On January 21, 2025, President Trump rescinded Executive Order 11246 (the race/ethnicity and gender portion of affirmative action compliance for federal contractors). This is a major change for federal contractors, who have been subject to the Executive Order since President Johnson signed it in 1965. Federal contractors have a 90-day grace period during which they may continue complying with the Executive Order before stopping activities under that order.
Tips: The requirements related to protected veterans and individuals with disabilities are unchanged. They are based on laws passed by Congress, specifically Section 503 of the Rehabilitation Act and Section 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). Only Congress can change or repeal these laws, and we have not heard of any push to do so.
In recent decades, the “affirmative action” aspects of the Office of Federal Contract Compliance Programs (OFCCP)’s enforcement have been limited in practice to engaging in good faith efforts to expand the pool of qualified workers for consideration in hiring and promotion. Making actual employment decisions on the basis of race/ethnicity or gender has (correctly) been deemed illegal by OFCCP. The agency has routinely demanded back pay on behalf of affected workers, including those who are white or male. For examples of OFCCP enforcement activity, see our newsletter articles from November 7, 2024, August 8, 2024, June 20, 2024, and June 6, 2024.
We don’t yet know whether the annual EEO-1 Report will still be required for federal contractors (those with at least 50 employees and a federal contract or first-tier subcontract worth at least $50,000) or other private employers (those with at least 100 employees). Until we have further guidance, it’s probably best to continue to collect race/ethnicity and gender information from new hires in case the information is needed for the EEO-1 Report.
Vigilant will be monitoring any further developments that may occur. For example, we do not yet know whether the OFCCP will be tasked with new duties in reviewing federal contractors’ compliance in other areas. We will provide guidance to assist our affirmative action clients in addressing these changes. If you have any questions, please contact your Vigilant affirmative action representative or your Vigilant Law Group employment attorney.
