Friday, October 5, 2012

Growing opposition to proposed federal hiring quotas

Back in December of last year, the Obama Administration's Department of Labor's Office of Federal Contract Compliance Programs posted a notice that the agency was planning to impose hiring quotas for individuals with disabilities on federally-funded projects. This proposal has drawn fire from a wide range of business and professional organizations who have expressed concerns about the adverse impact of this policy upon the business sector.

The proposed OFCCP policy would mandate a seven percent hiring quota for disabled and an additional two percent hiring quota for those with undefined “severe disabilities.” Patricia Shiu, director of the Office of Federal Contract Compliance Programs, claimed this policy will help reduce a thirteen percent unemployment rate for those with disabilities. Shiu defended the proposed mandates, claiming that "specific goals" and "real accountability" were needed to ensure increased hiring of disabled individuals on federally-funded projects.

The immediate reaction of our members—the chief human resource officers of over 335 major companies, most of which are federal contractors—was one of the highest levels of concern about a proposed policy we have ever heard in the 45 year history of the association. It was clear that our members believed that the proposal would fundamentally transform affirmative action from a focus on federal contractors’ good faith efforts to a rigid system of numerical “goals” that would operate very much like quotas.

The Associated General Contractors of America, representing many of the nation's largest construction contractor firms, warned that "because of the physical tasks required, dangers presented, and safety regulations that must be followed in many construction craft positions, many disabled individuals are not qualified to perform the essential functions of the job with or without a reasonable accommodation."

In spite of these and other groups, including the U.S. Chamber of Commerce, the feds seem determined to implement this program.

As someone who has been working in the construction industry, I see contractors bid and do work for little more than break-even prices to keep from shutting down or laying off more employees in the current economy. In such an environment, every employee must add value by producing revenue and avoiding incurring additional costs. With labor costs eating up a third to half of a company's payroll, the costs of having seven or nine percent of a company's workforce not earning its keep could exceed the entire profit margin for a contract, risking putting contractors out of business and adding to nation's out-of-work headcount.

So I'll agree with the experts - this policy presents a major threat to a continued economic survival of a large number of companies which depend in part or full upon working on federally-funded contracts.

If the many voices of concern which have weighed in on this proposal haven't caused the Department of Labor to have second thoughts, it's hard to see them making a radical course correction on this matter should the Obama administration receive a second term in office next month.

While many want to see opportunities created for those seeking to overcome disabilities to return to the workforce, arbitrary and unfunded mandates upon employers aren't the answer. Bankrupting businesses in the name of well-meaning social goals won't help pull the nation's economy out of the economic doldrums, nor will crashing those companies create viable long-term opportunities for those living with disabilities.


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