On Tuesday, February 3, 2026, the President signed into law H.R. 7148, the “Consolidated Appropriations Act, 2026.” This significant legislative action provides consolidated appropriations for the fiscal year ending September 30, 2026, and marks a turning point for federal contractor enforcement efforts.

Specifically, the Act allocates $100,976,000 to the Office of Federal Contract Compliance Programs (OFCCP) for salaries and expenses, approximately $11 million below the previous year’s funding. This appropriation effectively ends a year of budgetary uncertainty for the agency and signals a resumption of formal compliance reviews and audits.

Navigating the Funding Rollercoaster 

Since January 21, 2025, the OFCCP has operated under significant operational constraints following Executive Order 14173. While that Executive Order rescinded EO 11246 (related to race, color, religion, sex, and national origin), it explicitly did not apply to veterans or individuals with disabilities.

However, the subsequent lapse in appropriations and shifting funding proposals throughout 2025 led to a temporary abeyance or pause in many investigative activities. With the passage of H.R. 7148, the agency now has the necessary resources to resume its enforcement mandate.

Understanding Your Continued Obligations

While the enforcement landscape has shifted over the past year, the statutory obligations for federal contractors under the Vietnam Era Veterans Readjustment Assistance Act of 1974(VEVRAA) and Section 503 of the Rehabilitation Act have remained in effect.

• VEVRAA: Requires federal contractors with a contract of $200,000 or more (see updated jurisdictional thresholds as of October 1, 2025) to take affirmative action to employ and advance employment for protected veterans.
• Section 503 of the Rehabilitation Act of 1973: Prohibits discrimination against individuals with disabilities and requires contractors with contracts exceeding $20,000 to take affirmative action in hiring and promotion.

Note: For both VEVRAA and Section 503, a written Affirmative Action Program (AAP) for veterans and individuals with disabilities is generally required if your organization has 50 or more employees and meets the relevant contract dollar thresholds.

What This Means for Federal Contractors

The restoration of just over $100 million in funding means that the OFCCP is positioned to re-engage in its standard enforcement mechanisms. Federal contractors should prepare for:

• Resumption of Compliance Evaluations: The agency is likely to begin processing its backlog of pending reviews and may release new Corporate Scheduling Announcement Letters (CSALs) in the coming months.
• Audit Readiness: Contractors should ensure their current AAPs for veterans and individuals with disabilities are up-to-date, including the required data collection, hiring benchmarks (currently 5.1% for veterans), and utilization goals (7% for individuals with disabilities).
• Information Collection: Recent agency activity suggests a renewed focus on VEVRAA recordkeeping and complaint investigations. Ensure that your “Invitation to Self-Identify” processes and VEVRAA mandatory job listing are fully compliant.

With the budget finalized through September 30, 2026, wait-and-see is no longer a viable compliance strategy. DirectEmployers recommends HR professionals and compliance managers conduct an immediate internal audit of their VEVRAA and Section 503 protocols to ensure they are prepared for potential OFCCP contact in the case of a CSAL or future compliance evaluation.

How DirectEmployers Supports

To navigate this renewed enforcement environment, federal contractors can rely on DirectEmployers’ suite of tools designed specifically for OFCCP compliance. For VEVRAA obligations, our proprietary VetCentral technology streamlines the mandatory job listing requirement by nightly acquiring your job openings and delivering them directly to the appropriate American Job Centers (AJCs) and employment service delivery systems (ESDS) nationwide. To aid in Section 503 outreach requirements, VocRehab+ bridges the gap between your organization and the disability community by delivering your jobs to a network of vocational rehabilitation (VR) counselors across the country. But it goes beyond just job distribution, and provides direct contact information for these counselors through our Partner Relationship Manager (PRM), enabling your team to engage in the meaningful, one-on-one outreach that the OFCCP looks for during a compliance evaluation.

For over 25 year’s DirectEmployers has been the “Gold Standard” in VEVRAA compliance solutions for federal contractors. Ready to learn more? Let’s talk! Our Membership Team would love to explore VEVRAA solutions and find the one that best fits your needs.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.