What happened?

On May 30, 2025, the Department of Labor released its Fiscal Year 2026 budget proposal, which included the defunding of the Office of Federal Contract Compliance Programs (OFCCP).

The agency was dismantled when the One Big Beautiful Bill Act (OBBBA) was passed on July 4, 2025, which eliminated all funding and formally shut down the OFCCP.

Overview:

What’s Changing

The OFCCP, which oversaw anti-discrimination and affirmative action compliance for federal contractors, has been dismantled. Its remaining responsibilities are being transferred:

• Section 503 (disability discrimination) enforcement is expected to move to the Equal Employment Opportunity Commission (EEOC).

• VEVRAA (veteran protections) enforcement will shift to the Veterans’ Employment and Training Service (VETS).

What’s Still Pending

• Congressional action is still needed to give EEOC and VETS the legal authority to enforce these programs.

• OFCCP can temporarily resume enforcement of Section 503 and VEVRAA while the transition is underway, by Order 08-2025 issued on July 2, 2025, by Labor Secretary Lori Chavez-DeRemer.

• The annual VEVRAA compliance certification process remains paused, and enforcement of VA health benefits program requirements is still on hold, while VEVRAA enforcement responsibilities move to the Veterans’ Employment and Training Service (VETS).

Source References

• DOL Budget Proposal for 2026
• Federal: OFCCP Reinstates Disability and Veteran Compliance Reviews (VensureHR)
• Federal: The One Big Beautiful Bill Act Has Arrived – Key Changes for Employers (VensureHR)

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.