OFCCP drops the disability utilization goal and leaves the veterans' benchmark standing

5 September 2026

The Office of Federal Contract Compliance Programs published two final rules on 21 August 2026, effective 21 September, modifying the regulations implementing Section 503 of the Rehabilitation Act at 41 CFR part 60-741 and the Vietnam Era Veterans’ Readjustment Assistance Act at part 60-300.¹² Both duties are statutory: Section 503 requires contractors to “take affirmative action to employ and advance in employment qualified individuals with disabilities” under 29 U.S.C. 793(a), and VEVRAA requires “affirmative action to employ and advance in employment qualified covered veterans” under 38 U.S.C. 4212(a)(1).³⁴ Neither can be rescinded by rule, and neither rule attempts it; both align the regulations with Executive Order 14173, which revoked Executive Order 11246 on 21 January 2025, and the Section 503 rule also invokes Executive Order 14219 (see Labor rescinds the Executive Order 11246 regulations and finds it lacks authority for them).¹² The Section 503 rule drew 651 comment submissions and the VEVRAA rule 18.¹²

The enforcement machinery is relocated, then demolished. Part 60-30 held the administrative proceeding procedures, which served the Executive Order 11246 regime and “also governs administrative proceedings authorized under Section 503 … and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA).”⁵ Rather than let those proceedings lapse with the order that occasioned them, each rule moves the procedures into its own part: the VEVRAA rule moves them “directly into the VEVRAA regulations, specifically into 41 CFR 60-300.65(c) through (mm), except where duplicative of current part 60-300 provisions,” and the Section 503 rule makes the parallel move into 41 CFR 60-741.65.²¹ With the procedures rehoused, part 60-30 goes: amendatory instruction 1 of the Section 503 rule directs the Department to “remove and reserve 41 CFR Part 60-30,” effective 21 December 2026.¹ The VEVRAA rule also removes the EO 11246 cross-reference at 60-300.65(b), the reference to part 60-3 at 60-300.21(g)(2), and “the unnecessary 29 U.S.C. 793 reference” from the part’s authority citation.²
Section 503 loses its goal, its inquiry and its data. The rule rescinds “the disability inquiry requirement at 41 CFR 60-741.42,” “the related data collection requirements at 41 CFR 60-741.44(k)” and “the utilization requirements at 41 CFR 60-741.45” — the last containing the 7 percent utilization goal added by the 2013 rule.¹ The Department gives four reasons: that contractors “may, in practice, be induced to use quotas to meet the utilization goal”; that the goal “requires knowledge of disability status, which results in impermissible disability inquiries under the ADA,” the ADA standards being incorporated into the Rehabilitation Act by 29 U.S.C. 793(d); that the analysis is “not required by the statutory text of Section 503”; and that it is “now unworkable,” because 41 CFR 60-741.45(d)(2) requires contractors to use “the same job groups established for their analyses under E.O. 11246.”¹³ Commenters disputed the quota premise, citing “the current regulations’ express prohibition on quotas found at 41 CFR 60-741.45(h)” and noting that contractors “were not penalized for failing to meet the goal.”¹ The Department replied that while failing to meet the goal “is not a violation in itself,” it “routinely issued violations if contractors failed to conduct the utilization analysis or failed to execute ‘action-oriented programs’ to address underutilization of individuals with disabilities.”¹
The two statutory regimes were not narrowed alike, and the record shows the choice being made twice. Commenters proposed alternatives to outright rescission of the Section 503 goal, including “instituting a hiring benchmark” and moving the utilization provisions to appendices as optional guidelines; the Department “considered these alternatives and declines to retain the utilization goal and related analyses in any form.”¹ In the companion rule, commenters asked the Department to remove VEVRAA’s affirmative-action programme requirements and to require a barrier analysis for contractors below the VEVRAA hiring benchmark at 41 CFR 60-300.45 for two consecutive years; it declined both as “outside the scope of this rulemaking.”² A disability benchmark was therefore refused in the same package in which a veterans’ benchmark was left standing. The Department’s own footnote records that the 93rd Congress enacted Section 503 and amended VEVRAA to include “a similar affirmative action requirement,” and that a conference report on the VEVRAA amendments “explains that the 93rd Congress understood affirmative action to encompass ‘goals and timetables’ under certain circumstances”; it disagrees that this requires utilization goals under Section 503, on the ground that it must interpret “what the statute means,” not “what the legislature meant,” citing Epic Systems Corp. v. Lewis.¹⁶ The same footnote adds that “[a]t their own discretion, contractors remain free to conduct utilization analyses,” and that “[i]n doing so, contractors should ensure they are acting in accordance with all applicable laws and regulations, including the ADA.”¹
Public comment changed one thing, and the thresholds moved on their own. The Section 503 rule is “largely adopting its NPRM revisions, with a clarification related to the requirement to measure the effectiveness of affirmative action efforts” — new 41 CFR 60-741.44(l), which provides that “[c]ontractors are not required to consider quantitative data on the numbers of individuals with disabilities who were referrals, applicants, or hires when assessing the effectiveness of their outreach efforts and affirmative action program.”¹ That is the only place in either rule where comment altered the regulatory text. Both coverage thresholds also rose, Section 503’s “from $15,000 to $20,000” and VEVRAA’s from $150,000 to $200,000, each “in accordance with the inflationary adjustment requirements in 41 U.S.C. 1908” and effective 1 October 2025 — the statutory figures as adjusted rather than separate regulatory ones, since § 1908(c)(2) requires the Federal Acquisition Regulatory Council to adjust “each acquisition-related dollar threshold provided by law” and § 1908(c)(3) makes that the exclusive means.¹²⁷ The Department made those adjustments without notice and comment, finding under 5 U.S.C. 553(b)(B) that “notice and comment is unnecessary because the inflationary adjustments are minor and technical amendments that were previously subject to notice and comment through the Federal Acquisition Regulatory (FAR) Council’s rulemaking process and are now binding on the VEVRAA regulations.”² It estimates annualised cost savings from the Section 503 changes of “approximately $80 million” at a 7 percent discount rate.¹

