[Federal Register Volume 82, Number 217 (Monday, November 13, 2017)]
[Rules and Regulations]
[Pages 52186-52207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24214]


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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: Final rule.

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SUMMARY: VETS published a proposed rule implementing the Honoring 
Investments in Recruiting and Employing (HIRE) American Military 
Veterans Act of 2017 (HIRE Vets Act or Act). The HIRE Vets Act requires 
the Department of Labor (DOL or Department) to establish by rule a HIRE 
Vets Medallion Program (Medallion Program) and annually solicit and 
accept voluntary information from employers for consideration of 
employers to receive a HIRE Vets Medallion Award (the award). Under the 
Program, VETS will review applications and notify recipients of their 
awards, and announce their names at a time that coincides with Veterans 
Day. This final rule sets out the criteria for the different categories 
and levels of HIRE Vets Medallion Awards, the award application 
process, and the award fees. VETS invited written comments on the 
proposed rule, and any specific issues related to the proposal, from 
members of the public.

DATES: This rule is effective on January 12, 2018.

FOR FURTHER INFORMATION 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#9cd4d5ced9cad9c8cfdcf8f3f0b2fbf3ea"><span class="__cf_email__" data-cfemail="0840415a4d5e4d5c5b486c6764266f677e">[email protected]</span></a>, 
telephone: (202) 693-4700 or TTY (877) 889-5627 (these are not toll-
free numbers). For press inquiries, contact Joe Versen, Office of 
Public Affairs, U.S. Department of Labor, 200 Constitution Avenue NW., 
Room S-1032, Washington, DC 20210, email: <a href="/cdn-cgi/l/email-protection#b8ceddcacbddd696d2d7cbddc8d096d0f8dcd7d496dfd7ce"><span class="__cf_email__" data-cfemail="5325362120363d7d393c2036233b7d3b13373c3f7d343c25">[email protected]</span></a>, 
telephone: (202) 693-4696 (this is not a toll-free number).

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 Act requires the Department to issue regulations 
establishing the HIRE Vets 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.
    On August 18, 2017, VETS published a notice of proposed rulemaking 
(NPRM) to implement the HIRE Vets Act (82 FR 39371). VETS invited 
public comment on the proposed regulations, and included questions 
about specific issues. The comment period closed on September 18, 2017, 
and VETS has considered all timely comments received in response to the 
proposed regulations.
    VETS received 18 comments from a wide variety of sources. 
Commenters included: Veterans, employers, a national organization 
representing service providers, an employer association, and members of 
the public. While a few of the comments were general comments related 
to the benefit of the program or to veterans issues, the majority of 
comments specifically addressed issues contained in VETS' proposed 
rule.

Section-by-Section Summary of the Final Rule and Discussion of Comments

    This preamble summarizes the final rule, section by section, and 
evaluates and responds to the public comments received. The subparts of 
the preamble generally follow the subparts of the final rule. Within 
each subpart of the preamble, VETS addresses those public comments 
related to regulatory sections within that subpart of the rule. If a 
proposed regulatory section is not addressed in the discussion below, 
it is because the public comments submitted in response to the NPRM did 
not substantively address that specific section and no changes have 
been made to the regulatory text. Further, VETS has made a number of 
non-substantive changes to improve the readability and conform the 
document stylistically that are not discussed in the analysis below.
    Before beginning the section-by-section analysis, however, VETS 
acknowledges and responds to comments that did not correspond to 
specific sections of the rule.
    Comments: Several commenters expressed general support for the HIRE 
Vets Medallion Program and the proposed rule.
    Response: VETS looks forward to honoring employers who make it a 
priority to invest in recruiting, employing, and retaining veterans. 
The HIRE Vets Medallion Award is based on transparent criteria and aims 
to honor all employers, from the smallest to the largest, who meet 
these standards. The example set by recipients of this award will serve 
as models for other employers committed to hiring and retaining 
veterans.
    Comments: Conversely, several commenters expressed skepticism as to 
the utility of the proposed program and whether the costs of the 
proposed program outweighed the program's benefits.
    Response: No one is required to apply for a HIRE Vets Medallion 
Award. If the costs for an employer exceed the benefits, they need not 
apply. Nevertheless, VETS is of the opinion that some employers will 
find that the benefits of the award exceed the costs of applying. 
Congress determined that the HIRE Vets Medallion Program is a 
constructive way for the Federal Government to recognize companies that 
have made significant efforts to hire and retain veterans. The HIRE 
Vets Medallion Program will allow VETS to further leverage its existing 
Veteran Employment Outreach Program (VEOP) that directly supports 
efforts to assist employers in recruiting and employing veterans, along 
with existing partnerships with agencies such as the Small Business 
Administration (SBA) and State workforce agencies. This Program allows 
VETS to highlight and model employer efforts that can assist employers 
nationwide to develop veteran employment efforts further.
    Comment: Finally, one commenter questioned why the HIRE Vets 
Medallion Program is not administered by the U.S. Department of 
Veterans Affairs.
    Response: Under 38 U.S.C. 4102A(a)(1), the Assistant Secretary of 
Labor for VETS is responsible for all DOL employment and training 
programs that to the extent that they affect veterans. VETS' mission is 
to prepare America's veterans, service members, and their spouses for 
rewarding careers, provide them with employment resources and 
expertise, protect their employment rights, and promote their

[[Page 52187]]

employment opportunities. Consistent with that responsibility, Congress 
specifically assigned administration of the HIRE Vets Medallion Award 
to the Secretary of Labor (Secretary). VETS supports workforce 
resources for employers to develop a globally competitive workforce and 
the public workforce system is a valuable resource to support human 
capital development of workers across the country. The system offers 
essential tools to employers to help transform the workforce to meet 
the changing demands of the 21st-century economy, and to become more 
competitive.

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

    Sections 1011.000 through 1011.015 detail the program's purpose, 
scope, definitions, and award types. VETS received several comments on 
the definitions at Sec.  1011.005 and on the employer size categories 
at Sec.  1011.015.

Definition of Veteran

    Comment: One commenter questioned the use of the definition of 
``veteran'' at 38 U.S.C. 101. The commenter expressed a desire for VETS 
to incorporate National Guard members mobilized under U.S.C. title 32 
into the definition of ``veteran'' as it implements the statute into 
final regulatory text.
    Response: Section 8(c) of the Act states that the term ``veteran'' 
has the meaning given such term under 38 U.S.C. 101. Incorporating all 
mobilization under Title 32 would be inconsistent with the meaning of 
section 8(c) of the Act. Consequently, VETS declines to make this 
change. However, as we stated in the NPRM, 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 
the Act. VETS' primary concern is that an employer applying for an 
award reports as accurately as it is reasonably able. VETS retains the 
language as proposed.

Employer Size Categories

    Comments: Two commenters requested a change to the employer award 
size categories, expressing that it might be difficult for companies 
with more than 500 employees but fewer than 10,000 employees to compete 
with those employers that have more than 10,000 employees. One 
commenter questioned if perhaps revenue would be a better standard by 
which to categorize employers, while another recommended defining large 
employers as those with 10,000 or more employees.
    Response: VETS retains the rule language as proposed because the 
employer category sizes are established by statute in section 3(b) of 
the Act. Consequently, VETS does not have the discretion to make this 
change.

Subpart B--Award Criteria

    Sections 1011.100 through 1011.120 enumerate the award criteria for 
the various award categories and levels. VETS received a few comments 
suggesting additional criteria or requesting clarification on criteria. 
VETS also received several comments on the violation of labor law 
provision at Sec.  1011.120. Because many of these comments apply 
across sections, this preamble first addresses comments that touch on 
multiple sections, then addresses comments on Sec.  1011.120, and 
finally addresses comments suggesting new criteria.

