[Federal Register Volume 82, Number 159 (Friday, August 18, 2017)]
[Proposed Rules]
[Pages 39371-39396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17249]


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DEPARTMENT OF LABOR

Veterans' Employment and Training Service

20 CFR Part 1011

[Docket No. VETS-2017-0001]
RIN 1293-AA21


HIRE Vets Medallion Program

AGENCY: Veterans' Employment and Training Service (VETS), Labor.

ACTION: Notice of proposed rulemaking.

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SUMMARY: VETS is publishing this Notice of Proposed Rulemaking (NPRM) 
to propose regulations implementing the Honoring Investments in 
Recruiting and Employing (HIRE) American Military Veterans Act of 2017 
(HIRE Vets Act of 2017 or Act). The HIRE Vets Act requires the 
Department of Labor (DOL, Department) to annually solicit and accept 
voluntary information from employers for consideration of employers to 
receive a HIRE Vets Medallion Award. VETS will review

[[Page 39372]]

applications and notify recipients of their awards, and announce their 
names at a time that coincides with Veterans' Day. The Act establishes 
specific criteria at two levels, ``gold'' and ``platinum,'' for large 
employers (those with 500 or more employees) and allows the Department 
of Labor discretion in establishing additional criteria for each large 
employer award level and criteria for small and medium employers to 
qualify for similar awards. The NPRM proposes the application process 
and criteria that VETS intends to use to receive, review, and process 
applications; verify the information provided; and award the HIRE Vets 
Medallion Award to those employers meeting the criteria and deserving 
of the award.
    The Act establishes a fund, designated as the ``HIRE Vets Medallion 
Award Fund'' and requires the Secretary to assess a reasonable fee from 
the applicants to cover the costs associated with carrying out the HIRE 
Vets Medallion Award program. The NPRM provides the fee amount and how 
to submit the fee. These awards are intended to recognize employer 
efforts to recruit, employ, and retain our Nation's veterans.

DATES: To be assured of consideration, comments must be received on or 
before September 18, 2017.

ADDRESSES: You may send comments, identified by RIN number 1293-AA21, 
by one of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
Web site instructions for sending comments; or
    Mail or Hand Delivery Courier: Please submit all written comments 
(including disk and CD-ROM submissions) by hand delivery, express mail, 
messenger, or courier service to: Randall Smith, Veterans' Employment 
and Training Service, U.S. Department of Labor, Room S-1325, 200 
Constitution Avenue NW., Washington, DC 20210.
    Please submit your comments by only one method. Comments received 
by means other than those listed above or received after the comment 
period has closed will not be reviewed. VETS will post all comments 
received on http://www.regulations.gov without making any change to the 
comments, including any personal information provided. The http://www.regulations.gov Web site is the Federal e-rulemaking portal and all 
comments posted there are available and accessible to the public. VETS 
cautions commenters not to include personal information such as Social 
Security Numbers, personal addresses, telephone numbers, and email 
addresses in their comments as such information will become viewable by 
the public on the http://www.regulations.gov Web site. It is the 
commenter's responsibility to safeguard his or her information. 
Comments submitted through http://www.regulations.gov will not include 
the commenter's email address unless the commenter chooses to include 
that information as part of his or her comment.
    Postal delivery in Washington, DC, may be delayed due to security 
concerns. Therefore, VETS encourages the public to submit comments 
through the http://www.regulations.gov Web site.
    Comments concerning information collection requirements should be 
directed to: Office of Information and Regulatory Affairs, Attn: OMB 
Desk Officer for the Department of Labor, Veterans' Employment and 
Training Service, Office of Management and Budget, Room 10235, 
Washington, DC 20503, fax: (202) 395-6881 (this is not a toll-free 
number), email: <a href="/cdn-cgi/l/email-protection#440b0d16051b373126292d37372d2b2a042b29266a212b346a232b32"><span class="__cf_email__" data-cfemail="f9b6b0abb8a68a8c9b94908a8a909697b996949bd79c9689d79e968f">[email protected]</span></a>. Please submit your 
comments by only one method. Receipt of submissions will not be 
acknowledged; however, the sender may request confirmation that a 
submission has been received by telephoning VETS at (202) 693-4700 or 
TTY (877) 889-5627 (these are not toll-free numbers).
    Docket: For access to the docket to read background documents or 
comments received, go to the Federal eRulemaking portal at http://www.regulations.gov. VETS will also make all the comments received 
available for public inspection during normal business hours, 8:15 a.m. 
to 4:45 p.m. at: Room S-1325, 200 Constitution Avenue NW., Washington, 
DC 20210. If you need assistance to review the comments, VETS will 
provide you with appropriate aids such as readers or print magnifiers. 
VETS will make copies of the rule available, upon request, in large 
print and as an electronic file on computer disk. VETS will consider 
providing the proposed rule in other formats upon request. To schedule 
an appointment to review the comments and/or to obtain this NPRM in an 
alternate format, please contact VETS at the address listed above or at 
(202) 693-4700 or TTY (877) 889-5627 (these are not toll-free numbers).

FOR FURTHER INFORMATION CONTACT: Contact Randall Smith, Veterans' 
Employment and Training Service, U.S. Department of Labor, Room S-1325, 
200 Constitution Avenue NW., Washington, DC 20210, email: 
<a href="/cdn-cgi/l/email-protection#6a2223382f3c2f3e3944243a38272a0e0506440d051c"><span class="__cf_email__" data-cfemail="e1a9a8b3a4b7a4b5b2cfafb1b3aca1858e8dcf868e97">[email protected]</span></a>, telephone: (202) 693-4700 or TTY (877) 889-5627 
(these are not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    The HIRE Vets Act was enacted on May 5, 2017, as Division O of the 
Consolidated Appropriations Act, 2017, Public Law 115-31. The purpose 
of the Act is to create a voluntary program for recognizing efforts by 
employers to recruit, employ, and retain veterans through a HIRE Vets 
Medallion Award (the award). The Act requires the Department of Labor 
to issue regulations establishing the HIRE Vets Medallion Program 
(Medallion Program).
    In preparation for drafting a rule to implement the Act, VETS 
conducted three stakeholder sessions during the week of June 5, 2017. 
During these stakeholder sessions, VETS obtained input from large, 
medium, and small employers, veterans service organizations, military 
service organizations, and other interested parties. The Department of 
Labor invites comments on this proposed rule by all interested parties.

Section-by-Section Analysis

Subpart A--Introduction to the Regulations for the HIRE Vets Act

Section 1011.000: What is the HIRE Vets Medallion Program?
    Proposed Sec.  1011.000 provides a description of the goals and 
purposes of the Medallion Program. This language is derived from the 
language in sec. 2(a) of the Act, which states that the HIRE Vets 
Medallion Program is a program through which the Department of Labor 
will solicit voluntary applications from employers for the award.
Section 1011.005: What definitions apply to the Medallion Program 
regulations?
    Proposed Sec.  1011.005 contains proposed definitions for this 
part. Each definition is discussed individually below.
    Active Duty: The definition of ``active duty'' relates to the pay 
differential criterion used for the large employer, medium employer, 
and small employer awards in proposed Sec. Sec.  1011.000(b)(8), 
1011.105(b)(5)(ii), and 1011.110(b)(4)(iv). To satisfy this criterion, 
employers must provide employees serving on active duty in the United 
States National Guard or Reserve with compensation that is sufficient, 
in combination with the employee's active duty pay, to achieve a 
combined level of income commensurate with the employee's salary prior 
to undertaking active duty. To ensure simplicity, the

[[Page 39373]]

proposed rule's definition of active duty is consistent with the 
definition used at 10 U.S.C. 101(d)(1) (defining active duty for 
purposes of the armed forces). However, VETS requests comments on 
whether this definition is appropriate for this program.
    Dedicated Human Resources Professional: The term ``dedicated human 
resources professional'' is used in the human resources criterion for 
the large employer platinum award established in sec. 3(b)(1)(C)(iv) of 
the Act and implemented in proposed Sec.  1011.100(b)(7). This proposed 
definition clarifies that to satisfy this criterion, an employer may 
either employ an individual who devotes 100 percent of their time to 
supporting the hiring, training, and retention of veteran employees 
(for purposes of this rule, ``veteran employees'' refers to employees 
who are veterans) or the equivalent of a full-time employee. For 
example, three full-time employees who devote fifty percent, thirty 
percent, and twenty percent of their time, respectively, to supporting 
the hiring, training, and retention of veteran employees would satisfy 
this criterion. Any other combination of time dedicated to this 
objective that equals one full-time employee would also satisfy this 
criterion. Because most human resources professionals do not dedicate 
all of their time to a single objective, this clarification will retain 
flexibility for employers while also ensuring that veteran employees 
receive sufficient human resources support.
    Additionally, this definition does not require that the human 
resources professionals be employees of the applicant. An applicant can 
satisfy this criterion by contracting out these services so long as 
those contracted services otherwise meet this definition.
    Finally, as with the Human Resources Veterans' Initiative, the 
Dedicated Human Resources Professional must provide support in all 
three of the following areas: hiring, training, and retention.
    Employee: The proposed rule defines ``employee'' as any individual 
for whom the employer furnishes an IRS Form W-2, with the exception of 
temporary workers. Although many other definitions of employee exist in 
Federal law, most of those definitions are for purposes of enforcing 
Federal protections. For the purposes of the Medallion Program, VETS 
will defer to how an employer categorizes its workers for tax purposes. 
This definition simplifies the burden on employers in assessing whether 
they meet the award criteria.
    The proposed definition of ``employee'' includes both permanent 
full-time and permanent part-time employees. Permanent part-time 
employees are included in addition to permanent full-time employees 
because many disabled veterans rely on part-time positions and because 
basing the award on calculations of all permanent employees seems a 
more accurate reflection of veteran employment.
    Although VETS supports the hiring of veterans in all positions, 
including temporary positions, the proposed rule excludes temporary 
workers from the definition of employee. The proposed rule has this 
exclusion because of the retention criterion for large employers, which 
requires that certain veteran employees be retained for at least twelve 
months. The inclusion of temporary workers in the definition of 
employee would thus foreclose employers and industries that hire large 
numbers of temporary workers from consideration for the award. Instead, 
this exclusion ensures that employers that retain a large percentage of 
veterans in permanent positions are not excluded simply because of the 
fact that some of their business is seasonal in nature.
    Additionally, although the proposed regulation does not explicitly 
exempt workers who work outside of the United States from the 
definition of employee, tying the definition of employee to the IRS 
Form W-2 effectively excludes workers outside of the United States from 
the definition of employee, unless those workers are U.S. citizens or 
permanent residents, because those workers do not receive IRS Form W-
2s. The proposed rule excludes most workers who work outside of the 
United States (other than those noted in the previous sentence) from 
the definition of employee because it does not seem reasonable to 
measure employment of veterans by including workers not in the United 
States and the inclusion of such workers may make it difficult for 
otherwise meritorious employers to satisfy the veteran hiring and 
retention criteria. However, the proposed rule does not exclude those 
U.S. citizens or permanent residents who might work outside of the 
United States and still receive an IRS Form W-2 in order to limit the 
amount of analysis employers must go through in assessing their 
employee population for the purposes of this rule.
    Employer: The proposed definition of ``employer'' derives from the 
definition at sec. 8(a) of the Act. In addition to including the 
statutory language, the definition of ``employer'' clarifies that VETS 
will distinguish employers based on their Employer Identification 
Numbers, as described by the IRS in their regulations implementing 26 
U.S.C. 6109 at 26 CFR 301.7701-12. In drafting this definition, VETS 
evaluated how to incorporate franchises, subsidiaries, and retail 
branches into the definition of employer. VETS settled on the proposed 
definition because it is the simplest definition for employers to 
implement and is reflective of how employers define themselves. 
However, the proposed rule creates an exemption from this definition 
where an IRS-recognized third party furnishes an employee's IRS Form W-
2 pursuant to 26 CFR 31.3504-1, 26 CFR 31.3504-2, or 26 U.S.C. 7705. 
This exemption is to ensure that deserving employers are not barred 
from an award because they have used one of the mechanisms identified 
in the previous sentence.
    The definition of employer includes local governments and tribal 
governments. However, VETS proposes to exclude foreign governments from 
the definition of employer. VETS makes this proposal to avoid any 
apparent conflict that could occur as a result of granting a foreign 
government an award.
    This definition also allows an independently owned franchise or a 
subsidiary to apply for its own award.
    VETS requests comments on whether this is an appropriate definition 
of employer.
    Human Resources Veterans' Initiative: This proposed definition 
applies to the small employer and medium employer award criteria at 
proposed Sec. Sec.  1011.105(b)(5)(i) and 1011.110(b)(4)(iii). This 
criterion is a variation on the dedicated human resources professional 
criterion for the large employer platinum award. Instead of needing to 
employ a dedicated human resources professional (as defined above), an 
employer satisfies the human resources veterans' initiative criterion 
if the employer provides hiring, training, and retention support for 
veteran employees. Employers must provide support in all three of these 
areas. An employer would not satisfy this criterion if it only provided 
support in one or two of these areas. This adjusted definition 
recognizes that not all small and medium employers will employ 
dedicated human resources professionals.
    Additionally, this definition does not require that this support be 
provided by employees of the applicant. An applicant can satisfy this 
criterion by contracting out or partnering with a third-party that 
provides this support so long as the support provided otherwise meets 
this definition. One way an employer may satisfy the hiring support 
portion of the human resources

[[Page 39374]]

veterans' initiative criterion is by partnering with an American Job 
Center that is part of the nationwide workforce development system as 
defined in Section 3(67) of the Workforce Innovation and Opportunity 
Act.
    Post-Secondary Education: The term ``post-secondary education'' is 
used in the tuition assistance program criterion established for large 
employers in sec. 3(b)(1)(C)(vi) of the Act. To satisfy this criterion, 
an employer must have a tuition assistance program to support 
employees' attendance in post-secondary education during the term of 
their employment. The proposed definition of ``post-secondary 
education'' is consistent with the definition of ``program of 
education'' in the G.I. Bill (38 U.S.C. 2002), but it is simplified to 
provide clear guidance for employers to use as they apply for the 
award. Under the proposed definition, any tuition assistance program 
that supports employees' attendance in post-secondary courses, 
including courses that lead to an associates or bachelor's degree or 
higher; a recognized post-secondary credential; or an apprenticeship 
would be acceptable.
    Salary: The proposed rule defines ``salary'' as an employee's base 
pay. The definition of salary relates to the pay differential criterion 
used for the large employer, medium employer, and small employer awards 
in proposed Sec. Sec.  1011.100(b)(8), 1011.105(b)(5)(ii), and 
1011.110(b)(4)(iv). VETS proposes to use base pay to define salary 
because base pay is the standard measure for pay differential. However, 
VETS seeks comments on whether any of the following should also be 
included in the definition of salary: Overtime, shift differential, 
bonuses, tips, commissions, vacation and holiday pay, retirement and 
other related benefits, stock options and awards, profit sharing, etc.
    The proposed definition of ``salary'' does not set a specific 
formula for determining salary. Because this is an awards program, the 
method for calculating salary can be determined by the employer so long 
as that determination is reasonable and applied consistently across all 
employees. For example, it might be reasonable for an employer to 
determine an employee's salary by using the employee's annual salary 
associated with their job description. It might also be reasonable for 
an employer to determine an employee's salary by looking at an 
employee's average wages over the course of several months prior to the 
employee's active duty. However, it would likely be unreasonable for an 
employer to use an employee's wages from a pay period in which the 
employee spent much of the pay period on unpaid leave.
    Temporary Worker: The proposed definition of ``temporary worker'' 
provides additional clarity as to which non-permanent employees are 
excluded from the definition of employee. This proposed definition 
states that temporary workers are those who are hired with the 
intention that they be retained for less than a year and who actually 
are retained for less than a year. A worker retained for more than a 
year is considered an employee for the purposes of this regulation so 
long as that worker meets the rest of the requirements to qualify as an 
employee.
    Veteran: The proposed definition of ``veteran'' is the statutory 
definition of veteran in sec. 8(c) of the Act. VETS recognizes that 
most employers determine which employees are veterans according to the 
employee's self-identification. VETS does not expect employers to 
change these practices in order to guarantee that every employee who 
self-identifies as a veteran meets the definition of veteran set out in 
this proposed section and in the Act. VETS' primary concern is that an 
employer applying for an award informs VETS as accurately as it is 
reasonably able to as to the number of veterans that it employs.
    Additionally, consistent with the definition of veteran at 38 
U.S.C. 101, the term is limited to veterans of the U.S. Armed Forces. 
Consequently, veterans who served in foreign militaries do not come 
within the definition of veteran for the purpose of determining whether 
an employer qualifies for a HIRE Vets Medallion Award.
    VETS: This term is defined for clarity. This term refers to the 
Veterans' Employment Training Service of the Department of Labor.
Section 1011.010: Who is eligible to apply for a HIRE Vets Medallion 
Award?
    Proposed Sec.  1011.010 defines the entities that are eligible to 
apply for an award. An employer that employs at least one employee may 
qualify for an award so long as the employer satisfies all of the 
criteria and application requirements under this part.
Section 1011.015: What are the different types of the HIRE Vets 
Medallion Awards?
    Proposed Sec.  1011.015 describes the different types of HIRE Vets 
Medallion Awards for which an employer may apply.
    Paragraph (a) describes the three different employer size award 
categories. This paragraph implements the language at secs. 3(b)(1)(A) 
& 3(b)(2) of the Act, which define the employer size requirements for 
each category of award. Paragraph (a)(4) clarifies that the correct 
category of award for which an employer is eligible is determined by 
the employer's number of employees as of December 31 of the year prior 
to the year in which the employer applies for a HIRE Vets Medallion 
Award. For the purposes of this section, employee is defined as 
described in Sec.  1011.005.
    Paragraph (b) establishes the different levels of award within each 
category. The Act provided for these levels for the large employer 
awards in sec. 3(b)(1)(B)-(C). Sec. 3(b)(2) of the Act also requires 
VETS to establish ``similar awards'' for the small and medium 
employers. Consequently, the proposed regulations employ the gold and 
platinum distinctions for the small and medium employers.

