Federal contractors have navigated a turbulent regulatory landscape throughout 2025, starting with significant policy shifts as the Trump Administration re-entered the White House in January. For federal contractors subject to Office of Federal Contract Compliance Programs (OFCCP) oversight, the year has been marked by intensified efforts to align with affirmative action requirements under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act, which mandates that covered federal contractors and subcontractors take proactive steps to recruit and employ protected veterans and individuals with disabilities.

Let’s dive in and review the changes federal contractors have experienced this year:

January 21, 2025: Rescission of Executive Order 11246

President Trump issued Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which revoked Executive Order 11246 and ended federal contracting requirements tied to diversity, equity, and inclusion (DEI). For nearly six decades, Executive Order 11246, originally signed by President Lyndon B. Johnson in 1965, has remained the cornerstone of federal equal employment opportunity and affirmative action obligations, with protections having been expanded in 2014 to include sexual orientation and gender identity. It required federal contractors to establish and maintain affirmative action programs and prohibited discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. 

See Member Guidance following this Executive Order

View the Webinar for a more detailed account of the EO 11246 rescission

January 24, 2025: Secretary’s Order 03-2025 to Cease & Desist All Investigative Enforcement Activity Under Rescinded Executive Order 11246

Mere days following Executive Order 14173, Secretary’s Order 03-2025 placed enforcement of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) into abeyance, halting audits and compliance reviews. Contractors suddenly found themselves in uncharted territory, with traditional compliance mechanisms paused, AAP certification suspended, and years of established practice thrown into question. 

March 14, 2025: Rescission of Federal Contractor Minimum Wage

Following Executive Order 14148 on January 20, 2025, “Initial Rescissions of Harmful Executive Orders and Actions,” which was aimed at revoking 78 Presidential Orders and memoranda, President Trump also revoked a myriad of 18 additional Presidential Orders and memorada–one of which was Executive Order 14026, which had increased the federal contractor minimum wage in 2021. This action effectively reinstated a lower minimum wage, and the DOL is expected to issue a rule to rescind the regulations implementing the Biden-era contractor minimum wage formally.

View the Webinar Cataloging the First 90 Days

April 23, 2025: Executive Order Signed, “Restoring Equality of Opportunity & Meritocracy”

On Wednesday, April 23, 2025, President Trump signed an Executive Order “Restoring Equality of Opportunity and Meritocracy” aimed at disparate impact liability under various titles of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991. The Executive Order also called for the Attorney General to evaluate whether there can be federal preemption of state laws with disparate impact liability. Among the mandates of the Executive Order is the deprioritization of enforcement of employment practices disparate impact liability, which is based in statute–specifically the Civil Rights Act of 1991. Disparate impact liability refers to a legal concept where a seemingly neutral policy or practice results in a disproportionately negative impact on a specific group of people, even if there was no intentional discrimination. In this case, if a neutral employment practice has a disparate impact on the basis of race, religion, sex, or national origin, the employer must show that the practice is job-related for the position and consistent with business necessity.

View the Webinar on the Impact of this Executive Order

View the blog post by Josh Roffman, Managing Attorney at Roffman Horvitz

July 1, 2025 NPRM: Major Modifications Proposed to Section 503

On July 1, 2025, the OFCCP published three Notices of Proposed Rulemaking (NPRM) to rescind or modify the following regulations: 

• Rescinding Executive Order 11246 from implementing regulations
• Modification to regulations implementing Section 503 of the Rehabilitation Act of 1973, as amended
• Modification to regulations implementing the Vietnam Era Veterans Readjustment Assistance Act of 1974, as amended 

While the modifications to VEVRAA are mainly administrative, removing references to Executive Order 11246, the modifications proposed to Section 503 are far more impactful. These modifications include: 

• the requirement to solicit disability status from applicants or employees;
• the need to conduct a disability utilization analysis; and
• the tracking of disability applicants and hire metrics used to assess Section 503 outreach.

Federal contractors and partners are encouraged to submit comments by the September 2, 2025, deadline. It’s important to note that until finalized, the current regulatory obligations for Section 503 and VEVRAA remain entirely in effect.

View guidance and tips for how to submit comments to NPRMs

July 2, 2025: Abeyance Lifted & Enforcement Resumes for Section 503 & VEVRAA

On July 2, 2025, Secretary of Labor Lori Chavez-DeRemer issued Secretary’s Order 08-2025, which officially lifted the enforcement pause (abeyance) imposed by Order 03-2025 under EO 14173. This allows the OFCCP to resume enforcement activities under Section 503 of the Rehabilitation Act and VEVRAA. While the abeyance was lifted for Section 503 and VEVRAA enforcement, Secretary’s Order 03-2025 provisions related to EO 11246 remained in effect. Contracts should note these key highlights: 

• Resuming Complaint Processing Under Section 503 and VEVRAA: The OFCCP has announced that it will resume processing all pending and newly filed complaints under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). These complaints had previously been held in abeyance since the Secretary’s Order 03-2025 on January 24, 2025. (See above)
• Administrative Closure of EO 11246 Compliance Reviews: OFCCP has administratively closed all pending compliance reviews initiated under Executive Order 11246 from the November 2024 scheduling list. This action reflected the agency’s decision due to the interconnected enforcement of EO 11246 with Section 503 and VEVRAA. Impacted federal contractors will receive formal notifications confirming the closure of these reviews for their records.
• AAP Certification Portal Remains Closed: Although enforcement activities are resuming, the Affirmative Action Program (AAP) certification portal for Section 503 and VEVRAA remains temporarily closed as OFCCP continues system and process updates. Contractors will be notified once the portal is reopened.

Strategic Considerations for the Remainder of 2025

While the above activity is simply a high-level overview, much more has transpired over the past seven months. One thing remains–the need for federal contractors to maintain full compliance with currently existing Section 503 and VEVRAA regulations, which include VEVRAA mandatory job listing requirements, nondiscrimination practices, outreach, and documentation.

How Federal Contractors Can Prepare

• Prepare for potential investigations or complaint processing by OFCCP: Ensure documentation is readily available and accessible. DirectEmployers has always recommended self-audits to ensure all of your practices are sound.
• Watch incoming notifications: Particularly, watch for clearance letters regarding administrative closure of compliance reviews, and retain them for your records.
• Engage with the NPRM: Formulate comments or organizational input by September 2, 2025, especially on self-identification and utilization goal proposals. DirectEmployers, with support from Roffman Horvitz, will be compiling Member comments and submitting them on behalf of the Association.
• Plan a flexible policy strategy: Be ready to adapt internal practices quickly if the proposed regulatory shifts go final.

Changes to Keep Top of Mind

If the proposed NPRM is finalized, the result could mean that key affirmative action components that federal contractors have relied on to measure and drive improvement–especially that of the 7% utilization goal and self-ID mechanisms for individuals with disabilities–will require new internal practices and or ways to measure progress. In addition, the broader regulatory landscape remains in flux. With EO 11246 enforcement revoked, the uncertainty of OFCCP remains–even after the Senate Appropriations Committee approved funding for OFCCP for fiscal year 2026 in late July.

Stay informed  by closely monitoring OFCCP communications and maintaining internal readiness, and proactive engagement to respond to evolving agency structure, system changes, and policy guidance. As the regulatory framework continues to evolve, DirectEmployers remains dedicated to Member support, education, and advocating on behalf of the contractor community each day.

THIS BLOG POST 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.