which specialize in training or educating handicapped individuals.

(9) The contractor should use all available resources to continue or establish on the job training programs.

(j) Sheltered workshops. Contracts with sheltered workshops do not constitute affirmative action in lieu of employment and advancement of qualified handicapped individuals in the contractor's own workforce. Contracts with sheltered workshops may be included within an affirmative action program if the sheltered workshop trains employees for the contractor and the contractor is obligated to hire trainees at full compensation when such trainees become qualified "qualified handicapped individual" as defined in § 60-741.2.

as

[43 FR 49276, Oct. 20, 1978; 43 FR 51402, Nov. 3, 1978]

§ 60-741.7 Determination of handicap.

(a) Any handicapped individual filing a complaint with the Director under this part shall submit with his or her complaint a signed statement specifying the handicapping impairment or situation (see § 60-741.2 definition of "handicapped individual"). If the Director determines that further documentation is necessary, he or she may require the complainant to provide additional information.

(b) Any contractor requiring a determination of an applicant's or employee's handicap may require the applicant or employee to provide medical documentation of the impairment or, in the alternative, may require the applicant or employee to undergo a medical examination at the contractor's expense.

(c) Any determination of handicap required pursuant to paragraph (b) of this section must meet the requirements of § 60-741.5(c) and must be for the purpose of affirmative action and proper job placement. Information obtained therefrom shall not be used to exclude or otherwise limit the employment opportunities of qualified handicapped individuals.

(d) All medical documentation required under this section shall be based upon the American Medical Association Guides to the Evaluation of Permanent Impairment, provided that

the Guides shall be used only to determine the existence of impairment without regard to the degree of impairment.

[43 FR 49276, Oct. 20, 1978; 43 FR 51402, Nov. 3, 1978]

§ 60-741.8 Listing of employment openings.

Contractors should request State employment security agencies to refer qualified handicapped individuals for consideration under their affirmative action programs.

§ 60-741.9 Labor unions and recruiting and training agencies.

(a) Whenever performance in accordance with the affirmative action clause or any matter contained in the regulations in this part may necessitate a revision of a collective bargaining agreement, the labor union or unions which are parties to such agreements shall be given an adequate opportunity to present their views to the Director.

(b) The Director shall use his or her best efforts, directly or through contractors, subcontractors, local officials, vocational rehabilitation facilities, and all other available instrumentalities, to cause any labor union, recruiting and training agency or other representative of workers who are or may be engaged in work under contracts and subcontracts to cooperate with, and to assist in, the implementation of the purposes of the Act.

Subpart B-General Enforcement and Complaint Procedure

§ 60-741.20 Subcontracts.

Each nonexempt prime contractor and subcontractor shall include the affirmative action clause prescribed in § 60-741.4 in each of their nonexempt subcontracts. The clause may be incorporated by reference in accordance with § 60-741.22.

§ 60-741.21 Adaptation of language.

Such necessary changes in language may be made to the affirmative action clause (see § 60-741.4) as shall be appropriate to identify properly the parties and their undertakings.

the alleged violation, unless the time for filing is extended by the Director for good cause shown.

(b) Referral to contractor. When a complaint is filed by an employee of a contractor and the contractor has an applicable internal review procedure, the complaint shall be referred to the contractor for processing under that procedure. The complaint and all actions taken thereunder shall be kept confidential by the contractor. If there has not been a resolution of the complaint under that procedure satisfactory to the complainant within 60 days of the referral, the Department of Labor will proceed as provided in this section.

(c) Contents of complaints. Complaints must be signed by the complainants or their authorized representatives and must contain the following information: (1) Name and address (including telephone number) of the complainant, (2) name and address of the contractor or subcontractor who committed the alleged violation, (3) a description of the act or acts considered to be a violation, (4) a signed statement that the individual is handicapped or has a history of a handicap or other documentation of impairment or was regarded by the contractor as having an impairment, and (5) other pertinent information available which will assist in the investigation and resolution of the complaint, including the name of any known Federal agency with which the employer has contracted.

(d) Incomplete information. Where a complaint contains incomplete information, the Director shall seek the needed information from the complainant. If the information is not furnished to the Director within 60 days of the date of such request, the case may be closed.

(e) Investigations. The Department of Labor shall institute a prompt investigation of each complaint, and shall be responsible for developing a complete case record. A complete case record consists of the following: (1) Name and address of each person interviewed, (2) a summary of his or her statement, (3) copies or summaries of pertinent documents, (4) a narrative summary of the evidence disclosed in

the investigation as it related to each charge, and (5) recommended findings and resolution.

