By Mark A. McAnulty, Nicholas J. Golding, and Jackson T. Treadway
On July 1, 2025, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) proposed rules altering compliance requirements for federal contractors. On July 2, 2025, the DOL issued Secretary’s Order 08-2025, which lifted its previous suspension of OFCCP’s enforcement activities under Section 503 of the Rehabilitation Act (Section 503) and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) after President Trump revoked earlier this year Executive Order 11246, signed by Lyndon B. Johnson, which mandated federal contractors take affirmative action in hiring, promotion, and other employment practices.
Proposed Rescission of Executive Order 11246 Regulations
OFCCP’s new proposals rescind the regulations requiring contractors to maintain affirmative action programs and set diversity goals based on race and sex. The proposed rollback includes the removal of the following key regulations:
- 41 C.F.R. § 60-1 (Obligations of Contractors and Subcontractors)
- 41 C.F.R. § 60-2 (Affirmative Action Programs)
- 41 C.F.R. § 60-3 (Uniform Guidelines on Employee Selection Procedures)
- 41 C.F.R. § 60-20 (Sex Discrimination)
Key Modifications to Existing Regulations
Along with the rollback of Executive Order 11246, OFCCP’s proposals also revise Section 503, which governs affirmative action for individuals with disabilities. The proposed changes eliminate the requirement for contractors to solicit disability self-identification from applicants and employees and remove the seven percent utilization goal for hiring individuals with disabilities. Federal contractors’ obligations under Section 503 to refrain from discrimination in employment against individuals with disabilities remain in place.
Under VEVRAA, federal contractors will still be required to set annual hiring benchmarks for protected veterans and maintain outreach and recruitment programs.
Changes Announced in Secretary’s Order 08-2025
The DOL’s Secretary’s Order 08-2025 immediately instituted the following changes impacting federal contractors:
- OFCCP is now authorized to “immediately resume” processing of “[a]ny Section 503 and VEVRAA complaints” which had been paused since January 24, 2025.
- OFCCP will also “administratively close all pending compliance reviews” under Section 503 and VEVRAA and “take no further action related to the scheduling list released in November 2024.” Contractors who were under review will receive formal notice from OFCCP of these closures.
- For now, contractors are not required to certify their compliance with OFCCP’s Affirmative Action Program (“AAP”), but OFCCP notes “that Section 503 and VEVRAA, along with their implementing regulations, remain in effect” and advises contractors to continue to comply with their obligations under Section 503 and VEVRAA.
- OFCCP is also extending the enforcement moratorium for the Veterans Affairs Health Benefits Program (VAHBP) through May 7, 2027. VAHBP providers will continue to be exempt from enforcement of their affirmative obligations under Section 503 and VEVRAA, but they will remain subject to nondiscrimination obligations and discrimination complaint investigations by OFCCP.
Next Steps for Federal Contractors
The deadline to submit public comments on OFCCP’s proposed rules is September 2, 2025, and the changes announced in Secretary’s Order 08-2025 take effect immediately. Federal contractors should continue monitoring developments and are encouraged to consult with counsel to evaluate their ongoing obligations under Section 503 and VEVRAA in light of these changes.
For more information about these changes, please contact Mark A. McAnulty, Nicholas J. Golding, Jackson T. Treadway, or another member of the KDDK Labor and Employment Law practice group.
