Employers with federal contracts or subcontracts have seen significant changes to their affirmative action obligations over the past two years, and another important change takes effect this month.
In January 2025, Executive Order 11246, which had long required certain federal contractors to maintain affirmative action programs addressing race and sex, was revoked. Federal contractors were directed to wind down compliance with the Executive Order 11246 regulatory framework by April 21, 2025.
However, the end of Executive Order 11246 did not eliminate all affirmative action obligations for federal contractors. Separate requirements under Section 503 of the Rehabilitation Act, which addresses individuals with disabilities, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which addresses protected veterans, remain in effect for covered federal contractors and subcontractors.
Section 503 Changes Effective September 21
The U.S. Department of Labor recently issued additional changes to the regulations implementing Section 503. Effective September 21, 2026, several longstanding requirements relating to disability data will be eliminated.
Among the changes, covered contractors will no longer be required to:
- Invite applicants and employees to voluntarily self-identify as individuals with disabilities for Section 503 compliance purposes;
- Use the federal government’s voluntary disability self-identification form, Form CC-305;
- Conduct the former disability applicant and hiring data analysis; or
- Measure their workforce against the former 7% disability utilization goal.
The Department of Labor has announced that Form CC-305 will be discontinued effective September 21, 2026.
Importantly, Section 503 itself is not going away. Covered federal contractors continue to have obligations related to nondiscrimination and affirmative action for individuals with disabilities. VEVRAA obligations relating to protected veterans also continue to apply to covered federal contractors and subcontractors.
Are You Required to Have an AAP?
Not every federal contractor or subcontractor is required to maintain a written Affirmative Action Program. Current thresholds include:
Section 503 – Individuals with Disabilities
A written Section 503 AAP is generally required when an employer has:
- 50 or more employees; and
- At least one federal contract or subcontract of $50,000 or more.
VEVRAA – Protected Veterans
A written VEVRAA AAP is generally required when an employer has:
- 50 or more employees; and
- At least one federal contract or subcontract of $200,000 or more.
Employers should keep in mind that federal contractor obligations can apply even when a written AAP is not required. For example, the current basic coverage threshold under Section 503 is generally a federal contract or subcontract exceeding $20,000, regardless of employee count. Employers should evaluate their specific contracts and circumstances to determine which requirements apply.
What Should Federal Contractors Do Now?
Employers with federal contracts or subcontracts should review their current affirmative action programs, application and onboarding processes, applicant tracking systems, and related compliance procedures to determine whether changes are necessary before September 21.
Employers should also be cautious about simply deleting historical affirmative action data and analyses. Information that was lawfully collected and analyses that were completed under requirements in effect at the time may need to be maintained as historical compliance records even though the underlying requirements have changed.
The changing regulatory landscape also makes this a good time for employers to confirm whether their federal contracts or subcontracts subject them to Section 503 and/or VEVRAA affirmative action requirements and whether their current AAP reflects today’s requirements.
Need Help With Your Affirmative Action Program?
The MBA can assist employers in evaluating their affirmative action obligations and developing or updating Affirmative Action Programs for covered federal contractors and subcontractors.
If your organization has a federal contract or subcontract, is unsure whether an AAP is required, or needs assistance updating or developing its program, contact the MBA’s HR & Legal Services team.