The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced it’s removing affirmative action plan obligations for employers.
On the heels of the Trump Administration’s Executive Order 14173, which formally revoked Executive Order 11246 in January 2025, the OFCCP has now taken additional steps to eliminate affirmative action requirements based on race, ethnicity, and gender.
Key Developments
Federal contractors with more than 50 employees that have contracts valued at $50,000 or more were previously required to implement Affirmative Action Plans (AAPs) to ensure equal employment opportunities.
Here’s what federal contractors need to know about the latest changes:
- Affirmative action regulations are being formally rescinded. On July 1, 2025, OFCCP issued a Proposed Rule to rescind the implementing regulations of EO 11246. These regulations — outlined in 41 C.F.R. Parts 60-1, 60-2, and 60-4 — required written affirmative action plans, compensation analyses, adverse impact reviews, and targeted outreach for women and protected minorities.
- Contractors are invited to report their “wind-down” efforts. In a June 27, 2025 letter, OFCCP Director Catherine Eschbach encouraged federal contractors to voluntarily submit information on how they are dismantling affirmative action programs tied to EO 11246. Submissions are accepted through the OFCCP Contractor Portal until Sept. 25, 2025.
- Section 503 and VEVRAA enforcement resumes. Following a months-long pause, the Department of Labor issued Secretary’s Order 08-2025, which lifts the abeyance on enforcement activities under Section 503 of the Rehabilitation Act and VEVRAA, ensuring these obligations remain active and enforceable.
Legal Justifications for the Rescission
The Proposed Rule to rescind EO 11246 regulations cites multiple justifications:
- Legal vulnerability post-SFFA decision: OFCCP points to the 2023 Supreme Court ruling in Students for Fair Admissions v. Harvard, which struck down race-based affirmative action in higher education. The agency argues that requiring contractors to act without evidence of discrimination contradicts this precedent.
- Executive Order 14173 directives: The OFCCP states that EO 11246’s mandates are now “null and void,” and continuing enforcement would create confusion and conflict with federal non-discrimination laws.
The rule is now open for public comment through Sept. 2, 2025, after which final rulemaking may proceed.
Compliance Requirements That Still Apply
Although affirmative action based on race, ethnicity, and gender is no longer mandated, federal contractors must still comply with other affirmative action requirements, including:
- Section 503 of the Rehabilitation Act, which requires affirmative action and non-discrimination for individuals with disabilities
- VEVRAA, which imposes similar obligations for protected veterans
OFCCP has resumed accepting, processing, and investigating complaints under both statutes. However, the agency will administratively close all pending compliance reviews and take no action on audits previously listed in the November 2024 Corporate Scheduling Announcement List.
What’s Next for the OFCCP?
The Trump Administration’s FY2026 budget proposal eliminates all funding for the OFCCP, and plans are underway to transfer remaining responsibilities:
- Section 503 enforcement would move to the Equal Employment Opportunity Commission (EEOC).
- VEVRAA oversight would transfer to the Veterans’ Employment and Training Service (VETS).
These changes would require Congressional approval. On Aug. 1, the Senate Appropriations Committee voted 26-3 to fund the OFCCP through Sept. 26, 2026. The bill now goes to the Senate for consideration. This would not impact the removal of AAP requirements for contractors, but would open the door for the OFCCP to remain in operation as a government agency during this time period.
What Employers Should Do Now
This moment marks a profound shift in federal contractor obligations. While race-based affirmative action is no longer enforced:
- Affirmative action programs for individuals with disabilities and veterans remain legally required
- Voluntary disclosures about EO 11246 wind-down efforts are encouraged through September 25
- Compliance documentation and internal reviews should be updated to reflect the post-EO 11246 landscape
Failure to align with current regulations—or prematurely discontinuing mandated programs under Section 503 and VEVRAA — could expose organizations to risk.
How Trusaic Can Help
Trusaic supports federal contractors in maintaining compliance through this transition:
- PayParity® – Conduct internal equity audits to ensure compensation fairness and legal defensibility
- RAPTR™ – Automate multi-jurisdictional reporting, including U.S. pay data and global transparency mandates
As compliance requirements shift, Trusaic provides clarity and structure to help employers stay ahead.