DOL proposes to eliminate agency.
The U.S. Department of Labor released its proposed budget for Fiscal Year 2026, which runs from October 1, 2025 through September 30, 2026. The budget proposal is the agency’s request to Congress for funding.
In its proposed budget, DOL aims to eliminate the Office of Federal Contract Compliance Programs entirely. The OFCCP enforces the non-discrimination and affirmative action obligations of federal contractors. Since January 21 when President Trump rescinded Executive Order 11246, the OFCCP’s only responsibility has been enforcement of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act. The OFCCP laid off the vast majority of its workforce due to its diminished oversight responsibilities.
Under the DOL’s plan, enforcement of Section 503 would be transferred to the Equal Employment Opportunity Commission, and enforcement of VEVRAA would move to the Veterans’ Employment and Training Service, another agency within the Department of Labor.
The Department of Labor suggests that shifting “duties to monitor contractor compliance” with VEVRAA from OFCCP to VETS would be “a more efficient and appropriate way to ensure veterans have access to the good-paying jobs that they deserve.”
Regarding the transfer of enforcement of Section 503 to the EEOC, the Department of Labor states that the “realignment of responsibilities will ensure consistent oversight while shrinking the Federal bureaucracy.” Although the EEOC’s current mission includes investigating and enforcing non-discrimination laws with respect to individuals with a disability, its powers have never included enforcing the affirmative action obligations of federal contractors.
The VEVRAA statute empowers the Secretary of Labor to enforce its provisions and to promulgate regulations. Existing regulations grant this enforcement authority to the OFCCP. Thus, to effectuate the proposed change, the DOL would need to amend the VEVRAA regulations.
Section 503 also vests authority with the Secretary of Labor. Thus, Congress would need amend the statute to effectuate the proposed change of granting enforcement power to the EEOC, and the Section 503 regulations would need to be updated as well.
Ultimately, Congress will decide whether to approve the DOL’s budget proposal, which would pave the way for the elimination of the OFCCP.
PartnerCara co-chairs Constangy’s practice groups relating to EEO/Contractor Compliance, Reporting & Analytics, and DEI Compliance. She advises employers on proactive strategies to help avoid litigation and has defended employers ...
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