Subpart B--Award Criteria

    The proposed rule provides specific award criteria for the large 
employer gold and platinum awards. Although the number of criteria an 
employer is required to satisfy in the proposed rule differs by award, 
the large employer criteria established by statute are generally 
incorporated across the large employer, medium employer, and small 
employer awards. Consequently, this introduction to Subpart B will 
describe the criteria generally. The preamble for the specific award 
provisions at proposed Sec. Sec.  1011.100, 1011.105, 1011.110 will 
describe the extent to which any of the criteria differ for the 
purposes of a particular award.
    Hiring Criterion: In sec. 3(b)(1)(B)(i), the Act requires that 
veterans constitute not less than 7 percent of all employees hired 
during the prior calendar year for the large employer gold award. Sec. 
3(b)(1)(C)(ii) similarly establishes a 10 percent hiring requirement 
for a large employer platinum award.
    The Act is clear that employers cannot satisfy this criterion by 
rounding up. The percentage of employees hired in the prior calendar 
year must be not less than the required percentage. Consequently, even 
if 6.99 percent of a large employer's new hires for the prior calendar 
year were veterans, the employer would not qualify for the large 
employer gold award. Likewise, 9.99 percent would not qualify a large 
employer for the large employer platinum award.
    Retention Criterion: The Act also establishes a retention criterion 
for the large employer awards. For the large employer gold award, sec. 
3(b)(1)(B)(ii) of the Act requires employers to have

[[Page 39375]]

retained not less than 75 percent of the veteran employees hired during 
the calendar year preceding the preceding calendar year for a period of 
at least 12 months from the date on which the employees were hired in 
order to be eligible for the award. Sec. 3(b)(1)(C)(iii) of the Act 
makes this an 85 percent requirement for the large employer platinum 
award.
    This language is somewhat complex; consequently, this preamble 
offers an example of the application of this criterion for an 
application that is submitted in 2020 for a large employer gold award. 
To satisfy the retention criterion, the employer applying in 2020 will 
need to look at all of the veteran employees it hired in 2018. If 75 
percent of those veteran employees hired in 2018 were retained for at 
least 12 months from the date of hire, then the employer satisfies this 
criterion.
    As with the hiring criterion, the retention criterion contains the 
term ``not less than.'' Consequently, a retention percentage of 74.99 
would not satisfy the large employer gold criterion, and a retention 
percentage of 84.99 would not satisfy the large employer platinum 
criterion.
    Employee Veteran Organization or Resource Group Criterion: Sec. 
3(b)(1)(B)(iii) of the Act sets out a criterion that requires employers 
to have established an employee veteran organization or resource group 
to assist new veteran employees with integration, including coaching 
and mentoring. Per the language of the statute, this must be a distinct 
organization or group. Although admirable, an employer would not 
satisfy this criterion if the employer provided coaching and mentoring 
to veteran employees but did so without having established an 
organization or group. Additionally, the organization or group must 
still be in existence as of December 31 of the year prior to the 
calendar year in which the employer applies for the award. For example, 
if an employer applies for an award in 2020, the organization or group 
must still be in existence on December 31, 2019.
    Leadership Program Criterion: The Act also sets out a leadership 
program criterion at sec. 3(b)(1)(B)(iv). To satisfy the leadership 
program criterion, employers must have established programs to enhance 
the leadership skills of veteran employees during their employment. A 
leadership program does not need to be provided exclusively to veterans 
in order to satisfy this criterion. For example, an employer could 
satisfy this criterion by offering a program to enhance leadership 
skills to all employees as long as veteran employees may participate. 
The primary concern for this criterion is that veterans have the 
opportunity to enhance their leadership skills and not that such 
programs only benefit veterans.
    As with the employee veteran organization or resource group 
criterion, the leadership program must be in existence as of December 
31, of the year prior to the calendar year in which the employer 
applies for the award.
    Human Resources Criteria: Sec. 3(b)(1)(C)(iv) of the Act 
establishes a criterion related to human resources support for 
veterans. Unlike the previous criteria, the human resources 
requirements vary based on the size of employer. Requirements for the 
human resources criteria are discussed in additional detail in the 
introduction to the small employer and medium employer award criteria.
    Pay Differential Criterion: The Act also sets out a pay 
differential criterion in sec. 3(b)(1)(C)(v). To satisfy this 
criterion, employers must provide each of its employees serving on 
active duty in the United States National Guard or Reserve with 
compensation sufficient, in combination with the employee's active duty 
pay, to achieve a combined level of income commensurate with the 
employee's salary prior to undertaking active duty. This criterion 
contains a couple of key terms--active duty and salary--that are 
defined in proposed Sec.  1011.005 and explained in the corresponding 
definitions preamble text.
    Additionally, VETS requests comments on whether to establish a 
minimum amount of time that an employer must provide the pay 
differential in order to satisfy the criterion. Currently, the proposed 
regulation offers no minimum, which means that the employer must 
provide the differential for as long as the employee is on active duty.
    Tuition Assistance Program Criterion: Finally, the Act at sec. 
3(b)(1)(C)(vi) includes a criterion that requires an employer to 
establish a tuition assistance program to support veteran employees' 
attendance in post-secondary education during the term of their 
employment. As with the leadership program criterion, this benefit need 
not be exclusively for veteran employees as long as veteran employees 
are able to benefit from it. Additionally, this assistance may take 
many forms, including financial assistance, leave assistance, or 
discounts on postsecondary education. Postsecondary education is 
defined in Sec.  1011.005.
    Other Criteria: In addition to the criteria established by the Act 
for large employers, sec. 3(b)(1)(E) permits the VETS to establish 
additional criteria. As discussed in the preamble for proposed Sec.  
1011.120, VETS has established an additional criterion regarding 
veteran-specific labor violations. VETS requests comments on what other 
criteria it should establish, such as criteria connecting employers to 
the workforce development system.
Section 1011.100: What are the criteria for the large employer HIRE 
Vets Medallion Award?
    Proposed Sec.  1011.100 sets out the criteria for the large 
employer awards as established in sec. 3(b)(1)(B)-(C) of the Act. These 
criteria are described in greater detail in the introduction to this 
subpart.
    Paragraph (a)(1) implements sec. 3(b)(1)(A) of the Act, which 
states the size requirements for the large employer award.
    Paragraph (a)(2) includes the criterion, further explained in 
proposed Sec.  1011.120, that employers are not eligible for an award 
if they have violated certain labor protections.
    Paragraphs (a)(3)-(6) implement the additional criteria for the 
large employer gold award at sec. 3(b)(1)(B) of the Act.
    Paragraph (b) sets out the requirements for the large employer 
platinum award.
    As with paragraph (a)(1), paragraph (b)(1) implements sec. 
3(b)(1)(A) of the Act, which states the size requirements for the large 
employer award.
    Paragraph (b)(2), as with paragraph (a)(2), includes the criterion, 
further explained in proposed Sec.  1011.120, that employers are not 
eligible for an award if they have violated certain labor protections.
    Paragraphs (b)(3)-(b)(6) set out the large employer gold criteria 
in section 3(b)(1)(B) of the Act that also apply to the large employer 
platinum criteria per sec. 3(b)(1)(C)(i).
    Paragraph (b)(7) implements the dedicated human resources 
professional criterion at sec. 3(b)(1)(C)(iv) of the Act. ``Dedicated 
human resources professional'' is further explained in proposed Sec.  
1011.005 (the definitions section) and the accompanying preamble text. 
Additionally, as further explained in proposed Sec.  1011.115, there is 
an exemption for employers with 5,000 or fewer employees.
    Paragraphs (b)(8) and (b)(9) set out the criteria at sec. 
3(b)(1)(C)(v)-(vi) of the Act.

[[Page 39376]]

Small and Medium Employer Awards
    Sec. 3(b)(2) of the HIRE Vets Act authorizes VETS to establish 
criteria for small and medium employers. In examining which criteria 
should apply to the awards for small and medium employers, this 
proposed rule attempts to balance two sometimes conflicting objectives. 
First, this rule seeks to ensure simplicity by keeping unique criteria 
for which employers must familiarize themselves to a minimum. Second, 
the proposed rule attempts to take into account the potentially 
different structures and resources of small and medium employers.
    In balancing these objectives, the proposed rule adopts most of the 
large employer criteria for the small and medium employer awards, but 
the criteria for small and medium employers differ in three fundamental 
ways.
    First, instead of requiring the small and medium employers to meet 
all of the criteria outlined for the large employers, the criteria for 
the small and medium employers include more options and alternatives. 
For example, employers applying for the small platinum award need only 
have two of the five forms of integration assistance identified for the 
large employer platinum award. Likewise, instead of needing to meet 
both the hiring criterion and the retention criterion, small and medium 
employers must meet either the hiring criterion or a criterion that 
includes retention and veteran employee percentage.
    The second major difference is the inclusion of this ``veteran 
employee percentage'' criterion for the small and medium employers. For 
small and medium employers who might not meet the hiring criterion, 
they may qualify for an award if they meet the retention requirements 
and if a certain percentage (7 percent for the gold and 10 percent for 
the platinum) of the employer's employees during the last year were 
veterans. The proposed rule includes this option to allow small and 
medium employers who did not hire last year, but demonstrated their 
commitment to veteran employment by hiring the year before, to receive 
a medallion for their longer term veteran hiring efforts.
    This proposed veteran employee percentage criterion is required in 
addition to the retention criterion to ensure that the employer has 
provided a commitment to veteran employment. Because small and medium 
employers have the choice between meeting the hiring criterion or the 
retention criterion, if the percentage of veteran employees criterion 
was not added to the retention criterion, an employer with 499 
employees could qualify for an award even if it only had a single 
veteran employee (so long as it had hired that veteran employee two 
years ago and had retained that veteran employee for at least twelve 
months). The addition of the veteran employee percentage criterion 
ensures employers are making substantive efforts to employ veterans 
even if they do not meet the hiring criterion. The veteran employee 
percentage criterion uses 7 percent as the minimum requirement for the 
gold award and 10 percent for the platinum. These percentages were 
selected to reflect the requirements of the hiring criterion. VETS 
requests comments on whether a small or medium employer that meets the 
other criteria but does not meet the hiring or retention criteria 
should receive an award if that employer meets the veteran employee 
percentage test. The Department also requests comments on whether 
percentages other than 7 and 10 should be used for this criterion.
    The proposed rule also establishes that to measure this veteran 
employee percentage criterion, an employer must use a snapshot analysis 
of what percentage of its employees were veterans on December 31 of the 
year prior to the year in which the employer applies for the award. 
VETS also requests comments on whether a snapshot on December 31 is an 
appropriate way to measure this criterion.
    Finally, the human resources criterion for small and medium 
employer awards differs from the human resources criterion for the 
large employer awards. Small and medium employers often do not have the 
same human resource support as large employers. Consequently, under 
this proposed rule, small and medium employers are instead required to 
meet a similar requirement of providing hiring, training, and retention 
services for veteran employees. This is further described in the 
definition of ``human resources veterans' initiative'' at proposed 
Sec.  1011.005.
Section 1011.105: What are the criteria for the medium employer HIRE 
Vets Medallion Award?
    Proposed Sec.  1011.105 sets out the criteria for the medium 
employer gold and platinum awards. Paragraph (a) contains the 
requirements for the medium employer gold award and paragraph (b) 
contains the requirements for the medium employer platinum award.
    Paragraph (a)(1) implements sec. 3(b)(2)(B) of the Act, which 
states that the medium employer award is for employers with more than 
50 but fewer than 500 employees.
    Paragraph (a)(2) includes the criterion, further explained in 
proposed Sec.  1011.120, that employers are not eligible for an award 
if they have violated certain labor protections.
    Paragraph (a)(3) sets out a criterion with two alternatives. To 
satisfy this criterion, employers must meet at least one of the two 
alternative criteria: The hiring criterion or the retention plus 
veteran employee percentage criterion. So long as the employer meets at 
least one of the two alternative criteria, it need not meet the other.
    Paragraph (a)(4) sets out another criterion with alternatives. This 
criterion is similar to the large employer gold award criteria in that 
it includes both forms of integration assistance included in the large 
employer gold award. However, unlike with the large employer gold 
award, medium employers applying for the gold award need only have one 
of the two forms of integration assistance: Either an employee veteran 
organization/resource group or a leadership program; the medium 
employer need not have both to satisfy this criterion. However, VETS 
requests comments as to rather the employer should be required to meet 
both of these requirements for the medium employer gold award.
    Paragraphs (b)(1)-(5) set out the requirements for the medium 
employer platinum award. Paragraphs (b)(1)-(3) are the same 
requirements that paragraphs (a)(1)-(3) establish for the medium 
employer gold award. However, the percentages in paragraph (b)(3) are 
higher than those at (a)(3) to reflect the higher standard to which 
platinum applicants will be held. Paragraph (b)(4) is similar to the 
medium employer gold integration assistance requirements in paragraph 
(a)(4). However, paragraph (b)(4) requires the employer to have both an 
employee veteran organization/resource group and a leadership program. 
This difference also reflects the fact that recipients of the platinum 
awards should be held to a higher standard.
    Paragraph (b)(5) is an additional requirement that distinguishes 
the medium employer platinum award from the medium employer gold award. 
Paragraph (b)(5) requires that applicants for the medium employer 
platinum award must also offer one of the forms of integration 
assistance required for the large employer platinum award. By allowing 
applicants for the medium employer platinum award to choose between the 
various forms of integration assistance that qualify an employer for

[[Page 39377]]

