The U.S. Department of Labor issued three final rules on Friday that rescind affirmative‑action requirements for federal contractors, effectively rolling back a key component of President Donald Trump’s 2025 executive order. The documents outline the elimination of race‑ and sex‑based affirmative‑action programs and related diversity, equity, and inclusion mandates. They target specific regulations tied to the 1965 executive order signed by Lyndon Johnson, as well as Section 503 of the 1973 Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974.
Removing benchmarks for disabled workers
One of the most significant changes involves the removal of a specific utilization goal. The regulations previously established a benchmark requiring contractors to hire qualified individuals with disabilities at a rate of 7 % for each job group within their workforce. The new rules eliminate this metric and adjust the coverage thresholds, which are calculated based on the dollar value of specific government contracts. They also make changes to the laws’ coverage thresholds, which are based on the dollar amounts of particular contracts.
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Federal contractors have been anticipating these final rules following the publication of Trump’s 2025 executive order. The directive instructed the federal government to eliminate affirmative‑action programs and DEI initiatives as enforced by the Office of Federal Contract Compliance Programs. DOL initially paused OFCCP’s investigation and enforcement activities shortly after the order’s publication, noting that the agency no longer had authority under the rescinded Johnson executive order. The department lifted the pause as it pertained to Section 503 and VEVRAA in July 2025.
What contractors must still do
While the rules remove several affirmative‑action mandates, they do not strip away all obligations regarding disabled workers. Contractors must still take affirmative action to employ and advance qualified individuals with disabilities, according to attorneys at Jackson Lewis. They also must continue to assess the effectiveness of their recruitment efforts and outreach to such individuals. This distinction means that the numerical goals are gone, but the underlying duty to ensure equal opportunity remains in place for those specific regulations.
Employers must still comply.
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The changes are not absolute. Employers should note that the rules do not eliminate the discrimination prohibitions of Title VII of the 1964 Civil Rights Act or other federal, state, and local laws, attorneys at Ogletree Deakins said in an analysis. The 2025 executive order referenced in the three rules is separate from Trump’s March order requiring contractors to avoid engaging in discriminatory DEI programs. That March order carries the risk of contract cancellation, and at least one lawsuit has been filed challenging it, with litigation remaining ongoing.
The three rules take effect on different timelines: the first rule, which targets the 1965 order, is effective Oct. 26. Most of the Section 503 rule is effective Sept. 21, with the exception of one section that takes effect Dec. 21. The VEVRAA rule is effective Sept. 21.
