September Government Affairs Newsletter
OFCCP Final Rule Significantly Changes Section 503 Affirmative Action Requirements – What Covered Employers Need to Know - Federal contractors will soon face a significantly different approach to affirmative action for individuals with disabilities. No sooner than their effort to re-up their self-identification form over the summer, now the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a final rule revising the regulations implementing Section 503 of the Rehabilitation Act with these substantive changes taking effect on September 21, 2026. So, what is changing and what is not?
Mandatory Disability Self-Identification Is Eliminated
One of the most significant changes is the elimination of 41 CFR § 60-741.42, which currently requires contractors to invite applicants and employees to voluntarily self-identify as individuals with disabilities. Under the existing regulations, contractors solicit disability status from applicants, again following an offer of employment, and periodically from employees. Employees generally must be invited to self-identify every five years. Effective September 21st, § 60-741.42 is removed and reserved. As a practical matter, contractors should prepare to discontinue the Section 503-mandated use of Form CC-305 and review applicant tracking, onboarding and HRIS systems where the form or related questions are currently embedded. Employers should be cautious about simply continuing to collect the same information voluntarily. DOL's rationale for eliminating the requirement includes concerns about the ADA's restrictions on disability-related inquiries.
The 7% Utilization Goal and Disability Metrics Are Going AwayThe final rule also eliminates OFCCP's longstanding 7% utilization goal for individuals with disabilities. Currently, contractors generally compare the representation of individuals with disabilities in each job group against that benchmark.
Beginning September 21, contractors will no longer need to calculate disability utilization, determine whether job groups meet the 7% benchmark, or develop action-oriented programs simply because a job group falls below the goal. Related annual disability applicants and hiring calculations are also eliminated. Currently, §60-741.44(k) requires contractors to document statistics involving applicants with disabilities, total applicants, job openings and jobs filled, hires with disabilities and total hires. Those calculations will no longer be required. For contractors and their AAP vendors, these changes should significantly reduce the quantitative component of the annual Section 503 AAP.
Affirmative Action Is Not Going Away Altogether Contractors should not interpret these changes as eliminating their obligation to take affirmative action for qualified individuals with disabilities. Covered contractors will continue to have responsibilities involving outreach and positive recruitment, review of personnel processes, reasonable accommodation, internal dissemination of affirmative action policies, auditing and reporting, training, recordkeeping and nondiscrimination. Contractors also must continue evaluating whether their affirmative action efforts are effective. The existing regulations require an audit and reporting system designed to measure program effectiveness, identify the need for remedial action and determine whether program objectives have been achieved. What changes are the role of disability statistics in making that assessment. Under the revised regulations, contractors will not be required to use quantitative data concerning individuals with disabilities who were referrals, applicants or hires when evaluating their outreach and affirmative action efforts. That may place greater importance on documenting what the contractor actually did—for example, relationships with disability employment organizations, recruiting initiatives, job fairs, referral sources and other outreach activities—and making a meaningful qualitative assessment of whether those efforts are effective. Reasonable accommodation obligations also remain unchanged. Eliminating the disability self-identification process does not affect an applicant's or employee's ability to request an accommodation or the employer's responsibility to address those requests.
Written Section 503 AAPs Still RequiredThe final rule also does not eliminate the written Section 503 affirmative action program requirement. Contractors with 50 or more employees and a federal contract or subcontract of $50,000 or more remain subject to the written AAP requirement.
Key Takeaways for Employers
With the September 21 effective date approaching, federal contractors should begin preparing now. HR and affirmative action professionals should:
- Review applicant and employee self-identification processes and prepare to discontinue the Section 503-mandated CC-305 process on September 21.
- Coordinate with ATS, HRIS and AAP vendors to remove or modify disability data collection and reporting processes.
- Update Section 503 AAP templates to eliminate the § 60-741.44(k) applicant/hire calculations and 7% utilization analysis.
- Continue disability outreach and affirmative action efforts. The underlying Section 503 obligation remains.
- Develop a meaningful way to document outreach effectiveness without relying upon the disability statistics previously required.
- Continue reasonable accommodation, training, auditing and nondiscrimination practices.
The Bottom Line: While Section 503 affirmative action obligations remain, much of the mandatory disability data-collection and numerical analysis framework does not.
