Recent OFCCP Policy Shifts: What Federal Contractors Need to Know

Federal contractors are facing significant changes in their compliance obligations due to recent shifts at the Office of Federal Contract Compliance Programs (OFCCP). These shifts are primarily driven by Executive Order 14173, enacted on January 21, 2025, which revoked the longstanding Executive Order 11246 (EO 11246). EO 11246 historically mandated affirmative action related to race and sex, significantly influencing employment practices among federal contractors.

Under the current administration, the OFCCP is substantially altering its approach and scale. The agency, previously employing over 475 individuals across 55 offices, is downsizing drastically to roughly 50 employees located in just four offices and regions. This reduction signifies a clear policy redirection toward merit-based employment practices and away from traditional affirmative action and diversity-driven policies.

Leadership changes within the OFCCP reflect this philosophical shift. Catherine Eschbach, recently appointed Director as of March 24, 2025, brings experience rooted in limiting regulatory reach, which aligns with the administration's goals. Eschbach has publicly stated her commitment to restoring merit-based employment opportunities, indicating that OFCCP's future efforts will focus more narrowly, potentially discontinuing or reevaluating affirmative action programs traditionally enforced under EO 11246.

This policy pivot has immediate practical implications. Federal contractors must now stop annually preparing affirmative action programs (AAPs) specifically aimed at minorities and women. They should also eliminate EO 11246-related references in company documentation, such as pay transparency notices, policy manuals, and subcontracts. Importantly, obligations related to veterans and disabled individuals under Section 503 and VEVRAA remain in effect, necessitating continued compliance in these areas.

Additionally, the OFCCP has indicated it may revisit previously closed audits, particularly those related to race or sex discrimination. Such reconsideration could result in reopened audits, creating a potential risk area for contractors who have previously undergone OFCCP scrutiny. Federal contractors should therefore carefully reassess historical compliance measures and prepare to address any potential inquiries.

Another layer of complexity involves self-identification practices regarding race and sex during the hiring process. Contractors must now reconsider these practices, ensuring clear communication of privacy measures and preventing any use of demographic information in employment decisions. Failure to manage these processes carefully may lead to scrutiny by both OFCCP and the Equal Employment Opportunity Commission (EEOC).

Disclaimer: This content provides general information and should not be considered precise legal advice. Readers are encouraged to consult with qualified legal counsel for advice tailored to their specific circumstances.