The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has issued a final rule significantly revising the regulations implementing Section 503 of the Rehabilitation Act of 1973, which governs disability nondiscrimination and affirmative action obligations for covered federal contractors and subcontractors. The rule is generally effective September 21, 2026.
The rule represents one of the most significant changes to OFCCP’s disability-related affirmative action requirements since the agency’s 2013 revisions.
Background
Section 503 of the Rehabilitation Act applies to covered federal contractors and subcontractors and requires them to provide equal employment opportunities to qualified individuals with disabilities. For more than a decade, OFCCP regulations required many federal contractors to collect disability self-identification information, track disability workforce data, and measure progress against a 7% utilization benchmark for individuals with disabilities as part of their affirmative action obligations. OFCCP’s August 2026 final rule removes many of those affirmative action and data collection requirements.
Disability Self-Identification Requirements Rescinded
Perhaps the most notable change is the elimination of the regulatory requirement that covered federal contractors invite applicants and employees to voluntarily self-identify as individuals with disabilities. The final rule rescinds the provisions that required disability self-identification inquiries and the related data collection obligations.
As a result, federal contractors will no longer be subject to the Section 503 regulatory requirement to solicit disability self-identification information from applicants and employees under the rescinded provisions.
7% Disability Utilization Goal Eliminated
The final rule also rescinds the longstanding 7% utilization goal for individuals with disabilities that was established as part of the 2013 Section 503 regulations.
Under the prior rule, covered federal contractors were required to assess workforce representation against the 7% utilization benchmark and conduct related analyses. The Department concluded that the utilization-goal framework should be removed and rescinded the corresponding regulatory provisions.
Related Recordkeeping and Analysis Requirements Removed
Because the disability self-identification and utilization-goal provisions are being eliminated, the final rule also removes related data collection, recordkeeping, and analytical requirements that supported those obligations.
The Department stated that the rule is intended to align the regulations with its current interpretation of applicable law and recent executive orders.
Disability Nondiscrimination Requirements Remain
Importantly, the rule does not eliminate Section 503’s core nondiscrimination requirements.
Federal contractors remain prohibited from discriminating against qualified individuals with disabilities and must continue complying with applicable reasonable accommodation obligations and other disability nondiscrimination requirements under Section 503.
In addition, certain affirmative action program obligations continue to apply to covered federal contractors, although several disability-specific requirements have been removed.
Coverage Threshold Updated
The final rule also incorporates a technical revision reflecting an increase in the basic Section 503 contract coverage threshold from $15,000 to $20,000 based on inflation-related federal procurement adjustments.
OFCCP updated the regulations to reflect the revised threshold.
Employers Impacted
The rule is particularly relevant to:
- Federal contractors and subcontractors subject to Section 503;
- Employers that maintain affirmative action programs for individuals with disabilities;
- HR and compliance professionals responsible for OFCCP compliance; and
- Organizations that currently use disability self-identification processes to satisfy Section 503 requirements.
Employer Takeaway
Federal contractors should review disability-related affirmative action policies, applicant tracking procedures, self-identification forms, and affirmative action program documentation in light of the new rule. While Section 503’s disability nondiscrimination requirements remain in place, contractors may no longer be required to comply with certain disability self-identification, utilization-goal, and related recordkeeping requirements that have been rescinded.
Employers should also monitor any additional OFCCP guidance regarding implementation of the revised regulations and determine whether updates to affirmative action programs and compliance processes are warranted before the rule’s effective date.