DOL Plans to Eliminate OFCCP Under New Budget

Big changes may be on the horizon for federal contractors. The U.S. Department of Labor (DOL) has confirmed plans to shut down the Office of Federal Contract Compliance Programs (OFCCP), raising significant questions about enforcement responsibilities, contractor obligations, and the future of affirmative action in federal workplaces.  

The DOL’s proposed 2026 budget reflects this seismic shift. “These are no longer just rumors,” said Christy Kiely, an attorney with Seyfarth in Washington, D.C. “The Department of Labor’s proposed budget for 2026 confirms the intent to eliminate the OFCCP.”  

She noted that the budget allocates neither funding nor staff to the agency for next year. Instead, the DOL plans to reassign the OFCCP’s responsibilities under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) to the U.S. Equal Employment Opportunity Commission (EEOC) and the Veterans’ Employment and Training Service (VETS), respectively.  

What Happens Next?

The mechanics of shutting down the OFCCP are relatively straightforward, at least on paper. “The DOL has already essentially done that by eliminating OFCCP’s funding and staff,” Kiely explained.  

However, transferring enforcement authority is more complex. While the OFCCP currently holds the power to enforce affirmative action under Section 503, transferring that power requires congressional action. “Congress will need to amend the Rehabilitation Act to shift that authority elsewhere,” Kiely said. “That’s not necessarily an obstacle given the current Congress, but it will take time.” Until then, legal and procedural gaps may linger. 

Webinar: Diving Deeper into Affirmative Action and Federal Contractor Compliance

Possible Shift to EEOC 

The question of whether the EEOC will absorb the OFCCP’s responsibilities remains an open one. While the EEOC and OFCCP share a broad mission of enforcing anti-discrimination and equal opportunity laws, they approach their work very differently.  

“There’s substantial philosophical overlap between OFCCP and EEOC,” Kiely said, “but OFCCP has always had that added element of affirmative action, which goes beyond neutrality and requires active efforts to recruit from diverse populations when filling positions.”

The OFCCP also focuses heavily on audits, driven by a neutral selection process. The EEOC, by contrast, is largely complaint-based. “EEOC would require expanded authority, operational adjustments, and structural change to absorb OFCCP’s functions,” which would be difficult to implement in light of the EEOC’s declining funding, Kiely explained.  

Legal Uncertainty Ahead

For HR professionals, the immediate concern is how these changes will affect compliance obligations. “There will be a time of legal uncertainty and compliance gaps if enforcement shifts from the OFCCP to other agencies,” Kiely cautioned. Contractors are already accustomed to dual oversight, but the transition could destabilize existing practices. “A shift in government philosophy can lead to inconsistent interpretations of obligations,” she added.  

That ambiguity is magnified by ongoing regulatory revisions. “OFCCP recently proposed revisions to Section 503 and VEVRAA,” though they are still in the proposal stage and unlikely to be finalized by the start of 2026, said Kristie Iacopetta, an attorney with Seyfarth in New York City. Despite the agency making plans for the next year, “the future of the OFCCP itself remains uncertain,” she said.  

Iacopetta recommended that contractors stay the course for now. “Continue to comply with the current requirements under Section 503 and VEVRAA and monitor for any regulatory developments or shifts in enforcement priorities,” she said. 

Compliance Changes 

Should enforcement move to the EEOC and VETS, contractors may see some changes in how day-to-day compliance is managed. The potential shift of enforcement responsibilities may “signal a possible easing of compliance burdens,” Iacopetta said. However, she cautioned that doubt remains regarding how the EEOC and VETS might interpret and enforce compliance duties.  

Toolkit: Managing Equal Employment Opportunity

A Philosophical Divide 

Ultimately, the debate over the OFCCP’s closure comes down to a matter of enforcement philosophy. “Critics of the proposal argue that dismantling OFCCP will weaken federal oversight of workplace equity and lead to less accountability from employers,” Kiely said. Meanwhile, supporters “argue that it eliminates unnecessary and unproductive burdens on contractors and properly restores the enforcement focus to individual discrimination claims, which focus on motive and discriminatory intent rather than statistics.”

For HR professionals at federal contracting organizations, the most prudent course of action is to stay informed and remain compliant with current OFCCP regulations — at least until any changes are formally enacted.