On August 21, 2026, the Office of Federal Contract Compliance Programs (OFCCP) published three final rules on behalf of the Department of Labor (DOL), formally rescinding longstanding policies to align regulations governing federal contracts with the Administration’s goals.
The new rules, respectively, formally rescinded the implementing affirmative action regulations of Executive Order (EO) 11246, and significantly changed portions of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).
Recission of Executive Order 11246
EO 11246, issued in 1965 by President Lyndon B. Johnson, prohibited discriminatory practices and prescribed affirmative action in federal government hiring and employment for women and minorities, requiring contractors with 50 or more employees and contracts of $50,000 or more to implement affirmative action plans to increase the participation of minorities and women in the workplace, if under-represented. On January 21, 2025, President Trump revoked EO 11246.
To align federal regulations with this executive action, a final rule (91 FR 5444) rescinds the implementing regulations of EO 11246, effectively barring covered employers from (i) developing, maintaining, or implementing affirmative action plans based on sex or race; (ii) conducting workforce analyses based on their employees’ sex or race; and (iii) auditing its workforce to determine whether there is underutilization based on race or sex. This elimination of EO 11246 regulations takes effect October 26, 2026.
Changes to Section 503
The Final Rule, published at 91 FR 54482, which becomes effective September 21, 2026, modifies the regulations implementing Section 503 to not only rescind the requirement that employers ask applicants and employees to self-identify as to any disabilities, but also to bar employers from collecting this information from employees unless it “is job-related and consistent with business necessity” as set forth in the statute.
Because the requirement to collect this information no longer exists, the final rule further clarifies that employers are no longer required to collect, retain, and analyze data concerning applicants and employees, who self-identify as individuals with disabilities. Additionally, and in accordance with these changes, employers are no longer expected to have seven percent of their workforce consist of employees who self-identify as an individual with a disability.
Other existing regulations implementing Section 503 remain in effect, including the requirements for covered employers to maintain affirmative action plans to recruit individuals with disabilities and to assess those recruitment efforts. However, as a result of this new final rule, covered employers do not need to use quantitative data to assess the results of their affirmative action plans.
Other changes to the regulations include cleanup language to adjust references to the minimum amount for contracts and sub-contracts to be covered by the Section 503 rules; the threshold was increased in 2025 from $15,000 to $20,000.
Changes to VEVRAA
The updates to VEVRAA regulations (91 FR 54234) remove references to EO 11246, which is now obsolete. The rule also creates administrative procedures through new regulations in the Act, and, similar to the changes to Section 503 rules, cleans up language related to the threshold for regulatory coverage (also increased to $200,000 in 2025).
OFCCP Changes Are Consistent With Other Federal Trends
By Executive Order (EO) 14219, signed February 19, 2025, the Administration announced its commitment to “focus the executive branch's limited enforcement resources on regulations squarely authorized by constitutional federal statutes, and to commence the deconstruction of the overbearing and burdensome administrative state.”
Importantly, the foregoing final rules modify the affected regulations to align them with the goals of EO 14173, issued on January 21, 2025, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which revoked EO 11246. EO 14173 is just one of many Executive Orders restraining race or sex preferences in both public and private enterprises. See EO 14151 - “Ending Radical and Wasteful Government DEI Programs and Preferencing”; EO 14281, “– Restoring Equality of Opportunity and Meritocracy; EO 14398 – Addressing DEI Discrimination by Federal Contractors.” These three regulatory modifications, combined with the EEOC's rescission of its affirmative action guidance (July 2026) and EEO reporting requirements (August 2026), align with the administration's deregulation agenda and efforts to dismantle affirmative action and “end” DEI initiatives.
How Do These Changes Impact Employers?
The DOL’s rollbacks will likely inject even more uncertainty into the legal landscape. There are still many state and local governments that require their contractors to take affirmative action to ensure equal employment opportunities for women, minorities, individuals with disabilities and veterans. Affirmative action programs in jurisdictions such as New York, Illinois, California, Minnesota, and D.C. vary in nature and scope.
Additionally, employers whose obligations have been altered by these final rules may still be subject to the anti-discrimination provisions of other federal laws, such as Title VI, Title VII, the Equal Pay Act, and Section 1981, as well as applicable state and local laws.
What does this all mean for affected employers? The regulatory rollbacks may:
- Reduce compliance burdens (including costs) associated with the elimination of affirmative action program requirements
- Provide greater flexibility in hiring decisions without race, sex, or disability-based goals
- Reduce documentation and reporting requirements
- Impact the speed of the Federal contracting process
- Impact the representation of minorities, women, workers with disabilities, and veterans in workplaces
- Potentially result in an increase in disparate treatment or disparate impact claims of discrimination
- Create conflicting obligations for contractors seeking to comply with state obligations and contrary federal mandates.
To be clear, OFCCP’s updated regulations apply only to federal contractors. They represent a further step in a deregulatory and “anti-equity/pro-equality” agenda that will lead to mixed reactions given the dismantling of civil rights protections for minorities, women, individuals with disabilities, and veterans.
Elizabeth A. Ledkovsky, Staff Attorney at Epstein Becker Green, assisted in preparing this post.
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The Workforce Bulletin blog is currently edited by Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.
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