The Future of the OFCCP: Workplace Equity and Federal Oversight

The Office of Federal Contract Compliance Programs (OFCCP) within the U.S. Department of Labor (DOL), is facing an existential threat. In its proposed Fiscal Year 2026 budget, the DOL—under the second Trump administration—has recommended the elimination of the OFCCP, signaling a profound shift in the federal government’s approach to enforcing non-discrimination and affirmative action among federal contractors. This proposal marks a continuation of conservative efforts to reduce the agency’s reach. Yet it also raises serious questions about how the federal government will ensure equal employment opportunity—especially for historically marginalized communities, protected veterans, and people with disabilities.

A Brief History of the OFCCP

The OFCCP was created in 1965 to enforce Executive Order 11246, which prohibits federal contractors from discriminating on the basis of race, color, religion, sex, or national origin. Over the years, the agency’s responsibilities expanded to include Section 503 of the Rehabilitation Act of 1973 (protecting individuals with disabilities) and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) (protecting veterans). The agency has served as both watchdog and educator, conducting audits, requiring Affirmative Action Plans, and pushing federal contractors—who collectively employ about 25% of the U.S. workforce—to create fairer, more inclusive workplaces.

Administration’s Approach: From Weakening to Dismantling

During President Trump’s first term, the OFCCP’s powers were gradually weakened. Enforcement actions declined, staffing levels dropped, and the agency shifted toward a more “compliance assistance” focus. The administration also rolled back the EEOC’s EEO-1 Component 2 pay data collection—a critical tool for uncovering pay disparities. These steps were part of a broader deregulatory agenda aimed at limiting what the administration viewed as government overreach. In his second term, that approach has escalated. In January 2025, President Trump rescinded Executive Order 11246, stripping the OFCCP of its most significant authority. The agency has since been relegated to enforcing only Section 503 and VEVRAA. Most of its staff has been laid off, leaving a diminished enforcement footprint.

The FY2026 Proposal: Dismantling the OFCCP

The DOL’s proposed budget would finalize the OFCCP’s dissolution by:

• Transferring Section 503 enforcement to the Equal Employment Opportunity Commission (EEOC).
• Moving VEVRAA enforcement to the Veterans’ Employment and Training Service (VETS).

The DOL positions this restructuring as a move to “streamline oversight” and “shrink the federal bureaucracy.” However, critics argue that these transfers would eliminate the affirmative action components that only the OFCCP currently enforces. While the EEOC enforces anti-discrimination laws, it has never been tasked with overseeing affirmative action plans by federal contractors.

Legal and Legislative Hurdles

Eliminating the OFCCP is, however, far more complex than issuing a budget proposal. Both Section 503 and VEVRAA place enforcement authority with the Secretary of Labor, and current regulations assign these responsibilities to the OFCCP. Any realignment of authority would require:

• Amending DOL regulations, particularly those tied to VEVRAA.
• Congressional action to change the statutory authority under Section 503.

These changes are unlikely to go unchallenged. Democrats in Congress are expected to strongly oppose the elimination of a key civil rights agency. Additionally, advocacy groups for veterans, people with disabilities, and communities of color are already preparing for a legal and political battle, arguing that the proposal weakens protections just when persistent disparities demand greater enforcement.

What’s at Stake?

The OFCCP occupies a unique space in the federal enforcement landscape. It not only investigates discrimination but also requires contractors to take proactive steps to diversify their workforce and ensure equal opportunity. This dual focus—enforcement and affirmative action—sets it apart from agencies like the EEOC. Without the OFCCP, federal contractors may no longer be subject to the systemic reviews that uncover patterns of discrimination or hold companies accountable for failing to recruit and retain people from underrepresented groups. The burden of proof would shift from systemic accountability to individual complaints—perhaps leaving many violations invisible and unaddressed.

A Pivotal Moment

The proposal to eliminate the OFCCP is not just a bureaucratic reshuffle—it’s a symbolic and practical rollback of decades of civil rights progress. It reflects an ideological shift away from proactive inclusion toward a minimalist view of anti-discrimination, where the government intervenes only after harm has occurred. Whether Congress accepts or rejects this proposal will determine the fate of one of the last remaining federal mechanisms dedicated to affirmative action and systemic equity in employment. As the debate unfolds, the stakes are clear: not just the future of one agency, but the federal government’s role in ensuring that taxpayer dollars support workplaces that are fair, inclusive, and free from discrimination.

What Should Employers Do Now?

Whether or not the OFCCP is ultimately dissolved, federal contractors should take a proactive approach to compliance and workforce equity. Here are some key action items:

• Maintain well-documented AAPs and update them annually. Ensure they are audit-ready, even in the absence of an OFCCP review. This demonstrates commitment to fair hiring and advancement.
• Continue tracking applicant flow, hires, promotions, terminations, and compensation by race, gender, veteran status, and disability status. Data-driven decision-making remains a best practice regardless of external enforcement changes.
• Embed diversity, equity, inclusion, and accessibility (DEIA) principles into business operations. Build internal systems that go beyond compliance and create a culture of continuous improvement.
• Keep your HR, legal, and compliance teams informed of policy updates from the DOL, EEOC, and VETS. Budget proposals are only the first step—changes may evolve through rulemaking, litigation, or Congressional amendments.
• Equip hiring managers, recruiters, and senior leaders with training on inclusive hiring practices, disability accommodations, and veteran outreach. Clear communication around your organization’s values and compliance goals can reinforce trust and engagement.

Preparing for Multiple Scenarios

Given the uncertainty surrounding the OFCCP’s future, employers should be prepared for a range of outcomes. If the proposal is enacted, expect realignment of responsibilities, potential regulatory gaps, and adjustments in compliance expectations. The transition period will likely involve interim guidance and rulemaking. If the proposal is not enacted, the OFCCP may remain in a reduced form, with continued emphasis on voluntary compliance and limited audits. In either case, prioritizing equitable practices will position organizations to succeed in both risk mitigation and workforce development.

Disclaimer: The information provided above is for informational purposes only and does not constitute legal advice. Please consult a legal professional before acting on any information provided.