OFCCP lowered the current VEVRAA “Benchmark for hires” for protected veterans from 6.4% to 5.9% effective March 31, 2019. Since the inception of this percentage in 2014, we have watched OFCCP steadily stair step down the Benchmark. But how much do you really know about this percentage and the meaning behind it? Let’s go back to its inception and reflect on the thought process surrounding the new regulation.
Hint: The Benchmark is simply the “national percentage of veterans in the civilian labor force” (if the contractor uses the Benchmark percentage OFCCP publishes annually). See 41 CFR Section 60-300.45(b)(1)). Alternatively, the Benchmark may be the “average percentage of veterans in the civilian labor force in the State(s) where the Contractor is located…” if the Contractor elects to itself calculate the availability of protected veterans rather than to rely on OFCCP’s annual national calculation. See 41 CFR Section 60-300.45(b)(2).
Practice Tip: We have only heard of one Contractor taking the time and absorbing the expense to calculate a local, customized Benchmark for hires. Most Contractors, however, seem to prefer OFCCP’s cost-free calculated percentage.
The primary intent of the Benchmark was to provide the Contractor with a yardstick that could be used to measure progress to employ protected veterans. OFCCP recognized that data demonstrating the availability of protected veterans similar to those data Contractors use to compute the availability of minorities and women pursuant to EO 11246, do not exist. Owing to the imprecise nature of the data upon which OFCCP would base the Benchmark percentage, the Agency did not propose additional affirmative action obligations (or OFCCP enforcement actions) if a Contractor did not meet OFCCP’s Benchmark. Also, OFCCP followed the model of its construction program – for which OFCCP took it upon itself to calculate and publish the availability of minorities and women in all construction trades for each county in the United States rather than to force the contractor to undertake those calculations – as OFCCP mandates as to Executive Order 11246 AAPs.
Beginning in 2014, OFCCP also required Contractors for the first time to undertake so-called “Effectiveness Reviews.” These reviews cause Contractors to candidly, and without penalty, annually evaluate the effectiveness of their recruitment and outreach efforts for protected veterans. In requiring Contractors to “assess” their external outreach and recruitment efforts, OFCCP’s “effective” outreach requirement only implies that the Contractor should compare protected veteran applicant flow percentages against the Benchmark availability percentage then in place to ensure sufficient outreach and recruitment has occurred. See 41 CFR Section 60-300.45(f)(3). Then, OFCCP expects the Contractor to adjust its recruitment efforts for the following year based on what it has learned about the effectiveness of its recruitment processes via these reviews. The purpose of VEVRAA Benchmarks is thus simply to provide the Contractor a quantifiable means to measure its progress towards achieving equal employment opportunity for protected veterans.
OFCCP intended the Benchmark to raise awareness of the significant number of veterans who, having made enormous sacrifices defending our nation on our behalves, nevertheless continue to face considerable difficulties finding work upon their return home from their service to our country. These veterans are highly trained, highly skilled and disciplined, and they possess important leadership and team-building experience – in other words, excellent candidates for employment. While recent federal efforts have greatly helped veterans’ employment prospects, the service of these veterans to our nation is still too often forgotten, and the lasting contribution they can make to our private sector is still too often unfulfilled. The Benchmark for hires, therefore, is an important diagnostic tool to address this pressing national issue and the vital role covered federal Contractors have to employ all protected veterans in meaningful jobs.
Why is it a company-wide goal?
The limited availability of protected veteran data drove OFCCP’s policy decision to have its Benchmark for hires percentage apply facility-wide within a Contractor establishment. This establishment-wide policy is in stark contrast, of course, to the Executive Order 11246 OFCCP requirement that Contractors declare “Placement Goals” by particular Job Groups of similarly situated employees the Contractor identifies. OFCCP agrees that more discrete availability data by Job Group, and also at the County or Metropolitan Statistical Area levels, would be optimal to set specific and more meaningful goals. However, such data do not exist.
NOTE: The Benchmark is not a rigid and inflexible quota, nor is it a ceiling or a floor for the employment of protected veterans.
What are the consequences of not meeting the Benchmark?