the large employer platinum award, the proposed rule recognizes that 
medium employers will likely not have as many resources as large 
employers. However, by still requiring applicants for the medium 
employer platinum award to provide at least one of these forms of 
integration assistance, the proposed rule ensures that the prestige of 
the medium employer platinum award is commensurate with that of the 
large employer platinum award.
Section 1011.110: What are the criteria for the small employer HIRE 
Vets Medallion Award?
    Proposed Sec.  1011.110 sets out the criteria for the small 
employer gold and platinum awards. Paragraph (a) contains the 
requirements for the small employer gold award and paragraph (b) 
contains the requirements for the small employer platinum award.
    Paragraph (a)(1) implements sec. 3(b)(2)(A) of the Act, which 
states that the small employer award is for employers with 50 or fewer 
employees.
    Paragraph (a)(2) includes the criterion, further explained in Sec.  
1011.120, that employers are not eligible for an award if they have 
violated certain labor protections.
    Paragraph (a)(3) sets out a criterion with two alternatives. To 
satisfy this criterion, employers must meet at least one of the two 
alternative criteria: The hiring criteria or the retention plus veteran 
employee percentage criteria. So long as the employer meets at least 
one of the two alternative criteria, it need not meet the other.
    Paragraphs (b)(1)-(4) set out the requirements for the small 
employer platinum award.
    Paragraphs (b)(1)-(3) are the same requirements that paragraphs 
(a)(1)-(3) establish for the small employer gold award. However, the 
percentages in paragraph (b)(3) are higher than those at (a)(3) to 
reflect the higher standard to which platinum applicants will be held. 
Paragraph (b)(4) is an additional requirement that distinguishes the 
small employer platinum award from the small employer gold award. This 
criterion requires that an employer have at least two of the five forms 
of integration assistance identified for the large employer platinum 
award. This proposal allows small employers to have additional 
flexibility in recognition of the differences in their resources and 
structure from large employers while also ensuring that recipients of 
the platinum award are held to a high standard in providing support for 
their veteran employees.
Section 1011.115: Is there an exemption for certain large employers 
from the dedicated human resources professional criterion for the large 
employer platinum HIRE Vets Medallion Award?
    Proposed Sec.  1011.115 implements sec. 3(b)(1)(D) of the Act, 
which provides an exemption for large employers who employ 5,000 or 
fewer employees from needing to satisfy the full-time dedicated human 
resources professional criterion for the large employer platinum award 
that is set out in Sec.  1011.100(b)(7) of this proposed rule. For 
additional information on how this regulation defines ``dedicated human 
resources professional,'' please see the definitions section of this 
proposed rule at Sec.  1011.005 and accompanying preamble.
Section 1011.120: Under what circumstances will VETS find an employer 
ineligible to receive a HIRE Vets Medallion Award for a violation of 
labor law?
    Proposed Sec.  1011.120 outlines the circumstances that would 
disqualify or delay an employer from receiving a HIRE Vets Medallion 
Award. The HIRE Vets Medallion Award recognizes those employers that 
recruit, employ, and retain veterans. Consistent with this goal, VETS 
proposes to disqualify from consideration those employers that have 
incurred violations under labor laws protecting veterans as 
administered by, or in conjunction with, VETS and the Office of Federal 
Contract Compliance Programs (OFCCP). Additionally, VETS proposes that 
employers debarred from holding federal contracts pursuant to the laws 
identified in this section would also be ineligible for the duration of 
the debarment, as would employers that, pursuant to the laws identified 
in this section, have had contracts terminated within a specified 
period of time prior to the issuance of an award. Finally, Sec.  
1011.120 would provide VETS with the discretion to delay the issuance 
of an award if it has information indicating that a significant 
violation of one of these laws has occurred that could lead to one of 
the disqualifying events discussed above.
    Proposed paragraph (a) of this section provides that any employer 
with an adverse labor law decision, stipulated agreement, contract 
debarment, or contract termination (as defined in proposed paragraphs 
(b) through (e) of this section), pursuant to specifically enumerated 
laws administered by VETS, will not be eligible to receive an award. 
The proposed list of specifically enumerated laws includes the 
following:
    <bullet> Uniform Services Employment and Reemployment Rights Act 
(USERRA);
    <bullet> Vietnam Era Veterans' Readjustment Assistance Act, as 
amended (VEVRAA).
    An adverse labor law decision is defined in proposed paragraph (b) 
of this section as a civil or criminal court judgment, a final 
administrative merits determination of an administrative adjudicative 
board or commission, or a decision of an administrative law judge or 
other administrative judge that is not appealed and that becomes the 
final agency action. The term ``civil or criminal court judgment'' is 
intended to include any final judgment of a trial court or appellate 
court level that has not been overturned at the time the award is to be 
issued. The proposed paragraph (b) goes on to establish a timeframe 
within which such decisions would render an employer ineligible for an 
award: A decision issued in the calendar year prior to the year in 
which applications are solicited; or in the calendar year in which 
applications are solicited, up until the issuance of the award.
    A stipulated agreement that would disqualify an employer from 
receiving an award is defined in proposed paragraph (c) of this 
section. This definition includes any agreement, including a settlement 
agreement, conciliation, agreement, consent decree, or other similar 
document, which contains an admission that the employer violated any of 
the laws outlined in paragraph (a). An agreement that states that it 
does not constitute evidence or admission of wrongdoing would not fall 
under this definition. As with paragraph (b), this proposed paragraph 
also sets forth that any such agreement that was entered into in the 
calendar year prior to the year in which applications are solicited, or 
in the calendar year in which applications are solicited up until the 
issuance of the award, would render the employer ineligible for an 
award. VETS seeks comments on whether certain violations of these laws 
should not result in disqualification.
    Proposed paragraphs (d) and (e) define the terms ``contract 
debarment'' and ``contract termination,'' respectively. They cover 
debarments or terminations of federal contracts effected through an 
order or voluntary agreement pursuant to any of the laws listed in 
proposed paragraph (a). Accordingly, as proposed, these definitions 
would not cover employers whose federal contracts were debarred or 
terminated pursuant to laws other than those identified in paragraph 
(a). Proposed paragraph (e) clarifies that, for contract terminations, 
the same

[[Page 39378]]

ineligibility timeframe as in paragraphs (b) and (c) applies--a 
termination that occurred in the calendar year prior to the year in 
which applications are solicited, or in the calendar year in which 
applications are solicited up until the issuance of the award. For 
debarments, proposed paragraph (d) sets forth that an employer will be 
ineligible for the duration of time the debarment is in effect, 
regardless of when it was first entered.
    Proposed paragraph (f) states that, even in the absence of the 
specific triggering events in proposed paragraphs (b) through (e), if 
VETS has credible information indicating that a significant violation 
of one of the laws in paragraph (a) may have occurred that could 
potentially result in one of the triggering events requiring 
disqualification, VETS retains the discretion to delay granting an 
award.
    VETS specifically requests comments on several provisions of this 
section. First, VETS seeks comments on whether to expand the list to 
include additional laws administered by, or in conjunction with, the 
Department, such as the Fair Labor Standards Act; the Occupational 
Safety and Health Act of 1970 (OSHA); or the Mine Safety and Health 
Act. The proposed language is limited to laws that provide labor 
protections specific to veterans because the focus of this rule is on 
the hiring and retention of veterans.
    Second, VETS is specifically interested in comments on the proposed 
basis for disqualifying an employer from receiving an award, including 
the scope of the definitions set forth in paragraphs (b) through (e), 
whether additional disqualifying events should be added, and whether 
the stated timeframes in which one of these triggering events will 
disqualify an employer should be adjusted. Third, VETS seeks comments 
on whether it should consider the nature of the violation (e.g., the 
magnitude of the violation; whether an applicant committed more than 
one violation during the relevant time period) as a factor in whether a 
violation is disqualifying. Fourth, VETS requests specific comment as 
to whether contract debarments under additional laws should disqualify 
an employer from receiving an award. VETS notes that changes to the 
labor violations included in this section will impact the cost of the 
program and, therefore, the application fees. A dramatic increase in 
the number of violations triggering disqualification would likely 
result in a noticeable increase to the application fees. Finally, with 
regard to proposed paragraph (f), VETS seeks comments on whether it is 
advisable to delay awards in those circumstances where it has 
information suggesting a significant violation may have occurred, 
whether ``credible information suggesting a significant violation'' is 
an appropriate standard, and/or whether a different standard should be 
set.

Subpart C--Application Process

Section 1011.200: How will VETS administer the HIRE Vets Medallion 
Award process?
    Proposed Sec.  1011.200 implements the requirements in sec. 2(b) of 
the Act regarding the award application process. Proposed Sec.  
1011.200 retains the statutory language with minor adjustments for 
context.
Section 1011.205: What is the timing of the HIRE Vets Medallion Award 
process?
    Proposed Sec.  1011.205 sets out the timing for the awards.
    The introductory paragraph implements the language in sec. 3(a)(1) 
of the Act and cross-references the application cap section.
    Paragraph (a) establishes a timeframe for when an employer's 
actions may qualify it for an award. This language is necessary in 
order to clarify what time period the award covers and to make the 
award process administratively feasible. Additionally, this language is 
consistent with the requirement in sec. 3(a)(2) of the Act, which 
states that VETS shall require the submission of information from 
employers about efforts from the calendar year prior to that in which 
the award is to be awarded.
    Paragraphs (b)-(e) reflect the statutory language at sec. 2(c) of 
the Act but paragraph (c) of Sec.  1011.205 provides additional clarity 
to employers about when applications are due.
    Paragraph (f) implements the statutory language at sec. 2(c)(5) of 
the Act. Additionally, paragraph (f) clarifies that applicants who 
receive a denial will also receive notice of the denial along the same 
timeline as the award notices.
Section 1011.210: How often can an employer receive the HIRE Vets 
Medallion Award?
    Proposed Sec.  1011.210 repeats the language in sec. 2(d) of the 
Act, which sets limitations on how frequently an employer is eligible 
to receive an award.
Section 1011.215: How will the employer complete the application for 
the HIRE Vets Medallion Award?
    Proposed Sec.  1011.215 describes the application process and 
implements requirements in sec. 3(a) of the HIRE Vets Act.
    Paragraph (a) implements sec. 3(a)(2) of the Act.
    Paragraph (b) makes clear that VETS may request information in 
addition to information relevant to determining whether an employer 
qualifies for an award. VETS may collect other information that might 
support the awards program, such as success stories. This paragraph is 
authorized under sec. 3(a)(2) of the Act, which authorizes VETS to 
require applicants to provide information in addition to information 
governing eligibility for an award.
    Paragraph (c) implements the attestation requirement of sec. 
3(a)(2) of the Act and clarifies that the individual providing the 
attestation can be an equivalent official if an employer does not have 
a chief executive officer or chief human resources officer.
    Paragraph (d) provides that the application form will be made 
available on the HIRE Vets Web site maintained by VETS.
    Paragraph (e) describes how applicants can submit the application 
form. VETS requires all applicants to submit the completed application 
electronically unless the applicant requests a reasonable accommodation 
under paragraph (f). Electronic submittal is more efficient and less 
costly to the applicant and to the agency for processing.
    Paragraph (f) describes how VETS will provide a reasonable 
accommodation to applicants.
    Paragraph (g) provides that if an employer's application is deemed 
incomplete, VETS will attempt to contact the employer for the missing 
information using the contact information provided on the application. 
Should the applicant not respond within the timeframe provided, the 
application will be deemed incomplete and will be denied.
Section 1011.220: How will VETS verify a HIRE Vets Medallion Award 
application?
    Proposed Sec.  1011.220 implements the requirements at sec. 3(a)(3) 
of the Act, which require the Secretary to verify all information 
provided in the applications to the extent that such information is 
relevant in determining whether or not an employer should receive an 
award or in determining the appropriate level of award. The second 
sentence of proposed Sec.  1011.220 explains that this verification 
will be conducted by reviewing the information that the employer is 
required to submit with the application. The application will require 
that employers provide information to show that they have met the 
criteria for the awards and to attest

[[Page 39379]]

to the veracity of that information. VETS has narrowly tailored its 
request for additional information to minimize the cost of applying for 
the award and because the requirement that the chief executive officer, 
the chief human resources officer, or an equivalent official attest 
under penalty of perjury that the information provided is accurate will 
provide a strong deterrent against false applications.
Section 1011.225: Under what circumstances will VETS conduct further 
review of an application?
    Proposed Sec.  1011.225 establishes that VETS may conduct further 
review of an application if VETS becomes aware of facts that indicate 
the application might have included incorrect information or that the 
applicant is ineligible under Sec.  1011.120. The proposed section 
describes the circumstances under which VETS will conduct this further 
review. This is intended to ensure that awards are only given to 
employers who actually meet the award criteria. If VETS initiates such 
review prior to issuing the Award, VETS will not be required to meet 
the timeline requirements in this part.
Section 1011.230: Under what circumstances can VETS deny or revoke an 
award?
    Proposed Sec.  1011.230 describes the circumstances under which 
VETS can deny or revoke an award. Paragraph (a) applies before the 
receipt of an award, and paragraph (b) applies after the receipt of an 
award. Under both paragraphs (a) and (b), VETS may either deny or 
revoke an award, as applicable, based on an employer's failure to 
provide documentation, VETS' determination that the employer's chief 
executive officer, the chief human resources officer, or an equivalent 
official falsely attested to information provided with an award 
application, or the determination that an employer is ineligible to 
receive an award pursuant to Sec.  1011.120. VETS notes that it can 
deny or revoke an award for both intentional and unintentional false 
statements by an employer's chief executive officer, the chief human 
resources officer, or an equivalent official.
    Paragraph (b)(4) states that VETS may also revoke an award for 
violations of the display restrictions at Sec.  1011.405.
    Paragraph (c) includes the reconsideration process that will be 
followed if VETS decides to deny or revoke an award.

Subpart D--Fees and Caps

Section 1011.300: What are the application fees for the HIRE Vets 
Medallion Award?
    Proposed Sec.  1011.300 sets out the application fees for the HIRE 
Vets Medallion Awards.
    Paragraph (a) summarizes the requirement in sec. 5(b) of the Act 
that the Secretary must establish an application fee that covers the 
cost of the program.
    Paragraph (b) explains that VETS periodically will use the Implicit 
Price Deflator for Gross Domestic Product (GDP Price Deflator) 
published by the U.S. Department of Commerce to adjust the fee for 
inflation. The GDP Price Deflator measures inflation by taking the 
current prices of all domestic production of final goods and services 
in the U.S. economy (nominal GDP) and converting it into constant-
dollars to measure the change in price levels. The GDP includes the 
output from the entire U.S. economy and will include any changes in 
consumption or investment. To capture the price increases that occur 
year to year in the cost of material and services, it will be necessary 
to escalate the fee using the GDP Deflator, which should capture the 
inflation occurring in the economy.
    Paragraph (b)(1) clarifies the process VETS will use if it needs to 
make a significant adjustment to the fee for any reason other than 
inflation.
    Paragraph (b)(2) provides that VETS will round the fee to the 
nearest dollar. VETS would do this for the administrative ease of both 
the agency and the applicants.
    The fees identified in the paragraph (b) table were reached by 
analyzing the costs of the program and the amount of review each 
application will require. This analysis is discussed further in the 
``Application Fee'' section of the Regulatory Procedures section of 
this preamble.
    Paragraph (c) provides that fees will be submitted by applicants 
under the HIRE Vets Medallion Program using the U.S. Treasury pay.gov 
system or an equivalent system. Pay.gov provides a proven, secure 
electronic payment method that facilitates employers paying the 
requisite fee to apply for the award. Pay.gov (https://www.pay.gov) 
will allow employers to make electronic payments to the Federal 
government using the Internet. Instructions for making the application 
fee payment will be included in the instructions for the application 
form. This method of payment provides an efficient and effective method 
of receiving and tracking fee payments for the Act.
    Paragraph (d) provides that the application fees are nonrefundable.
Section 1011.305: May VETS set a limit on how many applications will be 
accepted in a year?
    Proposed Sec.  1011.305 provides that VETS may limit how many 
applications it will accept in a given year. The proposed rule includes 
this provision so that VETS can prevent the system for reviewing 
applications from being overwhelmed by the number of applications in 
the first few years of the program. Should VETS decide to set a limit 
for how many applications will be accepted in a year, it will provide 
notice in advance of the application acceptance period on this number 
of applications that will be accepted.

Subpart E--Design and Display

Section 1011.400: What does a successful applicant receive?
    Proposed Sec.  1011.400 describes what recipients of the HIRE Vets 
Medallion Award will receive.
    Paragraph (a) implements the statutory language at sec. 3(c) of the 
Act.
    Paragraph (b) explains that VETS will create a digital image of the 
Medallion for recipients to use. This provision is proposed because 
recipients will likely want to display the award on digital platforms.
Section 1011.405: What are the restrictions on display and use of the 
HIRE Vets Medallion Award?
    Proposed Sec.  1011.405 implements sec. 4 of the Act.

Subpart F--Requests for Reconsideration

Section 1011.500: What is the process to request reconsideration of a 
denial or revocation?
    Proposed Sec.  1011.500 describes the reconsideration process 
applicants may use to request reconsideration over the denial of an 
award, the revocation of an award, or the denial of a particular award 
level. Because the reconsideration process applies to a voluntary award 
and because any reconsideration process must be paid for out of 
applicant fees, VETS has proposed a simple and limited reconsideration 
process to prevent a complicated reconsideration process from driving 
up the costs of the award application fees.
    Paragraph (a) describes the circumstances under which an applicant 
may request reconsideration for a determination and the timeline for 
that request. Paragraph (a) also clarifies

[[Page 39380]]

where a request for reconsideration must be submitted.
    Paragraph (b) describes what an employer must include in its 
request for reconsideration.
    Paragraph (c) states that VETS may request additional evidence or 
explanation from an employer requesting reconsideration.
    Paragraph (d) provides the timeline for VETS to respond to a 
request for reconsideration with a determination about whether to grant 
or deny the request.
    Paragraph (e) states that no additional Department review is 
available. Therefore, no additional administrative review is available 
anywhere in the Department.

Subpart G--Record Retention

Section 1011.600: What are the record retention requirements for the 
HIRE Vets Medallion Award?
    This section is necessary to protect the integrity of the awards. 
VETS chose a record retention period of two years to provide sufficient 
time to examine any issues that arise from applications while not being 
unduly burdensome to applicants.

Regulatory Procedures

Executive Orders 12866 and 13563: Regulatory Planning and Review

Introduction
    Executive Order 13563 directs agencies to propose or adopt a 
regulation only upon a reasoned determination that its benefits justify 
its costs; tailor the regulation to impose the least burden on society, 
consistent with achieving the regulatory objectives; and in choosing 
among alternative regulatory approaches, select those approaches that 
maximize net benefits. Executive Order 13563 recognizes that some 
benefits are difficult to quantify and provides that, where appropriate 
and permitted by law, agencies may consider and discuss qualitatively 
values that are difficult or impossible to quantify, including equity, 
human dignity, fairness, and distributive impacts.
    Under Executive Order 12866, the Office of Management and Budget 
(OMB) must determine whether a regulatory action is significant and 
therefore subject to the requirements of that Executive Order and to 
review by OMB. 58 FR 51735. Section 3(f) of Executive Order 12866 
defines a ``significant regulatory action'' as an action that is likely 
to result in a rule that: (1) Has an annual effect on the economy of 
$100 million or more, or adversely affects in a material way a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local or tribal governments or 
communities (also referred to as economically significant); (2) creates 
serious inconsistency or otherwise interferes with an action taken or 
planned by another agency; (3) materially alters the budgetary impacts 
of entitlement grants, user fees, or loan programs, or the rights and 
obligations of recipients thereof; or (4) raises novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in Executive Order 12866. Id.
    The Office of Management Budget did not find rule significant under 
Executive Order 12866 and, therefore, waived review. We analyzed costs 
and benefits of this rule using 2016 employment and wage data from the 
Bureau of Labor Statistics. The cost analysis uses a ten year time 
horizon. This benefits analysis is qualitative and appears at the end 
of this section. Since the benefits analysis is qualitative, there will 
be no analysis of net benefits (benefits minus costs). VETS's estimates 
of costs are presented as follows:
    <bullet> Veteran employment and potential eligibility for the 
award--Estimates how many employers may meet the application 
requirements of the award.
    <bullet> Unit costs--Estimates the unit costs of complying with the 
application requirements of the award.
    <bullet> Participation rates--Estimates how many eligible employers 
will potentially choose to apply for the award.
    <bullet> Government costs--Estimates the costs to the government 
for processing the applications and the costs to develop the system to 
support the review and approval process.
    <bullet> Total annualized costs--Estimates the total annualized 
private and government costs of the program.
    Costs for this regulation are uncertain due partly to the program 
being entirely new with no obvious equivalents; VETS cannot anticipate 
the number of employers that will choose to participate in the program. 
For this reason, this analysis contains estimates that are based on 
very limited data. This is the first veteran hiring award established 
by the Department to recognize employers for their accomplishments in 
recruiting, retaining, and hiring veterans. VETS welcomes comments on 
all of the estimates provided below.

