What Federal Contractors Need to Know: DOL’s New Affirmative Action Rules Explained

On August 21, 2026, the U.S. Department of Labor’s (“DOL”) Office of Federal Contract Compliance Programs (“OFCCP”) published three final rules that significantly change affirmative action reporting requirements for federal contractors and subcontractors. Here’s what you need to know.

First, on October 26, 2026, race- and sex-based affirmative action requirements will no longer be required in federal contracts. The DOL has formally rescinded the regulations that required contractors to maintain minority and female participation goals. However, nondiscrimination requirements remain, and contractors must certify they will not discriminate and may be required to furnish records proving compliance.

Second, on September 21, 2026, disability-related paperwork will be dramatically reduced. The DOL’s Section 503 prohibits contractors with any federal contract or subcontract valued at $20,000 or more from discriminating against employees and applicants on the basis of disability. That obligation remains in effect. However, Section 503 rules will no longer require contractors to ask applicants and employees to self-identify as disabled, and the DOL removed its 7% disability utilization goal, which required covered contractors to annually assess whether individuals with disabilities made up at least 7% of employees in each job group within their workforce. Contractors must still maintain affirmative action plans, provide reasonable accommodations, and ensure accessibility, they just won’t be tracking disability data the same way.

Third, the DOL’s protections for veterans remain largely unchanged. The Vietnam Era Veterans’ Readjustment Assistance Act (“VEVRAA”)’s requirements remain in effect, including protected-veteran self-identification, hiring benchmarks, and veteran-focused affirmative action plans. The only significant change is an increase in the coverage threshold from $150,000 to $200,000.

Before these effective dates, contractors and subcontractors should review their forms, applicant-tracking and human resource systems, affirmative action plans, contract clauses, and recruiting practices to ensure compliance with the new rules. Contractors should also review their current contract certifications and non-discrimination practices.

Importantly, these federal changes do not change state or local affirmative action requirements for other public contracts, including programs for Disadvantaged Business Enterprises (“DBEs”), Minority/Women Business Enterprises (“M/WBEs”), or other diversity contracting mandates. Contractors working on state projects, or federally-funded projects administered by state or local agencies, should consult with counsel to confirm what requirements apply in their jurisdictions. Discrimination on the basis of sex, race, and disability remains illegal under federal and state law and should not be tolerated in the workplace. All employers should maintain robust nondiscrimination, accessibility, and accommodation policies and procedures.

Below, we take a deeper look at each of these changes.

Race- and Sex-Based Affirmative Action Requirements Eliminated

Dating back to 1965, Executive Order (“E.O.”) 11246 prohibited federal contractors from discriminating against employees based on race, color, religion, sex, and national origin. It also required covered contractors to maintain affirmative action plans (“AAPs”) with minority and female participation goals. Contractors were expected to make “substantially uniform progress” toward these goals through race- and sex-conscious steps, including recruitment and workforce-management measures.

President Trump revoked E.O. 11246 in January 2025, and the DOL’s E.O. Final Rule officially rescinds the regulations that implemented it. The Final Rule also removes pay-transparency protections, the Uniform Guidelines on Employee Selection Procedures (“UGESP”) as codified in 41 C.F.R. Part 60-3, and the E.O. 11246-based OFCCP requirement to file an annual EEO-1 Report with the EEOC.

With this rescission, minority and female participation goals, and race- and sex-based AAPs, will no longer be a requirement in federal contracts. This is a drastic departure from the past decades where contractors were expected to prepare affirmative action plans and conduct utilization analyses.

This change does not eliminate contractors’ nondiscrimination obligations. E.O. 14173 directs enforcement of federal nondiscrimination standards through the contracting process, and E.O. 14398 (March 2026) requires contractors to certify they will not engage in disparate treatment based on race or ethnicity and will furnish records needed to verify compliance. Those obligations are enforced primarily through procuring agencies and contract remedies.

Changes to Disability Data Collection Requirements and Affirmative Action Plans

Section 503 prohibits discrimination against employees and applicants on the basis of disability by contractors with a federal contract. Section 503 applied to contractors with a federal contract exceeding $15,000, and the new Final Rule increases this threshold to $20,000 to account for inflation (“Covered Contractors”).