Comments on Proposed Criteria

    Comment: One commenter suggested that the same criteria should 
apply to all employers regardless of size.
    Response: For the sake of simplicity, VETS retained consistency 
across awards to the extent possible. However, to recognize that 
employers of different sizes will likely have different resources, VETS 
proposed that small employers need not satisfy as many criteria as 
medium employers and that medium employers need not satisfy as many 
criteria as large employers. VETS concludes that the proposed language 
strikes the best balance between these two interests and retains the 
language as proposed.
    Comment: A commenter requested that VETS ensure that there is a 
meaningful retention requirement. The commenter also suggested 
companies that hire veterans in order to meet award requirements and 
subsequently lay off those veterans be made to return any award they 
receive.
    Response: VETS agrees that retention is a very important issue for 
veteran employees. Consequently, every award has a retention criterion. 
As to the commenter's concern about employers hiring veterans and then 
laying them off, these awards recognize actions taken and VETS will not 
revoke an award if an employer legitimately qualified for the award in 
the previous year. However, VETS can revoke an award for the reasons 
described in Sec.  1011.230, including if the employer falsely attested 
to its retention numbers. Moreover, Sec.  1011.225 allows VETS to 
review an application, if at any time VETS becomes aware of facts that 
indicate information provided by an employer may be incorrect, and 
Sec.  1011.600 requires the employer to retain the information 
supporting its application for 2 years. VETS retains the language as 
proposed.
    Comment: One commenter stated that for some industries, retention 
numbers are proprietary information and asked how employers could 
ensure that information used for judging the award would not be 
released to the public or their competitors.
    Response: VETS cannot ensure that information submitted for 
evaluating an application will not be released to the public. 
Therefore, information submitted by an applicant may become available 
to the public. The HIRE Vets Medallion Program is a voluntary program. 
In order to ensure reviewability, all applicants must provide the 
required information in order to qualify for an award. VETS retains the 
language as proposed.
    Comment: One commenter stated that the retained percentage should 
be compared to the number of actual hires and that employers should 
present the number of hires along with the number of veterans retained 
within a given timeframe.
    Response: VETS agrees that the awards should include both hiring 
and retention and such criteria are included.
    Comment: A commenter requested that VETS merge the requirements 
that employers establish internal organizations (such as the veteran 
organization or resource group) with the requirement that employers 
establish an assistance or training program. This commenter also 
suggested that the percentage of veteran employees enrolled in the 
veteran organization or resource group could be an additional weighted 
criterion.
    Response: VETS retains the language as proposed. Section 3(b)(1) of 
the Act establishes these criteria as separate criteria intended to 
serve separate purposes. Veteran organizations or resource groups are 
support networks for veteran employees while the ``assistance or 
training program'' focuses on the provision of post-secondary education 
to veteran employees. However, there can be overlap in how the employer 
satisfies its criteria. For instance, a large employer's human 
resources professional might run the employee veteran organization or 
resource group. Similarly, the tuition assistance program for post-
secondary education might overlap with the programs established to 
enhance the leadership skills of veteran employees. As for the 
suggestion that the percentage

[[Page 52188]]

of veteran employees enrolled in the veteran organization or resource 
group be an additional criterion, VETS declines to make this change 
because it would create an additional reporting burden for employers.
    Comment: One commenter stated, in regard to the dedicated human 
resources professional criterion, that large employers might have 
hiring, training, and retention responsibilities spread across multiple 
departments.
    Response: Large employers can have veteran hiring, training, and 
retention responsibilities spread across multiple departments and still 
meet the criterion at Sec.  1011.100(b)(7). Large employers with more 
than 5,000 employees need to have at least one dedicated human 
resources professional per the requirements of section 3(b)(1)(C)(iv) 
of the Act, but the definition of Dedicated Human Resources 
Professional in Sec.  1011.005 states that these duties can be split 
amongst multiple people so long as the time spent supporting the 
hiring, training, and retention of veteran employees is the equivalent 
of one full-time professional. Additionally, large employers that 
employ 5,000 or fewer employees need not have a dedicated human 
resources professional but may instead satisfy this criterion by having 
at least one human resources professional whose regular work duties 
include supporting the hiring, training, and retention of veteran 
employees. The proposed language is consistent with the Act and does 
not prohibit large employers from having veteran hiring, training, and 
retention responsibilities spread across multiple departments. VETS 
retains the language as proposed.
    Comment: One commenter expressed concern that the pay differential 
criterion was too vague, as it did not define the types of deployment 
to which the pay differential criterion applied. The commenter also 
questioned the length of time an employer would need to offer the pay 
differential in order to satisfy the criterion and whether small and 
medium employers would be able to afford the pay differential for more 
than a year.
    Response: The definition of Active Duty in the United States 
National Guard or Reserve at Sec.  1011.005 defines the types of 
deployment to which the pay differential criterion applies by reference 
to the definition of active duty in 10 U.S.C. 101(d)(1). Because this 
definition is well-established and sufficiently clear, VETS retains the 
proposed language without change. Additionally, VETS appreciates the 
commenter's concern that the pay differential applies for as long as 
the employee is on active duty. However, the pay differential is only 
included as part of the platinum award criteria and is only required 
for the large employer platinum award. Consequently, employers could 
receive all awards except the large employer platinum award without 
satisfying this criterion. VETS concludes that inclusion of the 
provision of pay differential for as long as the employee is on active 
duty is consistent with the higher standard expected of platinum 
awardees. Consequently, VETS retains the language as proposed.
    Comment: One commenter requested an explicit list as to which 
programs constitute ``assistance'' or ``training'' programs.
    Response: VETS retains the language as proposed in order to retain 
flexibility for employers to provide integration assistance that best 
suits their workforce. However, VETS agrees that a non-exhaustive list 
of examples of post-secondary education programs that would satisfy the 
tuition assistance program criterion would be useful for employers. 
Examples of post-secondary programs and courses for which employers may 
provide tuition assistance include:

[squ] Correspondence training
[squ] Cooperative training
[squ] Entrepreneurship training
[squ] Flight training
[squ] Independent and distance learning
[squ] Undergraduate and graduate degrees
[squ] Licensing and certification reimbursement
[squ] Vocational/technical training and non-college degree programs
[squ] National testing reimbursement
[squ] On-the-job training and apprenticeships
[squ] Tutorial assistance

Also, as the proposed rule explained, the assistance provided through 
an employer's tuition assistance program may take many forms, including 
financial assistance, leave assistance, or discounts on post-secondary 
education.
    VETS will continue to offer technical assistance on the types of 
activities and programs that satisfy the other integration assistance 
criteria.

