What is Section 503 and VEVRAA?

Do you know what Section 503 of the Rehabilitation Act and the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) mean for your organization? These two regulations are key to ensuring fair hiring practices and fostering inclusive workplaces, especially when it comes to IWD and protected veterans. If you're curious as to how these laws might impact your compliance strategy, read on! 

Either way, understanding Section 503 and VEVRAA is a must, not only to remain compliant, but also to help build a workplace that values inclusion, equity, and opportunity for all. 

Let’s get into more specifics on all of this and how trusted partners like OutSolve can help. Here are three key takeaways you’ll learn in this article: 

1. An overview of Section 503 and VEVRAA  
2. HR’s responsibilities when it comes to Section 503 and VEVRAA 
3. How you can stay ahead of upcoming changes in enforcement  

Section 503: Supporting Individuals with Disabilities in the Workforce 

What It Is: Section 503 of the Rehabilitation Act of 1973 is a federal law that prohibits employment discrimination against individuals with disabilities and requires affirmative action to recruit, hire, promote, and retain them. 

This law applies specifically to federal contractors and subcontractors with contracts exceeding $10,000. For contractors with 50 or more employees and contracts worth $50,000 or more, a written Affirmative Action Plan (AAP) is also required. 

Here are the Key Requirements: 

1. 7% Utilization Goal: 7% is the current utilization goal for individuals with disabilities in each job group of a contractor’s workforce. This goal is meant to serve as a benchmark and not a rigid quota. 
   
   If your organization has fewer than 100 employees, then you may apply the 7% goal to your workforce as a whole. HR teams should use this benchmark to assess whether their recruitment and outreach strategies are effectively reaching people with disabilities. 
2. Voluntary Self-Identification: Contractors must invite applicants and employees to voluntarily self-identify as individuals with disabilities: 
   • During the pre-offer application stage 
   • After a job offer is made 
   • Periodically (at least every five years) for current employees 
   In the past the OFCCP required specific use of a form they provided, however, that form has been removed from their website, leaving contractors wondering if the specific form is still required. Until further guidance is provided, or the form is expressly eliminated by the OFCCP, we suggest using a substantially similar format with language protected under the OMB documentation. HR should also integrate the form into their onboarding and HRIS systems. 
3. Recordkeeping and Metrics: Contractors must collect and analyze data on: 
   • The number of applicants and hires who self-identify 
   • Total job openings and number of applicants 
   • Effectiveness of outreach efforts 
   This data must be retained for three years, making solid HRIS and applicant tracking systems (ATS) records a key part of your compliance process. 
4. Outreach and Recruitment: Contractors are expected to reach out to organizations that support individuals with disabilities, such as local vocational rehabilitation centers, community organizations, or disability-focused job boards. You’ll also need to assess the effectiveness of your efforts annually and document the results. 

VEVRAA: Ensuring Opportunity for Protected Veterans 

What It Is: VEVRAA is a federal law that that was originally enacted in 1974 to assist returning Vietnam veterans but has expanded to cover other categories of veterans. VEVRAA aims to protect veterans from employment discrimination and ensure they receive equal opportunities in the workplace, by requiring federal contractors and subcontractors to take affirmative action to employ and advance qualified protected veterans. These include: 

• Disabled veterans 
• Recently separated veterans 
• Armed Forces service medal veterans 
• Active-duty wartime or campaign badge veterans 

VEVRAA applies to contractors with federal contracts or subcontracts of $150,000 or more. Like Section 503, it also requires an AAP for contractors with 50+ employees. 

Here are the Key Requirements: 

1. Annual Hiring Benchmark: The OFCCP publishes an updated hiring benchmark for protected veterans every 1-2 years. The current benchmark, as of July 30, 2025, of 5.1% is applied to the entire workforce, not per job group. Contractors have the option to use the national benchmark as prescribed or calculate their own based on local labor data. 
2. Self-Identification Requirements: Much like Section 503, VEVRAA requires contractors to invite applicants to self-identify their veteran status: 
   • At the pre-offer stage 
   • At the post-offer stage 
   • Periodically for current employees 
   These forms help you track progress toward your hiring goals while maintaining confidentiality and voluntary participation. 
3. Mandatory Job Listings: One of VEVRAA’s more specific mandates is the requirement to list job openings with the appropriate Employment Service Delivery System (ESDS), which is usually your state workforce agency. HR must ensure job postings are: 
   • Provided in a format accepted by the state 
   • Timely and accurate 
   • Reflective of all open positions (with limited exceptions) 
4. Veteran Outreach: Like Section 503, VEVRAA requires outreach to veteran-focused organizations. This may include local veterans’ service organizations (VSOs), job fairs, or community groups that support veteran reintegration. 
5. Three-Year Record Retention: Contractors must retain records related to outreach, self-identification, job listings, and applicant data for at least three years.