OFCCP does not subject Contractors to enforcement actions or find them in violation of the VEVRAA regulations if they fail to meet the Benchmark. Hiring preferences are not required, the Rule does not state that Contractors will be expected to achieve Benchmarks, and the VEVRAA Rule does not prescribe actions the Contractor must take if it does not accomplish the Benchmark. The Benchmark provides the Contractor with a tool to measure its progress in employing protected veterans. Consequently, the VEVRAA enforcement scheme does not provide an incentive for contractors to disfavor non-protected veterans in employment. The point of the Benchmark is to encourage contractors to be inclusive of protected veterans rather than to discriminate against non-veterans through preferences or quotas.
Setting the Benchmark
OFCCP’s Rules require covered government Contractors and subcontractors to identify their Benchmark for hires annually and to document and maintain the Benchmark for a period of not fewer than 3-years. Set Benchmarks in one of two ways.
Option I: Adopt the National Percentage of Veterans in the Civilian Labor Force
The simple method. The Contractor adopts the national Benchmark which OFCCP calculates and publishes annually based on the then percentage of protected veterans in the civilian labor force.
NOTE: This availability percentage has NOTHING to do with the unemployment rate of protected veterans. A lower veteran’s unemployment rate does not mean fewer veterans available in the civilian labor force…just fewer unemployed veterans. And, by the way, the unemployment rate numbers USDOL Bureau of Labor Statistics publishes for the nation are for all “veterans” and not for “protected veterans.”
No additional Contractor calculation or analysis is required. Contractors with multiple establishments which choose this option may use the national percentage Benchmark for any or all of their establishments. This percentage is now 5.9%, as of this writing in April 2019.
Option II: Develop Individualized Benchmarks for hires
Contractors preferring to establish an individualized Benchmark for hiring may use an alternative method OFCCP’s Rules describe in only vague terms. To do so, Contractors must consider all of the five factors listed below. Contractors are not required to use all five. However, they must document each factor they considered and explain the methodology and rationale used to arrive at the Benchmark they calculated.
The first two factors are U.S. Department of Labor statistics on State-level availability of veterans, available here.
- The average percentage of veterans in the civilian labor force for the State where the establishment is located, for the previous three years.
- The number of veterans who participated in the employment service delivery system in the State where the establishment is located, over the previous four quarters.
The next two factors are items that contractors may obtain from their AAPs for protected veterans.
- The applicant ratio and hiring ratio for the establishment for the previous year.
- The most recent assessment of the effectiveness of their outreach and recruitment efforts.
The last factor allows Contractors to consider any other relevant factors that might affect the availability of qualified protected veterans for their workforce.
- Any other factor, such as the nature of the job openings or the facility’s location, that would tend to affect the availability of qualified protected veterans.
You may find in-depth directions to establish an individualized benchmark here.
OFCCP’s Rules dictate that Contractors with multiple establishments may use both options when establishing the Benchmark for those establishments, but may use only one Benchmark option per establishment.
- Benchmarks for hires: The percentage of total hires who are protected veterans that the employer seeks to hire in the following year.
- Civilian Labor Force (CLF): The sum of people who are employed and those who are unemployed but looking for work in a specified area, e.g., nationwide or in a particular State.
- Employment Service Delivery System (ESDS): An employment service office in a State or locality that provides labor exchange services, including employment, training, and placement services, as part of the national One-Stop service delivery network established by the States.
Federal Register Vol. 78, No.185
Title 41 CFR §60-300.45 Benchmarks for hiring.
OFCCP website: https://www.dol.gov/ofccp/regs/compliance/vevraa.htm
 Federal Register/Vol.78, No. 185 pg. 58638 paragraph 3
 Federal Register/Vol.78, No. 185 pg. 58638 paragraph 5
 Federal Register/Vol.78, No. 185 pg. 58639 paragraph 6
 Federal Register/Vol.78, No. 185 pg. 58640 paragraph 2
 Federal Register/Vol.78, No. 185 pg. 58639 paragraph 2
Jennifer Polcer, PHR, SHRM-CP, is the VP of Compliance at DirectEmployers Association where she looks to be a resource to Members providing guidance on compliance matters related to Affirmative Action, audit advocacy and additional education surrounding government contractor obligations. Full Bio »