Comments on Veteran-Specific Labor Violations Criterion at Sec.  
1011.120

    Section 1011.120 outlines the circumstances that would disqualify 
or delay an employer from receiving a HIRE Vets Medallion Award for 
violations incurred under labor laws protecting veterans as 
administered by, or in conjunction with, VETS and the Office of Federal 
Contract Compliance Programs (OFCCP). Commenters supported: The premise 
that an employer that does not take its obligations under the Uniformed 
Services Employment and Reemployment Rights Act of 1994 (USERRA) and 
the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA) 
seriously is undeserving of an award; limiting the covered laws to 
USERRA and VEVRAA; and retaining discretion to delay an award if VETS 
has credible information suggesting that a significant violation may 
have occurred. A commenter also stated that no additional disqualifying 
events should be added to the list.
    Comment: One commenter stated that while most of the regulation 
tracks the Act, the Act contained no corresponding section to the 
violation of labor law provision proposed at Sec.  1011.120.
    Response: Section 3(b)(1)(E) of the Act grants VETS authority to 
establish additional criteria for each level of award. VETS used this 
authority to establish the criterion described in Sec.  1011.120. VETS 
chose to include this criterion because employers that have been proven 
to have violated, or have explicitly admitted violating the rights of 
their veteran employees should not receive an award from VETS for their 
veteran employment practices. VETS retains the language as proposed.
    Comment: One commenter suggested that ``technical or minor'' 
violations of USERRA or VEVRAA should not be disqualifying. The 
commenter asserted that this provision in the proposed rule was similar 
to provisions in the guidance implementing the now rescinded Executive 
Order 13673, and that the effect could be employers being disqualified 
for the award for issues unrelated to the recruitment, employment, and 
retention of veterans.
    Response: The disqualification standard proposed in Sec.  1011.120 
is far narrower than the one used in the implementation of now 
rescinded Executive Order (E.O.) 13673. The E.O. covered numerous 
additional labor statutes (instead of just the veteran employment 
protections covered here) and would disqualify an employer for 
violation determinations made by the agency before judicial enforcement 
proceedings began. Since fairness requires that all applicants be 
subject to a clear and consistent standard, the final rule will retain 
the bright line standard instead of adopting a flexible standard. 
Additionally, VETS declines to revise the regulatory text to 
distinguish between purportedly major and minor violations for the 
purposes of this rule.
    Comment: One commenter questioned whether one of the proposed 
disqualifying events, a settlement agreement in which the employer

[[Page 52189]]

admits a violation of either USERRA or VEVRAA, should be included given 
the varying reasons that employers enter into settlement agreements. If 
VETS were to keep this provision, the commenter opined that it should 
not be expanded, so as to avoid creating a disincentive for settling 
allegations.
    Response: VETS retains the language as proposed. The rule would 
only disqualify employers with settlement agreements in which the 
employer specifically admits to violating USERRA or VEVRAA, two laws 
closely related to veteran employment. If the employer has violated 
these laws and admits to doing so in a settlement agreement, VETS has 
concluded that this is as serious as the judgment of a court or 
tribunal and, thus, considers it a disqualifying event. Settlement 
agreements in which the employer does not admit liability for 
violations of these statutes would not disqualify an employer from 
consideration.
    Comment: One commenter suggested that the regulation more 
explicitly reference the VEVRAA requirement that covered Federal 
Government contractors and subcontractors follow mandatory job listing 
requirements.
    Response: VETS retains the language as proposed because the fact 
that VETS has incorporated USERRA or VEVRAA into the rule should serve 
to highlight all USERRA and VEVRAA requirements for covered employers. 
Additionally, it is not appropriate to elevate this single aspect of 
the VEVRAA requirements when covered employers must comply with all 
requirements.
    Comment: One commenter raised the specific concern that Federal 
contractors attempting to comply with the mandatory job listing 
requirement set forth in the VEVRAA statute and regulations may 
nevertheless have violations alleged against them, which could result 
in their disqualification from receiving an award. The commenter 
expressed concern over an employer not being able to qualify for an 
award because, although the employer provides job vacancies to a State 
or local employment service as required by law, the employment service 
fails to post the vacancies.
    Response: This concern is misplaced. First of all, the specific 
situation described by the commenter, in which a contractor provides 
the required job vacancy information to the employment service delivery 
system (ESDS) location and the ESDS does not post it, does not 
constitute a violation of VEVRAA. Per the relevant VEVRAA regulations, 
so long as the contractor provides the job vacancy information ``in any 
manner and format permitted'' by the appropriate ESDS, it has satisfied 
its obligation under the regulations, and would not be disqualified 
from receiving an award as a result. See 41 CFR 60-300.5(a)(2). Second, 
an ``alleged'' violation of VEVRAA's mandatory job listing requirement 
would not alone trigger disqualification. As this final rule makes 
clear, only a decision of an administrative law judge that is not 
appealed and becomes the final agency action, or a settlement agreement 
in which the employer explicitly admits that it violated VEVRAA, could 
result in disqualification.

Suggested New Criteria

    Comment: One commenter requested that VETS create an alternative 
criterion to the veteran employee percentage criterion that weighs the 
number of veterans who are applying for employment, potentially 
tracking progress for employers with nascent veteran hiring programs. 
The commenter expressed concern that the alternative veteran employee 
percentage criterion does not always correlate with the effort that 
employers put into a veterans hiring initiative, favoring employers 
with already established programs.
    Response: The number of veteran applications, while an integral 
part of recruitment, does not necessarily equate to hiring or 
retention, the focus of the Act. Therefore, in order to best reflect 
the focus of the Act and to retain simplicity, VETS retains the 
language as proposed instead of adding an additional alternative 
criterion.
    Comment: One commenter requested that a portion of the application 
allow employers to outline military/veteran-friendly initiatives or 
awards that the employers have received.
    Response: The application form contains an optional item that 
allows employers to describe efforts to support the veteran and 
military community. However, this item is not a criterion for 
recognition and will not factor into whether an employer receives an 
award. It will instead be used to facilitate the sharing of good 
practices for veteran hiring and retention. The HIRE Vets Medallion 
Program is a recognition program to honor employer commitment to, and 
investment in, veteran recruiting and employment. Therefore, VETS 
declines to establish a criterion for the HIRE Vets Medallion Program 
related to other military/veteran-friendly initiatives and awards.
    Comment: A commenter requested inclusion of an additional criterion 
more specifically targeting community and charitable services provided 
by employers to the veteran community.
    Response: Section 2(a) of the Act states that the purpose of the 
Act is to recognize efforts by employers to recruit, employ, and retain 
veterans and to provide community and charitable services supporting 
the veteran community. VETS agrees that community and charitable 
services are an integral part of supporting the veteran community. 
However, VETS declines to establish an additional criterion related to 
community and charitable services because these services are already 
integrated throughout the large employer criteria that serve as the 
basis for the small and medium employer criteria. Consequently, VETS 
retains the language as proposed.
    Comment: One commenter suggested an additional criterion that 
employers use the workforce development system to list their job 
openings, either directly with State job banks or through the National 
Labor Exchange (NLx). The commenter expressed concern that if such a 
criterion is not established, then the high-quality jobs offered by 
employers applying for the award might not reach the veterans, 
transitioning service members, and spouses served by the Department.
    Response: NLx is recognized as a workforce system tool that 
collects and disseminates job postings, including through State job 
banks. VETS encourages employers to use State job banks as a resource 
to help with the recruitment of veteran employees. Although VETS 
encourages the use of State job banks, it declines to add a related 
criterion in order to retain flexibility for employers in structuring 
how they satisfy the award criteria.
    Comment: One commenter also suggested an additional criterion 
requiring engagement with the workforce development system or that, at 
the very least, additional consideration be provided to applications 
that reflect collaboration with the workforce development system. The 
commenter stated that employers could use the workforce development 
system to screen job applicants and facilitate participation in career 
and hiring events, as well as for help with many other activities. The 
commenter noted that these services might be particularly critical for 
small employers who lack a human resources professional. The commenter 
also noted that employers can serve on State and Local Workforce 
Development Boards where they can participate in the design and 
operation of services in their area.

