By Sam Hananel
WASHINGTON (AP) -- Disabled Americans, facing even higher hurdles than others finding jobs, would get a boost under an Obama administration plan to set new hiring procedures for government contractors.
The Labor Department proposed a rule Thursday that would require most companies with federal contracts to set goals of having disabled workers make up 7 percent of their workforce.
Labor officials hailed the plan as an economic game-changer at a time when a staggering eight of 10 working-age Americans with disabilities are out of the workforce entirely.
The government long has used the leverage of federal spending to promote affirmative action in the hiring of women and minorities. The new rule would, for the first time, give similar treatment to people with disabilities.
Some businesses have indicated concern about increased costs, including for record-keeping and other paperwork. And Republican lawmakers have complained frequently about the costs that new regulations impose on businesses. On Wednesday, the House passed a measure that would require congressional review of rules that have an effect on the economy of $100 million or more or adverse effects on employment and productivity.
The Labor Department will take comments on the rule for 60 days before it considers final approval next year.
"This is probably the greatest proposal for real substantive change since the passage of the Americans with Disabilities Act" in 1990, said Patricia Shiu, director of the department's Office of Federal Contract Compliance Programs. "For nearly 40 years, the rules have said that contractors simply need to make a `good faith' effort to recruit and hire people with disabilities. Clearly, that's not working."
The proposed rule is not a quota. It would require companies to devote more resources to recruiting efforts to hire disabled workers, improve training programs and update data collection.
Contractors would have to keep detailed records showing they were complying. The rule would require them to list job openings to increase their pool of qualified applicants.
Federal contractors and subcontractors account for nearly a quarter of the nation's workforce. The proposal could have a ripple effect across the country and help bring down the 13 percent unemployment rate for disabled workers. The rate is 8.6 percent for all workers.
There are about 200,000 federal contractors taking in about $700 billion annually in contracts.
Disability advocates praised the proposed rule, saying employers would also benefit.
"Job seekers with disabilities will have access to more opportunities," said Mark Perriello, president of the American Association of People with Disabilities. "Federal contractors will experience greater diversity in their workforces and benefit from the contributions that people with disabilities are qualified and eager to make."
Businesses have had mixed reactions to the plan, which could prove easier for larger companies to put in place than smaller ones that face increased costs and paperwork.
"The agency issued a number of regulations that have dramatically expanded paperwork and record-keeping requirements with real costs to contractors," said Michael Eastman, executive director for labor law policy at the U.S. Chamber of Commerce.
That organization has not taken a formal position on the proposed rule. Eastman said his group supports the goals of trying to bring more people with disabilities into the workforce, "but we have concerns whether the agency has proposed the right approach or not."
Some businesses also are nervous about asking job applicants to identify themselves as disabled, fearing they may run afoul of the Americans with Disabilities Act's ban on discrimination, Eastman said.
The ADA defines a disability as a physical or mental impairment that substantially limits one or more major life activities. The definition also includes a history of impairment or being regarded as having a disability. The ADA was amended in 2009 to be construed more broadly, including impairments such as cancer, diabetes and epilepsy.
Seth Harris, deputy secretary of labor, said President Barack Obama has made a commitment to put the government in the lead when it comes to improving the lives of the disabled. Last year, Obama signed an executive order setting a goal for the federal government to increase its employment of people with disabilities by 100,000 over five years.
"The president recognizes that people with disabilities are eager to work; all they need is the opportunity," Harris said.
The government has struggled over the years to increase job opportunities for disabled workers. Among working-age people with disabilities, 79 percent are outside the labor force altogether, compared with 30.5 percent for those without disabilities, according to the Bureau of Labor Statistics.
The rule would apply to those contractors with at least 50 employees that have a minimum $50,000 in government contracts. That currently includes about 170,000 contractors.
By contrast, the ADA applies to employers with 15 or more workers. That law prohibits discrimination against the disabled, but does not require businesses to set a specific goal for hiring.
Labor officials would monitor compliance with the new rules through annual audits, which are currently performed on about 4,000 contractors each year.
Companies failing to comply could be ordered to make back payments to those denied employment or to change training policies and procedures. In rare cases, the agency could seek court orders to bar companies from bidding for federal contracts.
Don't Miss: Companies Hiring Now
Stories from AARP