GOVERNMENT CONTRACTING, COMPLIANCE, AND REPORTING
OFCCP Directive Revived Disability and Veteran Enforcement While affirmative action obligations based on race, sex, and other EO 11246 categories remain nullified under a January executive order, the DOL gave the green light in July for federal contractor audits and investigations involving disability and veteran bias to resume. Reporting Remained Despite speculation that the new administration might roll back federal reporting requirements, both the EEO-1 Component 1 filing and VETS-4212 reporting remained fully intact in 2025. Agencies signaled that these filings continue to serve as core workforce-data tools, and contractors should expect no different in 2026. If anything, increased scrutiny of demographic reporting, veteran hiring, and contractor workforce composition means these obligations will stay firmly in place.
2025 PREDICTIONS RECAP
Trump Administration Made Big Waves President Trump said he would shake things up if he were re-elected, and he made good on that promise. We correctly predicted the following actions from the White House and federal agencies: Rescinding contractor minimum wage: President Trump scrapped a Biden-era order that ultimately raised the minimum wage for workers on federal contracts to $17.75. But federal contractors still have obligations under federal, state, and local law. Be sure to review best practices as you adjust your compensation plans moving forward. Ending certain affirmative action and diversity programs: Many federal contractors and subcontractors have long been required to create affirmative action plans related to women, minorities, individuals with disabilities, and veterans. President Trump quickly unraveled such programs related to affirmative action for women and minorities early in his second term by revoking an executive order that mandated certain aspects of the affirmative action requirements, connecting the existence of “illegal DEI programs” to false claims act liability and signing an executive order that promotes “colorblind equality” and merit-based opportunity. No pay data reporting: As we also predicted, the Trump EEOC shelved any plans to collect employee pay data as part of annual EEO-1 reporting. The Biden EEOC wanted to reinstate Component 2 data with 2024’s reporting, but nothing in this year’s instruction booklet or the White House’s administrative filings indicated that pay data collection would be required in 2025 or in any future year.
PREDICTIONS FOR 2026
Dissolution of the OFCCP There are ongoing discussions about the potential restructuring or dissolution of the Office of Federal Contract Compliance Programs. In the aftermath, enforcement responsibilities would shift to other DOL divisions or agencies like the EEOC. Federal contractors should keep informed of developments in this area and have a plan to pivot if needed. Potential Enforcement Shifts for Section 503 and VEVRAA The DOL gave the green light in July for federal contractor audits and investigations involving disability and veteran bias to resume immediately. While some affirmative action obligations remain nullified under a January executive order, the agency got back to business for enforcing Section 503 (disability) and VEVRAA (protected veterans). In 2026, regulators will pursue more targeted or industry- specific enforcement strategies under each law. New Regulations for Section 503 and VEVRAA
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
MORE FROM 2025 New DEI Guidance Tied Federal Funding to Compliance.
We expect the DOL to issue its final regulations related to Section 503 and VEVRAA after proposing updates in the fall of 2025. The most sweeping change the DOL proposes to Section 503 is eliminating the requirement for contractors to monitor disability utilization, including removing the obligation to invite applicants and employees to voluntarily self-identify their disability status. For VEVRAA, the DOL seeks to excise references to rescinded EO 11246 and align enforcement of VEVRAA under the statute’s regulations. Additionally, and to align with Executive Order 14173, the DOL’s proposal seeks to rescind the entire regulatory framework related to rescinded EO 11246. Federal contractors should prepare to make updates to their practices accordingly.
Sheila M. Abron Columbia Partner, Chair
In addition to the potential for False Claims Act claims pursuant to certifications with the federal government, federal officials issued another warning in July that employers may be at risk of losing federal funding if their DEI or similar programs violate anti-discrimination laws. The guidance reminded all federal agencies and recipients of federal funding that programs should not discriminate based on race, color, national origin, sex religion, or other protected characteristics “no matter the program’s labels, objectives, or intentions.” The
DOJ also suggested best practices for creating compliant programs. While these practices are not required, all organizations and HR departments can use the guidance as a roadmap.
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