The United States Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has finalized three significant rules that substantially alter affirmative action requirements for federal contractors and subcontractors. Published on August 21, 2026, these changes continue the regulatory shift that began with Executive Order (EO) 14173, which rescinded EO 11246 in January 2025.
What Changed?
End of Race- and Sex-Based Affirmative Action Requirements
The most consequential change is the formal rescission of the regulations implementing EO 11246. For more than 60 years, EO 11246 served as the foundation for federal contractor affirmative action obligations related to race and sex. The final rule eliminates the implementing regulations contained in multiple sections of 41 CFR Chapter 60, effectively ending federal requirements for race-based and sex-based affirmative action plans (AAPs) and related OFCCP enforcement authority.
While these affirmative action requirements have been eliminated, employers must remember that federal, state, and local anti-discrimination laws remain fully in effect. Title VII of the Civil Rights Act, the Equal Pay Act, 42 U.S.C. § 1981, and similar state and local protections continue to prohibit employment discrimination.
Section 503 Disability Program Requirements Significantly Narrowed
The second rule substantially modifies contractor obligations under Section 503 of the Rehabilitation Act. Effective September 21, 2026, contractors will no longer be required to:
- Invite applicants and employees to voluntarily self-identify as individuals with disabilities using Form CC-305.
- Maintain the 7% utilization goal for individuals with disabilities.
- Conduct utilization analyses related to disability representation.
- Collect disability data previously required under the regulations.
The Department of Labor stated that employer-initiated disability self-identification requirements conflict with the Americans with Disabilities Act (ADA), prompting the elimination of these obligations.
Importantly, however, Section 503’s core requirements remain intact. Covered contractors still must comply with disability nondiscrimination obligations, provide reasonable accommodations, maintain written affirmative action plans when applicable, conduct outreach assessments, preserve required records, and comply with audit and reporting requirements.
The rule also updates the Section 503 contract coverage threshold from $15,000 to $20,000 to reflect inflation-related adjustments.
VEVRAA Requirements Largely Remain Unchanged
The third rule makes primarily technical amendments to regulations under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). Changes include removing obsolete references to EO 11246, relocating enforcement procedures, and eliminating duplicative regulatory citations.
Unlike Section 503, however, VEVRAA’s substantive affirmative action requirements remain largely unchanged. Contractors must continue to solicit self-identification from protected veterans, track applicant and hiring data, comply with outreach and benchmark requirements, and submit VETS-4212 reports.
The most notable change is an increase in the contract threshold requiring affirmative action plans from $150,000 to $200,000.
What HR and Business Leaders Should Do Now
Federal contractors should review their compliance programs immediately and develop a plan for implementation based on the varying effective dates of the new rules.
Priority action items include:
- Remove mandatory CC-305 disability self-identification processes and related utilization analyses by the September 21, 2026 effective date.
- Evaluate disability and veteran-related data collection practices to ensure they align with the revised regulations.
- Maintain existing disability accommodation, outreach, recordkeeping, and nondiscrimination obligations under Section 503.
- Continue all required VEVRAA compliance activities, including veteran self-identification and reporting obligations.
- Review state and local affirmative action requirements, which may continue to impose obligations independent of federal law.
Employers should consult with experienced human resources professionals and/or labor and employment counsel with any questions regarding these employment law developments and any required changes to employer policies and practices. For all MEA members, the Hotline is available to provide this assistance. For MEA Essential and Premier members, a Member Legal Services attorney is available for additional consultation.
*This Alert is provided for general informational purposes only and does not constitute legal advice.
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