DOL Rolls Back Federal Contractor Affirmative Action Rules

The U.S. Department of Labor (DOL) has finalized three rules dismantling or scaling back longstanding affirmative action requirements for federal contractors, completing a major piece of the White House’s effort to reshape federal equal employment opportunity enforcement.

Published in the Federal Register Aug. 21, the rules address three pillars of the regulatory framework administered by DOL’s Office of Federal Contract Compliance Programs (OFCCP): Executive Order 11246, Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).

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The most sweeping rule formally rescinds regulations implementing Executive Order 11246, the 1965 order signed by President Lyndon B. Johnson that for decades required covered federal contractors to take affirmative action based on race and sex and prohibited certain forms of employment discrimination.

President Donald Trump revoked the order in January 2025 through Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The order directed OFCCP to stop promoting diversity and holding federal contractors responsible for taking affirmative action under the Johnson-era order. DOL subsequently paused enforcement activities tied to Executive Order 11246.

The final rule now removes the regulatory infrastructure that supported those requirements, including regulations governing written affirmative action programs and goals for women and minorities. It takes effect Oct. 26.

DOL also finalized substantial changes to its regulations implementing Section 503, which prohibits disability discrimination by covered federal contractors and requires certain contractors to take affirmative action to employ and advance qualified individuals with disabilities.

Among the most significant changes is the elimination of the 7% utilization goal for individuals with disabilities. Introduced in 2013, the benchmark called for contractors to aspire to have individuals with disabilities comprise at least 7% of each job group in their workforce. The new rule also eliminates requirements for contractors to invite applicants and employees to self-identify as having a disability and related data-collection requirements. DOL said the requirements raised concerns under the Americans with Disabilities Act (ADA). 

Section 503 itself, however, remains intact. Covered contractors must continue taking affirmative action to employ and advance qualified individuals with disabilities and comply with the statute’s nondiscrimination requirements. Most of the regulatory changes take effect Sept. 21.

The third rule revises regulations implementing VEVRAA, which protects certain veterans and requires covered contractors to take affirmative action to employ and advance protected veterans. Unlike the Section 503 rule, the VEVRAA changes are largely technical, including removing references to the now-revoked Executive Order 11246 and updating the contract threshold to $200,000. The underlying veteran affirmative action requirements remain in place.

The rules further narrow OFCCP’s traditional role overseeing contractor employment practices. But federal contractors are not free from discrimination law: Title VII of the Civil Rights Act, the Rehabilitation Act, VEVRAA and applicable state and local nondiscrimination laws continue to apply.

For contractors, the result is a substantially different compliance landscape — one with fewer federally mandated affirmative action metrics and data-collection requirements. However, there remain continuing obligations to prevent unlawful discrimination and, in the disability and protected-veteran contexts, enduring statutory affirmative action duties.