Veteran Employment and Potential Eligibility for the Award

    As of 2016 there were 20.9 million veterans,\1\ making up 10 
percent of the civilian non-institutionalized population over the age 
of 18. While the total number of veterans varies over time, there are 
between 240,000 and 360,000 service members who leave military service 
each year according to a 2013 White House report.\2\ In 2016 there were 
10 million veterans employed according to data collected from the 
Current Population Survey and reported by the Bureau of Labor 
Statistics (BLS) making up close to 7 percent of the U.S. employed 
population.
---------------------------------------------------------------------------

    \1\ Bureau of Labor Statistics, U.S. Department of Labor, 
Current Population Survey, 2016.
    \2\ Watson, Ben, (2014) Veteran Unemployment Rate Drops, But 
Still Outpaces the Rest of the Country. www.defenceone.com, May 
2,2014. Retrieved from: http://www.defenseone.com/news/2014/05/D1-Watson-veteran-unemployment-rate-drops-still-outpaces-rest-country/83692/.
---------------------------------------------------------------------------

    The three leading industry sectors for veteran employment are 
Manufacturing (NAICS code 31-33), with 1.3 million veterans; Wholesale 
and retail trade (NAICS code 42, 44-45) with 1.1 million veterans; and 
Professional and business services (NAICS code 54-56) with 1.1 million 
veterans. Evaluating veteran employment as a percentage of total 
employment by industry highlights the various industries where veterans 
make up more than 7 percent of the employed population. Based on the 
data, it appears there are many industries where a typical employer can 
readily meet the basic criteria of hiring 7 percent or more veteran 
employees while it may be more difficult in other industries.
    Veteran employment levels at the 3 digit NAICS level (industry 
subsectors) were mapped to BLS data from the Current Employment Survey 
to derive veteran employment as a percentage of total employees by 
NAICS code. The results of this comparison are presented in Table 1. A 
majority of private industry subsectors have veteran employment with 7 
percent or higher; the industries with the highest percentages were the 
Petroleum and coal products industry with 22.4 percent veteran 
employment, followed by Utilities with 20.5 percent veteran employment. 
The two industries with the lowest percentage of veteran employment 
are: Management of companies and enterprises with 0.5 percent and 
Internet publishing and broadcasting and web search portals with 1.0 
percent veteran employment. Other industry sectors where the percentage 
of veterans employed is

[[Page 39381]]

lower than the national average are Healthcare and Social assistance 
sector with 3.5 percent, and the Accommodations and food services 
sector with 1.6 percent veteran employment. The concentration of 
veteran employment in Utilities and Manufacturing industries is a 
reflection of the type of military experience many veterans offer when 
seeking jobs that match their skill set.

                                       Table 1--Veteran Employment in 2016
----------------------------------------------------------------------------------------------------------------
                                                                      Veteran          Total        Percent of
                            Industry                              employment \1\  employment \2\     veterans
                                                                  (in thousands)  (in thousands)   employed (%)
----------------------------------------------------------------------------------------------------------------
Total Employment................................................          10,129         151,423             6.7
Mining, quarrying, and oil and gas..............................              92             626            14.7
Construction....................................................             588            6711             8.8
Manufacturing...................................................           1,285          12,348            10.4
Durable goods manufacturing.....................................             898           7,719            11.6
    Nonmetallic mineral products................................              39             408             9.6
    Primary metals and fabricated metal products................             156           1,763             8.8
    Machinery manufacturing.....................................             125           1,080            11.6
    Computers and electronic products...........................             113           1,048            10.8
    Electrical equipment and appliances.........................              30             383             7.8
    Transportation equipment....................................             269           1,625            16.6
    Wood products...............................................              34             392             8.7
    Furniture and fixtures......................................              28             389             7.2
    Miscellaneous manufacturing.................................             103            591.            17.4
Nondurable goods manufacturing..................................             387           4,629             8.4
    Food manufacturing..........................................              92           1,554             5.9
    Beverage and tobacco products...............................              26             233            11.2
    Textiles, apparel, and leather..............................              23             371             6.2
    Paper and printing..........................................              76             818             9.3
    Petroleum and coal products.................................              25             112            22.4
    Chemicals...................................................             106             811            13.1
    Plastics and rubber products................................              38             699             5.4
Wholesale and retail trade......................................           1,090          21,687             5.0
Wholesale trade.................................................             260           5,867             4.4
Retail trade....................................................             830          15,820             5.2
Transportation and utilities....................................             753           5,546            13.6
Transportation and warehousing..................................             638           4,989            12.8
Utilities.......................................................             114             556            20.5
Information.....................................................             180           2,772             6.5
Publishing, except Internet.....................................              15             730             2.1
Motion pictures and sound recording industries..................              13             420             3.1
Radio and TV broadcasting and cable subscriptions programming...              42             269            15.6
Internet publishing and broadcasting and web search portals.....               2             201             1.0
Telecommunications..............................................              96             795            12.1
Data processing, hosting, and related services..................              10             300             3.3
Libraries, archives, and other information services.............               2              59             3.4
Financial activities............................................             496           8,285             6.0
Finance and insurance...........................................             309           6,142             5.0
    Finance.....................................................             174           3,559             4.9
    Insurance...................................................             135           2,583             5.2
Real estate and rental and leasing..............................             187           2,143             8.7
    Real estate.................................................             146           1,559             9.4
    Rental and leasing services.................................              41             583             7.0
Professional and business services..............................           1,092          20,136             5.4
Professional and technical services.............................             658           8,877             7.4
Management, administrative, and waste services..................             433          11,259             3.8
    Management of companies and enterprises.....................              11           2,241             0.5
    Administrative and support services.........................             384           8,613             4.5
    Waste management and remediation services...................              38             405             9.4
Education and health services...................................             826          22,616             3.7
Educational services............................................             161           3,560             4.5
Health care and social assistance...............................             664          19,056             3.5
    Hospitals...................................................             266           5,025             5.3
    Health services, except hospitals...........................             322          10,396             3.1
    Social assistance...........................................              76           3,636             2.1
Leisure and hospitality.........................................             344          15,620             2.2
Arts, entertainment, and recreation.............................             128           2,235             5.7
Accommodation and food services.................................             216          13,386             1.6
    Accommodation...............................................              49           1,947             2.5
    Food services and drinking places...........................             167          11,439             1.5
Other services..................................................             351           5,685             6.2
Other services, except private households.......................             337           4,961             6.8
    Repair and maintenance......................................             150           1,289            11.6
    Personal and laundry services...............................              68           1,445             4.7

[[Page 39382]]

 
    Membership associations and organizations...................             119           2,950             4.0
Government--Local \3\...........................................             708          14,339             4.9
----------------------------------------------------------------------------------------------------------------
Source:
\1\ Bureau of Labor Statistics, Current Population Survey, 2016.
\2\ Bureau of Labor Statistics, Current Employment Statistics, 2016.
\3\ U.S. Census of Governments, 2012.
(See Spreadsheets, Exhibit X for all sources and derivation).

    The job posting site Indeed\3\ identified five occupational 
categories where veterans have the highest levels of employment. These 
are: Transportation and Material Moving, Installation Maintenance and 
Repair, Protective Service, Management, and Construction and 
Extraction. Many veterans find the skills and experience they developed 
while in the military align better with these occupations, making the 
transition to a civilian job easier.\3\
---------------------------------------------------------------------------

    \3\ Culbertson, Daniel, (2016) A Deep Look at the Data: How Are 
Veterans Doing in Today's Workforce? Indeed blog, November 10, 2016. 
Retrieved from: http://blog.indeed.com/2016/11/10/veterans-employment/.
---------------------------------------------------------------------------

    Due to the fact the proposed award program requires a fee, it was 
determined that employers with less than five employees, are relatively 
unlikely to participate in the program (although they are still 
eligible to apply for the award if they choose). Very small employers 
with less than 5 employees will most likely not hire often or may not 
choose to invest resources in actions that would qualify them for the 
award program, thus this analysis contains three groupings of employer 
size: small employers with 5 to 49 employees; medium employers with 50 
to 499 employees; and large employers with over 500 employees. These 
groupings were based on the availability of data in the U.S. Census 
Bureau, 2014 Statistics of U.S. Businesses (SUSB),\4\ which closely 
approximates the definition of small, medium and large employers in the 
statute. The SUSB data showed a total of 2,361,000 employers with more 
than four employees. However, knowing the percentage of veterans in an 
industry's work force does not indicate how many employers in that 
industry can meet the quantitative criteria for receiving the award. 
For example, if 7 percent of an industry's workforce is veterans there 
will be many employers that are above and below this average in any 
given year's hiring. In order to estimate the number of potentially 
eligible employers (those meeting the quantitative criteria) in an 
industry, we need to be able to estimate the effects of turnover on the 
ability to meet retention criteria, the percentage of employers that 
hire 7 percent or more veterans, and the percentage with 7 percent 
employees in their current work forces. VETS welcomes comments on the 
estimates of veteran employment, and the percentage of employers in 
industries that meet or exceed the proposed hiring criteria of 7 
percent veterans.
---------------------------------------------------------------------------

    \4\ U.S. Census Bureau, 2014. Statistics of U.S. Businesses 
Annual Datasets by Establishment Industry: U.S & States, NAICS, 
detailed employment sizes. Accessed on 6/15/2017 at https://www.census.gov/data/datasets/2014/econ/susb/2014-susb.html.
    Eligibility estimates by VETS. See text and spreadsheets 
(exhibit X).
---------------------------------------------------------------------------

    The effects of turnover on the ability to meet retention criteria 
may be the most difficult quantitative criteria to estimate. Average 
separation rates across all industries are such that if veterans are 
typical of all workers, a 75 percent retention rate would be difficult 
to meet.\5\ However, published separation rates include seasonal and 
temporary employments, which are excluded under the definition of 
``employee'' and subsequently from the calculation of retention rates 
in this proposed rule. Absent more detailed data, VETS assumes that 
half of the employers able to meet a 7 percent hiring rate will not be 
able to meet a requirement for 75 percent retention. VETS welcomes 
comments on the estimates of employment turn over, and the percentage 
of employers in industries able to meet the retention criteria.
---------------------------------------------------------------------------

    \5\ Bureau of Labor Statistics (BLS) Job Openings and Labor 
Turnover (2017). News Release; For release 10:00 a.m. (EDT), July 
11, 2017 https://www.bls.gov/news.release/pdf/jolts.pdf.
---------------------------------------------------------------------------

    For this analysis, if we make the simplifying assumptions that the 
percentage of veterans currently in the workforce are typical of 
available new hires in an industry, and that each new hire and each 
employee have an equal chance of being a veteran, then we can use the 
binomial distribution to estimate the probability that an employer has 
more than 7 percent veterans among new hires or more than 7 percent 
veterans among existing employees. The binomial distribution is 
designed to calculate the probability that 7 percent or more employees 
in a set of employees are veterans given the probability of an event 
(whether a given new hire or employee is a veteran). The application of 
the binomial distribution requires estimates of the number of new hires 
per year and the number of employees. For this purpose, VETS used U.S. 
Census Bureau, 2014 Statistics of U.S. Businesses (SUSB) \6\ data on 
the number of employers and employees for small employers, medium 
employers and large employers. These averages of new hires were 13 
employees per employer for small employers, 123 employees per employer 
for medium employers and 3,000 employees per employer for large 
employers. VETS estimated that these employers would hire 25 percent of 
their workforce in any given year. The SUSB data shows a total of 
2,311,602 employers with more than four employees. Of these, VETS 
estimates that 424,952, or 18 percent of all employers in the size 
range, would be potentially eligible for the program.
---------------------------------------------------------------------------

    \6\ U.S. Census Bureau, 2014. Statistics of U.S. Businesses 
Annual Datasets by Establishment Industry: U.S & States, NAICS, 
detailed employment sizes. Accessed on 6/15/2017 at https://www.census.gov/data/datasets/2014/econ/susb/2014-susb.html.
    Eligibility estimates by VETS. See text and spreadsheets 
(exhibit X).
---------------------------------------------------------------------------

    The complete formulas for the probability calculation are given in 
the spread sheets (Docket exhibit X). There are four probabilities 
needed for these calculations:

PH = probability more than 7 percent of new hires are veterans;
PE = the probability that more than 7 percent of employees are 
veterans;
PR = the probability that 75 percent of veteran hires are retained 
(estimated to be .5 in all cases); and

[[Page 39383]]

PLYH = the probability that an employer hired at least one veteran in 
the year prior to the current year.

    Given these probabilities the formula used in the calculations for 
small and medium employers is:

Total probability = PH + (1-PH)*PE*PLYH*PR

    For large employers, the formula is somewhat simpler:

Total Probability = PH + (1-PH)*PLYH*PR

    Table 2 shows the results for the estimate of potentially eligible 
employers by size class and industry.

                                     Table 2--Estimate of Eligible Employers
----------------------------------------------------------------------------------------------------------------
                                                                        Potentially eligible employers
                                                    Total    ---------------------------------------------------
                    Industry                      employers      Small        Medium       Large
                                                     (5+)      employers    employers    employers      Total
                                                                 (5-49)      (50-499)      (500+)
----------------------------------------------------------------------------------------------------------------
Forestry, logging, fishing, hunting, and               2,837          536          389           93        1,017
 trapping......................................
Mining, quarrying, and oil and gas extraction..        9,350        3,377        1,322            0        4,700
Construction...................................      204,561       51,059        8,464          915       60,438
Nonmetallic mineral products...................        6,136        1,430          699          244        2,374
Primary metals and fabricated metal products...       35,064        7,638        3,613        1,025       12,276
Machinery manufacturing........................       14,706        3,928        2,432          682        7,043
Computers and electronic products..............        7,439        1,743        1,279          519        3,541
Electrical equipment and appliances............        3,359          553          398          210        1,161
Transportation equipment.......................        6,458        2,121        1,575          550        4,246
Wood products..................................        7,325        1,588          705          165        2,457
Furniture and fixtures.........................        7,641        1,417          456           84        1,958
Miscellaneous manufacturing....................       11,429        5,057        1,344          340        6,741
Food manufacturing.............................       13,073        1,812          722           59        2,593
Beverage and tobacco products..................        2,653          773          247           90        1,110
Textiles, apparel, and leather.................        6,238          998          264           24        1,286
Paper and printing.............................       14,483        3,426        1,404          350        5,179
Petroleum and coal products....................          710          253          197          113          563
Chemicals......................................        6,476        1,746        1,341          589        3,676
Plastics and rubber products...................        7,397          788          517           18        1,323
Wholesale trade................................      133,958       15,239        2,664            2       17,905
Retail trade...................................      258,174       37,563        4,402           42       42,007
Transportation and warehousing.................       61,190       20,258        6,418        2,245       28,921
Utilities......................................        2,837        1,185          640          194        2,019
Publishing, except Internet....................        9,340          455           37            0          493
Motion pictures and sound recording industries.        4,802          395           30            0          425
Radio and TV broadcasting and cable                    2,857        1,127          344          111        1,582
 subscriptions programming.....................
Telecommunications.............................        3,705        1,097          498          160        1,755
Data processing, hosting, and related services.        4,885          334           88            0          422
Libraries, archives, and other information             3,237          269           37            0          307
 services......................................
Finance........................................       33,143        3,767        1,228            8        5,003
Insurance......................................       33,515        4,844          476           14        5,334
Real estate....................................       47,711       12,428        2,509          778       15,714
Rental and leasing services....................        9,613        1,774          424          166        2,364
Professional and technical services............      205,067       42,079        7,476        2,116       51,670
Management of companies and enterprises........       23,944           66            6            0           72
Administrative and support services............      108,014       12,007        2,405            3       14,415
Waste management and remediation services......        8,782        2,240          570          168        2,977
Educational services...........................       43,887        4,718        1,320            1        6,039
Hospitals......................................        3,407           16          388           36          441
Health services, except hospitals..............      247,348       20,285        1,726            0       22,011
Social assistance..............................       67,460        3,486          270            0        3,756
Arts, entertainment, and recreation............       42,698        6,202        1,700           59        7,962
Accommodation..................................       29,467        1,935          130            0        2,065
Food services and drinking places..............      273,382       10,708          262            0       10,970
Repair and maintenance.........................       61,091       20,895        1,820          610       23,325
Personal and laundry services..................       58,697        7,987          395            0        8,382
Membership associations and organizations......      121,174       13,647        1,017            0       14,664
Government--Local..............................       40,882            0        8,273            0        8,273
                                                ----------------------------------------------------------------
    Total......................................    2,311,602      337,247       74,922       12,784      424,952
----------------------------------------------------------------------------------------------------------------
Source: U.S. Census Bureau, 2014. Statistics of U.S. Businesses Annual Datasets by Establishment Industry: U.S &
  States, NAICS, detailed employment sizes. Accessed on 6/15/2017 at https://www.census.gov/data/datasets/2014/econ/susb/2014-susb.html.
U.S. Census Bureau, 2012. Government Organization Summary Report: 2012. Accessed on 7/21/2017 at https://www2.census.gov/govs/cog/g12_org.pdf.
Eligibility estimates by VETS.
See text and spreadsheets (Exhibit X).


