Section 503 of the Rehabilitation Act requires federal contractors to take affirmative action in recruiting, hiring, and retaining people with disabilities, including job posting practices designed to reach the disability community.
This post covers what Section 503 compliance requires: who it applies to and what compliance looks like in practice.
What is Section 503?
Section 503 of the Rehabilitation Act of 1973 prohibits federal contractors from discriminating against people with disabilities and requires affirmative action to recruit, hire, and retain them. It's enforced by the DOL's Office of Federal Contract Compliance Programs (OFCCP), the same enforcement agency that oversees VEVRAA.
In practice, Section 503 compliance breaks down into four obligations: not discriminating, providing reasonable accommodation, posting job openings in ways that reach the disability community, and documenting all of it in a written affirmative action program. Each one has a specific mechanism behind it, and each is something an enforcement agency will ask to see documented, not just described, during a compliance evaluation.
Who Does Section 503 Apply To?
Section 503 applies to federal contractors and subcontractors with contracts of $20,000 or more. If your organization is already tracking VEVRAA obligations because of a covered federal contract, Section 503 almost certainly applies too. The two run in parallel, with separate but overlapping recordkeeping requirements.
Contractors with 50 or more employees and a contract of $50,000 or more have an additional obligation: a written affirmative action program, reviewed and updated annually, for each establishment.
What Does Section 503 Compliance Look Like in Practice?
Section 503 compliance comes down to a few concrete actions:
Nondiscrimination and reasonable accommodation
Contractors can't discriminate against qualified individuals on the basis of disability in any employment practice: recruitment, hiring, pay, promotion, training, or termination. They also have to provide reasonable accommodation to qualified applicants and employees unless doing so would cause undue hardship. In practice that means a written accommodation procedure people can find and use, and a record of how requests were handled.
Job posting and outreach
Section 503 requires outreach and positive recruitment activities reasonably designed to recruit qualified individuals with disabilities, drawn from resources like state vocational rehabilitation agencies, local American Job Centers, and disability organizations or Centers for Independent Living. Contractors must document these relationships and assess their effectiveness annually.
Written affirmative action program
Contractors over the size threshold maintain a written program covering policy, personnel processes, job qualification standards, accommodation and harassment procedures, internal and external dissemination, and an audit and reporting system. More on what goes into it below.
Recordkeeping
General personnel and hiring records must be kept for two years, or one year for contractors with fewer than 150 employees and under $150,000 in contracts. Records tied to outreach effectiveness and the utilization analysis carry a flat three-year retention requirement for every contractor, regardless of size.
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How Does Section 503 Relate to VEVRAA and Other Compliance Obligations?
Section 503 and VEVRAA are frequently discussed together because they cover overlapping ground: both require an affirmative action program from contractors over a size threshold, both require job posting to specific channels, and both fall under the same enforcement agency. If you've already read our guide to VEVRAA compliance, most of Section 503's mechanics will look familiar.
For a broader view of how federal contractor obligations fit together, our overview of federal contractor compliance is a good starting point if you haven't already built out your compliance foundation.
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Frequently Asked Questions About Section 503 Compliance
Section 503 compliance refers to a federal contractor's obligations under Section 503 of the Rehabilitation Act, including nondiscrimination and affirmative action for people with disabilities, a workforce utilization goal, and job posting practices designed to reach the disability community.
Federal contractors and subcontractors with contracts of $20,000 or more must meet basic Section 503 nondiscrimination and affirmative action requirements (raised from $15,000 in a 2025 inflationary adjustment). Contractors with 50 or more employees and a contract of $50,000 or more must also maintain a written affirmative action program.
The Section 503 utilization goal is 7%. This is a benchmark for the percentage of a contractor's workforce, calculated by job group, that should be individuals with disabilities. It's a goal rather than a quota, but contractors are expected to document good-faith efforts toward it.
Yes. The OFCCP compliance evaluations, which cover both VEVRAA and Section 503, resumed in July 2025 after a temporary suspension earlier that year. Congress funded OFCCP at nearly $101 million for FY 2026, preserving its oversight role under both programs.
A shortfall against the 7% goal isn't automatically a violation. The evaluation will expect to see a documented, action-oriented response: specific outreach steps tied to the shortfall, a timeline, and evidence those steps were carried out.
No. Section 503 compliance no longer requires a numerical utilization goal for individuals with disabilities and does not require a utilization analysis. Compliance is measured by outreach, recruitment, accommodation, and the documentation behind them.
