OFCCP Issues Final Rules on Federal Contractors Affirmative Action Requirements
August 31, 2026
At A Glance
- Effective October 26, 2026, Executive Order 11246 regulations will be rescinded
- Effective September 21, 2026, federal contractors will no longer be required to invite applicants to self-identify as individuals with disabilities
- OFCCP requirements related to race and sex-based affirmative action programs for federal contractors will be eliminated
Summary
On August 21, 2026, The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) published three final rules that collectively eliminate affirmative action requirements based on race and sex, reduce disability-related compliance obligations, and update veteran hiring regulations.
These rules finalize changes that began when Executive Order 14173 revoked EO 11246 in January 2025. The final rules formally remove the underlying regulations and provide clarity regarding federal contractor obligations moving forward.
Rescission of Executive Order 11246 Regulations
Effective October 26, 2026, the Rescission of Executive Order 11246 Implementing Regulations, rescinds the regulatory framework implementing EO 11246, including 41 CFR Parts 60-1, 60-2, 60-3, 60-4, 60-20, 60-40, 60-50, and 60-999. Further, it removes related enforcement provisions from part 60-30.
As a result, federal contractors are no longer required under federal law to:
- Maintain affirmative action programs for women and minorities.
- Conduct availability and utilization analyses.
- Establish placement goals for minorities and women.
- Analyze personnel activity for adverse selection disparities.
- Comply with construction contractor participation goals.
- Follow EO 11246 pay transparency anti-retaliation provisions.
- Comply with EO 11246-specific sex, religion, and national origin discrimination guidelines.
The rescission eliminates the regulatory requirement to include the EO 11246 Equal Opportunity Clause in covered federal contracts and subcontracts. In addition, contractors will no longer be required under EO 11246 regulations to state in job advertisements that applicants will receive consideration without regard to protected characteristics.
Regulations related to OFCCP compliance reviews, audits, and enforcement activities tied specifically to EO 11246 obligations will also be rescinded.
Section 503 Disability Requirements
Section 503 of the Rehabilitation Act final rule eliminates several requirements of the Act while keeping others.
Effective September 21, 2026, contractors are no longer required to:
- Invite applicants and employees to self-identify as individuals with disabilities.
- Use Form CC-305 for disability self-identification.
- Collect and maintain disability-related applicant and workforce data.
- Conduct utilization analysis’, or measure workforce representation against the 7% disability utilization goal.
The rule also updates the basic Section 503 contract coverage threshold from $15,000 to $20,000 to reflect recent inflationary adjustments.
The annual Affirmative Action Plan requirement, the reasonable accommodation obligations, the underlying nondiscrimination protections, and the duty to document and assess the effectiveness of outreach and recruitment efforts all remain part of the Rehabilitation Act.
VEVRAA Requirements
Effective September 21, 2026, the VEVRAA final rule makes technical changes to the VEVRAA regulations, removing cross-references to EO 11246 and updates the coverage threshold from $150,000 to $200,000 in accordance with recent inflationary adjustments established by the Federal Acquisition Regulatory (FAR) Council.
Next Steps
Affected employers should review how state and local requirements may conflict with these new federal rules and consult with their legal counsel if any conflicts are identified.
Thank you for choosing Paylocity as your valued service partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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