[[Page 39384]]

Unit Cost

    Using the information provided in the stakeholder meetings, and 
estimates from similar analysis done by other Department of Labor 
agencies, burden costs were estimated by employer size for each aspect 
of the application process including rule familiarization, collection, 
filling out the form, and follow-up/requests for reconsideration. VETS 
invites public comment on the steps employers would have to take to 
apply for the award program, how long each step would take and who 
would be involved in the process of applying for the award.
    Rule familiarization costs are estimated to take one hour for all 
employers regardless of size; this is based on OSHA's recordkeeping 
rule updated in 2014.\7\ This activity would typically be performed by 
a human resources manager at a large or medium size employer or by a 
person with equivalent responsibilities at a small employer. Using the 
data from the May 2016 BLS Occupational Employment survey (OES), the 
mean hourly wage of the human resources manager is $57.79. For the 
purposes of this analysis, VETS estimates a fully loaded wage rate, 
including fringe benefits and overhead, resulting in a doubling of the 
OES wage rate.\8\ The total hourly wage being used to estimate the cost 
of familiarization is $115.58. The regulation is structured by employer 
size which would not require employers to consider all aspects of 
eligibility but only those that pertain to their size. For these 
reasons one hour was estimated for rule familiarization of the award 
program requirements of eligibility and the application form 
instructions.
---------------------------------------------------------------------------

    \7\ Occupational Injury and Illness Recording and Reporting 
Requirements: North American Industry Classification System Update 
and Reporting Revisions (docket number: OSHA-2010-0019-0127).
    \8\ The value of two is recommended by HHS in HHS, Guidelines 
for Regulatory Analysis, 2016, p. 33.
---------------------------------------------------------------------------

    The eligibility requirements for the award program require that all 
employers compile information needed to fill out the application form 
and retain the information for two years. VETS estimated this would 
require 5 hours for large employers and 3 hours for medium and small 
employers. Each criterion for eligibility will have an entry in the 
application form. Information requested will include the following: 
Employer address and other identifying information, veteran employment 
data, descriptions of the relevant veteran programs, and descriptions 
of the benefits offered to veterans. These estimates are an average for 
the gold and platinum award requirements. This activity will likely be 
performed by human resource specialists for a large or medium size 
employer. Using the data from the May 2016 BLS Occupational Employment 
survey (OES), the mean hourly wage of the human resources specialist is 
$31.20. Adding overhead and fringe benefits, the fully loaded hourly 
wage rate used to estimate the collection of information is $62.40. For 
a small employer, this activity is anticipated to be done by a payroll 
and timekeeping clerk, the mean hourly wage for this position as 
reported by BLS is $20.95, and adding the fringe benefits and overhead 
results in an hourly wage of $41.90.
    Three hours of labor was estimated by VETS for a medium and small 
employer to compile information for the form, this was determined based 
on the number of award criteria, and due to human resources staff in 
medium and small employers being more familiar with the day to day 
management of an employer. At the stakeholder meetings held the week of 
June 5, 2017, smaller employers stated all the information needed to 
apply would come directly from the owner and would be easily obtained. 
VETS estimated five hours for large employers due to the additional 
information required to match the criteria for eligibility and the time 
for a human resource manager to determine if the programs offered by 
the employer meet the regulation criteria. Larger employers at the 
stakeholder meetings provided a range of one to four days, based on 
their past experience in applying for other award programs such as the 
Employer Support of the Guard and Reserve (ESGR) Freedom Award.\9\ The 
application form for VETS's award program requires employers to provide 
employment and descriptive information for as many as seven fields to 
as few as two fields depending on the size of the employer and the 
award level. This is less time consuming than the information requested 
for the ESGR Freedom Award. For these reasons, an average of five hours 
was estimated for large employers, and an average of three hours was 
estimated for medium and small employers to collect and retain needed 
information.
---------------------------------------------------------------------------

    \9\ Employer Support of The Guard and Reserve Freedom Award is 
given to employers who are nominated to recognize those that support 
their employees who serve in the Guard and Reserve. There are up to 
15 awards presented each year by frim size and to the public sector. 
http://www.freedomaward.mil/.
---------------------------------------------------------------------------

    Large and medium size employers are expected to incur the cost for 
running a query to identify the number of veterans hired and veterans 
retained for the years requested on the application form. The majority 
of large and medium employers will have a database system for managing 
their workforce; this system typically includes the hire date and 
various demographic information about their employees. Running a query 
specifically for this application form is estimated to take two hours 
by a database administrator at a large or medium size employer 
according to comments received from the stakeholder meeting in early 
June of 2017. Using the data from the May 2016 BLS Occupational 
Employment survey (OES), the mean wage of the database administrator is 
$41.89. Adding overhead and fringe benefits,\10\ the total wage used to 
estimate the cost of this task is $83.78. Small employers with less 
than 50 employees typically do not manage their workforce using a 
database, and due to the closer interactions among employees at small 
employers, the payroll clerk would know most of the employees 
individually. Thus, a small employer would not have a need to run a 
query.
---------------------------------------------------------------------------

    \10\ Bureau of Labor Statistics (BLS) Occupational Employment 
Statistics (OES) (2017). Fringe markup is from the following BLS 
release: Employee Costs for Employee Compensation news release text; 
For release 10:00 a.m. (EDT), June 9, 2017. https://www.bls.gov/news.release/pdf/ecec.pdf.
_____________________________________-

    Once the information has been gathered by an employer, applicants 
will need to enter the information in the form and enter the payment 
information needed on www.pay.gov; this was estimated to take 2 hours 
for a large employer, 1.5 hours for a medium employer, and 1 hour for a 
small employer. These burden estimates are an average for the gold and 
platinum award requirements. Large employers are expected to take 2 
hours due to the additional criteria required to be eligible for the 
award, this activity would be done by a human resource specialist. A 
medium employer is expected to take 1.5 hours because there are fewer 
criteria than a large employer, this activity would be done by a human 
resource specialist. Using the data from the May 2016 BLS Occupational 
Employment survey (OES), the mean wage of a human resource specialist 
is $31.20. Adding overhead and fringe benefits, the total wage used to 
estimate the cost of this task is $62.40. A small employer is estimated 
to take 1 hour because there are fewer criteria than a medium size 
employer. For a small employer, a payroll and timekeeping clerk would 
most likely perform this task, with a mean hourly wage of $20.95 as 
reported in the BLS 2016 OES, with

[[Page 39385]]

added fringe benefits and overhead, results in an hourly wage of 
$41.90.
    The form requires the attestation of an executive (CEO, CFO, or 
equivalent) that the information on the form is accurate and true. It 
is expected that this would take 15 minutes for all employers applying 
for the award and would most likely require the executive to take the 
time to review the form. For a large and medium size employer, this 
activity will be performed by an executive with a mean hourly wage of 
$93.44 as reported in the BLS 2016 OES, then adding fringe benefits and 
overhead the hourly wage for this task would be $186.88. At a small 
employer where the executive positions may not exist, this task may be 
done by someone with equivalent responsibilities and duties, such as 
the owner. For the purposes of estimating the cost of attestation for 
small employers we are using the wage rate of a human resource manager 
with a mean hourly wage of $57.79 as reported in the BLS 2016 OES, 
adding fringe benefits and overhead results in a fully loaded wage for 
this task of $115.58. For a smaller employer, the position of a general 
and operations manager would be similar to the owner of the firm, the 
mean hourly wage is $58.70 as reported in the BLS 2016 OES, adding 
fringe benefits and overhead results in a fully loaded wage for this 
task of $117.40.
    Following up on incomplete applications is estimated to take 30 
minutes for 5 percent of employers applying, and a request for 
reconsideration would take 30 minutes for 1 percent of employers 
applying. At a large and medium size employer, following up on an 
application would be done by the human resource specialist with an 
hourly wage of $62.40 (including fringe benefits and overhead), and a 
reconsideration would be done by a human resource manager with an 
hourly wage of $115.58 (including fringe benefits and overhead). At a 
small employer, the payroll clerk may likely follow up on an 
application, with an hourly wage of $41.90 (including fringe benefits 
and overhead), and the human resource manager equivalent would be 
involved in a reconsideration of a denied application, with an hourly 
wage of $115.58 (including fringe benefits and overhead). The majority 
of large and medium employers have a human resource staff which manage 
different aspects of the workforce, or outsource the managing of the 
database for tracking the employer's workforce over time. As a result, 
large and medium employers are expected to have the same occupations 
involved in the process of applying for the award, while a different 
set of occupations were identified for small employers which typically 
do not have dedicated human resource staff or a database administrator.

                                     Table 3--Burden Costs by Employer Size
----------------------------------------------------------------------------------------------------------------
        Tasks by employer size                  Resource               Wage            Hours           Cost
----------------------------------------------------------------------------------------------------------------
Large Employers:
    Rule familiarization..............  HR manager..............            $116             1.0            $116
    Data collection large employers...  HR specialists..........              62             5.0             312
    Query report large employers......  DB Administrators.......              84             2.0             168
    Filling form, large employers.....  HR specialists..........              62             2.0             125
    Executive signature...............  Executive...............             187            0.25              47
    Follow up (assume 5 percent)......  HR specialists..........              62             0.5              31
    Reconsideration if denied award (1  HR manager..............             116             0.5              58
     percent).
                                                                 -----------------------------------------------
    Average unit cost per employer....  ........................  ..............  ..............             857
Medium Employer Activities:
    Rule familiarization..............  HR manager..............             116             1.0             116
    Data collection medium employers..  HR specialists..........              62             3.0             186
    Query report medium employers.....  DB Administrators.......              84             2.0             168
    Filling form medium employers.....  HR specialists..........              62             1.5              93
    Executive signature...............  Executive...............             187            0.25              47
    Follow up (assume 5 percent)......  HR specialists..........              62             0.5              31
    Reconsideration if denied award (1  HR manager..............             116             0.5              58
     percent).
                                                                 -----------------------------------------------
    Average unit cost per employer....  ........................  ..............  ..............             699
Small Employer Activities:
    Rule familiarization..............  HR manager..............             116             1.0             116
    Data collection small employers...  Payroll and timekeeping               42             3.0             126
                                         clerks.
    Filling form, small employers.....  Payroll and timekeeping               42             1.0              42
                                         clerks.
    Executive signature...............  HR manager..............             116            0.25              29
    Follow up (assume 5 percent)......  Payroll and timekeeping               42             0.5              21
                                         clerks.
    Reconsideration if denied award (1  HR manager..............             116             0.5              58
     percent).
                                                                 -----------------------------------------------
    Average unit cost per employer....  ........................  ..............  ..............             392
----------------------------------------------------------------------------------------------------------------
Source: Bureau of Labor Statistics, Occupational Employment Statistics 2016.
(See Spreadsheets, Exhibit X for all sources and derivation)

    The burden estimates were mainly driven by the duration of time 
expected for each aspect of the application process, and the type of 
occupation identified as performing the various activities for the 
employer size.

Government Costs

    The cost to the government involves the intake, review, 
verification, processing of the applications, and notification/
distribution of the award. To efficiently process applications, VETS 
will develop and maintain a system to electronically receive, review 
applications to determine eligibility and issue the awards. The cost 
for such a system would include IT hardware and software, IT 
maintenance, helpdesk costs, and VETS program management personnel 
costs. VETS has estimated lifecycle costs. The estimated cost of 
creating an application system and form is approximately $933,100 which

[[Page 39386]]

annualized over 10 years at a 3 percent discount rate results in a cost 
of $109,388 per year.
    The business process for the intake, review, and processing of 
applications was estimated using average wage data from BLS Occupation 
codes for each phase including solicitation, application processing, 
application review, award notification, and reporting to Congress. The 
cost to the government for processing is estimated to be $2.6 million 
dollars per year based on 10,728 applications being processed per year.
    As part of the business process there will be costs associated with 
program outreach, messaging, and notification of award winners. This is 
estimated to cost $245,086 annually. An outreach specialist is 
estimated to spend 1,140 hours involved in these tasks. The outreach 
specialists with an hourly wage rate of $45.42 as reported by OPM for a 
GS 13 in 2017; \11\ plus fringe benefits and overhead the hourly wage 
for this task would be $90.84. These tasks will also involve a program 
manager spending 1,000 hours with an hourly wage rate of $53.67 GS 14, 
plus fringe benefits and overhead the hourly wage would be $107.36. An 
IT specialist GS 12 would also be involved in supporting tasks with 
messaging and recognition of award winners, spending 100 hours with an 
hourly wage of $38.20, plus fringe benefits and overhead the hourly 
wage would be $76.40.
---------------------------------------------------------------------------

    \11\ OPM https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2017/DCB_h.pdf.
---------------------------------------------------------------------------

    The application process will require support from contractors to 
set up the process, the receipt of the forms and the processing of the 
applications; this is estimated to cost $1,896,940 annually. A program 
specialist will spend 200 hours annually with a mean hourly wage rate 
of $59.31 as reported in the BLS 2016 OES,\12\ plus fringe benefits and 
overhead, would be $118.62. An IT specialist will spend 40 hours to 
support these activities with an hourly wage rate of $42.25,\13\ plus 
fringe benefits and overhead the hourly wage is $84.50. The program 
manager\14\ is estimated to spend 151 hours processing applications, 
with an hourly wage rate of $58.7, plus fringe benefits and overhead 
the hourly wage is $117.40. A Program specialist\15\ will perform the 
bulk of the application review tasks, this will total 18,569 hours with 
an hourly wage rate of $35.99 plus fringe benefits and overhead the 
hourly wage will be $71.98. As part of the review process of the 
applications, VETS will need to verify applicants do not have adverse 
labor law decisions, stipulated agreements, contract debarments, or 
contract terminations, against them under the Uniform Services 
Employment and Reemployment Rights Act (USERRA); or the Vietnam Era 
Veterans' Readjustment Assistance Act (VEVRAA).
---------------------------------------------------------------------------

    \12\ BLS OES occupation code 11-2031 Public Relations and 
Fundraising Managers.
    \13\ BLS OES occupation code 15-0000 Computer and Mathematical 
Occupations.
    \14\ BLS OES occupation code 11-1021 General and Operations 
Managers.
    \15\ BLS OES occupation code 13-1199 Business Operations 
Specialists.
---------------------------------------------------------------------------

    This verification process will involve VETS and the Office of 
Federal Contract Compliance Programs (OFCCP) checking their databases 
for award applicants. VETS estimates it will take each agency, OFCCP 
and VETS, an average of 15 minutes per application for this review. A 
GS -13 would perform the check with a loaded hourly wage of $90.84 and 
spend 13 minutes per employer on the list, and a GS-15 with a loaded 
hourly wage of $126.28 would spend 2 minutes per employer on the list 
verifying the findings in the initial check. The IT process developed 
to support this review will be maintained by a contractor \16\ spending 
240 hours with a loaded hourly wage of $84.50, (hourly mean wage from 
BLS without fringe benefits or overhead is $42.25).
---------------------------------------------------------------------------

    \16\ BLS OES occupation code 15-0000 Computer and Mathematical 
Occupations.
---------------------------------------------------------------------------

    The notification of the award will also be executed by a 
contractor, and will involve 50 hours of a program manager's \17\ time 
with a loaded hourly wage of $117.40, and 40 hours of a program 
specialist \16\ time with a loaded hourly wage of $71.98.
---------------------------------------------------------------------------

    \17\ BLS OES occupation code 11-1021 General and Operations 
Managers.
---------------------------------------------------------------------------

    The oversight of the contract for the application processing will 
be done by VETS personnel. This will take 312 hours of a program 
manager's time (GS-14) with a loaded hourly wage of $107.36, and 120 
hours of a program specialist's time (GS-13) with a loaded hourly wage 
of $90.84.
    The statute requires a report to congress; this will be done by 
VETS personnel, and will cost a total of $10,406 dollars annually. This 
task will take a program manager (GS-14) 80 hours with a loaded hourly 
wage of $107.36 and another 20 hours of time for a program specialist's 
time (GS-13) with a loaded hourly wage of $90.84.
    VETS invites public comment on the cost of developing a system to 
accept and review applications.

