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The U.S. Department of Labor (DOL) has confirmed its plans to eliminate the Office of Federal Contract Compliance Programs (OFCCP), which governs and enforces federal contractor responsibilities. The DOL's proposed 2026 budget allocates no funding or staff to OFCCP.
According to a DOL spokesperson, the DOL intends to reassign OFCCP's duties under Section 503 of the Rehabilitation Act to the U.S. Equal Employment Opportunity Commission (EEOC). Likewise, it plans to transfer responsibility for the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) to the Veterans' Employment and Training Service (VETS).
However, transferring enforcement authority is not as straightforward as simply defunding an agency. Only Congress has the authority to transfer power; for instance, it would have to amend the Rehabilitation Act to transfer Section 503 powers from OFCCP to the EEOC. Since congressional action does not occur instantaneously, closure of the office in 2026 is likely to result in a lapse in compliance and enforcement efforts.
Furthermore, the extent to which EEOC can or will absorb OFCCP responsibilities is unclear. While both agencies enforce anti-discrimination and equal opportunity laws, OFCCP's duties also include affirmative action, which requires active efforts to recruit from diverse populations to maintain compliance. Furthermore, whereas the OFCCP has relied heavily on audits through a neutral selection process, the EEOC has acted based on complaints. Therefore, integrating OFCCP functions may be challenging within the EEOC's current structure and operations.
The closure of OFCCP and the potential transfer of power to EEOC leave HR professionals with substantial uncertainty about their companies' compliance duties. Gaps in compliance and enforcement are bound to occur, no matter how smooth the transition. However, existing compliance enforcement practices may also change or become inconsistent, leading to further confusion.
Ongoing regulatory revisions will only exacerbate the uncertainty. OFCCP recently proposed revisions to Section 503 of the Rehabilitation Act and VEVRAA. Nonetheless, the revisions are unlikely to be complete by January 2026.
For now, employers should adhere to current compliance standards and await further guidance. If enforcement authority transfers from OFCCP to the EEOC and VETS, contractors may see changes in compliance routines and efforts, as those agencies determine how to carry out these new duties. Some fear that the transfer of power, accompanied by the dismantling of OFCCP, will result in a decrease in federal oversight of workplace equity. However, supporters of the move claim that the elimination of unnecessary regulatory burdens on federal contractors restores focus to individual discrimination claims, where it should rightfully be.
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