(f) [Reserved]

(g) Resolution of matters. (1) If the complaint investigation shows no violation of the Act or regulations in this part, or if the Director decides not to initiate administrative or legal proceedings against the contractor, the complainant shall be SO notified. Within 30 days, the complainant may request review by the Director of such a finding or decision.

(2) Where an investigation indicates that the contractor has not complied with the requirements of the Act or this part, efforts shall be made to secure compliance through concillation and persuasion within a reasonable time. Before the contractor or subcontractor can be found to be in compliance, it must make a specific commitment, in writing, to take corrective action to meet the requirements of the Act and this part. The commitment must indicate the precise action to be taken and dates for completion. The time period allowed should be no longer than the minimum period necessary to effect such changes. Upon approval of such commitment by the Director, the contractor may be considered in compliance on condition that the commitments are kept.

(3) Where the complaint investigation indicates a violation of the Act or regulations in this part and the complaint has not been resolved by informal means), the Director shall afford the contractor an opportunity for a hearing in accordance with § 60-741.29. [43 FR 49276, Oct. 20, 1978; 43 FR 51402, Nov. 3, 1978]

§ 60-741.27 Noncompliance with the affirmative action clause.

Noncompliance with the prime contractor's or subcontractor's obligations under the affirmative action clause is a ground for taking appropriate action for noncompliance as set forth in § 60741.28 by the Director, prime contractor, or subcontractor.

§ 60-741.28 Actions for noncompliance.

(a) General. In every case where any complaint investigation indicates the

existence of a violation of the affirmative action clause or these regulations, the matter should be resolved by informal means, including conciliation, and persuasion, whenever possible. This will also include establishing a corrective action program in accordance with § 60-741.26(g)(2). Where the apparent violation is not resolved by informal means, the Director shall proceed in accordance with the enforcement procedures contained in this part.

(b) Judicial enforcement. In addition to the administrative remedies set forth herein, the Director may, within the limitations of applicable law, seek appropriate judicial action to enforce the contractual provisions set forth in § 60-741.4 including appropriate injunctive relief.

(c) Withholding progress payments. With the prior approval of the Director so much of the accrued payment due on the contract or any other contract between the government prime contractor and the Federal Government may be withheld as necessary to correct any violations of the provisions of the affirmative action clause.

(d) Termination. A contract or subcontract may be canceled or terminated, in whole or in part, for failure to comply with the provisions of the affirmative action clause.

(e) Debarment. A prime contractor or subcontractor or a prospective contractor or subcontractor may be debarred from receiving future contracts for failure to comply with the provisions of the affirmative action clause. § 60-741.29 Formal hearings.

(a) Hearing opportunity. An opportunity for a formal hearing shall be afforded to a prime contractor or a subcontractor or a prospective prime contractor or subcontractor by the Director in any of the following circumstances:

(1) An apparent violation of the affirmative action clause by a contractor or subcontractor, as shown by any investigation, is not resolved by informal means and a hearing is requested; or

(2) The Director proposes to cancel or terminate the contract or withhold progress payments, or cause the contract to be canceled or terminated or

progress payments to be withheld, in whole or in part, on a contract or contracts, or to require cancellation or termination of a contract or subcontract or withholding of progress payments; or

(3) The Director proposes to declare a prime contractor or subcontractor ineligible for further contracts or subcontracts under the Act.

(b) Hearing practice and procedure. (1) All hearings conducted under section 503 of the Rehabilitation Act of 1973, as amended, and the regulations in this Part shall be governed by the Rules of Practice for Administrative Proceedings to Enforce Equal Opportunity Under Executive Order 11246 contained in 41 CFR Part 60-30 except that complaints shall be issued by the Associate Solicitor, Division of Labor Relations and Civil Rights, Office of the Solicitor, rather than by the Solicitor of Labor.

(2) For the purposes of hearings pursuant to this Part 60-741, references in 41 CFR Part 60-30 to "Executive Order 11246" shall mean section 503 of the Rehabilitation Act of 1973, as amended; to "equal opportunity clause" shall mean the affirmative action clause published at 41 CFR 60741.4; and to "regulations" shall mean the regulations contained in this Part 60-741.