[[Page 52190]]

    Response: The public workforce system includes a nationwide network 
of over 2,400 American Job Centers (AJCs), a network operated in 
partnership by Local Workforce Development Boards, State Workforce 
Agencies, and DOL. VETS will continue to work closely with Federal and 
State partners to provide coordinated information and services to job 
seekers and employers while continually facilitating and developing 
meaningful employment and training opportunities for transitioning 
service members, veterans, and military families. VETERANS.GOV enables 
employers to directly contact VETS' VEOP to request assistance in 
hiring veterans. Although, as with the comment on including a State job 
bank or NLx criterion, VETS encourages employers to take advantage of 
the public workforce system, it declines to add a related criterion in 
order to retain flexibility for employers.
    Comment: One commenter suggested adding a criterion for procedural 
descriptions of a 6-month onboarding process for veteran employees.
    Response: Although VETS agrees that effective onboarding of veteran 
employees is important to the establishment of a successful working 
environment for veteran employees, the final rule retains the language 
as proposed because the various forms of integration assistance covered 
by the proposed criteria already answer the purpose of this request. 
For example, the veteran organization or resource group criterion 
requires that the organization or resource group assist ``new veteran 
employees'' (emphasis added).

Subpart C--Application Process

    Subpart C sets out the application process for the HIRE Vets 
Medallion Award. VETS received two comments on subpart C.
    Comment: A commenter asked that VETS reconsider Sec.  1101.210 and 
that employers be allowed to win an award every year.
    Response: The requirement at Sec.  1011.210 is a requirement of the 
Act. Section 2(d) of the Act states that ``[a]n 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.'' 
Consequently, VETS does not have discretion to make this change. 
However, for purposes of clarity, VETS has amended proposed Sec.  
1011.210 to reference section 2(d) of the HIRE Vets Act.
    Comment: A commenter also asked VETS to clarify who will be 
reviewing applications for the medallion awards.
    Response: VETS is responsible for the application review and award 
determination for the HIRE Vets Medallion Program.
    VETS also made a nonsubstantive change to Sec.  1011.230(a), 
clarifying that VETS can deny an award if an employer fails to satisfy 
all application requirements. This is not a substantive change; this 
requirement was already included in Sec.  1011.010. However, VETS has 
added it to the language of Sec.  1011.230 for additional clarity.

Subpart D--Fees and Caps

    Subpart D sets out the fees for the HIRE Vets Program and the 
application caps that VETS can utilize.
    Comment: One commenter requested clarity as to whether it is VETS' 
understanding that the fee authorized by section 5(b) of the Act can 
only be collected if a future appropriations action triggers the fee 
collection.
    Response: Section 5(b) of the Act grants VETS authority to collect 
fees and states that VETS ``shall establish the amount of the fee such 
that the amounts collected as fees and deposited into the [HIRE Vets 
Medallion Award] Fund are sufficient to cover the costs associated with 
carrying out this division.'' Therefore, the Act grants VETS authority 
to collect fees and does not require a future appropriations action to 
trigger this authority.
    Comment: One commenter expressed concern about the accountability 
of the award fund and asked what safeguards would be in place to 
protect money in the fund.
    Response: Funds contained in the HIRE Vets Medallion Award Fund 
will be subject to the same protections and safeguards that are applied 
to all Federal Government funds.

Subpart E--Design and Display

    VETS received no comments on subpart E.

Subpart F--Requests for Reconsideration

    VETS received no comments on subpart F.

Subpart G--Record Retention

    VETS received no comments on subpart G.

Procedural Determinations

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 qualitative 
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.
    VETS has determined that this rule is not an economically 
significant regulation--neither the costs nor the benefits exceed $100 
million dollars in any given year. VETS has determined that this rule 
is not a ``significant regulatory action'' under section 3(f) of 
Executive Order 12866. VETS analyzed costs and benefits of this rule 
using 2016 employment and wage data from the Bureau of Labor Statistics 
(BLS). The cost analysis uses a 10-year time horizon. The 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' 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.

[[Page 52191]]

    <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 VETS to recognize employers for their accomplishments in recruiting, 
retaining, and hiring veterans.

Introduction

    The methodology for these estimates will remain the same as those 
presented in the NPRM. No public comments were received addressing the 
methodology for estimating costs of the regulation. VETS did receive 
public comments related to some aspects of the analysis, as well as 
comments on the benefits to employers and veteran employees. VETS 
responds to these comments in the remainder of this section.

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 BLS, making up close to 7 
percent of the U.S. employed population.
---------------------------------------------------------------------------

    \1\ BLS, DOL, Current Population Survey, 2016.
    \2\ Watson, Ben, (2014) Veteran Unemployment Rate Drops, But 
Still Outpaces the Rest of the Country. www.defenseone.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 (North American Industry Classification System (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 
Statistics 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 of 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 lower than the national 
average are the 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           6,711             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

[[Page 52192]]

 
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
    Membership Associations and Organizations...................             119           2,950             4.0
Government--Local \3\...........................................             708          14,339             4.9
----------------------------------------------------------------------------------------------------------------
Source:
\1\ BLS, Current Population Survey, 2016.
\2\ BLS, Current Employment Statistics survey, 2016.
\3\ U.S. Census of Governments, 2012.
(See Spreadsheets, Docket No. VETS-2017-0001-0002 for all sources and derivation).

    The job posting site, Indeed.com, identified five occupational 
categories where veterans have the highest levels of employment: 
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 than with 
others, 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 award program requires a fee, it was determined 
that employers with fewer 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 fewer 
than five 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 500 or more 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 show a total of 2,379,033 employers with more 
than four employees. However, knowing the percentage of veterans in an 
industry's workforce does not indicate how many employers in that 
industry can meet the quantitative criteria for receiving the

[[Page 52193]]

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 veterans as 7 percent or more of their total number 
of new hires for the applicable time period, and the percentage with 7 
percent veterans in their current workforces. 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' rates are equal to the typical 
rates of all workers considered together, 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 final rule. Absent comments on the methodology 
and more detailed data, VETS retains its assumption from the NPRM 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. 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 used here 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 2014 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. Of the 2,379,033 employers with more 
than four employees, VETS estimates that 424,952, or 18 percent of all 
employers in the three size ranges, would be potentially eligible for 
the program.
---------------------------------------------------------------------------

    \4\ U.S. Census Bureau, 2014. SUSB 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 (Docket No. VETS-2017-0001-0002).
    \5\ BLS Job Openings And Labor Turnover (2017). News Release; 
For release 10 a.m. (EDT), July 11, 2017, https://www.bls.gov/news.release/pdf/jolts.pdf.
    \6\ U.S. Census Bureau, 2014. SUSB 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 (Docket No. VETS-2017-0001-0002).
---------------------------------------------------------------------------

    The complete formulas for the probability calculations are given in 
the supplemental spreadsheets (Docket No. VETS-2017-0001-0002). There 
are four probabilities needed for these calculations:

PH = the probability that 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 0.5 in all cases); and
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
                                                 ---------------------------------------------------------------
            Industry                   Total           Small          Medium           Large
                                  employers (5+)   employers (5-  employers (50-     employers         Total
                                                        49)            499)           (500+)
----------------------------------------------------------------------------------------------------------------
Forestry, Logging, Fishing,                2,837             536             389              93           1,017
 Hunting, and Trapping..........
Mining, Quarrying, and Oil and             9,350           3,377           1,322               0           4,700
 Gas Extraction.................
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             35,064           7,638           3,613           1,025          12,276
 Metal Products.................
Machinery Manufacturing.........          14,706           3,928           2,432             682           7,043
Computers and Electronic                   7,439           1,743           1,279             519           3,541
 Products.......................
Electrical Equipment and                   3,359             553             398             210           1,161
 Appliances.....................
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

[[Page 52194]]

 
Motion Pictures and Sound                  4,802             395              30               0             425
 Recording Industries...........
Radio and TV Broadcasting and              2,857           1,127             344             111           1,582
 Cable Subscriptions Programming
Telecommunications..............           3,705           1,097             498             160           1,755
Data Processing, Hosting, and              4,885             334              88               0             422
 Related Services...............
Libraries, Archives, and Other             3,237             269              37               0             307
 Information 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               205,067          42,079           7,476           2,116          51,670
 Services.......................
Management of Companies and               23,944              66               6               0              72
 Enterprises....................
Administrative and Support               108,014          12,007           2,405               3          14,415
 Services.......................
Waste Management and Remediation           8,782           2,240             570             168           2,977
 Services.......................
Educational Services............          43,887           4,718           1,320               1           6,039
Hospitals.......................           3,407              16             388              36             441
Health Services, Except                  247,348          20,285           1,726               0          22,011
 Hospitals......................
Social Assistance...............          67,460           3,486             270               0           3,756
Arts, Entertainment, and                  42,698           6,202           1,700              59           7,962
 Recreation.....................
Accommodation...................          29,467           1,935             130               0           2,065
Food Services and Drinking               273,382          10,708             262               0          10,970
 Places.........................
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              121,174          13,647           1,017               0          14,664
 Organizations..................
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. SUSB 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 (Docket No. VETS-2017-0001-0002).

