The federal machinery that required government contractors to track race and sex in hiring goals is being dismantled. The Department of Labor’s Office of Federal Contract Compliance Programs finalized three rules on August 21 rescinding affirmative action obligations that contractor HR teams have built compliance workflows around for decades.

What happened

The Department of Labor published three final rules in the Federal Register: one rescinding the regulations implementing Executive Order 11246 (effective October 26), one removing the 7 percent disability-hiring utilization goal under Section 503 of the Rehabilitation Act (effective September 21), and one modifying rules under the Vietnam Era Veterans’ Readjustment Assistance Act (also effective September 21). The DOL says the changes implement Executive Order 14173, which revoked EO 11246 in January 2025.

Why it matters for the HR leader

For 60 years, EO 11246 was the backbone of federal contractor compliance: written affirmative action plans, numeric placement goals, and OFCCP audits that HR teams and HRIS vendors built reporting modules to satisfy. Its removal does not touch Title VII or state pay transparency rules, which still require compliance infrastructure. But it strips out the goal-setting and utilization-analysis requirements that shaped how contractor HR teams configured applicant tracking and workforce planning systems for two generations.

The original insight

The disability and veteran hiring goals are going the same direction as the race and sex goals, a detail most coverage of the EO 11246 rescission has left out. Contractors still must recruit and accommodate people with disabilities and veterans under Section 503 and VEVRAA itself; only the numeric benchmark disappears. HR teams that drop outreach programs built around that 7 percent goal, not just the paperwork tied to it, are the ones likely to see accommodation metrics slip first.

Compliance teams should expect HRIS vendors to start stripping OFCCP goal-tracking fields from configuration templates this fall, even as EEOC recordkeeping obligations keep expanding elsewhere, per EEOC Hearing Splits Over Ending EEO-1 Reports. The compliance stack is shrinking in one place and growing in another, a pattern also visible in EEOC Sues University Over DEI Training Segregation.

Source: Federal Register