(3) The Administrative Law Judge's recommended findings, conclusions and decision shall be certified to the Assistant Secretary, Employment Standards Administration rather than to the Secretary (see 41 CFR 6030.27). Accordingly, exceptions to the recommended decision (41 CFR 6030.28) shall be filed with the Assistant Secretary, Employment Standards Administration, and the final Administrative Order contemplated by 41 CFR 60-30.30 shall be issued by the Assistant Secretary, Employment Standards Administration. Except for these changes in procedure, all the other provisions of the rules of practice cited in this 41 CFR 60-741.29(b) shall remain in full force and effect.

§ 60-741.30 Notification of agencies.

The Director shall notify the heads of all agencies of any action for noncompliance taken against any contrac

tor after such actions have been taken. No agency may issue a waiver under § 60-741.3(b)(1) to any contractor subject to such action without prior approval of the Director.

§ 60-741.31 Contractor ineligibility list.

The Director shall distribute periodically a list to all executive departments and agencies giving the names of prime contractors and subcontractors who have been declared ineligible under the regulations in this Part and the Act.

§ 60-741.32 Disputed matters related to the affirmative action program.

The procedures set forth in the regulations in this Part govern all disputes relative to a contractor's compliance with the affirmative action clause and the requirements of this Part. Any disputes relating to issues other than compliance, including contract costs arising out of the contractor's efforts to comply, shall be determined by the disputes clause of the contract.

Subpart C-Ancillary Matters

§ 60-741.50 Reinstatement of ineligible contractors and subcontractors.

Any prime contractor or subcontractor debarred from further contracts or subcontracts under the Act may request reinstatement in a letter directed to the Director. In connection with the reinstatement proceedings, the prime contractor or subcontractor shall be required to show that it has established and will carry out employment policies and practices in compliance with the affirmative action clause.

§ 60-741.51 Intimidation and interference.

The sanctions and penalties contained in this regulation may be exercised by the Director against any prime contractor or subcontractor, who fails to take all necessary steps to insure that no person intimidates, threatens, coerces, or discriminates against any individual for the purpose of interfering with the filing of a complaint, furnishing information, or assisting or participating in any manner

in an investigation, compliance review, hearing, or any other activity related to the administration of the Act.

§ 60-741.52 Recordkeeping.

(a) Each contractor and subcontractor shall maintain for a period not less than 1 year records regarding complaints and actions taken thereunder, and such employment or other records as required by the Director or by this Part and shall furnish such information in the form required by the Director or as the Director deems necessary for the adminstration of the Act and regulations issued under this Part.

(b) Failure to maintain complete and accurate records as required under this section or failure to update annually the affirmative action program as required by § 60-741.5(b) constitutes noncompliance with the contractor's or subcontractor's obligatons under the affirmative action clause and is a ground for the imposition of appropriate sanctions.

such impairment, or is regarded as having such an impairment.

"Life activities" may be considered to include communication, ambulation, selfcare, socialization, education, vocational training, employment, transportation, adapting to housing, etc. For the purpose of section 503 of the Act, primary attention is given to those life activities that affect employability.

The phrase "substantially limits" means the degree that the impairment affects employability. A handicapped individual who is likely to experience difficulty in securing, retaining or advancing in employment would be considered substantially limited.

"Has a record of such an impairment” means that an individual may be completely recovered from a previous physical or mental impairment. It is included because the attitude of employers, supervisors, and coworkers toward that previous impairment may result in an individual experiencing difficulty in securing, retaining, or advancing in employment. The mentally restored, those who have had heart attacks or cancer often experience such difficulty. Also, this part of the definition would include individuals who may have been erroneously classified and may experience discrimination based on this misclassification. This group may include persons such as those who have been misclassified as mentally retarded or mentally restored.

"Is regarded as having such an impairment" refers to those individuals who are perceived as having a handicap, whether an impairment exists or not, but who, because of attitudes or for any other reason, are regarded as handicapped by employers, or supervisors who have an effect on the individual securing, retaining or advancing in employment.

APPENDIX B

1. This employer is a government contractor subject to section 503 of the Rehabilitation Act of 1973, which requires government contractors to take affirmative action to employ and advance in employment qualified handicapped individuals. If you have such a handicap and would like to be considered under the affirmative action program, please tell us. Submission of this information is voluntary and refusal to provide it will not subject you to discharge or disciplinary treatment. Information obtained concerning individuals shall be kept confidential, except that (i) supervisors and managers may be informed regarding restrictions on the work or duties of handicapped individuals, and regarding necessary accommodations, (ii) first aid and safety personnel may be informed, when and to the extent appropriate, if the condition might require emergency treatment, and (iii) government