    In the NPRM, data from BLS on veteran employment were presented as 
a key input for estimating the number of eligible employers. VETS did 
not receive comments on the use of BLS data for estimating the number 
of employers meeting the criterion of 7 percent veteran employment. The 
methodology presented in the NPRM to estimate the number of eligible 
employers has not been modified, although there were various commenters 
who recommended changes to the regulation that could have impacts on 
the eligibility estimates. For reasons explained in the responses to 
public comments above, VETS did not make changes to the rule in 
response to public comments. Therefore, no changes were made to the 
employer eligibility estimates used in the NPRM.

Unit Cost

    Using the information provided in the stakeholder meetings, as well 
as estimates from similar analysis done by other DOL 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 
used the data from the May 2016 BLS Occupational Employment Statistics 
(OES) survey. For the purposes of this analysis, VETS estimates a fully 
loaded wage rate to include fringe benefits and overhead, resulting in 
a doubling of the OES wage rate.<SUP>7 8</SUP>
---------------------------------------------------------------------------

    \7\ The value of two is recommended by HHS in HHS, Guidelines 
for Regulatory Analysis, 2016, p. 33.
    \8\ BLS OES survey (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.
---------------------------------------------------------------------------

    Rule familiarization costs are estimated to take 1 hour for all 
employers regardless of size; this is based on the Occupational Safety 
and Health Administration's (OSHA's) recordkeeping rule updated in 
2014.\9\ This activity would typically be performed by a human 
resources manager at a large or medium employer or by a person with 
equivalent responsibilities at a small employer. Using the data from 
the OES survey, the mean hourly wage of the human resources manager is 
$57.79. Adding overhead and fringe benefits, the fully loaded hourly 
wage rate 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, 1 hour was 
estimated for rule familiarization of the award program requirements of 
eligibility and the application form instructions.
---------------------------------------------------------------------------

    \9\ Occupational Injury and Illness Recording and Reporting 
Requirements: North American Industry Classification System Update 
and Reporting Revisions (docket number: OSHA-2010-0019-0127).
---------------------------------------------------------------------------

    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 2 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

[[Page 52195]]

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 resources 
specialists for a large or medium employer. Using the data from the May 
2016 BLS OES survey, 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 were estimated by VETS for medium and small 
employers 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 5 hours for large employers due to the additional 
information required to match the criteria for eligibility and the time 
for a human resources manager to determine if the programs offered by 
the employer meet the regulation criteria. Larger employers at the 
stakeholder meetings provided a range of 1 to 4 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.\10\ The 
application form for VETS' award program requires employers to provide 
employment and descriptive information for as many as seven fields to 
as few as one field 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 5 hours was 
estimated for large employers, and an average of 3 hours for medium and 
small employers, to collect and retain needed information.
---------------------------------------------------------------------------

    \10\ The ESGR Freedom Award is given to employers who are 
nominated to recognize those that support their employees who serve 
in the United States National Guard or Reserve. There are up to 15 
awards presented each year by firm size and to the public sector. 
http://www.freedomaward.mil/.
---------------------------------------------------------------------------

    Large and medium 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 2 hours by 
a database administrator at a large or medium employer according to 
comments received from the stakeholder meeting in early June of 2017. 
Using the data from the May 2016 BLS OES Survey, the mean wage of the 
database administrator is $41.89. Adding overhead and fringe 
benefits,\11\ the total wage used to estimate the cost of this task is 
$83.78. Small employers with 50 or fewer 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.
---------------------------------------------------------------------------

    \11\ BLS 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. A large employer is 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 resources specialist. A 
medium employer is expected to take 1.5 hours because there are fewer 
criteria than for a large employer; this activity would be done by a 
human resources specialist. Using the data from the May 2016 BLS OES 
survey, the mean wage of a human resources 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 for a medium 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 survey; with added fringe benefits and overhead, this 
results in an hourly wage of $41.90.
    The form requires the attestation of an executive (chief executive 
officer, chief human resources officer, or equivalent official) 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 or medium employer, this activity will be performed 
by an executive with a mean hourly wage of $93.44 as reported in the 
BLS 2016 OES survey; 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 resources manager with a mean hourly 
wage of $57.79 as reported in the BLS 2016 OES survey; adding fringe 
benefits and overhead results in a fully loaded wage for this task of 
$115.58.
    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 or medium employer, following up on an application 
would be done by the human resources specialist with an hourly wage of 
$62.40 (including fringe benefits and overhead), and a request for 
reconsideration would be handled by a human resources 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 resources manager equivalent would be 
involved in a request for 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 human resources staff that 
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

[[Page 52196]]

resources staff or a database administrator.

                                    Table 3--Burden Costs by Employer Size *
----------------------------------------------------------------------------------------------------------------
        Tasks by employer size                  Resource               Wage            Hours           Cost
----------------------------------------------------------------------------------------------------------------
Large Employer Activities:
    Rule familiarization..............  HR manager..............            $116             1.0            $116
    Data collection large employers...  HR specialists..........              62             5.0             310
    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  ........................  ..............  ..............             855
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: BLS, OES 2016.
* Wages and costs are rounded values.
(See Spreadsheets, Docket No. VETS-2017-0001-0002 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.
    The rulemaking docket includes a spreadsheet used to estimate the 
unit costs to employers who apply for the award. The unit costs in the 
spreadsheet included burden costs 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 
received a few public comments related to these aspects of the cost 
estimation. For example, a commenter stated that there are ``small 
employer[s] who may lack a dedicated Human Resources professional, and 
rel[y] on the AJC staff for many hiring functions.'' VETS agrees that 
smaller employers often will not employ the same type of human 
resources professionals as medium or larger employers do, and this is 
reflected in the cost estimates and criteria for applying. Other 
commenters suggested changes in certain program criteria, which, if 
adopted by VETS, could have impacted unit costs associated with filling 
out the forms. However, as explained in the responses to public 
comments above, VETS did not make any changes to the award criteria in 
response to public comments. Therefore, no changes were made to the 
unit cost estimates used in the NPRM.
    In the NPRM, estimates for cost and burden were based on comments 
received from stakeholder meetings and OSHA's recordkeeping rule update 
in 2014.

