After a year of uncertainty over the Office of Federal Contract Compliance Programs’ (OFCCP) future, the agency has been funded for FY 2026 with only a 10% reduction in its budget. This compliance alert looks at what federal contractors should expect in the year ahead.
Summary
On Tuesday, February 3, 2026, President Trump signed H.R.7148 -Consolidated Appropriations Act, 2026, a critical routine spending bill covering six key departments and their related agencies.
Of particular interest to federal contractors, the bill allocates $100,976,000 to the OFCCP. While this is $11 million less than FY 2025 (a 10% reduction), the amount is a significant turnaround from earlier budget proposals that sought to eliminate the agency’s budget entirely.
With race and gender-based affirmative action plans no longer officially required, and the agency’s 2026 headcount down to around 40% of what it was in 2025, the OFCCP’s focus in 2026 will primarily be on violations of Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). However, the relatively small budget reduction arguably leaves room for the agency to take on additional responsibilities.
Who Is Impacted?
Federal contractors who fall within the OFCCP’s updated Section 503 and VEVRAA thresholds can expect there to be no disruption in OFCCP enforcement activity this year. The current thresholds are:
- Section 503
- Basic coverage: Any number of employees and a contract of more than $20,000
- AAP coverage: 50 or more employees and a contract of $50,000 or more
- VEVRAA
- Basic coverage: Any number of employees and a contract of more than $200,000
- AAP coverage: 50 or more employees and a contract of more than $200,000
LEARN MORE ABOUT THE NEW THRESHOLDS | ‘The 2026 Regulatory Landscape: What to Expect and How to Prepare’
Actions Required
With compliance evaluations, audits, and complaint investigations continuing, federal contractors should:
- Maintain fully prepared AAPs, compensation analyses, and adverse impact analyses aligned with Section 503 and VEVRAA compliance
- Ensure all documentation is easily retrievable in anticipation of OFCCP interactions
- Anticipate continued (and potentially increased) OFCCP activity around pay equity and non-discrimination
Though race and gender-based affirmative action plans are no longer officially required and enforced by the OFCCP, Affirmity advises that affirmative action-style workforce analytics remains an essential tool for monitoring your organization’s compliance with key laws such as Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963.
How Affirmity Can Help
Affirmity offers a wide range of software and consulting services support to federal contractors, including:
Additionally, we will continue to provide compliance alerts on OFCCP changes and other critical topics. To ensure you receive these alerts, please sign up here.
Prepare for OFCCP activity in 2026: connect with our team today.
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.