Recent changes, effective September 21, 2026, have altered the requirements for Federal Contractors regarding the tracking of individuals with disabilities.
Over the past several years, we’ve seen a number of changes to federal contractor rules and practices. Below is a summary of key changes, recent developments, and required next steps beginning with the most recent updates.
Key Changes for Federal Contractors:
September 21, 2026 – The published Final Rule amended Section 503 of the Rehabilitation Act. Under the new rule, the OFCCP has rescinded the disability self-identification requirement and the utilization goal. This means:
- Contractors are no longer required to invite applicants or employees to self-identify disability status.
- The annual utilization goal of 7% for persons with Disabilities is eliminated. Contractors are no longer required to measure their workforce against a goal or run the utilization analysis.
- However, contractors meeting the 50+ employees and $50,000 threshold must continue to develop and maintain a full written AAP. The annual written AAP should include Section 503 outreach, recruitment, and the audit and reporting system, but should no longer include the data component or analysis.
What Action Should Contractors Take?
- Remove disability self-ID prompts and forms in the application and onboarding processes and active tenure (pre-employment and post-employment).
- Have experts review your recruitment, hiring, retention, and promotion practices to ensure they are not discriminatory at the beginning of each plan year.
- Continue to provide reasonable accommodations under the Americans with Disabilities Act.
- For those contractors meeting the written AAP threshold (50 or more employees and a contract of $50,000 or more), DCSI can develop an annual Section 503 AAP and document outreach efforts and measure effectiveness.
Other Recent Activity and Changes for Contractors
July 21, 2026 – The EEOC submitted a Notice of Proposed Rulemaking (NPRM), proposing to eliminate federal EEO reporting and recordkeeping requirements, including the EEO-1.
- Until further guidance is issued, employers with at least 100 employees should continue collecting race and gender data and prepare to submit reports if the EEOC opens the reporting portal.
October 1, 2025 – The Federal Contractor minimum contract thresholds for Section 503 of the Rehabilitation Act (Disabilities) and the Vietnam Era Veterans’ Readjustment Assistance Act (Veterans) were increased.
- The basic coverage threshold for Section 503 increased from $15,000 to $20,000 and the VEVRAA threshold increased from $150,000 to $200,000.
- As a result, the AAP requirements for VEVRAA now apply to covered contractors and subcontractors with 50+ employees and a single contract of $200,000 or more. For Section 503, the AAP requirements continued to apply to covered contractors and subcontractors with 50+ employees and a single contract of $20,000 or more.
January 21, 2025 – Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” was issued, which revoked E.O. 11246. Under this Executive Order:
- Federal contractors could no longer take affirmative action or allow workforce balancing. The focus shifted to merit-based employment practices and programs.
- The OFCCP closed pending compliance reviews and took no further action on the scheduling list released in November 2024.
- Race and gender AAPs were discontinued. Employers required to submit EEO-1 reports each year were directed to continue collecting race and gender information for current employees, but not applicants.
- Section 503 and VEVRAA, along with their implementing regulations, remained in effect and contractors were directed to continue to comply with these obligations.
- Employers subject to annual EEO-1 reporting requirements were directed to continue collecting race and gender information for current employees, but not applicants.
These changes must be in effect no later than Monday, December 21, 2026 to comply with the recent Federal regulation changes.
Need help navigating compliance regulations or developing annual written AAPs? Federal contractor compliance requirements continue to evolve, and DCSI can help you stay ahead of the changes. From AAP development to compliance reviews and ongoing HR support, our team can help you understand what needs to change and what remains in effect.
Frequently Asked Questions for Federal Contractor Compliance
What recent changes affect federal contractors?
Recent regulatory changes affect several federal contractor compliance requirements, including Section 503 disability requirements, affirmative action obligations, and federal EEO reporting. Contractors should review which requirements currently apply to their organization based on the number of employees (50+) and contract thresholds. Compliance practices must be updated by December 21, 2026 to comply with these recent regulation changes.
Are federal contractors still required to complete a Section 503 AAP?
Yes. Federal contractors and subcontractors that meet the applicable employee and contract thresholds must continue to develop and maintain a written Section 503 Affirmative Action Plan (AAP). Recent changes have eliminated certain disability self-identification and utilization goal requirements, but other Section 503 obligations remain in effect.
Do federal contractors still need to collect disability self-identification information?
Under the September 2026 Section 503 changes described in this article, contractors are no longer required to invite applicants or employees to self-identify disability status. Contractors should review their application materials and other processes to ensure outdated self-identification requirements are removed by the applicable deadline.
What are the current Section 503 and VEVRAA AAP thresholds?
As of October 1, 2025, the basic federal contractor coverage threshold increased to $20,000 for Section 503 and $200,000 for VEVRAA. Contractors with 50 or more employees and contracts meeting the applicable thresholds may have AAP obligations.
What should federal contractors do to prepare for the new requirements?
Federal contractors should review their AAPs, recruitment and hiring practices, application materials, recordkeeping procedures, and other compliance processes to identify updates needed under the latest regulations. Organizations should also continue meeting federal contractor requirements that remain in effect while additional guidance is issued.
What's the deadline for Federal Contractors to implement these changes?
These changes must be in effect no later than Monday, December 21, 2026.