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Sections 503 and 504 of the Rehabiliation Act of 1974

General

Section 503 of the Rehabilitation Act of 1973, as amended, which is administered and enforced by the Employment Standards Administration’s Office of Federal Contract Compliance Programs (OFCCP), includes most employers doing business with the Federal Government to take affirmative action to employ and advance in employment qualified individuals with a disability.

Section 504 and regulations implementing the Act also prohibit discrimination in employment against qualified individuals with a disability. Like the ADA, a qualified individual with a disability is a person who: (1) has a physical or mental impairment which “substantially limits” one or more major life activities, (2) has a record of such impairment, or (3) is regarded as having such an impairment.

Covered Federal contractors and subcontractors are required to make reasonable accommodations to the physical or mental limitations of qualified individuals with disabilities.

Employers are also required to take all necessary actions to ensure that no one attempts to intimidate or discriminate against an individual for filing a complaint or participating in a proceeding under Section 503.

Section 503 regulations apply to State and local government entities which have contracts with the Federal government if the State or local government entity participates in work on or under the contract or subcontract. Unlike coverage of private sector employers, the government entity but not the government as a whole becomes subject to Section 503 and its regulations when it enters into the contract.

Limitation Period and Filing Requirements

Plaintiffs suing private employers under Section 504 are not required to exhaust administrative remedies prior to bringing suit. However, individuals who believe they have been discriminated against on the basis of their disability by federal contractors or subcontractors, may file complaints with OFCCP. The complaints must be filed within 300 days from the date of the alleged discrimination, unless the time for filing is extended by OFCCP for good cause. Complaints may be filed directly with any of OFCCP’s regional or district offices throughout the country, or with OFCCP in Washington, D.C.

Disability discrimination complaints filed with OFCCP will be considered charges filed simultaneously under the ADA whenever the complaints also fall within the ADA’s jurisdiction. OFCCP will act as EEOC’s agent in processing the ADA component of the charge. OFCCP will transfer to the EEOC all disability discrimination complaints over which it does not, but EEOC may, have jurisdiction. OFCCP will investigate and process all of the Section 503/ADA complaints not transferred to EEOC. If OFCCP’s investigation reveals a violation, the agency will attempt to conciliate with the contractor, often entering into a conciliation agreement. A conciliation agreement may include a job offer, back pay, reinstatement, promotion or reasonable accommodation.

If the investigation results in a finding of no violation, OFCCP will issue both a finding of no violation and a right-to-sue letter under the ADA, and will close the complaint. Complainants may request a right-to-sue letter earlier in the process.

Jurisdiction

Section 503’s coverage extends to employers with Federal contracts or subcontracts in excess of $10,000 for the purchase, sale, or use of personal property or nonpersonal services, including construction.

The following types of contracts are exempt from Section 503:

  • Transactions of $10,000 and under;

  • Contracts and subcontracts for indefinite quantities, unless the purchaser has reason to believe that the amount to be ordered in any one year will be over $10,000;

  • Contracts for work that is performed outside the United States by employees who were not recruited in the U.S.;

  • Contracts exempt for national interest or security reasons; and

  • Contracts with State or local governments unless the governmental entity participates in work on or under the contract.

    Affirmative Action: Employers with Federal contracts or subcontracts of $50,000 or more and 50 or more employees must prepare, implement, and maintain a written affirmative action program for each establishment. The program must be reviewed and updated annually.

    Remedies and Damages

    OFCCP investigates for violations of Section 503 either through compliance reviews or in response to complaints. If a violation is found after an investigation, the Federal contractor is asked to enter into conciliation negotiations. If conciliation efforts fail, OFCCP initiates an administrative enforcement proceeding by issuing an administrative complaint to the contractor. The contractor has 20 days to request a review by an administrative law judge, who hears the case and makes a determination. The contractor may appeal the administrative law judge’s decision to the Administrative Appeal Board and, if dissatisfied with the Assistant Secretary’s decision, to the Federal courts. Violations may result in withholding of proposed contracts, canceling, suspending or terminating contracts, withholding of progress payments, and debarment. Final determinations on violations are enforceable through the courts.

    Individuals who bring suit under Section 504 may be entitled to monetary damages awards, including back pay. Attorneys fees may also be awarded to a prevailing planitiff.

    More Information

    504 Rehabiliation Act Articles

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