Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—OFCCP Finalizes Three Rules Resetting Federal Contractor Affirmative Action Requirements, (Aug 28, 2026)

By Christopher Durham and Zev L. Grumet-Morris of Duane Morris LLP

Since EO 11246 was rescinded on January 21, 2025, federal contractors have not had any race-based or sex-based affirmative action obligations.

On August 21, 2026, the U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) published three final rules continuing the Trump administration’s scaling back of affirmative action requirements for federal contractors. One rule eliminates the race- and sex-based affirmative action regulations that were based on Executive Order 11246, which was rescinded by Executive Order 14173 on January 21, 2025. The second rule narrows contractors’ disability affirmative action obligations under Section 503 of the Rehabilitation Act by removing employer-initiated disability self-identification and a job group-based utilization goal. The third rule makes technical changes to regulations for affirmative action for protected veterans issued pursuant to the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA). Section 503’s core nondiscrimination, reasonable accommodation, affirmative action, outreach, audit and recordkeeping obligations remain, as do VEVRAA’s substantive protected veteran requirements and generally applicable federal, state and local anti-discrimination laws.

EO 11246’s Implementing Regulations Rescinded

Since EO 11246 was rescinded on January 21, 2025, federal contractors have not had any race-based or sex-based affirmative action obligations. Last week’s final rule now rescinds EO 11246’s implementing regulations in 41 CFR chapter 60 (specifically, 41 CFR Parts 60-1, 60-2, 60-3, 60-4, 60-20, 60-30, 60-40, 60-50 and 60-999). Together with EO 14173, the final rule ends over 60 years of government-mandated affirmative action for women and minorities. The rescission does not, however, affect other existing nondiscrimination requirements including, but not limited to, under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §1981, the Equal Pay Act, state and local law and regulations, or contract-specific nondiscrimination provisions.

Section 503: Narrower Requirements, Core Duties Remain

The second final rule limited contractor obligations under Section 503, in a maneuver that the DOL described as bringing the law in line with the purpose and requirements of the Americans with Disabilities Act (ADA). The final rule enacts the following changes to Section 503, effective September 21, 2026, or as otherwise stated:

• Eliminates the required CC-305 form inviting applicants and employees to self-identify as an individual with a disability at the time of hire and every five years thereafter under 41 CFR 60-741.42, which the DOL describes as explicitly forbidden under the ADA (individuals, however, may volunteer this information when seeking reasonable accommodations, and contractors may make these inquiries if independently lawful);

• Eliminates the 7 percent utilization goal under 41 CFR 60-741.45;

• Eliminates the corresponding utilization analysis of individuals with disabilities;

• Eliminates disability data collection obligations previously required;

• Removes cross-references to the now-rescinded EO 11246 and adds the administrative procedures outlined in 41 CFR 60-30 directly into Section 503 regulations, effective December 21, 2026; and

• Updates the references to the basic coverage threshold for Section 503 from $15,000 to $20,000, which increased effective October 1, 2025.

These changes aside, covered contractors remain subject to disability nondiscrimination, reasonable accommodation and written affirmative action plan requirements for contractors meeting the 50-employee and $50,000 threshold. Annual outreach assessments, audit and reporting systems, notice and posting, inclusion of the equal employment opportunity clause in subcontracts and purchase orders, and recordkeeping requirements—including three-year retention of outreach records—also remain.

VEVRAA: Technical Updates, Substantive Duties Continue

Finally, the DOL enacted minor, technical changes to VEVRAA regulations by removing EO 11246 cross-references; relocating administrative enforcement procedures to 41 CFR Part 60-300, consistent with the changes enacted to Section 503; and removing a duplicative Section 503 authority citation. The biggest substantive change is the decision to raise the contract amount threshold from $150,000 to $200,000 for written affirmative action plan requirements. Notably, unlike under Section 503, the final rule left in place the obligations for federal contractors to track applicant data and solicit veteran status from new hires. Outreach and hiring benchmarks, VETS-4212 reporting and reasonable accommodation obligations remain as well.

What This Means for Federal Contractors

The DOL rules continue a significant push by the Trump administration to eliminate, or greatly reduce the scope of, federal contractors’ affirmative action obligations. And they further create risk for contractors who may wish to continue practices in place for years that they view as beneficial (e.g., providing applicants with an opportunity to self-identify as an individual with a disability). Contractors should consult with employment counsel regarding their current affirmative action programs and practices to ensure that they are meeting their continuing affirmative action obligations, while not continuing previously required practices that now could give rise to risk and exposure. At a minimum, they should remove the mandatory Form CC-305 self-identification process and the 7 percent utilization analysis from their disability compliance workflows by September 21, 2026. They should also consult counsel before continuing any voluntary, employer-initiated collection or analysis of disability data. Finally, it is critical for contractors not to lose sight of state and local affirmative action requirements to which they may be subject, and to consult with counsel regarding the often-complicated interplay between those requirements and the current enforcement positions of the DOL and EEOC at the federal level.

For More Information

If you have any questions about this Alert, please contact Christopher D. Durham, Zev L. Grumet-Morris, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Christopher Durham

Zev L. Grumet-Morris

Duane Morris LLP

30 S. 17th Street

Philadelphia, PA 19103-4196

United States

Tel.: +1 215 9791000

E-mail: solutions@duanemorris.com

URL: www.duanemorris.com/

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Attorneys: Christopher Durham and Zev L. Grumet-Morris (Duane Morris).

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