Office of Federal Contract Compliance Programs, Department of Labor, “Modifications to the Regulations Implementing Section 503 of the Rehabilitation Act of 1973, as Amended,” final rule, 91 FR 54482–54507, published 21 August 2026, FR Doc. 2026-17115, “effective September 21, 2026, except for amendatory instruction 1 (amendment to 41 CFR part 60-30) which is effective on December 21, 2026” — the DATES-line parenthetical being Federal Register shorthand for an amendment to title 41 chapter 60; amendatory instruction 1 itself reads “PART 60-30 [REMOVED AND RESERVED] … Effective December 21, 2026 … remove and reserve 41 CFR Part 60-30” (91 FR 54500). Quoted: the SUMMARY’s reliance on Executive Orders 14173 and 14219, 90 FR 10583 (25 February 2025); the removal of 60-741.42, 60-741.44(k) and 60-741.45 (54482), effected by amendatory instructions 11, 12(b) and 13 (54500–54501); the 2013 rule at 78 FR 58682 (24 September 2013) adding “a 7 percent utilization goal for individuals with disabilities” (54483); the four rationales, including the ADA reasoning and the citation of 29 U.S.C. 793(d), and “the same job groups established for their analyses under E.O. 11246” (54483–54484); commenters’ reliance on the quota prohibition at 60-741.45(h) and that contractors “were not penalized for failing to meet the goal,” with the Department’s reply on the same page (54484); the alternatives proposed and “declines to retain the utilization goal and related analyses in any form” (54492); footnote 8 on the 93rd Congress, S. Conf. Rep. No. 1240, 93rd Cong., 2nd Sess. (1974), the “goals and timetables” passage, Epic Systems, and “At their own discretion, contractors remain free to conduct utilization analyses” (54486); the “largely adopting” sentence (54482) and new 41 CFR 60-741.44(l) at footnote 21 (54493), enacted at 54501; the coverage threshold “from $15,000 to $20,000 in accordance with the inflationary adjustment requirements in 41 U.S.C. 1908,” citing 90 FR 41872 (27 August 2025) (54482); the $80 million annualised savings estimate (54498); and “DOL received 651 comment submissions in response to the NPRM” (54483), with a footnote noting the regulations.gov count is higher because some commenters counted one comment as several submissions. NPRM at 90 FR 28494 (1 July 2025); comment period extended by 90 FR 42712 (4 September 2025). The Part III cover page at 91 FR 54481 styles the document an “Interim Final Rule” while its ACTION line reads “Final rule.” https://www.federalregister.gov/documents/2026/08/21/2026-17115/modifications-to-the-regulations-implementing-section-503-of-the-rehabilitation-act-of-1973-as ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵
Office of Federal Contract Compliance Programs, Department of Labor, “Modifications to the Regulations Implementing the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as Amended,” final rule, 91 FR 54234–54244, published 21 August 2026, FR Doc. 2026-17116, effective 21 September 2026; 41 CFR part 60-300. Quoted: the statutory affirmative-action duty at 38 U.S.C. 4212(a) as the rule cites it; the Final Rule Summary’s four listed changes, including “moving the administrative proceeding procedures directly into the VEVRAA regulations, specifically into 41 CFR 60-300.65(c) through (mm), except where duplicative of current part 60-300 provisions,” the removal of the EO 11246 cross-reference at 60-300.65(b), the removal of the part 60-3 reference at 60-300.21(g)(2), and the removal of “the unnecessary 29 U.S.C. 793 reference” from the authority citation (54235); the comments recommending removal of the show cause notice procedures at 41 CFR 60-300.62, removal of the AAP requirements, and a barrier analysis for contractors below the hiring benchmark at 41 CFR 60-300.45 “for two consecutive years,” which the Department declined as “outside the scope of this rulemaking” (54236); the good-cause finding under 5 U.S.C. 553(b)(B) for implementing the inflationary adjustments without notice and comment — “notice and comment is unnecessary because the inflationary adjustments are minor and technical amendments that were previously subject to notice and comment through the Federal Acquisition Regulatory (FAR) Council’s rulemaking process and are now binding on the VEVRAA regulations” (54235); footnote 2, that “[e]ffective October 1, 2025, the coverage threshold under VEVRAA increased from $150,000 to $200,000, in accordance with the inflationary adjustment requirements in 41 U.S.C. 1908,” citing 90 FR 41872 (27 August 2025); and “DOL received 18 public comments in response to the NPRM” (54235). NPRM at 90 FR 28485 (1 July 2025). https://www.federalregister.gov/documents/2026/08/21/2026-17116/modifications-to-the-regulations-implementing-the-vietnam-era-veterans-readjustment-assistance-act-of ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸
