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DOL proposes refined rules for federal contractors
7/14/25
Hot off the presses, on July 1, 2025, the Department of Labor’s Office of Federal Contract Compliance Programs, better known as “OFCCP,” released three proposed rules to President Trump’s Executive Order 14173 (which eviscerated federal affirmative action requirements for federal contractors set forth in Executive Order 11246).
More specifically, Executive Order 11246 provided regulations for federal contractors to maintain certain affirmative action programs, including placement goals, and reflection or analysis review. In pertinent part, the Order prohibited covered federal contractors (and subcontractors) from discriminating against employees (or applicants) based on protected characteristics, including race, color, religion, sex, sexual orientation, gender identity and national origin, and further outlined required affirmative action obligations.
On January 21, 2025, President Trump issued Executive Order 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” setting forth a directive to immediately cease promotion of affirmative action and diversity, and rather, merely prohibit active illegal discrimination. As this was in contravention of Order 11246, Order 14173 effectively revoked Executive Order 11246’s regulations and requirements surrounding affirmative action and nondiscrimination rules for federal contractors.
Since the initial issuance, the OFCCP has now authored additional rules to the Order, further clarifying and revising federal contractor obligations, pending finalization. The pending rules seek to officially rescind Executive Order 11246’s non-discrimination and affirmative obligations but permits OFCCP continued governance over veterans and individuals disabled within the meaning of the Rehabilitation Act of 1973.
The OFCCP’s first proposed rule looks at official revocation of Executive Order 11246, in favor of Executive Order 14173.
The second proposed rule seeks to modify the Vietnam Era-Veterans’ Readjustment Assistance Act (“VEVRAA”). The rule proposes updates and alignment with references to Executive Order 14173, as well as provision of an administrative enforcement avenue.
The third proposed rule is directed at modifying Section 503 of the Rehabilitation Act. In addition to updating references from Executive Order 11246 to Executive Order 14173 in the Act, the rule proposes dissolving the current requirement that applicants and employees be presented with a voluntary self-identification form regarding their disability status, favoring instead, a 7% target of employment of disabled individuals.
Despite recent comments arguably suggesting that he planned to dissolve the OFCCP entirely, President Trump’s directive here brings into question whether the OFCCP will instead continue oversight and enforcement of regulations governing federal contractors. The future of the OFCCP remains in question.
These rules are not finalized or implemented, and it is important that employers contracting with the federal government remain diligent and abreast of anticipated regulatory changes.
In the meantime, anyone with interest can submit comments on the proposed rules until August 30, 2025. This can be done electronically or by mail, specifics of which can be found at the OFCCP’s official website.
The OFCCP has also specifically invited any federal contractors to voluntarily submit material regarding their initiatives and efforts to slow down affirmative action programs since Executive Order 14173’s January 2025 issuance, including provision of any information regarding a shift in attention to more merit-based initiatives. Employers should carefully consider whether to participate in this initiative.
Federal contractors can check back with Morgan Randle at morgan.randle@fmglaw.com, or your local FMG attorney, for assistance or updates on specific contracting obligations and requirements.
Information conveyed herein should not be construed as legal advice or represent any specific or binding policy or procedure of any organization. Information provided is for educational purposes only. These materials are written in a general format and not intended to be advice applicable to any specific circumstance. Legal opinions may vary when based on subtle factual distinctions. All rights reserved. No part of this presentation may be reproduced, published or posted without the written permission of Freeman Mathis & Gary, LLP.
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