Executive Order 11246 Revoked – Impact on Federal Contractors

The Details

By way of background, EO 11246 was issued in 1965 and applied to businesses with federal contracts, subcontracts and federally assisted construction contracts totaling more than $10,000. EO 11246 prohibits employment discrimination by federal contractors. 

If a company has at least 50 employees and a single contract of $50,000 or more, then it was also required to develop an Affirmative Action Program (AAP). Companies whose sole coverage came from construction contracts or federally assisted construction contracts were not required to develop an AAP, but they were required to take other affirmative actions.

EO 11246 Revoked

In relevant part, the new EO revokes EO 11246 and indicates that “for 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.”

The new EO also directs the Office of Federal Contract Compliance Programs (OFCCP) to immediately cease:

·       “Promoting Diversity”

·       “Holding contractors and subcontractors responsible for taking “affirmative action.”

·       “Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.”

On January 23, 2025 the OFCCP issued a statement reinforcing the new EO and also indicated the following:

 “It is important to note that requirements under Section 503 of the Rehabilitation Act, 29 U.S.C. 793, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), 38 U.S.C. 4212, both enforced by OFCCP, are statutory and remain in effect.”

Section 503 of the Rehabilitation Act of 1973 is a law that prohibits federal contractors and subcontractors from discriminating in employment against individuals with disabilities and requires employers take affirmative action to recruit, hire, promote, and retain these individuals.  The Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) is a law that prohibits federal contractors and subcontractors from discriminating in employment against protected veterans and requires employers take affirmative action to recruit, hire, promote, and retain these individuals.

In addition, on January 24, 2025 Acting U.S. Department of Labor (DOL) Secretary Vincent Micone issued an Order instructing DOL employees including OFCCP to stop all enforcement activity under the rescinded EO 11246. Specifically, the order instructs OFCCP to:

·       “Cease and desist all investigative and enforcement activity under the rescinded Executive Order 11246 and the regulations promulgated under it. This includes all pending cases, conciliation agreements, investigations, complaints, and any other enforcement-related or investigative activity.”

·       “Notify all regulated parties with impacted open reviews or investigations by January 31, 2025, that the EO 11246 component of the review or investigation has been closed and the Section 503 and VEVRAA components of the review or investigation are being held in abeyance pending further guidance.”

Next Steps

·       Review the new EO.

·       If you are a contractor that was covered under EO 11246 and have an open review, be on the lookout for additional guidance from the OFCCP regarding the future handling of the review.

·       The OFCCP statement indicates that additional information regarding OFCCP’s current activities will be forthcoming in the upcoming weeks and directs any questions to be submitted to the OFCCP Customer Service Helpdesk.

Impacted contactors should also consider consulting with counsel if they have questions about their obligations under the new EO.