Since 2013, Covered Contractors have been required to annually assess whether individuals with disabilities made up at least 7% of the employees in each job group within their workforce and to conduct annual utilization analyses. The 2013 rule required applicants to self-identify as having a disability before they received a job offer, and required employees to self-identify every five years. The DOL implemented Form CC-305 for these inquiries and added requirements to document and maintain quantitative data on applicants and hires with disabilities. In addition, contractors with 50 or more employees and a federal contract of $50,000 or more (the “AAP Threshold”) must develop and maintain an affirmative action program (“AAP”) that documents their affirmative action efforts on an annual basis.

These requirements were a part of the contracts themselves, so violations of Section 503 and its rules could lead to contract cancellation, financial penalties, and potential debarment.

Under the Section 503 Final Rule, OFCCP is rolling back several of these disability-related requirements, including:

• Eliminating disability self-identification requirements and discontinuing Form CC-305;
• Eliminating data collection requirements for applicants and hires with disabilities, although the rule clarifies that contractors may continue “to measure the effectiveness of their outreach efforts through other measures” that are “appropriate for their workforce,” and
• Eliminating the 7% utilization goal and related annual analyses.

The Section 503 Final Rule does not change contractors’ continuing obligations to take affirmative steps to employ and advance individuals with disabilities and to refrain from disability discrimination—it merely simplifies the data collection and reporting requirements. In addition, contractors above the AAP Threshold must continue to maintain their written AAPs, outreach documentation, reasonable-accommodation procedures, and accessibility practices. As for self-identification, applicants and employees may still voluntarily disclose a disability, and employers should continue to respond appropriately to accommodation requests.

Contractors should continue to ensure they are supporting the hiring and promotion of individuals with disabilities. The DOL recommends using measures that do not depend on knowledge of disability status, such as reviewing job descriptions to remove unnecessary barriers, partnering with disability employment organizations, and ensuring hiring platforms are accessible. If you have any questions on whether your disability programs will comply with the new Section 503 Rule, reach out to a Hinckley Allen attorney for help.

Technical Changes to Veterans’ Protections

Finally, the DOL issued a VEVRAA Final Rule, also effective September 21, 2026, that makes primarily technical changes to the VEVRAA regulations. VEVRAA, enacted in 1974, prohibits covered federal contractors from discriminating against “protected veterans”—including disabled veterans, recently separated veterans, and service medal veterans—and requires affirmative action to employ and advance them. VEVRAA was not affected by the revocation of E.O. 11246.

The changes include removing references to E.O. 11246, increasing the coverage threshold from $150,000 to $200,000, and relocating the administrative procedures, formerly in 41 C.F.R. Part 60-30, directly into the VEVRAA regulations.  Contractors with 50 or more employees and a federal contract or subcontract of $200,000 or more remain subject to the VEVRAA AAP requirement.

Contractors should continue to invite applicants to identify as protected veterans, maintain the annual hiring benchmark, and, if applicable, prepare and maintain VEVRAA AAPs. Note that the protected-veteran inquiry differs from the Section 503 disability self-identification that is being eliminated: the pre-offer VEVRAA invitation asks about protected-veteran status, not disability status.

Final Thoughts

With these effective dates approaching, contractors should review their policies and procedures regarding their federal contracting to ensure they comply with anti-discrimination obligations moving forward. There are nuances to when the rules apply, including when a state project receives federal funding, and there may be differences across the various states you operate in. Consult with counsel to make sure you understand the changing federal requirements and how they interplay with any state and local affirmative action requirements that may apply to your projects.

Remember: discrimination on the basis of sex, race, and disability remains illegal under federal and state law and should not be tolerated in the workplace. All employers should maintain robust nondiscrimination, accessibility, and accommodation policies and procedures. We can assist your business in reviewing your affirmative action plans, updating your compliance processes, and navigating the transition to ensure you continue to promote safe, unbiased, and accessible workplaces.

Hinckley Allen’s Labor & Employment and Construction Groups closely track DOL regulatory developments. If you have questions about how these Final Rules affect your operations, contact us today.