Government Costs

    The cost to the Government involves the intake, review, 
verification, and processing of the applications, and notification/
distribution of the award. To efficiently process applications, VETS 
will develop and maintain a system to electronically receive 
applications, 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 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 $2.5 million 
dollars per year based on 10,000 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 mean hourly 
wage rate for an outreach specialist is $45.42, as reported by the 
Office of Personnel Management (OPM) for a General Schedule (GS)-13 
(Step 1) in 2017; \12\ plus fringe benefits and

[[Page 52197]]

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 Step 1); plus fringe benefits and overhead, 
the hourly wage would be $107.36. An IT specialist (GS-12 Step 1) 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.
---------------------------------------------------------------------------

    \12\ 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 survey; \13\ plus fringe 
benefits and overhead, the hourly wage rate would be $118.62. An IT 
specialist will spend 40 hours to support these activities with an 
hourly wage rate of $42.25; \14\ plus fringe benefits and overhead, the 
hourly wage is $84.50. The program manager \15\ is estimated to spend 
151 hours processing applications, with an hourly wage rate of $58.70; 
plus fringe benefits and overhead, the hourly wage is $117.40. A 
program specialist \16\ will perform the bulk of the application review 
tasks, totaling 18,569 hours with an hourly wage rate of $35.99; plus 
fringe benefits and overhead, the hourly wage will be $71.98.
---------------------------------------------------------------------------

    \13\ BLS OES occupation code 11-2031 Public Relations and 
Fundraising Managers.
    \14\ BLS OES occupation code 15-0000 Computer and Mathematical 
Occupations.
    \15\ BLS OES occupation code 11-1021 General and Operations 
Managers.
    \16\ BLS OES occupation code 13-1199 Business Operations 
Specialists.
---------------------------------------------------------------------------

    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 USERRA; or the VEVRAA. This verification process 
will involve VETS and 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 \17\ spending 240 hours, with 
a loaded hourly wage of $84.50 (hourly mean wage from BLS without 
fringe benefits or overhead is $42.25).
---------------------------------------------------------------------------

    \17\ BLS OES occupation code 15-0000 Computer and Mathematical 
Occupations.
---------------------------------------------------------------------------

    The notification of the award will also be executed by a 
contractor, and it will involve 50 hours of a program manager's \18\ 
time, with a loaded hourly wage of $117.40, and 40 hours of a program 
specialist's \16\ time, with a loaded hourly wage of $71.98.
---------------------------------------------------------------------------

    \18\ 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 it 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. The 
cost to the Government was estimated in two parts: The costs to 
efficiently process applications and the costs of creating the 
application system. VETS solicited comments on the costs to the 
Government to develop a system to accept and review applications but 
none were received.
    The supplemental spreadsheet in the docket includes the methodology 
used in the NPRM to estimate the costs to the Government to process the 
application and the creation of the application system; no changes are 
being made to the Government cost calculations.

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 fee 
will cover the costs of solicitation of applications, processing 
applications, vetting applicants for labor law 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 
information about five types of integration assistance. However, the 
small employer platinum award only requires that the applicant provide 
information about two types of integration assistance. Consequently, 
the large employer award will take longer to review than the small 
employer award will.
    In recognition of these differences in the number of criteria and 
the amount of 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 fee for large employers is $495 
per applicant, the fee for medium employers is $190 per applicant, and 
the 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 that 
reflect the information needed to be reviewed. 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 cost.

                                            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

[[Page 52198]]

 
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, Docket No. VETS-2017-0001-0002 for all sources and derivation).
Average cost per application = total processing cost/# of employers.

    The proposed fee in the NPRM was estimated to cover the cost to the 
Government, which includes solicitation of applications, processing 
applications, vetting applicants for labor law violations, and award 
notifications, as well as the maintenance cost of the IT system used in 
the processing of applications. VETS did not receive comment on the 
cost estimates for the Government, nor the estimated graduated fee by 
employer size.
    The same calculation found in the spreadsheet and discussed in the 
NPRM is used to derive a graduated application fee by employer size.

Participation and Costs per Year

    VETS based its estimates of the level of participation partly on 
the CBO estimate of 4,000 employers in the first year and on the impact 
the criteria would have on the participation levels.
    There were no comments on the estimated level of participation; 
these estimates will stay the same. As indicated in the Summary and 
Explanation section of this document, some commenters expressed doubt 
that employers would be interested in participating in the HIRE Vets 
Medallion Program but no commenter provided specific data or evidence 
regarding how this supposition would impact the participation rates 
estimated in the NPRM.
    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 veterans' 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 4,152 employers will apply in the first year, but that 
this would increase to 6,228 employers in the second year and to 10,728 
per year in succeeding years. Table 5 shows the estimated participation 
rates by employer size class for each year and the resulting estimated 
costs of applications.

                                        Table 5--Estimated Participation Rates and Numbers of Applicants by Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             1st year        1st year        2nd year        2nd year        3rd year        3rd year
                       Size class                          participation     number of     participation     number of     participation     number of
                                                             rate  (%)      applicants       rate  (%)      applicants       rate  (%)      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            30.0           3,835
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................             N/A           4,152             N/A           6,228             N/A          10,728
--------------------------------------------------------------------------------------------------------------------------------------------------------
VETS Estimates (See Spreadsheets, Docket No. VETS-2017-0001-0002 for all sources and derivation).

    Table 6 shows the results 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 costs 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

[[Page 52199]]

 
Medium..........................................................       1,377,355       1,836,473       2,984,269
Large...........................................................       1,230,468       1,965,603       2,948,405
                                                                 -----------------------------------------------
    Total.......................................................       2,703,038       4,013,665       6,567,441
----------------------------------------------------------------------------------------------------------------
VETS Estimates (See Spreadsheets, Docket No. VETS-2017-0001-0002 for all sources and derivation).

    There are multiple factors that would contribute to the 
participation rate of large, medium, and small employers, such as the 
application fee, amount of outreach by VETS, and the potential benefits 
gained by the 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 to increase 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 and 25 percent of potentially eligible small 
employers apply every year.

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 Final Rule
----------------------------------------------------------------------------------------------------------------
                                                                                                    First year
                                                                                                     costs (if
                          Cost element                              Annualized      Annualized    different from
                                                                    costs at 3%     costs at 7%     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, Docket No. VETS-2017-0001-0002 for details).

Alternatives

    VETS considered alternative quantitative criteria for small and 
medium employers. One alternative would have been 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 have dropped the veteran employee 
percentage requirement. Keeping all the participation rates the same, 
VETS estimates that this change would have increased the number of 
potentially eligible employers by 38 percent, increased participation 
in the program by 19 percent, and increased annualized costs from 
approximately $8 million per year to $11.9 million a year. This 
alternative had the disadvantage that it would have allowed employers 
who had not recently achieved a 7 percent hiring goal to win the award.
    VETS also considered an option in which small and medium employers 
could have qualified if they met either of the following: (1) 7 percent 
of the employer's new hires during the previous year were veterans, or 
(2) 7 percent of the employees it hired over the last 2 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 would have broadened the hiring eligibility 
timeframe. This option would have also slightly increased program 
eligibility, but it would have done so by significantly increasing 
small employer eligibility while lowering eligibility for medium 
employers. VETS concluded that this was not a useful effect given that 
medium employers are more likely to participate in the program than 
small employers are.
    VETS also examined an option in which the only hiring and retention 
criteria for small and medium employers would have been that 7 percent 
of new hires over the last 2 years were veterans along with a 75 
percent retention criterion from the first of the 2 years (previous 
year of the previous year). Under this option, employers would no 
longer have been

[[Page 52200]]

able to satisfy the hiring and retention criteria solely by having 7 
percent of their new hires in the previous year be veterans. This 
approach also would have increased small employer eligibility at the 
expense of decreasing medium employers' eligibility. Again, because of 
expected high participation rates by medium employers relative to small 
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 these alternatives.
    VETS solicited comments on these proposed alternatives for medium 
and small employers but did not receive any specific comments to the 
alternatives proposed. Therefore, the criteria presented in the NPRM 
will not change for the final rule and VETS will not adopt the 
alternatives discussed here.