29 U.S.C. § 793(a) provides that “[a]ny contract in excess of $10,000 entered into by any Federal department or agency for the procurement of personal property and nonpersonal services (including construction) for the United States shall contain a provision requiring that the party contracting with the United States shall take affirmative action to employ and advance in employment qualified individuals with disabilities,” and applies the same requirement to subcontracts in excess of $10,000. The subsection directs the President to implement the section by regulation but does not prescribe the methods by which affirmative action is to be achieved. Subsection (d) supplies the standard on which the Department’s ADA reasoning rests: “The standards used to determine whether this section has been violated in a complaint alleging nonaffirmative action employment discrimination under this section shall be the standards applied under title I of the Americans with Disabilities Act of 1990 … and the provisions of sections 501 through 504, and 510 of the Americans with Disabilities Act of 1990.” The $10,000 figure is the threshold as enacted; the coverage threshold in force stood at $20,000 from 1 October 2025. https://www.govinfo.gov/link/uscode/29/793?link-type=html ↩ ↩²
38 U.S.C. § 4212(a)(1) provides that “[a]ny contract in the amount of $100,000 or more entered into by any department or agency of the United States for the procurement of personal property and nonpersonal services (including construction) for the United States, shall contain a provision requiring that the party contracting with the United States take affirmative action to employ and advance in employment qualified covered veterans,” and applies the section to subcontracts of $100,000 or more. The pin to (a)(1) is more precise than the VEVRAA rule’s own citation, which gives § 4212(a). The $100,000 figure is the threshold as enacted; it is adjusted for inflation under 41 U.S.C. 1908 and stood at $200,000 from 1 October 2025. The categories of covered veteran are given in the VEVRAA rule as disabled veterans, recently separated veterans, Armed Forces service medal veterans, and active duty wartime or campaign badge veterans. https://www.govinfo.gov/link/uscode/38/4212?link-type=html ↩
Office of Federal Contract Compliance Programs, “Rescission of Executive Order 11246 Implementing Regulations,” final rule, 91 FR 54444–54480, published 21 August 2026, FR Doc. 2026-17114, effective 26 October 2026, quoted for its description of part 60-30, which “also governs administrative proceedings authorized under Section 503 of the Rehabilitation Act of 1973, as amended (Section 503) and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA)” (91 FR 54446). See Labor rescinds the Executive Order 11246 regulations and finds it lacks authority for them. https://www.federalregister.gov/documents/2026/08/21/2026-17114/rescission-of-executive-order-11246-implementing-regulations ↩
Epic Systems Corp. v. Lewis, 584 U.S. 497 (2018), cited by the Department at footnote 8 of the Section 503 rule for the proposition that a court interprets what a statute means rather than what the legislature meant. The opinion states: “But legislative history is not the law. ‘It is the business of Congress to sum up its own debates in its legislation,’ and once it enacts a statute ‘[w]e do not inquire what the legislature meant; we ask only what the statute means,’” quoting Schwegmann Brothers v. Calvert Distillers Corp., 341 U.S. 384, 396, 397 (1951) (Jackson, J., concurring). The Department renders the Schwegmann pin as “341 U.S. 384, 397”; this post reproduces the Department’s pincite of 584 U.S. at 523, which could not be independently confirmed because the slip opinion carries no U.S. Reports pagination. https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf ↩
41 U.S.C. § 1908, “Inflation adjustment of acquisition-related dollar thresholds.” Subsection (b)(1) applies the adjustment requirement to “a dollar threshold that is specified in law as a factor in defining the scope of the applicability of a policy, procedure, requirement, or restriction provided in that law to the procurement of property or services by an executive agency, as the Council determines,” subject to the exceptions in (b)(2) — chapters 67 and 83 of title 41, specified sections of title 40, and Trade Agreements Act thresholds — none of which reaches Section 503 or VEVRAA. Subsection (c)(2): “On October 1 of each year evenly divisible by 5, the Council shall adjust each acquisition-related dollar threshold provided by law.” Subsection (c)(3): “A dollar threshold adjustable under this section shall be adjusted only as provided in this section.” The adjusted figures are therefore the statutory thresholds, not separate regulatory ones. https://www.govinfo.gov/link/uscode/41/1908?link-type=html ↩

Footnotes