The future of the Office of Federal Contract Compliance Programs (OFCCP) is again in doubt. For the second year in a row, the Office of Management and Budget has published a fiscal budget that seeks to defund the OFCCP and move its responsibilities elsewhere. This compliance alert looks at the known details of the proposal and the implications for federal contractors.
Summary
The Office of Management and Budget published President Donald Trump’s fiscal year budget for 2027 on April 3, 2026. This budget includes a 25.9% decrease in funding for the Department of Labor (DOL), achieved in part by eliminating all $101 million of the OFCCP’s current budget. The White House is proposing that the OFCCP’s now “limited statutory functions” involving veteran (VEVRAA) and disability (Section 503) affirmative action be moved under a newly expanded Office of Civil Rights.
This latest attempt to defund the OFCCP differs from the FY 2026 proposal, which sought to move Section 503 and VEVRAA enforcement to the EEOC. After a protracted back-and-forth, Congress rejected the elimination and set OFCCP funding at the aforementioned $101 million figure in its FY 2026 appropriations bill—only a 10% reduction since 2025, despite the end of its race and gender-based affirmative action remit in early 2025.
Who Is Impacted, and What Actions Are Required?
While the proposed elimination of the OFCCP and movement of VEVRAA and Section 503 responsibilities to the Office of Civil Rights has the potential to change how federal contracts are administered in the future, organizations should be aware that:
- As with the FY 2026 budget, final funding for all federal agencies is set by Congress, and it is likely that the plan will be challenged and potentially modified over the coming months.
- Federal contractors and subcontractors must continue to observe their existing legal obligations and must maintain their current efforts as-is until legislative and regulatory changes are fully formalized.
How Affirmity Can Help
Affirmity has a range of software and consulting services built to support federal contractors and leading organizations proactively complying with all aspects of employment law—while also helping them to leverage workforce data to build a better working environment for everyone. Our products include:
Prepare for OFCCP activity in the year ahead: connect with our team today and stay up to date on OFCCP changes and other critical topics by signing up for our compliance alerts.
About the Author
Kim Hendon oversees account management and sales for Affirmity. She is responsible for building successful, long-term partnerships with clients and generating new business. Having served with the company for more than 25 years, Ms. Hendon has in-depth knowledge and broad experience in all areas of workforce analytics and HR compliance.
Ms. Hendon assists clients with the planning and development of workforce compliance and non-discrimination programs, as well as employee engagement initiatives. She holds a Bachelor of Arts in Speech Communication and a Master’s in Business Administration. Connect with her on LinkedIn.