OFCCP Completes Overhaul of Federal Contractor Compliance Framework: Three Final Rules Rescind EO 11246 Regulations, Narrow Section 503 Affirmative Action Requirements, and Update VEVRAA Coverage Thresholds

On August 21, 2026, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) published three coordinated final rules that eliminate – from a regulatory perspective – federal contractor affirmative action requirements for women and minorities and narrow contractor affirmative action requirements regarding individuals with disabilities. The final rules: (1) formally rescind the implementing regulations for Executive Order (EO) 11246 effective October 26, 2026; (2) narrow Section 503 affirmative action requirements regarding individuals with disabilities, generally effective September 21, 2026; and (3) update VEVRAA coverage thresholds and enforcement procedures effective September 21, 2026.

Recission of the Regulatory Framework Underlying Executive Order (EO) 11246

Following President Trump’s January 2025 revocation of EO 11246 via EO 14173, the OFCCP has now formally rescinded the entire implementing regulatory framework underlying EO 11246. The rule rescinds 41 CFR Parts 60-1, 60-2, 60-3, 60-4, 60-20, 60-30, 60-40, 60-50, and 60-999. This eliminates:

• Written affirmative action program (AAP) requirements for race, sex, religion, and national origin;
• Availability and utilization analyses and placement goals for minorities and women;
• Analyses of personnel activity to determine whether there are selection disparities;
• Construction contractor participation goals and specifications;
• Pay transparency anti-retaliation provisions; and
• Sex, religion, and national origin discrimination guidelines.

This recission has been anticipated since President Trump issued EO 14173, and most government contractors and subcontractors have already discontinued their EO 11246 affirmative action programs. This rule is the Administration’s last step in eliminating federal contractor affirmative action obligations based on race or sex. 

Significant Revision of the Section 503 Regulatory Framework

This final rule revises the regulatory framework underlying Section 503 of the Rehabilitation Act of 1973. The rule makes the following substantive changes to contractors’ and subcontractors’ affirmative action obligations regarding individuals with disabilities:

• Rescinds the previously required 7% utilization goal for individuals with disabilities and eliminates the need to develop job groups as previously required by the EO 11246 and Section 503 regulations;
• Eliminates the requirement to conduct the disability utilization analysis previously required by 41 CFR 60-741.45;
• Rescinds the obligation to solicit disability status from all applicants and from employees at time of hire and again every five years;
• Rescinds the disability data collection and reporting requirements previously required by 41 CFR 60-741.44(k);
• Updates the coverage threshold from contracts or subcontracts of $15,000 to contracts or subcontracts of $20,000; and
• Relocates administrative enforcement procedures from 41 CFR Part 60-30 (one of the EO 11246 regulations that is being rescinded) directly into the Section 503 regulations, with no change to enforcement authority.  This provision is effective December 21, 2026.

In defense of these regulatory changes, in the final rule the OFCCP asserts that the obligation to invite applicants and employees to self-identify as an individual with a disability “require[s] contractors to make disability inquiries that the ADA explicitly forbids.” The OFCCP further contends that the 7% utilization goal should be eliminated because “while the Section 503 regulations state that the use of quotas is prohibited, contractors may, in practice, be induced to use quotas to meet the utilization goal.” 

It is important to note that while the final rule significantly narrows government contractor affirmative action obligations regarding individuals with disabilities, contractors and subcontractors with 50 or more employees and a contract of $50,000 or more must still maintain a written Section 503 AAP and continue outreach and positive recruitment efforts.

Finally, the Section 503 final rule states that “if a contractor learns of an applicant’s or an employee’s disability without asking—for example, through unsolicited disclosure during the interview process or a request for reasonable accommodation—then the contractor may take additional affirmative action to ‘employ or advance in employment’ that individual consistent with Section 503.”  The final rule further states that “DOL is not prohibiting contractors from exercising their own legal and business judgment about making disability inquiries consistent with the ADA,” which permits inquiries that are job related or are made for reasons of business necessity.

Minor Revisions to the VEVRAA Regulatory Framework 

The OFCCP’s final rule revising the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) regulations makes only minor changes to contractors’ affirmative action obligations regarding protected veterans:

• Increases the coverage threshold from $150,000 to $200,000, consistent with the FAR Council’s October 2025 inflation adjustment;
• Relocates administrative enforcement procedures from 41 CFR Part 60-30 directly into the VEVRAA regulations, with no change to enforcement authority; and

Contractors with 50 or more employees and a contract of $200,000 or more must still maintain a written VEVRAA AAP. Notably, while the Section 503 final rule eliminates the obligation to report on the disability status of applicants, the revisions to the VEVRAA regulations do not eliminate the 41 CFR 60-300.44(k) obligation to report on veteran applicants and hires. As a result, contractors will still be required to track applicant data and solicit veteran status from applicants and hires. 

What Should Federal Contractors Do Now?

• Discontinue EO 11246-based affirmative action programs for race, sex, religion, and national origin, if not already discontinued.
• Update Section 503 AAPs to eliminate the 7% utilization goal, utilization analyses, and disability data collection.
• Discontinue the practice of inviting all applicants and employees to self-identify as an individual with a disability and discontinue the use of Form CC-305 to collect this information.
• Continue to prepare VEVRAA affirmative action plans.