Benefits

    VETS expects that 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.
    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 District of Columbia, as reported in the March 2016 Employment 
Situation of Veterans release by BLS. The higher unemployment rate for 
veterans in the District of Columbia can be attributed to the labor 
market there, which is mostly composed of professional and service 
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 \19\ 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.
---------------------------------------------------------------------------

    \19\ 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.
---------------------------------------------------------------------------

    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.\20\ Employers who attain the award will be able to 
market themselves as a veteran friendly employer and be able to attract 
more veterans for job openings.
---------------------------------------------------------------------------

    \20\ 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 received some comments regarding the benefits described in the 
NPRM. The purpose of the HIRE Vets Medallion Award is to recognize 
employers who have recruited and retained veterans, as well as the 
efforts by these employers to establish employee development programs 
for veterans and to offer veteran specific benefits to improve 
retention. Those employers who meet the criteria to receive the award 
most likely recognize the benefits of employing veterans and would want 
to attract more veteran employees in the future. A recipient of this 
award would have the opportunity to utilize the medallion in the 
marketing of their firm when hiring, as well as to attract additional 
business. One commenter stated that employers already have a means to 
``advertise that they hire vets,'' concluding that this award would not 
result in new added benefits to employers. In addition, a couple 
commenters questioned if employers would be interested in applying 
given the burden of applying and the lack of quantifiable benefits. 
While benefits were not quantified, the employers in the stakeholder 
meetings and in the 2016 Forbes article \19\ discussed above both 
asserted that there are benefits employers receive from hiring 
veterans, and this award will enable employers to attract more veterans 
to their job openings.
    Other comments supported the idea that a HIRE Vets Medallion Award 
would yield tangible benefits to employers. For example, a commenter 
expressed that ``[o]nce employers who participate in this program start 
hiring more veterans, other companies will see the positive impact it 
has on business and hopefully will follow in the same direction'' 
(VETS-2017-0001-0018). This award program was mandated by an act of 
Congress to recognize those employers who currently meet those criteria 
in hiring, retaining, and supporting veteran employees. These employers 
have engaged with veteran employees because there are benefits gained, 
but as stated above, these benefits are not easily quantified. A Time 
article from April 25, 2016, ``Paying Their Workers' College Tuition 
Can Pay Off for Companies,'' stated that tuition reimbursement, 
``reduced employee turnover and lower[ed] recruiting costs,'' 
demonstrating the financial benefit these programs can have to 
employers' bottom lines.\21\ Employee resources groups, leadership 
training, differential pay, and tuition reimbursement have all been 
shown to reduce turnover.\22\ In an article from the Huffington Post, 
``How Much Does Employee Turnover Really Cost,'' posted on January 19, 
2017, the author found that ``the cost of losing an employee can range 
from tens of thousands of dollars to 1.5-2.0x the employee's annual 
salary.'' As these articles demonstrate, employers applying for a HIRE 
Vets Medallion Award are reaping many benefits, and this award will 
allow them to maximize the return on their investment in the employee 
programs they offer.
---------------------------------------------------------------------------

    \21\ Mulhere, Kaitlin, (2016) Paying Their Workers' College 
Tuition Can Pay Off for Companies. April 25, 2016. Retrieved from: 
http://time.com/money/4305549/paying-their-workers-college-tuition-can-pay-off-for-companies/.
    \22\ Altman, Jack, (2017) How Much Does Employee Turnover Really 
cost? January 18th, 2017. Retrieved from: https://www.huffingtonpost.com/entry/how-much-does-employee-turnover-really-cost_us_587fbaf9e4b0474ad4874fb7.
---------------------------------------------------------------------------

    Attaining awards can also result in benefits to businesses in the 
form of increased marketing potential, improved standing in their 
industry, recognition as a leader, and improved employee 
engagement.\23\ These benefits discussed are all reasons that 
businesses participate in awards and offer employee development 
programs.
---------------------------------------------------------------------------

    \23\ Narayanan, Sukruti, (2017) The 5 Benefits of Receiving 
Corporate Awards. January 15, 2017. Retrieved from: https://www.linkedin.com/pulse/5-benefits-receiving-corporate-awards-sukruti-narayanan.
---------------------------------------------------------------------------

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. (Note that this definition of ``small 
employers'' is consistent with SBA's definition and differs from that 
established by Congress for purposes of the HIRE Vets Medallion 
Program.) Table 8 shows the minimum and maximum impacts for each 3-
digit subsector within the 2-digit sector shown. (Full impacts and 
derivation are given in the supplemental spreadsheets, Docket No. VETS-
2017-0001-0002.) Table 8 shows that no industry sector has costs in 
excess of 1 percent of revenues or 5 percent of profits.

[[Page 52201]]



                                                                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, Fishing,         4,244,996           0.009           0.026           0.176           0.844
                                        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, Scientific, and           2,986,458           0.020           0.020           0.517           0.517
                                        Technical Services.
55...................................  Management.......................       2,306,072           0.026           0.026           0.131           0.131
56...................................  Administrative and Support, Waste       2,727,336           0.018           0.030           0.426           0.765
                                        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, and                2,963,512           0.014           0.039           0.236           2.414
                                        Recreation.
72...................................  Accommodation and Food Services..       1,381,321           0.033           0.065           0.505           1.224
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 Source Book, 2013. https://www.irs.gov/statistics/soi-tax-stats-corporation-source-book-us-total-and-sectors-listing, Accessed by Eastern Resource Group, Inc., 2016.
U.S. Census Bureau, 2012. SUSB 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, Docket No. VETS-2017-0001-0002, for full derivation.
*Negative profit rates reported for these industries.

    As a result of these considerations, per section 605 of the 
Regulatory Flexibility Act (RFA), VETS certifies that this final rule 
will not have a significant economic impact on a substantial number of 
small entities.
    VETS did not receive comments on this certification. 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 find that the benefits exceed the costs for 
them.

References

Altman, 2017. How Much Does Employee Turnover Really cost? 
Huffingtonpost.com January 18, 2017. From: https://www.huffingtonpost.com/entry/how-much-does-employee-turnover-really-cost_us_587fbaf9e4b0474ad4874fb7.
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. OES. 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/.
VETS based on data from IRS (U.S. Internal Revenue Service), 2013. 
Corporation SourceBook, 2013. https://www.irs.gov/statistics/soi-tax-stats-corporation-source-book-us-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 No. OSHA-2010-0019-0127).
Strauss, 2016. How Veterans Adjust To The Civilian Workforce, 
November 11, 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. SUSB 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 (Docket No. VETS-2017-0001-0002).

Paperwork Reduction Act

Overview

    The final HIRE Vets Medallion Award regulations contain collections 
of information (paperwork) requirements that are subject to review by 
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 the 
Department 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

[[Page 52202]]

display a valid OMB Control Number. See 5 CFR 1320.5(a) and 1320.6.

Solicitation of Comments

    On August 18, 2017, VETS published two separate Federal Register 
Notices that allowed the public an opportunity to comment on the 
proposed Information Collection Request (ICR) containing the 
collections of information contained in the proposed regulations and 
the HIRE Vets Medallion Award application and forms. First, in 
accordance with the PRA (44 U.S.C. 3507), the HIRE Vets Medallion 
Program NPRM provided 30 days for the public to comment on the ICR (82 
FR 39390). However, the PRA requires that agencies provide a 60-day 
public comment period on the collections of information in accordance 
with 44 U.S.C. 3506(c). As a result, VETS published a second companion 
notice to the NPRM (82 FR 39460) allowing the public the full 60 days 
to comment on the collections of information contained in the proposal. 
On August 18, 2017, VETS submitted an ICR for the proposed rule to OMB 
for review in accordance with 44 U.S.C. 3507(d).
    On October 25, 2017, OMB issued a Notice of Action (NOA) commenting 
on the proposal's ICR. OMB commented that the NOA is not an approval to 
conduct or sponsor the collections of information contained in the 
proposal. OMB noted that this action has no effect on any current 
approvals and assigned the ICR control number 1293-0015 to be used in 
future ICR submissions. Also, OMB instructed the Agency to resubmit 
this ICR when the final rule is issued.

