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Wednesday, April 18, 2012

Strategic CSR - Diversity

The article in the first url below falls under the category of good intentions, but unintended consequences. The article reports on a recent announcement by the Obama administration to create minimum requirements (up to 7%) for the number of disabled workers as a percentage of overall employees of federal contractors. While not mandatory, those contractors who do not meet the requirements could have their contracts revoked:

The good intentions:

The proposal could reshape hiring at roughly 200,000 companies that generate $700 billion a year in contracts with the federal government. They include defense contractor Lockheed Martin Corp., aircraft maker Boeing Co. and firms across the health-care, construction and information-technology industries.

The unintended consequences:

Companies have flooded the department with complaints that the rule amounts to a first-ever government quota for hiring disabled workers that would expose them to a thicket of legal pitfalls. Some employers say there might not be enough qualified disabled workers in their fields to meet that target and that they may have to fire nondisabled workers to achieve the ratio. Others say that existing federal law actually prohibits them from asking whether a job applicant is disabled, potentially forcing firms to violate one law in order to comply with another.

The directive is particularly confusing, given that:

The scope of what would constitute a disability also isn't clear since the Labor Department's proposal doesn't include a specific list. The Americans with Disabilities Act, updated in 2008, says that workers are disabled if they have a physical or mental impairment that substantially limits one or more of their major life activities. Lawyers who represent employers say that could include hundreds of possibilities from blindness to deafness to the less apparent such as asthma or mental illness.

The issue of hiring discrimination against the disabled is very real and firms should be incentivized to ensure equal opportunity applies to all who want to work. It is not clear, however, that a hard and fast number will achieve the stated goals. As the article in the second url below notes, this is particularly true if the federal government itself is unable to meet the standards it is imposing on for-profit firms:

… as HR Policy, an association of chief human-resource officers, notes, the federal government itself has only 5% disabled on its payrolls—and the Labor Department's percentage of disabled employees has decreased every year since President Obama took office, despite a sharp increase in the number of department employees.

Take care

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U.S. Pushes Target for Hiring the Disabled
By Melanie Trottman
February 29, 2012
The Wall Street Journal
Late Edition – Final

The Wrong Way to Help the Disabled
By James Bovard
April 9, 2012
The Wall Street Journal
Late Edition – Final