OFCCP Proposes New Rules to Clarify Federal Contactor Obligations Following the Revocation of EO 11246

President Trump’s revocation of Executive Order 11246 on January 21, 2025, left federal contractors and subcontractors wondering what would be required going forward. On July 1, OFCCP published three Notices of Proposed Rulemaking (NPRM) setting forth its vision of the future of federal contract compliance.

The Proposed Rescission of the EO 11246 Rules

The first NPRM reasserts the Department of Labor’s previously stated position that the Executive Order 11246 rules are “null and void as there is no source of valid legal authority supporting the regulations” and proposes formal rescission of the regulations. By taking this position, OFCCP makes it clear that federal contractors are no longer required to comply with OFCCP’s internet applicant rule, pay transparency rule or any of the other requirements relating to affirmative action for women and minorities under Executive Order 11246.¹ 

Among the rules that OFCCP is proposing to rescind is the requirement that federal contractors and first-tier subcontractors file EEO-1 reports. The rescission of this rule should end the obligation to identify as a federal contractor when filing EEO-1 reports and also end the EEOC’s practice of sharing EEO-1 reports with OFCCP. This means that federal contractors’ EEO-1 data will no longer be potentially available to the public through Freedom of Information Act requests. It also means that federal contractors and first-tier subcontractors with under 100 employees will no longer be required to file EEO-1 reports.

Finally, OFCCP is seeking to rescind its regulations at 41 CFR Part 60-3, which contain the Uniform Guidelines on Employee Selection Procedures (UGESP). The UGESP were jointly adopted in 1978 by the Equal Employment Opportunity Commission, Department of Labor, Department of Justice, and the Civil Service Commission to establish principles to assist employers, labor organizations, employment agencies, and licensing and certification boards to comply with requirements of federal law prohibiting employment practices that discriminate based on race, color, religion, sex, or national origin. Among other things, UGESP is a source of authority for employers’ inviting applicants to self-identify as to sex and race or ethnicity and periodically testing for adverse impact.

In proposing to rescind UGESP as it was incorporated into its own rules, OFCCP has explicitly stated, “[t]his action does not impact other agencies’ interpretation and application of UGESP.” Indeed, UGESP continues to be incorporated in the EEOC’s rules at 29 CFR Part 1607. Therefore, employers should consult with legal counsel before changing practices relating to the collection of demographic data from applicants or discontinuing the periodic analysis of that data for potential adverse impact.

The public may file comments on the proposed rules through September 2, 2025. Although various groups are likely to disagree with some of the OFCCP’s assertions regarding applicable law and its descriptions as to how the agency’s programs operated in the past, such issues are probably irrelevant as there would seem to be no basis upon which to object to the recission of those rules that relied on Executive Order 11246 as their sole source of authority. 

Proposed Revisions to the VEVRAA Rules

The second NPRM relates to the requirements under the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA). There are no proposed changes to the elements of the required affirmative action program for veterans. The only changes relate to the administrative process to be used in connection with enforcement actions. For the most part these changes are not substantive. The agency is simply moving rules that were located in the sections of the Code of Federal Regulations that related to EO 11246 to the section of the Code that relates to VEVRAA.

Under the revised rules, federal contractors and subcontractors that are subject to VEVRAA will have to continue to maintain affirmative action programs for protected veterans, list job openings with state employment delivery systems, prepare annual affirmative action plans, and annually file VETS-4212 reports. OFCCP also retains its authority to receive, investigate, and resolve complaints from applicants or employees and to conduct compliance reviews.

The public may file comments on the proposed rules through September 2, 2025.

Proposed Revisions to the Section 503 Rules

The third NPRM proposes to make some substantial changes to the implementation of Section 503. OFCCP proposes to rescind rules requiring contractors to invite applicants and employees to self-identify as to disability. Moreover, OFCCP includes as part of its discussion of this proposal an argument that such invitations to self-identify as to disability violate the Americans with Disabilities Act (ADA). Under the OFCCP’s interpretation of the ADA, state and local government requirements regarding self-identification as to disability are also unlawful. It is possible that the OFCCP’s argument here is foreshadowing guidance on this issue that may come from the EEOC once it regains a quorum and is able to announce new policy positions. 

OFCCP also proposes to rescind the utilization goal requirements. If the rules are adopted in their current form, contractors will still have to maintain affirmative action programs for individuals with disabilities, including a written plan, but the plan will not include any numerical data or analyses.

As with the VEVRAA rules, OFCCP is also proposing changes related to the administrative process applicable to enforcement actions. For the most part these changes are not substantive. The agency is simply moving rules that were located in the sections of the Code of Federal Regulations that related to EO 11246 to the section of the Code that relates to Section 503.

The public may file comments on the proposed rules through September 2, 2025. As OFCCP’s efforts on behalf of individuals with disabilities were generally seen as being effective, it seems likely that advocates for the disabled will comment on both OFCCP’s description of the law and the agency’s proposed changes. Whether those comments will result in OFCCP revising its proposals or lead to congressional action is impossible to predict. In the meantime, the existing regulations remain in place. For the time being, federal contractors must continue to invite applicants and employees to self-identify as to disability and prepare annual affirmative action programs including an analysis of the utilization of individuals with disabilities.

What Happens Next

As already noted, the public has until September 2, 2025 to submit comments on the proposed rules. This period may be extended by OFCCP if deemed appropriate. After the comment period closes, OFCCP is required to review the comments and address them as part of its publication of a final rule, which may differ from the original proposal. After adopting a final rule, OFCCP must then submit a report to Congress before the rule can take effect. 

Typically, this remaining portion of the rulemaking process would take a year or more to complete. However, OFCCP was extraordinarily quick in publishing its proposed rules just over five months into this new administration. It might be able to complete the remainder of this process in a similarly accelerated manner. Nevertheless, it is still hard to imagine a final rule being published, yet alone becoming effective, in calendar year 2025. For now, it would be prudent to assume that the existing rules will still be in place in 2026 so that contractors will still have to prepare 2026 affirmative action plans for individuals with disabilities, including the utilization analysis.