Collection of Information Requirements

    VETS received comments addressing the collections of information 
and the burden hour cost analysis. Responses to these comments are 
found in the Section-by-Section Summary of the Final Rule and 
Discussion of Comments and Executive Orders 12866 and 13563: Regulatory 
Planning and Review Introduction sections of the preamble.
    As related to this rulemaking, VETS submitted the final ICR, 
containing the full analysis and description of the burden hours and 
costs associated with the final rule, to OMB on the date of publication 
for approval. A copy of this ICR is available at https://www.reginfo.gov/public/do/PRAOMBHistory?ombControlNumber=1293-0015 
(this link will become active on the day following publication of the 
final rule). This request also seeks authority for VETS to engage in a 
demonstration of the information collection and award in 2018, before 
the implementation of this rule; this demonstration would not involve 
the collection of application fees.
    The regulations implementing the HIRE Vets Act require the 
Secretary annually to 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 or more 
employees) and allows the Secretary discretion in establishing criteria 
for small and medium employers to qualify for similar awards.
    The final rule includes the application process and criteria VETS 
will use to receive, review, and process applications; verify the 
information provided; and award the HIRE Vets Medallion Award to those 
employers meeting the criteria. VETS developed the HIRE Vets 
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 allows the Secretary to assess a reasonable fee from the 
applicants to cover the costs associated with carrying out the HIRE 
Vets Medallion Program. The final rule provides the fee amount and how 
to submit the fee.
    The final rule, like the proposed rule, provides specific award 
criteria for large employers to qualify for the gold and platinum 
awards. Although the number of criteria an employer is required to 
satisfy in the final 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 
require employers to provide information to meet award criteria 
dependent upon the size of the employer and the level of award the 
employer is requesting, gold or platinum. The following table provides 
the corresponding regulatory citation for each award type. In addition, 
employers must maintain documentation of the information relied upon to 
complete the application for 2 years after the application is submitted 
to VETS (Sec.  1011.600).

                       Final 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 applications solicit information that VETS will review and 
evaluate to determine if an employer will receive an award. Employers 
are required to maintain information relied upon to complete their 
application for 2 years, as previously noted. VETS may request this 
information if additional verification is needed, or in case VETS 
becomes aware of facts that may indicate information submitted on the 
application may be incorrect.
    Title of Collection: Honoring Investments in Recruiting and 
Employing American Military Veterans Act.
    OMB Control Number: 1293-0015.
    Total Estimated Number of Respondents: 7,036.
    Total Estimated Number of Responses: 34,245.
    Total Estimated Annual Time Burden Hours: 58,716.
    Total Estimated Annual Other Costs Burden: $1,847,746.

Small Business Regulatory Enforcement Fairness Act of 1996

    VETS has determined that this final rule 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 Small Business 
Regulatory Enforcement Fairness Act for rules with such impacts.

Unfunded Mandates Reform Act of 1995

    For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 
1532, this final rule 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 final rule in accordance with Executive 
Order 13132 regarding federalism and has determined that it does not 
have ``federalism implications.'' This 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.''

[[Page 52203]]

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

    This final rule does not have Tribal implications under Executive 
Order 13175 that require a Tribal summary impact statement. The final 
rule does 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

    The final rule uses plain language.

Effects on Families

    The undersigned hereby certifies that the final rule would not 
adversely affect the well-being of families.

Executive Order 13045 (Protection of Children)

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

Environmental Impact Assessment

    A review of this final rule 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 
part 1500 et seq.; and DOL NEPA procedures, 29 CFR part 11, indicates 
the final rule 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 final rule 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)

    This final rule 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 final rule was drafted and reviewed in accordance with 
Executive Order 12988 and will not unduly burden the Federal court 
system. The final rule was reviewed to eliminate drafting errors and 
ambiguities, written to minimize litigation, and 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.

0
 For the reasons set out in the preamble, the Veterans' Employment and 
Training Service amends 20 CFR chapter IX by adding 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?
1011.005 What definitions apply to this part?
1011.010 Who is eligible to apply for a HIRE Vets Medallion Award?
1011.015 What are the different types of the HIRE Vets Medallion 
Awards?
Subpart B--Award Criteria
1011.100 What are the criteria for the large employer HIRE Vets 
Medallion Award?
1011.105 What are the criteria for the medium employer HIRE Vets 
Medallion Award?
1011.110 What are the criteria for the small employer HIRE Vets 
Medallion Award?
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?
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
1011.200 How will VETS administer the HIRE Vets Medallion Award 
process?
1011.205 What is the timing of the HIRE Vets Medallion Award 
process?
1011.210 How often can an employer receive the HIRE Vets Medallion 
Award?
1011.215 How will the employer complete the application for the HIRE 
Vets Medallion Award?
1011.220 How will VETS verify a HIRE Vets Medallion Award 
application?
1011.225 Under what circumstances will VETS conduct further review 
of an application?
1011.230 Under what circumstances can VETS deny or revoke an award?
Subpart D--Fees and Caps
1011.300 What are the application fees for the HIRE Vets Medallion 
Award?
1011.305 May VETS set a limit on how many applications will be 
accepted in a year?
Subpart E--Design and Display
1011.400 What does a successful applicant receive?
1011.405 What are the restrictions on display and use of the HIRE 
Vets Medallion Award?
Subpart F--Requests for Reconsideration
1011.500 What is the process to request reconsideration of a denial 
or revocation?
Subpart G--Record Retention
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--General Provisions


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 this part?

    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

[[Page 52204]]

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 toward at least 
one of the following: associate's 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 1 year and who is actually retained 
for less than 1 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) Timing. 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 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 post-secondary 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 the 
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 the 
employer

[[Page 52205]]

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 post-secondary 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 the 
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 the 
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 post-secondary education during the 
term of their employment.


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. Large 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. A large 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) Uniformed 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) of this section 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 either of the laws cited in 
paragraph (a) of this section.
    (d) For purposes of this section, a contract debarment means any 
order or voluntary agreement, pursuant to the laws listed in paragraph 
(a) of this section, 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) of this section, that terminates an existing Federal contract prior 
to its completion. Employers shall be ineligible for the award if this 
termination occurred in

[[Page 52206]]

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 
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?

    Per section 2(d) of the HIRE Vets Act, an employer who receives a 
HIRE Vets Medallion Award for 1 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.hirevets.gov/.
    (e) Applicants will complete the application form and submit it 
electronically.
    (f) Applicants who need a reasonable accommodation in accessing the 
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;
    (3) The employer is ineligible to receive an award pursuant to 
Sec.  1011.120 of this part; or
    (4) The application does not satisfy all application requirements.
    (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

[[Page 52207]]

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 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 of Labor to establish a fee 
sufficient to cover the costs associated with carrying out the HIRE 
Vets Medallion Program.
    (b) Table 1 to Sec.  1011.300 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.

                       Table 1 to Sec.   1011.300
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                            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 
fees provided in table 1 to Sec.  1011.300. 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 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 15 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:
    (1) The employer name and identification number;
    (2) The reason for the request; and
    (3) An explanation, accompanied by any necessary documentation to 
support that 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 30 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 2 years from the 
date of application.

    Signed at Washington, DC, this 1st day of November 2017.
J.S. Shellenberger,
Deputy Assistant Secretary for the Veterans' Employment and Training 
Service.
[FR Doc. 2017-24214 Filed 11-9-17; 8:45 am]
 BILLING CODE 4510-79-P


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