Navigating Affirmative Action: Compliance After the Repeal of Executive Order 11246
Employers across the United States, whether federal government contractors or not, face unanswered questions surrounding the repeal of Executive Order 11246 for their workplace policies and practices. This Article will address what President Trump's Executive Order did, how it impacts both Federal government contractors and all private employers, and the affirmative action requirements that still apply to Federal government contractors based on legislative statutes that are still in effect.
The Repeal of Executive Order 11246 and Its Impact
On January 21, 2025, President Trump issued an executive order titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which repealed Executive Order 11246. For decades, Executive Order 11246 required Federal contractors to take affirmative action to ensure equal employment opportunities for women and minorities. Its repeal has generated significant discussion among Federal contractors and private employers regarding the future of affirmative action obligations in the workplace.
President Trump's Order provides that current Federal government contractors can continue to comply with the requirements of Executive Order 11246 until April 20, 2025. At that point, Federal government contractors would be prohibited from following their Affirmative Action Plans as it relates to minorities and gender-based hiring practices. Beginning April 20, 2025, employers should no longer make hiring decisions based on any efforts to meet minority or gender-based goals outlined in their Affirmative Action Plan, otherwise they may risk exposure to legal challenges.
Employers should be aware that the repeal of Executive Order 11246 does not change the many Federal and State laws that prohibit employment discrimination based on protected characteristics such as race, sex, gender, sexual orientation, gender identity, national origin, or religion. However, President Trump's recent Executive Order also instructed all Federal agencies to take all appropriate action to ensure that private sector employers no longer use Diversity, Equity, and Inclusion programs that rise to the level of discriminating on the basis of someone's race, sex, gender, or other protected characteristic.
Some Affirmative Action Requirements Are Still In Effect
Additionally, while Executive Order 11246 is no longer in effect, this does not mean that affirmative action requirements for Federal contractors have been entirely eliminated. Businesses that work with the Federal government are still subject to Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), which impose distinct affirmative action obligations, although the obligations are less burdensome that as proscribed in Executive Order 11246.
Understanding these remaining requirements is crucial for maintaining compliance and avoiding potential penalties.
Section 503 of the Rehabilitation Act of 1973
Section 503 requires federal contractors and subcontractors to take affirmative action to hire and advance qualified individuals with disabilities. The law aims to provide equal employment opportunities while ensuring that workplace environments are accessible and accommodating.
Who Must Comply?
Companies that have federal contracts or subcontracts valued at more than $15,000 are subject to Section 503. However, additional affirmative action program (AAP) requirements apply to businesses with 50 or more employees and a contract worth $50,000 or more.
Key Requirements
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Written Affirmative Action Plan (AAP) – Businesses with qualifying contracts must develop a formal plan to ensure equal employment opportunities for individuals with disabilities.
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Reasonable Accommodations – Employers must make adjustments for disabled employees unless doing so would cause undue hardship.
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Self-Identification Process – Employers must invite applicants and employees to voluntarily disclose their disability status, with strict confidentiality rules.
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Recordkeeping & Reporting – Employers must document efforts to hire and promote individuals with disabilities, maintaining records for up to three years.
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Utilization Goals – While not a quota, the 7% workforce goal helps measure efforts to employ individuals with disabilities.
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Job Posting & Notice Requirements – Businesses must post notices informing applicants and employees about their rights under Section 503.
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Compliance Audits – The Office of Federal Contract Compliance Programs (OFCCP) may conduct audits to ensure compliance.
Consequences of Noncompliance
Failure to meet Section 503 obligations can result in serious penalties, including:
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Loss of federal contracts
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Withholding of progress payments
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Legal action or fines
Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA)
VEVRAA mandates affirmative action in hiring and promoting qualified protected veterans. This law supports veterans transitioning from military to civilian employment and ensures they receive fair opportunities.
Who Must Comply?
VEVRAA applies to businesses with federal contracts or subcontracts worth $150,000 or more. Unlike some other regulations, VEVRAA does not allow aggregation of contract values to determine coverage.
Key Requirements
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Written AAP for Veterans – Businesses meeting the threshold must develop an AAP detailing efforts to recruit, hire, and advance protected veterans.
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Self-Identification Invitations – Employers must invite job applicants and employees to voluntarily identify as a protected veteran.
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Job Listings with State Agencies – Covered employers must list job openings with state workforce agencies.
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Recordkeeping & Reporting – Employers must document veteran hiring efforts, keeping records for three years.
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Benchmarking Goals – Companies must compare their veteran employment against national hiring benchmarks.
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Notice & Posting Requirements – Like Section 503, businesses must post notices about VEVRAA rights and obligations.
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OFCCP Compliance Audits – The OFCCP monitors and enforces compliance through audits and evaluations.
Consequences of Noncompliance
Failing to comply with VEVRAA can result in:
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Contract termination or suspension
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Financial penalties
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Prohibition from future federal contracts
Final Thoughts for Business Owners
For Federal contractors, compliance with Section 503 and VEVRAA is an ongoing requirement even though Executive Order 11246 has been rescinded. Business owners should regularly review their affirmative action programs, ensure proper documentation, and proactively engage in outreach and recruitment efforts.
For all employers, both Federal government contractors and non-contractor private entities, having their policies and procedures reviewed to address the new scrutiny given to hiring practices should reduce the likelihood of a charge or lawsuit under these newly enacted Federal government policies.