Application Fee

    The HIRE Vets Act provides that the Secretary may assess a 
reasonable fee on employers that apply for receipt of a HIRE Vets 
Medallion Award and that the amount of the fee must be sufficient to 
cover the costs associated with carrying out the HIRE Vets Act. The 
proposed fee will cover the costs of solicitation, processing 
applications, vetting for violations, and award notifications, as well 
as the maintenance cost of the IT system used in the processing of 
applications.
    In processing the applications, VETS will need to verify the 
information on the form being submitted by employers. Given that the 
number of criteria varies by employer size, and will consequently 
require additional review by VETS, the fee will vary by employer size 
to reflect the cost of reviewing additional criteria. For example, the 
large employer platinum award requires the applicant to provide five 
types of integration assistance. However, the small employer platinum 
award only requires that the applicant provide two types of integration 
assistance. Consequently, the large employer award will take longer to 
review than the small employer award.
    In recognition of these differences in the number of criteria and 
information needing to be reviewed and verified as part of processing 
awards, the fees will be graduated to reflect the differences in the 
amount of review VETS would need to perform for large, medium, and 
small employers. The proposed fee for large employers is $495 per 
applicant, the proposed fee for medium employers is $190 per applicant, 
and the proposed fee for small employers is $90 per applicant, which 
covers the anticipated cost to VETS for processing 4,152 applications 
in the first year. The fees were estimated by taking the average cost 
to VETS of $300 per application, and multiplying it using factors of 
time which reflect the added information needed to review. Large 
employers would take VETS 1.6 times longer than the estimated average 
cost to process the application, for medium employers it would be 0.6 
times the average cost, and for small employers it would be 0.3 times 
the average costs. VETS invites public comment on what is an 
appropriate fee amount for employer sizes, which will enable VETS to 
recover costs as required.

[[Page 39387]]



                                            Table 4--Government Costs
----------------------------------------------------------------------------------------------------------------
                                                                                     Employers
                     Application processing                      -----------------------------------------------
                                                                       4,152           6,228          10,728
----------------------------------------------------------------------------------------------------------------
Solicitation....................................................        $245,086        $245,086        $245,086
Receipt and Processing..........................................         565,828         823,693       1,382,564
Violation Vetting by VETS and OFCCP.............................         200,119         299,335         514,376
Award Notification..............................................         160,333         236,118         400,366
Contract Oversight..............................................          44,397          44,397          44,397
IT Support and maintenance......................................          20,280          20,280          20,280
Report to Congress..............................................          10,406          10,406          10,406
                                                                 -----------------------------------------------
    Total Processing Cost.......................................       1,246,449       1,679,315       2,617,473
Average government cost per application.........................             300             270             244
Sunk Development Costs:
    Development of Application System...........................  ..............  ..............          98,625
    Application Form Development................................  ..............  ..............         834,474
                                                                 -----------------------------------------------
        Total Development Costs.................................  ..............  ..............         933,099
----------------------------------------------------------------------------------------------------------------
Source: OSHA, Directorate of Standards and Guidance, Office of Regulatory Analysis.
(See Spreadsheets, Exhibit X for all sources and derivation.)
Average cost per application = total processing cost/# of employer.

Participation and Costs per Year

    CBO originally developed an estimate that 4,000 employers would 
participate in the program in the first year. This estimate was based 
on the assumption that only 2 percent of employers would be potentially 
eligible and 25 percent of medium and large employers potentially 
eligible would apply for the program. In CBO's estimate, small 
employers were excluded from being able to apply based on an earlier 
version of the HIRE Vets bill. If CBO had included small employers in 
their estimate using the same methodology the number of employers 
applying would increase to close to 50,000 employers.
    As noted above, VETS, making use of BLS veteran' labor force 
participation rate data, estimates that far more than 2 percent of 
employers that are eligible may choose to participate. Due to the lack 
of data for more accurate participation rates, VETS assumes that 
approximately 4,119 employers will apply in the first year, but that 
this would increase to 6,228 employers in the second year and 10,728 
per year in succeeding years. Table 5 shows the estimated participation 
rates by size class for each year, and resulting estimated costs of 
applications.

                                        Table 5--Estimated Participation Rates and Numbers of Applicants by Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        1st Year                          2nd Year                          3rd Year
                    Size class                       participation   1st Year number   participation   2nd Year number   participation   3rd Year number
                                                        rate (%)      of applicants       rate (%)      of applicants       rate (%)      of applicants
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small.............................................              0.1              304              0.2              674              0.6            2,023
Medium............................................              3.0            2,248              4.0            2,997              6.5            4,870
Large.............................................             12.5            1,601             20.0            2,557               30            3,835
                                                   -----------------------------------------------------------------------------------------------------
    Total.........................................               NA            4,152               NA            6,228               NA           10,728
--------------------------------------------------------------------------------------------------------------------------------------------------------
VETS Estimates (See Spreadsheets, Exhibit X for all sources and derivation)

    Table 6 shows the result of multiplying the employer unit costs of 
applying for the award, developed in the previous Unit Cost section, by 
the number of anticipated participants to obtain the costs by size 
class and total application cost for each year. These costs reflect the 
time and resources incurred by the employer when applying for the award 
program; this includes all the tasks discussed in the previous Unit 
Cost section.

                                   Table 6--Employer Application Costs by Year
----------------------------------------------------------------------------------------------------------------
                       Size class                          1st Year costs     2nd Year costs     3rd Year costs
----------------------------------------------------------------------------------------------------------------
Small..................................................            $95,215           $211,589           $634,767
Medium.................................................          1,377,355          1,836,473          2,984,269
Large..................................................          1,230,468          1,965,603          2,948,405
                                                        --------------------------------------------------------
    Total..............................................          2,703,038          4,013,666          6,567,441
----------------------------------------------------------------------------------------------------------------
VETS Estimates, (See Spread Sheets, Exhibit X for all sources and derivation)

    There are multiple factors which would contribute to the 
participation rate of large, medium, and small employers, such as the 
fee for applying, amount of outreach by VETS, and the potential 
benefits received by the

[[Page 39388]]

employers receiving the award. The problem here is a classically 
difficult one in economics--that of estimating demand for new products. 
In this case, we have little data and few comparable products on which 
to base an estimate. VETS is aware that the total costs are dependent 
on the number of employers that apply and the number could be much 
lower or higher than VETS baseline estimates.
    At the stakeholder meetings, some representatives from larger 
employers stated their willingness to pay up to several thousand 
dollars, while representatives for smaller employers didn't specify a 
fee amount they would be willing to pay. It would seem reasonable to 
assume a fee of more than several hundred dollars would discourage many 
small employers from applying. The total cost, burden plus fees, is 
estimated to range from $404 for small employers to $1,264 for large 
employers. Depending on the success of outreach and other messaging, 
these efforts could attract more applicants than CBO's estimate. Over 
the long term, employers will want to apply if there are quantifiable 
benefits in the form of increased revenue if this award attracts more 
customers, and by increasing the pool of veteran applicants when they 
are hiring. These factors have the potential of increasing the number 
of participating employers to close to 50,000. Higher participation 
would result in increased costs relative to the overall cost burden and 
overall government cost. However, considering all costs, the program 
will most likely not have costs in excess of $100 million per year. 
Such costs would only occur if 100 percent of potentially eligible 
medium and large employers apply and 25 percent of potentially eligible 
small employers apply every year.
    VETS invites public comment on the level or participation by 
industry and employer size.

Total Annualized Costs

    VETS estimated annualized costs to employers for participation in 
this award program over a 10 year period using 3 percent and 7 percent 
discount rates based on the costs of application and costs to the 
government developed above. These total costs are provided in Table 7.

                              Table 7--Total Annualized Costs of the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                                                    First year
                                                                    Annualized      Annualized       costs (if
                          Cost element                              costs at 3%     costs at 7%   different from
                                                                        ($)             ($)         annualized
                                                                                                    costs) ($)
----------------------------------------------------------------------------------------------------------------
Costs for Preparing Applications................................       5,845,415       5,735,649       2,703,038
Costs to Government of Processing Application (To be reimbursed        2,357,854       2,318,462       1,246,449
 through fees)..................................................
Total Private Sector Costs, including Fees for Government              8,203,269       8,054,111       3,949,487
 Processing.....................................................
Costs to Government for Developing System (Not reimbursed by             109,388         132,852         933,099
 fees)..........................................................
                                                                 -----------------------------------------------
    Total.......................................................       8,312,657       8,186,963       4,882,586
----------------------------------------------------------------------------------------------------------------
VETS Estimates (See Spreadsheets, Exhibit X for details)

Alternatives

    VETS considered alternative quantitative criteria for small and 
medium size employers. One alternative would be to change the proposed 
criteria for small and medium employers that require applicants to have 
both a retention rate of 75 percent (for gold)/85 percent (for 
platinum) and a veteran employee percentage of 7 percent (for gold)/10 
percent (for platinum). Instead, this first proposed alternative 
criterion would drop the veteran employee percentage requirement. 
Keeping all the participation rates the same, VETS estimates that this 
change would increase the number of potentially eligible employers by 
38 percent, participation in the program by 19 percent, and would 
increase annualized costs from approximately $8 million per year to 
$11.9 million a year. This alternative has the disadvantage that it 
would allow employers who have not recently achieved a 7 percent hiring 
goal to win the award.
    VETS also considered an option in which small and medium employers 
could qualify if they met either of the following: (1) 7 percent of the 
employer's new hires during the previous year were veterans, or (2) if 
a total of 7 percent of the employees it hired over the last two years 
were veterans and the employer retained 75 percent of those veterans 
hired in the first year of that timeframe (previous year of the 
previous year). This alternative broadens the hiring eligibility 
timeframe. This option also slightly increases program eligibility but 
it does so by significantly increasing small employer eligibility while 
lowering eligibility for medium employers. VETS felt that this was not 
a useful effect given medium employers are more likely to participate 
in the program.
    VETS also examined an option in which the only hiring/retention 
criteria for small and medium size employers would be that 7 percent of 
new hires over the last two years are veterans along with a 75 percent 
retention criteria from the first of the two years (previous year of 
the previous year). Under this option, employers would no longer be 
able to satisfy the hiring/retention criterion solely by having 7 
percent of its new hires in the previous year be veterans. This 
approach also increased small employer eligibility at the expense of 
decreasing medium employers' eligibility. Again, because of expected 
high participation rates by medium employers, VETS decided not to adopt 
this alternative.
    None of these estimates take into account the cost savings to both 
the private sector and the government of this alternative. VETS is 
interested in comments on these and other alternative criteria for 
medium and small employers.

Benefits

    The main purpose of the medallion is to recognize and award 
employers who have not only recruited and retained veterans for 
positions in their workforce but also established employee development 
programs for veterans and offered benefits to improve retention.
    The unemployment rate of veterans trends lower than the civilian 
unemployment rate, but regionally the unemployment rate for veterans 
can vary from a low of 1.8 percent in Indiana to a high of 7.6 percent 
in the

[[Page 39389]]

District of Columbia, as reported in the March 2016 release of the 
Employment Situation of Veterans by BLS. The higher unemployment rate 
for veterans can be attributed to the labor market in the District of 
Columbia which is mostly composed of professional and services industry 
occupations where historically there are lower employment rates for 
veteran workers. These veterans are experienced, mission focused, 
responsible, independent, and capable workers who often face 
difficulties finding jobs that match their skills. In a 2016 Forbes 
article \18\ highlighting veterans issues as they adjusted to the 
civilian workforce, the top challenges reported for veterans are a lack 
of training or education for the work, lack of advancement 
opportunities, and employers undervaluing their military experience.
---------------------------------------------------------------------------

    \18\ Strauss, Karsten, (2016) How Veterans Adjust To The 
Civilian Workforce, November 11th, 2016. Retrieved from: https://www.forbes.com/sites/karstenstrauss/2016/11/11/how-veterans-adjust-to-the-civilian-workforce/2/#2d316ff8395d.
---------------------------------------------------------------------------

    Employers will want to apply for the award if there are 
quantifiable benefits in the form of increased revenue generated by 
attracting more or repeat customers, or a better pool of veteran 
applicants for jobs.
    Many employers who seek out veterans to hire have stated there are 
many benefits in attracting veterans, such as the experience they 
bring, more focused attention, and the ability to work 
independently.\19\ Employers who attain the proposed award will be able 
to market themselves as a veteran friendly employer and be able to 
attract more veterans for job openings.
---------------------------------------------------------------------------

    \19\ Military & Defense team, (2016) 10 Reasons Companies Should 
Hire Military Veterans, November 11, 2016. Retrieved from: http://www.businessinsider.com/reasons-companies-should-hire-military-veterans-2016-11.
---------------------------------------------------------------------------

    VETS invites public comment regarding the type of benefits an 
employer who receives this award would gain.

Regulatory Flexibility Certification

    For regulatory flexibility purposes for this rule, economic impacts 
are considered significant in any given sector if costs are greater 
than 1 percent of revenues or 5 percent of profits. For the purpose of 
determining impacts on small employers, VETS considered costs as a 
percentage of revenues and profits by industry sector for employers 
with 5 to 500 employees. Table 8 shows the minimum and maximum impacts 
for each three digit sector within the two-digit sector shown. (Full 
impacts and derivation are given in the spreadsheets, Exhibit X). Table 
8 shows that no industry sector has costs in excess of 1 percent of 
revenues or 5 percent of profits. Further it should be noted that small 
employers are only subject to this rule if they choose to apply for the 
award. Thus no small business needs to incur the costs unless they 
believe that the benefits exceed the costs for them.

                                            Table 8--Economic Impacts
----------------------------------------------------------------------------------------------------------------
                                                  Average     Average cost to revenues   Average cost to profits
        NAICS                  Title            revenue per  ---------------------------------------------------
                                               establishment  Minimum (%)  Maximum (%)  Minimum (%)  Maximum (%)
----------------------------------------------------------------------------------------------------------------
11..................  Agriculture, Forestry,       4,244,996        0.009        0.026        0.176        0.844
                       Fishing, and Hunting.
21..................  Mining................      13,371,157        0.002        0.009        0.068        0.068
22..................  Utilities.............      21,521,736        0.003        0.003      *-0.220      *-0.220
31-33...............  Manufacturing.........      10,225,679        0.002        0.021        0.030        0.485
42..................  Wholesale Trade.......      20,024,426        0.002        0.006        0.014        0.203
44-45...............  Retail Trade..........       3,928,643        0.005        0.042        0.243        0.243
48-49...............  Transportation........       5,700,083        0.004        0.039        0.051        4.545
51..................  Information...........       4,990,489        0.009        0.020      *-0.165        0.192
52..................  Finance and Insurance.       5,367,956        0.007        0.019        0.015        0.314
53..................  Real Estate...........       4,371,291        0.007        0.025        0.038        0.566
54..................  Professional,                2,986,458        0.020        0.020        0.517        0.517
                       Scientific, and
                       Technical Services.
55..................  Management............       2,306,072        0.026        0.026        0.131        0.131
56..................  Administrative and           2,727,336        0.018        0.030        0.426        0.765
                       Support, Waste
                       Management and
                       Remediation Services.
61..................  Educational Services..       2,514,535        0.024        0.024        0.522        0.522
62..................  Health Care...........       8,435,099        0.003        0.051        0.052        0.964
71..................  Arts, Entertainment,         2,963,512        0.014        0.039        0.236        2.414
                       and Recreation.
72..................  Accommodation and Food       1,381,321        0.033        0.065        0.505        1.224
                       Services.
81..................  Other Services........       1,319,709        0.030        0.094        1.222        2.905
----------------------------------------------------------------------------------------------------------------
Source: VETS based on data from IRS (U.S. Internal Revenue Service), 2013. Corporation SourceBook, 2013. http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Source-Book:-U.S.-Total-and-Sectors-Listing, Accessed by ERG, 2016.
U.S. Census Bureau, 2012. Statistics of U.S. Businesses Employment and Payroll Summary: 2012-Data by enterprise
  employment size, Accessed on 7/11/2017 at https://www.census.gov/data/tables/2012/econ/susb/2012-susb-annual.html.
See Spreadsheets, Exhibit X, for full derivation.
*Negative profit rates reported for these industries.

    As a result of these considerations, per Sec.  605 of the 
Regulatory Flexibility Act, VETS certifies that this proposed rule will 
not have a significant economic impact on a substantial number of small 
entities. VETS requests comments on this certification.

References

BLS, 2016. Current Population Survey. Available at www.bls.gov/cps.
BLS, 2017. Job Openings And Labor Turnover--July 11, 2017. Available 
at https://www.bls.gov/news.release/pdf/jolts.pdf.
BLS, 2017. Occupational Employment Statistics. Fringe markup is from 
the following BLS release: Employee Costs for Employee 
Compensation--June 9, 2017. Available at https://www.bls.gov/news.release/pdf/ecec.pdf.
Culbertson, 2016. A Deep Look at the Data: How Are Veterans Doing in 
Today's Workforce?. Indeed blog, November 10, 2016. From: http://blog.indeed.com/2016/11/10/veterans-employment/.

