Federal contractors finally have clarity on the future of the Office of Federal Contract Compliance Programs (OFCCP). On February 3, 2026, the FY 2026 Consolidated Appropriations Act (H.R. 7148) was signed in to law, allocating funding to the OFCCP through September 30, 2026.
After a year of uncertainty around whether the agency would continue to function at all, federal contractors can refocus their compliance efforts. Understanding this funding decision and what it means for OFCCP compliance will be important as federal contractors plan recruiting activity for the year ahead.
Why OFCCP Funding Was at Risk
The FY 2026 budget process has been a long and arduous journey for federal contractors awaiting word of what the OFCCP would look like in the future.
For a recap of 2025 OFCCP updates and changes see our article, OFCCP Compliance Review 2025.
When the FY 2026 budget process began, both the White House’s proposed budget and the House Appropriations Committee plan had called for eliminating OFCCP’s funding entirely.
Senate appropriations version of the bill backed continuing to fund the agency and the final bill ultimately restored funding for the OFCCP, through at a slightly reduced level.
What the 2026 Appropriations Package Means for OFCCP
H.R. 7148 (the Consolidated Appropriations Act, 2026) has now become law and includes:
-
Funding for the Department of Labor (DOL) and its agencies, including the OFCCP
-
$100,976,000 for OFCCP salaries and expenses through the end of the fiscal year on September 30, 2026
While this is $11 million below 2025 funding, it does provide clarity around the agency’s future and signals that enforcement will continue.
Here’s what funding means:
-
The OFCCP will continue to operate as a fully funded agency and won’t be merged into another agency.
-
The agency will remain staffed and have enforcement ability under VEVRAA and Section 503 focusing on equal employment opportunity for individuals with disabilities and protected veterans.
-
Federal contractors should continue to meet obligations and documentation expectations.
What OFCCP Appropriation Bill Funding Means for Federal Contractors
Now that OFCCP funding has been restored for 2026, the most important thing for federal contractors to keep in mind is that they must continue to fulfill their obligations under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act.
Contractors should stay on top of their compliance obligations relating to VEVRAA and Section 503, including:
-
Outreach to protected veterans and individuals with disabilities, including posting to ESDS state job banks
-
Documentation and recordkeeping related to compliance activities
Federal contractors should also ensure that they’re:
-
Prepared as enforcement activity resumes, and
-
Regularly monitoring OFCCP guidance on enforcement priorities and rule changes
Review and Invest in Compliance Processes for 2026
With OFCCP Funding Restored for FY 2026 and enforcement continuing, now is a good time for federal contractors to review and invest in their compliance processes. Many federal contractors were hesitant to make these investments last year when federal contracts and the future of the OFCCP were uncertain.
Here’s why it’s important to make that investment now:
-
Stable funding means continued enforcement
-
Regulatory change magnifies risk
-
Manual processes are risky and hard to scale
-
Aligning recruitment technology with compliance reduces burden
Looking Ahead — OFCCP Enforcement, Rules, and Funding Beyond 2026
Contractors should anticipate continued legislative and regulatory activity in 2026, including:
-
Possible agency guidance or rule revisions under VEVRAA and Section 503.
-
Further developments related to complaint processing
-
Continued Congressional appropriations and policy discussions that could further reshape OFCCP’s scope or budget in future fiscal years
Staying informed will help HR and compliance teams navigate these developments with confidence.
After a turbulent year in 2025, the restoration of OFCCP funding in the FY 2026 appropriations bill ensures that federal contractor compliance remains active and relevant. While some regulatory requirements have shifted, obligations continue, and a funded agency means continued enforcement for employers. Contractors should use this clarity to reinforce their compliance frameworks and document retention strategies for the year ahead.
Resource: Federal Contractor Compliance Technology Guide — 2026
To support contractors navigating these changes, JobTarget created a practical, in-depth resource:
📘Federal Contractor Compliance Technology Guide — 2026
This guide covers:
-
How to evaluate compliance and recruitment technology
-
Features federal contractors should prioritize in 2026
-
Common compliance gaps and how technology helps close them
-
Best practices for implementation and long-term scalability
