The Office of Federal Contract Compliance Programs (OFCCP) recently proposed regulatory changes that will wind down federal contractor affirmative action programs under now-rescinded Executive Order 11246. The OFCCP is also announcing that it will resume compliance activities related to Section 503 of the Rehabilitation Act (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), laws under which federal contractors have nondiscrimination and affirmative action obligations with respect to individuals with disabilities and protected veterans.
As previously reported, on January 21, 2025, President Trump issued Executive Order 14173 that, among other things, revoked Executive Order 11246 pertaining to federal contracts. Executive Order 11246 required federal contractors to include nondiscrimination clauses in their contracts and to engage in affirmative efforts in employment and promotions. For certain federal contractors, this included creating written affirmative action plans. Federal contractors were allowed to continue compliance with Executive Order 11246 regulations for a period of 90 days.
Shortly after Executive Order 14173, then-Acting Secretary of Labor Vincent Micone ordered the OFCCP to cease and desist all investigative and enforcement activity under Executive Order 11246 and placed OFCCP’s activity related to Section 503 and VEVRAA, which were not impacted by Order 14173, in abeyance pending further guidance.
The OFCCP has been relatively quiet since then but has recently taken action to implement Executive Order 14173’s changes.
On June 27, 2025, the OFCCP sent a letter to federal contractors recounting the changes made by Executive Order 14173 and asking them for narrative submissions describing actions that contractors have taken to wind down compliance with Executive Order 11246. The letter states that providing information to OFCCP is voluntary, and the content and format is at the discretion of the contractor. Federal contractors should be cautious and consult with their legal counsel about the implications of voluntarily providing any information to the OFCCP in response to the letter and to determine the best course of action based on their specific business practices and circumstances.
Next, on July 1, 2025, the OFCCP published three regulatory proposals that would rescind existing Executive Order 11246 regulations and revise the regulations implementing Section 503 and VEVRAA to remove reference to Executive Order 11246 and “better align the regulations with recent case law and executive orders,” including Executive Order 14173. Federal contractors should consult with their legal counsel on the proposed regulatory changes to determine the potential impacts on their contracts and practices. The rules are only proposals at this point and have not been finalized. Employers and other interested parties may submit comments on the proposals until September 2, 2025.
Lastly, Secretary of Labor Lori Chavez-DeRemer issued Order 08-2025, lifting the hold that has been in place since January and allowing OFCCP to resume activity under Section 503 and VEVRAA. Complaints held or filed during the abeyance will resume or begin being processed.
Notably, the order states that because OFCCP’s compliance review format significantly entangled Executive Order 11246 review with Section 503 and VEVRAA, the agency would be “exercising its discretion to administratively close all pending compliance reviews and will take no further action related to the scheduling list released in November 2024.” OFCCP will provide notice of the compliance review closure directly to impacted contractors.
Federal contractors should continue to monitor these developments and consult with their legal counsel to help ensure they are in compliance with the law.
James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber
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