[[Page 39390]]

VETS based on data from IRS (U.S. Internal Revenue Service), 2013. 
Corporation SourceBook, 2013. http://www.irs.gov/uac/SOI-Tax-Stats-Corporation-Source-Book:-U.S.-Total-and-Sectors-Listing, Accessed by 
ERG, 2016.
Fleishman, 2014. Hilton Helping Veterans with Jobs, Free Hotel 
Stays. G.I. Money, January 16, 2016. From: http://gimoney.com/hilton-helping-veterans-jobs-free-hotel-stays/.
HHS, 2016. Guidelines for Regulatory Analysis. Page 33, available at 
https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf.
Military & Defense team, 2016. 10 Reasons Companies Should Hire 
Military Veterans, November 11, 2016. From: http://www.businessinsider.com/reasons-companies-should-hire-military-veterans-2016-11.
Occupational Injury and Illness Recording and Reporting 
Requirements: North American Industry Classification System Update 
and Reporting Revisions (docket number: OSHA-2010-0019-0127).
Strauss, 2016. How Veterans Adjust To The Civilian Workforce, 
November 11th, 2016. From: https://www.forbes.com/sites/karstenstrauss/2016/11/11/how-veterans-adjust-to-the-civilian-workforce/2/#2d316ff8395d.
Watson, 2014. Veteran Unemployment Rate Drops, But Still Outpaces 
the Rest of the Country. www.defenceone.com, May 2, 2014. From: 
http://www.defenseone.com/news/2014/05/D1-Watson-veteran-unemployment-rate-drops-still-outpaces-rest-country/83692/.
U.S. Census Bureau, 2014. Statistics of U.S. Businesses Annual 
Datasets by Establishment Industry: U.S & States, NAICS, detailed 
employment sizes. Accessed on 6/15/2017 at https://www.census.gov/data/datasets/2014/econ/susb/2014-susb.html. Eligibility estimates 
by VETS. See text and spreadsheets (exhibit X).

Paperwork Reduction Act

Overview

    The proposed regulations contain collections of information 
(paperwork) requirements that are subject to review by the Office of 
Management and Budget (OMB). The Paperwork Reduction Act of 1995 (PRA), 
44 U.S.C. 3501 et seq., and its implementing regulations, 5 CFR part 
1320, require that VETS consider the impact of paperwork and other 
information collection burdens imposed on the public. A Federal agency 
generally cannot conduct or sponsor a collection of information, and 
the public is generally not required to respond to an information 
collection, unless it is approved by OMB under the PRA and displays a 
currently valid OMB Control Number. In addition, notwithstanding any 
other provisions of law, no person may generally be subject to penalty 
for failing to comply with a collection of information that does not 
display a valid Control Number. See 5 CFR 1320.5(a) and 1320.6.

Solicitation of Comments

    VETS prepared and submitted an Information Collection Request (ICR) 
for the collections of information contained in the proposed 
regulations and the HIRE Vets Medallion Award application to OMB for 
review in accordance with 44 U.S.C. 3507(d). This NPRM allows a 30-day 
public comment period for the public to comment on the collections of 
information contained in the proposed rule. However, the PRA requires 
that Agencies provide a 60-day notice in the Federal Register 
requesting public comment on the collections of information in 
accordance with 44 U.S.C. 3506(c). VETS is publishing a companion 
notice elsewhere in this issue of the Federal Register allowing the 
public 60 days to comment on the collections of information contained 
in the proposal.
    VETS solicits comments on these collections of information and the 
HIRE Vets Medallion Award application and their associated estimated 
burden hours and costs. VETS also requests comments on the following 
items:
    <bullet> Whether the proposed collection of information 
requirements and application are necessary for the proper performance 
of VETS' functions, including whether the information is useful;
    <bullet> The accuracy of VETS' estimate of the burden (time and 
cost) of the information collection requirements, including the 
validity of the methodology and assumptions used;
    <bullet> The quality, utility and clarity of the information 
collected; and
    <bullet> Ways to minimize the compliance burden on employers, such 
as by using automated or other technological techniques for collecting 
and transmitting information.
    Members of the public who wish to comment on the paperwork 
requirements in this proposal must send their written comments to: 
Office of Information and Regulatory Affairs, Attn: OMB Desk Officer 
for the Department of Labor, VETS (RIN 1293-AA21), Office of Management 
and Budget, Room 10235, Washington, DC 20503, fax: (202) 395-6881 (this 
is not a toll-free number), or email: <a href="/cdn-cgi/l/email-protection#c38c8a91829cb0b6a1aeaab0b0aaacad83acaea1eda6acb3eda4acb5"><span class="__cf_email__" data-cfemail="81cec8d3c0def2f4e3ece8f2f2e8eeefc1eeece3afe4eef1afe6eef7">[email protected]</span></a>. VETS 
encourages commenters also to submit their comments on these paperwork 
requirements to VETS, see section Addresses for instructions on 
submitting comments to VETS.

Proposed Collection of Information Requirements

    The regulations implementing the Act require VETS to annually 
solicit and accept voluntary information from employers for 
consideration of employers to receive a HIRE Vets Medallion Award. The 
Act establishes specific criteria at two levels, gold and platinum, for 
large employers (those with 500 employees or more) and allows VETS 
discretion in establishing criteria for small and medium employers to 
qualify for similar awards.
    The NPRM proposes the application process and criteria that VETS 
intends to use to receive, review, and process applications, verify the 
information provided and award the HIRE Vets Medallion Award to those 
employers meeting the criteria and deserving of the award. VETS 
developed the HIRE Vets Medallion Award application Forms [VETS-1011LP, 
VETS-1011LG, VETS-1011MP, VETS-1011MG, VETS-1011SP, VETS-1011SG] for 
employers to complete and submit to VETS to fulfill the regulatory 
requirements to receive an award. The Act establishes a fund, 
designated as the ``HIRE Vets Medallion Award Fund'' and requires the 
Department to assess a reasonable fee from the applicants to cover the 
costs associated with carrying out the HIRE Vets Medallion program. The 
NPRM provides the fee amount and how to submit the fee.
    The proposed rule provides specific award criteria for the large 
employers to qualify for the gold and platinum awards. Although the 
number of criteria an employer is required to satisfy in the proposed 
rule differs by award, the large employer criteria established by 
statute are generally incorporated across the large employer, medium 
employer, and small employer awards. The applications would require 
employers to provide information to meet award criteria dependent upon 
the size of the employer and the reward the employer is requesting, 
gold or platinum. The following table provides the corresponding 
regulatory citation:

                      Proposed Regulatory Provision
------------------------------------------------------------------------
              Employer size                 Gold Award    Platinum Award
------------------------------------------------------------------------
Large...................................            Sec.            Sec.
                                             1011.100(a)     1011.100(b)
Medium..................................            Sec.            Sec.
                                             1011.105(a)     1011.105(b)
Small...................................            Sec.            Sec.
                                             1011.110(a)     1011.110(b)
------------------------------------------------------------------------

    The proposal also states that VETS may require additional 
information in support of the application for the HIRE Vets Medallion 
Award (Sec.  1011.215(b)). Also, employers are required to maintain 
information relied upon to

[[Page 39391]]

complete the application for two years after the application is 
submitted to VETS (Subpart G, Sec.  1011.600).
    Title of Collection: Honoring Investments in Recruiting and 
Employing American Military Veterans Act.
    OMB Control Number: 1293-0NEW.
    Total Estimated Number of Annualized Respondents: 7,036.
    Total Estimated Number of Annualized Responses: 34,245.
    Frequency: On Occasion.
    Total Estimated Annual Time Annual Burden hours: 58,716.
    Total Estimated Annual Other Costs Burden: $1,847,746.
    The application solicits the information VETS will review and 
evaluate to determine if an employer will receive an award, and if so, 
whether the award will be a gold or platinum award. Employers are 
required to maintain material used to complete that application for 
additional verification if needed or in case VETS becomes aware of 
facts that may indicate information submitted on the application may be 
incorrect.

Small Business Regulatory Enforcement Fairness Act of 1996

    VETS has determined that this proposed rulemaking does not impose a 
significant economic impact on a substantial number of small entities 
under the RFA; therefore, VETS is not required to produce any 
Compliance Guides for Small Entities, as mandated by the SBREFA.

Unfunded Mandates Reform Act of 1995

    For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532, this NPRM does not include any Federal mandate that may result in 
excess of $100 million in expenditures by state, local, and Tribal 
governments in the aggregate or by the private sector.

Executive Order 13132 (Federalism)

    VETS has reviewed this proposed rule in accordance with Executive 
Order 13132 regarding federalism, and has determined that it does not 
have ``federalism implications.'' This proposed rule will not ``have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government.''

Executive Order 13084 (Consultation and Coordination With Indian Tribal 
Governments)

    This NPRM does not have Tribal implications under Executive Order 
13175 that would require a Tribal summary impact statement. The NPRM 
would not have substantial direct effects on one or more Indian Tribes, 
on the relationship between the Federal government and Indian Tribes or 
on the distribution of power and responsibilities between the Federal 
government and Indian Tribes.

Plain Language

    VETS drafted this NPRM in plain language.

Effects on Families

    Section 654 of the Treasury and General Government Appropriations 
Act, enacted as part of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 
2681) requires the assessment of the impact of this proposed rule on 
family well-being. A rule that is determined to have a negative effect 
on families must be supported with an adequate rationale. VETS has 
assessed this proposed rule in light of this requirement and determined 
that this NPRM would not have a negative effect on families

Executive Order 13045 (Protection of Children)

    This NPRM would have no environmental health risk or safety risk 
that may disproportionately affect children.

Environmental Impact Assessment

    A review of this NPRM in accordance with the requirements of the 
National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et 
seq.; the regulations of the Council on Environmental Quality, 40 CFR 
1500 et seq.; and DOL NEPA procedures, 29 CFR part 11, indicates the 
NPRM would not have a significant impact on the quality of the human 
environment. There is, thus, no corresponding environmental assessment 
or an environmental impact statement.

Executive Order 13211 (Energy Supply)

    This NPRM is not subject to Executive Order 13211. It will not have 
a significant adverse effect on the supply, distribution, or use of 
energy.

Executive Order 12630 (Constitutionally Protected Property Rights)

    This NPRM is not subject to Executive Order 12630 because it does 
not involve implementation of a policy that has takings implications or 
that could impose limitations on private property use.

Executive Order 12988 (Civil Justice Reform Analysis)

    This NPRM was drafted and reviewed in accordance with Executive 
Order 12988 and will not unduly burden the Federal court system. The 
NPRM was: (1) Reviewed to eliminate drafting errors and ambiguities; 
(2) written to minimize litigation; and (3) written to provide a clear 
legal standard for affected conduct and to promote burden reduction.

List of Subjects in 20 CFR Part 1011

    Employment, Veterans, Employer Recognition, Medallion.
    For the reasons discussed in the preamble, VETS proposes to add 20 
CFR part 1011 to read as follows:

PART 1011--HIRE VETS MEDALLION PROGRAM

Subpart A--General Provisions

Sec.  1011.000 What is the HIRE Vets Medallion Program?
Sec.  1011.005 What definitions apply to the Medallion Program 
Regulations?
Sec.  1011.010 Who is eligible to apply for a HIRE Vets Medallion 
Award?
Sec.  1011.015 What are the different types of the HIRE Vets 
Medallion Awards?

Subpart B--Award Criteria

Sec.  1011.100 What are the criteria for the large employer HIRE 
Vets Medallion Award?
Sec.  1011.105 What are the criteria for the medium employer HIRE 
Vets Medallion Award?
Sec.  1011.110 What are the criteria for the small employer HIRE 
Vets Medallion Award?
Sec.  1011.115 Is there an exemption for certain large employers 
from the dedicated human resources professional criterion for the 
large employer platinum HIRE Vets Medallion Award?
Sec.  1011.120 Under what circumstances will VETS find an employer 
ineligible to receive a HIRE Vets Medallion Award for a violation of 
labor law?

Subpart C--Application Process

Sec.  1011.200 How will VETS administer the HIRE Vets Medallion 
Award process?
Sec.  1011.205 What is the timing of the HIRE Vets Medallion Award 
process?
Sec.  1011.210 How often can an employer receive the HIRE Vets 
Medallion Award?
Sec.  1011.215 How will the employer complete the application for 
the HIRE Vets Medallion Award?
Sec.  1011.220 How will VETS verify a HIRE Vets Medallion Award 
application?
Sec.  1011.225 Under what circumstances will VETS conduct further 
review of an application?
Sec.  1011.230 Under what circumstances can VETS deny or revoke an 
Award?

[[Page 39392]]

Subpart D--Fees and Caps

Sec.  1011.300 What are the application fees for the HIRE Vets 
Medallion Award?
Sec.  1011.305 May VETS set a limit on how many applications will be 
accepted in a year?

Subpart E--Design and Display

Sec.  1011.400 What does a successful applicant receive?
Sec.  1011.405 What are the restrictions on display and use of the 
HIRE Vets Medallion Award?

Subpart F--Requests for Reconsideration

Sec.  1011.500 What is the process to request reconsideration of a 
denial or revocation?

Subpart G--Record Retention

Sec.  1011.600 What are the record retention requirements for the 
HIRE Vets Medallion Award?

    Authority: Division O, Pub. L. 115-31, 131 Stat. 135.

Subpart A--Introduction to the Regulations for the HIRE Vets Act


Sec.  1011.000  What is the HIRE Vets Medallion Program?

    The HIRE Vets Medallion Program is a voluntary employer recognition 
program administered by the Department of Labor's Veterans' Employment 
and Training Service. Through the HIRE Vets Medallion Program, The 
Department of Labor solicits voluntary applications from employers for 
the HIRE Vets Medallion Award. The purpose of this Award is to 
recognize efforts by applicants to recruit, employ, and retain veterans 
and to provide services supporting the veteran community.


Sec.  1011.005  What definitions apply to the Medallion Program 
Regulations?

    Active Duty in the United States National Guard or Reserve means 
active duty as defined in 10 U.S.C. 101(d)(1).
    Dedicated Human Resources Professional means either a full-time 
professional or the equivalent of a full-time professional dedicated 
exclusively to supporting the hiring, training, and retention of 
veteran employees. Two half-time professionals, for example, are 
equivalent to one full-time professional.
    Employee means any individual for whom the employer furnishes an 
IRS Form W-2, excluding temporary workers.
    Employer means any person, institution, organization, or other 
entity that pays salary or wages for work performed or that has control 
over employee opportunities, except for the Federal Government or any 
State or foreign government. For the purposes of this regulation, VETS 
will recognize employers based on the Employer Identification Number, 
as described in 26 CFR 301.7701-12, used to furnish an IRS Form W-2 to 
an employee. However, in the case of an agent designated pursuant to 26 
CFR 31.3504-1, a payor designated pursuant to 26 CFR 31.3504-2, or a 
Certified Professional Employer Organization recognized pursuant to 26 
U.S.C. 7705, the employer shall be the common law employer, client, or 
customer, respectively, instead of the entity that furnishes the IRS 
Form W-2.
    Human Resources Veterans' Initiative means an initiative through 
which an employer provides support for hiring, training, and retention 
of veteran employees.
    Post-secondary education means post-secondary level education or 
training courses that would be acceptable for credit towards at least 
one of the following: associates or bachelor's degree or higher, any 
other recognized post-secondary credential, or an apprenticeship.
    Salary means an employee's base pay.
    Temporary worker means any worker hired with the intention that the 
worker be retained for less than one year and who is actually retained 
for less than one year.
    Veteran has the meaning given such term under 38 U.S.C. 101.
    VETS means the Veterans' Employment and Training Service of the 
Department of Labor.


Sec.  1011.010  Who is eligible to apply for a HIRE Vets Medallion 
Award?

    All employers who employ at least one employee are eligible to 
apply for a HIRE Vets Medallion Award. To qualify for a HIRE Vets 
Medallion Award, an employer must satisfy all application requirements.


Sec.  1011.015  What are the different types of the HIRE Vets Medallion 
Awards?

    (a) There are three different categories of the HIRE Vets Medallion 
Award:
    (1) Large Employer Awards for employers with 500 or more employees.
    (2) Medium Employer Awards for employers with more than 50 but 
fewer than 500 employees.
    (3) Small Employer Awards for employers with 50 or fewer employees.
    (4) The correct category of Award is determined by the employer's 
number of employees as of December 31 of the year prior to the year in 
which the employer applies for an Award.
    (b) Within each Award category, there are two levels of Award:
    (1) A Gold Award; and
    (2) A Platinum Award.

Subpart B--Award Criteria


Sec.  1011.100  What are the criteria for the large employer HIRE Vets 
Medallion Award?

    (a) Gold Award. To qualify for a large employer gold HIRE Vets 
Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a large employer as specified in Sec.  1011.015 
of this part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part;
    (3) Veterans constitute not less than 7 percent of all employees 
hired by such employer during the prior calendar year;
    (4) The employer has retained not less than 75 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired;
    (5) The employer has established an employee veteran organization 
or resource group to assist new veteran employees with integration, 
including coaching and mentoring; and
    (6) The employer has established programs to enhance the leadership 
skills of veteran employees during their employment.
    (b) Platinum Award. To qualify for a large employer platinum HIRE 
Vets Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a large employer as specified in Sec.  1011.015 
of this part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part;
    (3) Veterans constitute not less than 10 percent of all employees 
hired by such employer during the prior calendar year;
    (4) The employer has retained not less than 85 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired;
    (5) The employer has established an employee veteran organization 
or resource group to assist new veteran employees with integration, 
including coaching and mentoring;
    (6) The employer has established programs to enhance the leadership 
skills of veteran employees during their employment;
    (7) The employer employs a dedicated human resources professional 
as defined in Sec.  1011.005 of this part to support hiring, training, 
and retention of veteran employees;
    (8) The employer provides each of its employees serving on active 
duty in the

[[Page 39393]]

United States National Guard or Reserve with compensation sufficient, 
in combination with the employee's active duty pay, to achieve a 
combined level of income commensurate with the employee's salary prior 
to undertaking active duty; and
    (9) The employer has a tuition assistance program to support 
veteran employees' attendance in postsecondary education during the 
term of their employment.


