By James P. Wilkins and Zach J. Leciejewski
On August 19, 2026, the Office of Federal Contract Compliance Programs (OFCCP) issued final rules scaling back affirmative action requirements for federal contractors. The rules:
- Eliminate altogether affirmative action regulations based on the now-rescinded Executive Order (EO) 11246;
- Dramatically scale back the affirmative action obligations under Section 503 of the Rehabilitation Act relating to the employment of individuals with disabilities; and
- Make technical−but not substantive−changes to the regulations relating to the recruitment and employment of protected veterans under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).
Taken together, these rule changes will have a significant impact on the affirmative action compliance efforts of federal contractors as the new rules become effective later this month.
Here is what you need to know about these new rules and how they impact federal contractors:
Rule #1: Rescission of EO 11246 Regulations
For more than sixty years, EO 11246 required federal contractors to maintain affirmative action plans (AAPs) demonstrating good faith efforts to ensure equal employment opportunity for minorities and females. On January 21, 2025, President Trump issued EO 14173, which rescinded EO 11246 and directed federal agencies to take appropriate action to modify and streamline the federal contracting process.
To that end, the OFCCP rescinded EO 11246’s implementing regulations, including the placement goals for nonconstruction contractors, the participation goals for construction contractors, and the incorporation of the Uniform Guidelines on Employee Selection Procedures into this framework. This rule, which eliminates requirements applicable to an estimated 101,850 covered businesses, becomes effective on October 26, 2026.
Rule #2: Modifications to the Regulations Implementing Section 503 of the Rehabilitation Act
The second new rule makes significant changes to the regulations implementing Section 503 of the Rehabilitation Act, which prohibits federal contractors and subcontractors from discriminating against individuals with disabilities. The most notable rule changes include:
- Elimination of the requirement that contractors invite applicants and employees to voluntarily self‑identify as an individual with a disability, a requirement that was regarded as being at odds with the Americans with Disabilities Act (ADA);
- Removal of the 7 percent utilization goal for individuals with disabilities, and the related data collection and analysis requirements.
The new rule does not affect Section 503’s core nondiscrimination protections, outreach efforts, reasonable accommodation requirements, or the obligation to assess outcomes. The new rule likewise preserves the obligation to maintain an annual AAP for individuals with disabilities, though such plans will now be more narrative-based and less driven by data analysis.
The substantive changes under this new rule take effect on September 21, 2026 (although some technical revisions do not take effect until December 21, 2026).
Rule #3: Technical Changes to VEVRAA
The last new rule is more technical in nature. The OFCCP has removed the VEVRAA regulations’ cross-references to EO 11246, since that EO no longer exists. Thus, for example, the administrative enforcement procedures have been lifted from the EO 11246 regulations and inserted into VEVRAA’s own regulations. Under the new rule, a contractor is covered if it has a federal contract of $200,000 or more, up from the former jurisdictional coverage threshold of $150,000. Unlike under Section 503, the final rule did not remove the obligations for federal contractors to track applicant data and solicit veteran status from new hires. Covered federal contractors will remain obligated to update their AAP annually.
These technical changes become effective on September 21, 2026.
Key Takeaways from the Proposed Rule
- Core Obligations Remain Intact: These new rules do not eliminate the general prohibition on employment discrimination under federal law. Instead, these rules rescind and revise requirements relating to affirmative action, self-identification, and data collection for covered federal contractors. Contractors still must prepare annual AAPs for protected veterans and individuals with disabilities, but the AAPs covering minorities and females are now a thing of the past.
- State and Local Obligations Unaffected: The new rules also do not affect affirmative action requirements under state or local law, but the legal landscape in this area is changing rapidly (see our breakdown of the changes to Ohio’s AAP requirements in September 2025). Consult with employment counsel if you have questions about complying with these new changes while satisfying existing AAP obligations under state or local law.
- Previously Required Practices Now Carry Risk: The new rules do not prohibit contractors from maintaining and using race, sex, or disability data voluntarily disclosed by employees, but soliciting disability status may carry heightened legal risks. Federal contractors that have not updated their demographic data collection practices following the issuance of EO 14173 should take this opportunity to do so before the EO 11246 regulations are rescinded in October.
- Approaching Deadlines: The new rules have different effective dates ranging from September 21, 2026, to December 21, 2026. At a minimum, contractors should stop routinely asking applicants and employees to voluntarily self-identify as individuals with disabilities, since this self-identification process may violate the ADA.
We will continue monitoring developments in this area. If you have questions about how these new rules impact your organization, K|W|W attorneys are available to assist.
