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Court Challenge Fails: New 7% Disability Employment Goal Takes Effect for Federal Contractors

After a court challenge failed, a new Office of Federal Contract Compliance Programs (OFCCP) rule designed to increase employment of people with disabilities went into effect on March 24, 2014. A key element of the rule is for federal contractors to set a goal that 7% of their workforce be persons with disabilities.

"This is a milestone that will encourage even the most disability inclusive companies to challenge themselves to do better," said Jill Houghton, United States Business Leadership (USBLN) director, a business-led organization that promotes disability inclusion.

Patricia Shiu, OFCCP director summed up the rationale behind the rule: “As any good business leader knows, what gets measured gets done.” 

Ms. Shiu emphasized that 7% disability employment is a goal rather than a quota. It is similar to metrics OFCCP has successfully used to promote employment of women and minorities. Previous OFCCP efforts to promote employment of people with disabilities did not have a metric and fell short of expectations.

“By our estimation, if every company subject to this rule were to achieve the 7% employment goal, nearly 600,000 qualified workers with disabilities would be added to the workforce in just the first year,” Ms. Shiu said.

While only affecting federal contractors, the rule has far ranging impact. Some estimates are that more than 20% of the U.S. workforce is employed by federal contractors. If successfully implemented, the rule could also become a model for businesses without federal contracts.