Sec.  1011.105  What are the criteria for the medium employer HIRE Vets 
Medallion Award?

    (a) Gold Award. To qualify for a medium employer gold HIRE Vets 
Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a medium employer per Sec.  1011.015 of this 
part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part;
    (3) The employer has achieved at least one of the following:
    (i) Veterans constitute not less than 7 percent of all employees 
hired by such employer during the prior calendar year; or
    (ii) The employer has achieved both of the following:
    (A) The employer has retained not less than 75 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired; and
    (B) On December 31 of the year prior to the year in which employer 
applies for the HIRE Vets Medallion Award, at least 7 percent of the 
employer's employees were veterans; and
    (4) The employer has at least one of the following forms of 
integration assistance:
    (i) The employer has established an employee veteran organization 
or resource group to assist new veteran employees with integration, 
including coaching and mentoring; or
    (ii) The employer has established programs to enhance the 
leadership skills of veteran employees during their employment.
    (b) Platinum Award. To qualify for a medium employer platinum HIRE 
Vets Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a medium employer as specified in Sec.  
1011.015 of this part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part;
    (3) The employer has achieved at least one of the following:
    (i)Veterans constitute not less than 10 percent of all employees 
hired by such employer during the prior calendar year; or
    (ii) The employer has achieved both of the following:
    (A) The employer has retained not less than 85 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired; and
    (B) On December 31 of the year prior to the year in which employer 
applies for the HIRE Vets Medallion Award, at least 10 percent of the 
employer's employees were veterans;
    (4) The employer has the following forms of integration assistance:
    (i) The employer has established an employee veteran organization 
or resource group to assist new veteran employees with integration, 
including coaching and mentoring; and
    (ii) The employer has established programs to enhance the 
leadership skills of veteran employees during their employment; and
    (5) The employer has at least one of the following additional forms 
of integration assistance:
    (i) The employer has established a human resources veterans' 
initiative;
    (ii) The employer provides each of its employees serving on active 
duty in the United States National Guard or Reserve with compensation 
sufficient, in combination with the employee's active duty pay, to 
achieve a combined level of income commensurate with the employee's 
salary prior to undertaking active duty; or
    (iii) The employer has a tuition assistance program to support 
veteran employees' attendance in postsecondary education during the 
term of their employment.


Sec.  1011.110  What are the criteria for the small employer HIRE Vets 
Medallion Award?

    (a) Gold Award. To qualify for a small employer gold HIRE Vets 
Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a small employer as specified in Sec.  1011.015 
of this part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part; and
    (3) The employer has achieved at least one of the following:
    (i) Veterans constitute not less than 7 percent of all employees 
hired by such employer during the prior calendar year; or
    (ii) The employer has achieved both of the following:
    (A) The employer has retained not less than 75 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired; and
    (B) On December 31 of the year prior to the year in which employer 
applies for the HIRE Vets Medallion Award, at least 7 percent of the 
employer's employees were veterans.
    (b) Platinum Award. To qualify for a small employer platinum HIRE 
Vets Medallion Award, an employer must satisfy all of the following 
criteria:
    (1) The employer is a small employer as specified in Sec.  1011.015 
of this part;
    (2) The employer is not found ineligible under Sec.  1011.120 of 
this part;
    (3) The employer has achieved at least one of the following:
    (i) Veterans constitute not less than 10 percent of all employees 
hired by such employer during the prior calendar year; or
    (ii) The employer has achieved both of the following:
    (A) The employer has retained not less than 85 percent of the 
veteran employees hired during the calendar year preceding the 
preceding calendar year for a period of at least 12 months from the 
date on which the employees were hired; and
    (B) On December 31 of the year prior to the year in which employer 
applies for the HIRE Vets Medallion Award, at least 10 percent of the 
employer's employees were veterans; and
    (4) The employer has at least two of the following forms of 
integration assistance:
    (i) The employer has established an employee veteran organization 
or resource group to assist new veteran employees with integration, 
including coaching and mentoring;
    (ii) The employer has established programs to enhance the 
leadership skills of veteran employees during their employment;
    (iii) The employer has established a human resources veterans' 
initiative;
    (iv) The employer provides each of its employees serving on active 
duty in the United States National Guard or Reserve with compensation 
sufficient, in combination with the employee's active duty pay, to 
achieve a combined level of income commensurate with the employee's 
salary prior to undertaking active duty;
    (v) The employer has a tuition assistance program to support 
veteran employees' attendance in postsecondary education during the 
term of their employment.

[[Page 39394]]

Sec.  1011.115  Is there an exemption for certain large employers from 
the dedicated human resources professional criterion for the large 
employer platinum HIRE Vets Medallion Award?

    Yes. Employers who employ 5,000 or fewer employees need not have a 
dedicated human resources professional to support the hiring and 
retention of veteran employees. An employer with 5,000 or fewer 
employees can satisfy the criterion at Sec.  1011.100(b)(7) by 
employing at least one human resources professional whose regular work 
duties include supporting the hiring, training, and retention of 
veteran employees.


Sec.  1011.120  Under what circumstances will VETS find an employer 
ineligible to receive a HIRE Vets Medallion Award for a violation of 
labor law?

    (a) Any employer with an adverse labor law decision, stipulated 
agreement, contract debarment, or contract termination, as defined in 
paragraphs (b) through (e) of this section, pursuant to either of the 
following labor laws, as amended, will not be eligible to receive an 
Award:
    (1) Uniform Services Employment and Reemployment Rights Act 
(USERRA); or
    (2) Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA);
    (b) For purposes of this section, an adverse labor law decision 
means any of the following, issued in the calendar year prior to year 
in which applications are solicited or the calendar year in which 
applications are solicited up until the issuance of the Award, in which 
a violation of any of the laws in paragraph (a) is found:
    (1) A civil or criminal judgment;
    (2) A final administrative merits determination of an 
administrative adjudicative board or commission; or
    (3) A decision of an administrative law judge or other 
administrative judge that is not appealed and that becomes the final 
agency action.
    (c) For purposes of this section, a stipulated agreement means any 
agreement (including a settlement agreement, conciliation agreement, 
consent decree, or other similar document) to which the employer is a 
party, entered into in the calendar year prior to the year in which 
applications are solicited or the calendar year in which applications 
are solicited up until the issuance of the Award, that contains an 
admission that the employer violated any of the laws in paragraph (a).
    (d) For purposes of this section, a contract debarment means any 
order or voluntary agreement, pursuant to the laws listed in paragraph 
(a), that debars the employer from receiving any future federal 
contract. Employers shall be ineligible for an Award for the duration 
of time that the contract debarment is in effect.
    (e) For purposes of this section, a contract termination means any 
order or voluntary agreement, pursuant to the laws listed in paragraph 
(a), that terminates an existing federal contract prior to its 
completion. Employers shall be ineligible for the Award if this 
termination occurred in the calendar year prior to the year in which 
applications are solicited or the calendar year in which applications 
are solicited up until the issuance of the Award.
    (f) VETS may delay issuing an Award to an employer if, at the time 
of the Award is to be issued, VETS has credible information that a 
significant violation of one of the laws in paragraph (a) of this 
section may have occurred that could lead to an employer being 
disqualified pursuant to any of paragraphs (b) through (e) of this 
section.

Subpart C--Application Process


Sec.  1011.200  How will VETS administer the HIRE Vets Medallion Award 
process?

    The Secretary of Labor will annually--
    (a) Solicit and accept voluntary applications from employers in 
order to consider whether those employers should receive a HIRE Vets 
Medallion Award;
    (b) Review applications received in each calendar year;
    (c) Notify such recipients of their Awards; and
    (d) At a time to coincide with the annual commemoration of Veterans 
Day--
    (1) Announce the names of such recipients;
    (2) Recognize such recipients through publication in the Federal 
Register; and
    (3) Issue to each such recipient--
    (i) A HIRE Vets Medallion Award; and
    (ii) A certificate stating that such employer is entitled to 
display such HIRE Vets Medallion Award.


Sec.  1011.205  What is the timing of the HIRE Vets Medallion Award 
process?

    VETS will review all timely applications that fall under any cap 
established in Sec.  1011.305 of this part to determine whether an 
employer should receive a HIRE Vets Medallion Award, and, if so, of 
what level.
    (a) Performance period--except as otherwise noted in Sec.  1011.120 
of this part, only the employer's actions taken prior to December 31 of 
the calendar year prior to the calendar year in which applications are 
solicited will be considered in reviewing the award.
    (b) Solicitation period--VETS will solicit applications not later 
than January 31 of each calendar year for the HIRE Vets Medallion Award 
to be awarded in November of that calendar year.
    (c) End of acceptance period--VETS will stop accepting applications 
on April 30 of each calendar year for the Awards to be awarded in 
November of that calendar year.
    (d) Review Period--VETS will finish reviewing applications not 
later than August 31 of each calendar year for the Awards to be awarded 
in November of that calendar year.
    (e) Selection of recipients--VETS will select the employers to 
receive HIRE Vets Medallion Awards not later than September 30, of each 
calendar year for the Awards to be awarded in November of that calendar 
year.
    (f) Notice of awards and denials--VETS will notify employers who 
will receive HIRE Vets Medallion Awards not later than October 11, of 
each calendar year for the Awards to be awarded in November of that 
calendar year. VETS will also notify applicants who will not be 
receiving an Award at that time.


Sec.  1011.210  How often can an employer receive the HIRE Vets 
Medallion Award?

    An employer who receives a HIRE Vets Medallion Award for one 
calendar year is not eligible to receive a HIRE Vets Medallion Award 
for the subsequent calendar year.


Sec.  1011.215  How will the employer complete the application for the 
HIRE Vets Medallion Award?

    (a) VETS will require all applicants to provide information to 
establish their eligibility for the HIRE Vets Medallion Award.
    (b) VETS may request additional information in support of the 
application for the HIRE Vets Medallion Award.
    (c) The chief executive officer, the chief human resources officer, 
or an equivalent official of each employer applicant must attest under 
penalty of perjury that the information the employer has submitted in 
its application is accurate.
    (d) Interested employers can access the application form via the 
HIRE Vets Web site accessible from https://www.dol.gov/vets/.
    (e) Applicants will complete the application form and submit it 
electronically.
    (f) Applicants who need a reasonable accommodation in accessing the

[[Page 39395]]

application form, submitting the application form, or submitting the 
application fee may contact VETS at (202) 693-4700 or TTY (877) 889-
5627 (these are not toll-free numbers).
    (g) Should the information provided on the application be deemed 
incomplete, VETS will attempt to contact the applicant. The applicant 
must respond with the additional information necessary to complete the 
application form within 5 business days or VETS will deny the 
application.


Sec.  1011.220  How will VETS verify a HIRE Vets Medallion Award 
application?

    VETS will verify all information provided by an employer in its 
application to the extent that such information is relevant in 
determining whether or not such employer meets the criteria to receive 
a HIRE Vets Medallion Award or in determining the appropriate level of 
HIRE Vets Medallion Award for that employer to receive. VETS will 
verify this information by reviewing all information provided as part 
of the application.


Sec.  1011.225  Under what circumstances will VETS conduct further 
review of an application?

    If at any time VETS becomes aware of facts that indicate that the 
information provided by an employer in its application was incorrect or 
that the employer does not satisfy the requirements at Sec.  1011.120, 
VETS may conduct further review of the application. As part of that 
review, VETS may request information and/or documentation to confirm 
the accuracy of the information provided by the employer in its 
application or to confirm that the employer is not ineligible under 
Sec.  1011.120. Depending on the result of the review, VETS may either 
deny or revoke the Award. If VETS initiates such review prior to 
issuing the Award, VETS will not be required to meet the timeline 
requirements in this part.


Sec.  1011.230  Under what circumstances can VETS deny or revoke an 
Award?

    (a) Denial of Award. VETS may deny an Award for any of the 
following reasons:
    (1) The applicant fails to provide information and/or documentation 
as requested under Sec.  1011.225 of this part;
    (2) VETS determines that the chief executive officer, the chief 
human resources officer, or an equivalent official of the applicant 
falsely attested that the information on the application was true; or
    (3) The employer is ineligible to receive an Award pursuant to 
Sec.  1011.120 of this part.
    (b) Revocation of Award. Once the HIRE Vets Medallion Award has 
been awarded, VETS may revoke the recipient's Award for the following 
reasons:
    (1) The HIRE Vets Medallion Award recipient fails to provide 
information and/or documentation as requested under Sec.  1011.225 of 
this part;
    (2) VETS determines that the chief executive officer, the chief 
human resources officer, or an equivalent official of the recipient 
falsely attested that the information on the application was true;
    (3) The employer was ineligible to receive an Award pursuant to 
Sec.  1011.120 of this part; or
    (4) The employer violated the display restrictions at Sec.  
1011.405 of this part.
    (c) If VETS decides to deny or revoke an Award, it will provide the 
employer with notice of the Department's decision. An employer may 
request reconsideration of VETS' decision to deny or revoke an Award 
pursuant to Sec.  1011.500 of this part.

Subpart D--Fees and Caps


Sec.  1011.300  What are the application fees for the HIRE Vets 
Medallion Award?

    (a) The Act requires the Secretary to establish a fee sufficient to 
cover the costs associated with carrying out the HIRE Vets Medallion 
Program.
    (b) The table in this paragraph sets forth the fees an employer 
must pay to apply for the HIRE Vets Medallion Award. VETS will adjust 
the fees periodically according to the Implicit Price Deflator for 
Gross Domestic Product published by the U.S. Department of Commerce and 
notify potential applicants of the adjusted fees.
    (1) If a significant adjustment is needed to arrive at a new fee 
for any reason other than inflation, then a proposed rule containing 
the new fees will be published in the Federal Register for comment.
    (2) VETS will round the fee to the nearest dollar.

                            Application Fees
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Small Employer Fee...........................................     $90.00
Medium Employer Fee..........................................     190.00
Large Employer Fee...........................................     495.00
------------------------------------------------------------------------

    (c) All applicants must submit the appropriate application 
processing fee for each application submitted. This fee is based on the 
fee table provided at Sec.  1011.300(b) of this part. Payment of this 
fee must be made electronically through the U.S. Treasury pay.gov 
system or an equivalent.
    (d) Once a fee is paid, it is nonrefundable, even if the employer 
withdraws the application or does not receive a HIRE Vets Medallion 
Award.


Sec.  1011.305  May VETS set a limit on how many applications will be 
accepted in a year?

    Yes, VETS may set a limit on how many applications will be accepted 
in any given year.

Subpart E--Design and Display


Sec.  1011.400  What does a successful applicant receive?

    (a) The Award will be in the form of a certificate and will state 
the year for which it was awarded.
    (b) VETS will also provide a digital image of the medallion for 
recipients to use, including as part of an advertisement, solicitation, 
business activity, or product.


Sec.  1011.405  What are the restrictions on display and use of the 
HIRE Vets Medallion Award?

    It is unlawful for any employer to publicly display a HIRE Vets 
Medallion Award, in connection with, or as a part of, any 
advertisement, solicitation, business activity, or product--
    (a) for the purpose of conveying, or in a manner reasonably 
calculated to convey, a false impression that the employer received the 
Award through the HIRE Vets Medallion Program, if such employer did not 
receive such Award through the HIRE Vets Medallion Program; or
    (b) for the purpose of conveying, or in a manner reasonably 
calculated to convey, a false impression that the employer received the 
Award through the HIRE Vets Medallion Program for a year for which such 
employer did not receive such Award.

Subpart F--Requests for Reconsideration


Sec.  1011.500  What is the process to request reconsideration of a 
denial or revocation?

    (a) An applicant may file a request for reconsideration of the 
VETS' decision to deny or revoke a HIRE Vets Medallion Award or of 
VETS' decision as to the level of Award by mailing a request for 
reconsideration to the following address no later than fifteen business 
days after the date of VETS' notice of its decision. Requests for 
reconsideration must be sent to: HIRE Vets Medallion Program, DOL VETS, 
200 Constitution Ave. NW., Room S1325, Washington, DC 20210.
    (b) Requests for reconsideration pursuant to paragraph (a) of this 
section must contain the following:

[[Page 39396]]

    (1) The employer name and identification number;
    (2) The reason for the request; and
    (3) An explanation, accompanied by any necessary documentation to 
support its explanation, of why VETS' decision was incorrect.
    (c) VETS may request from the employer filing such request any 
additional evidence or explanation it finds necessary for 
reconsideration.
    (d) Within thirty business days after the later of the receipt of 
the request or the receipt of any additional evidence or explanation 
requested, VETS will issue a determination about whether to grant or 
deny the request.
    (e) No additional Department of Labor review is available.

Subpart G--Record Retention


Sec.  1011.600  What are the record retention requirements for the HIRE 
Vets Medallion Award?

    Applicants must retain a record of all information used to support 
an application for the HIRE Vets Medallion Award for two years from the 
date of application.

J.S. Shellenberger,
Deputy Assistant Secretary for the Veterans' Employment and Training 
Service, U.S. Department of Labor.
[FR Doc. 2017-17249 Filed 8-17-17; 8:45 am]
 BILLING CODE 4510-79-P


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