]

Crucially, the feds are applying the regulation to a firm’s entire workforce even if only one of its divisions has federal contracts, so that if, say, a food company has a single business unit that caters to military needs, and nineteen others that do no federal contracting whatsoever, all twenty units must adopt the quot… sorry, benchmarks.

Competitive Enterprise Institute scholar Hans Bader makes several additional points:

• Under the regulations, contractors will be obliged to aim for a seven percent quota for each division, a significantly harder task than if it were just a company-wide quota.
• Dodgy terminology to conceal the reality of quotas is nothing new; federal officials have a long history of resorting to euphemism and vagueness to characterize them as benchmarks, goals, and so forth.
• While disabled quotas, in contrast to racial quotas, do not raise immediate red flags of unconstitutionality, there are serious doubts whether they’re actually a lawful application of the statutes Congress has passed in this area. While one such law does refer vaguely to affirmative action for the disabled, that does not necessarily provide a broad enough basis to authorize the new scheme.
• Will compliance and paperwork on this and a related veteran-quota measure cost federal contractors $6 billion a year, as the Associated General Contractors of America has it? Or less than one-fifth that sum, as OFCCP insists? And will OFCCP face even the slightest consequences if its estimates turn out to be low-balls and the contractors turn out to be right?

(adapted from Overlawyered and followup post)