Employment Law Update: DOL Finalizes Rules Dismantling Affirmative Action Framework for Federal Contractors
Date: August 27, 2026
By:
Rafiq R. Gharbi
Rescission of Executive Order 11246 Regulations
The most far-reaching of the three rules formally eliminates the regulatory infrastructure that supported Executive Order 11246, the landmark 1965 directive signed by President Lyndon B. Johnson that had, for more than five decades, required covered federal contractors to engage in affirmative action on the basis of race and sex and to refrain from certain discriminatory employment practices. President Trump revoked Executive Order 11246 in January 2025 through Executive Order 14173, titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which directed OFCCP to cease promoting diversity initiatives and to discontinue holding contractors accountable under the Johnson-era framework. DOL subsequently suspended all enforcement activities linked to the order, and the newly finalized rule now removes the full regulatory apparatus, including provisions governing written affirmative action programs and workforce utilization goals for women and minorities. The rule takes effect on October 26, 2026.
Changes to Section 503 Disability Regulations
DOL also finalized significant amendments to the regulations implementing Section 503 of the Rehabilitation Act, which prohibits disability-based discrimination by covered federal contractors and imposes affirmative action obligations related to the employment and advancement of qualified individuals with disabilities. Among the most notable changes is the removal of the 7% utilization goal for individuals with disabilities, a benchmark first introduced in 2013 that called on contractors to aspire to a workforce composition in which at least 7% of each job group consisted of individuals with disabilities. The revised rule also eliminates the requirement that contractors invite applicants and employees to voluntarily self-identify as having a disability, along with associated data-collection mandates, citing concerns that those requirements may conflict with the Americans with Disabilities Act.
Importantly, the statute itself remains operative. Covered contractors must continue to fulfill their affirmative action duties with respect to qualified individuals with disabilities and must comply with Section 503's nondiscrimination requirements. The majority of the regulatory amendments become effective on September 21, 2026.
Revisions to VEVRAA Regulations
The third rule makes revisions to the regulations implementing VEVRAA, which protects certain categories of veterans and requires covered contractors to take affirmative action in their employment and advancement. Unlike the Section 503 amendments, the VEVRAA changes are predominantly technical in nature, including the removal of references to the now-revoked Executive Order 11246 and an update to the covered contract threshold to $200,000. The substantive veteran affirmative action requirements remain in place.
Key Takeaways for Employers
Taken together, these rules substantially narrow the traditional oversight role of OFCCP and significantly reduce the compliance burden for covered federal contractors. However, the elimination of these affirmative action metrics and data-collection obligations does not insulate contractors from discrimination liability. Title VII of the Civil Rights Act, the Rehabilitation Act, VEVRAA, and applicable state and local nondiscrimination laws remain fully enforceable.
First, federal contractors should promptly assess how the rescission of the Executive Order 11246 regulations affects their existing written affirmative action plans, particularly any race- or sex-conscious goals or timetables developed under the prior framework.
Second, contractors with disability-related affirmative action programs should evaluate the impact of the removal of the 7% utilization goal and the elimination of self-identification requirements on their internal tracking and compliance procedures, while recognizing that their underlying statutory obligations under Section 503 persist.
Third, all covered contractors should continue to maintain robust nondiscrimination policies and practices, as the legal exposure under Title VII, particularly in light of the Supreme Court's 2025 decision in Ames v. Ohio Department of Youth Services, which lowered the threshold for majority-group employees to bring discrimination claims, remains significant.
Whiteford's Labor and Employment Practice Group will continue to monitor developments in this rapidly evolving area and advise clients as further guidance emerges.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.