Affirmative Action: What It Means for Employers

What it means in practice

Two different ideas. Affirmative action and equal employment opportunity are often used together, but they are not the same. Non-discrimination means not making job decisions because of a protected trait. Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex and national origin, and the EEOC enforces it against private employers with 15 or more employees. Affirmative action, as the federal contractor rules use the term, adds required positive steps: outreach, written programs, audits and reports. Being an equal opportunity employer is a duty for every covered employer; a formal affirmative action program is a contract obligation for some federal contractors.

What Title VII says. Section 703(j) states that nothing in Title VII requires an employer to grant preferential treatment to any individual or group because of race, color, religion, sex or national origin on account of an imbalance in the numbers or percentages employed. Section 703(m) makes a practice unlawful when a protected trait was a motivating factor, even if other factors also played a part. Separately, section 706(g) lets a court that finds intentional discrimination order "such affirmative action as may be appropriate," such as reinstatement or hiring with or without back pay.

The EEOC view on DEI programs. The EEOC says a DEI initiative, policy, program or practice may be unlawful under Title VII if it involves an employment action motivated in whole or in part by race, sex or another protected characteristic, and that Title VII protections apply equally to all workers. On July 6, 2026, the EEOC rescinded its 1979 Guidelines on Affirmative Action (29 CFR part 1608), which had described when voluntary race- and sex-conscious affirmative action could be taken. Related concepts: disparate treatment, adverse impact and diversity.

What Executive Order 11246 required. Issued in 1965 and later amended, Executive Order 11246 required federal contractors to include an equal opportunity clause barring discrimination and requiring affirmative action based on race, color, religion, sex and national origin. DOL describes how 41 CFR part 60-2 required nonconstruction contractors with 50 or more employees and a contract of at least $50,000 to keep a written program for each establishment, compare the race, ethnic and sex makeup of each job group with availability, and set placement goals where representation fell short.

What changed in 2025 and 2026. Executive Order 14173 revoked Executive Order 11246, let contractors keep following the prior rules for 90 days, and directed OFCCP to immediately stop promoting "diversity," holding contractors responsible for "affirmative action," and allowing or encouraging workforce balancing based on race, color, sex, sexual preference, religion or national origin. It also directs agencies to put two terms in every contract: that compliance with federal anti-discrimination laws is material to payment decisions for purposes of 31 U.S.C. 3729(b)(4), and a certification that the contractor does not operate DEI programs that violate those laws. OFCCP says Secretary's Order 03-2025 halted Executive Order 11246 enforcement, that Order 08-2025 later let Section 503 and VEVRAA work resume, and that it administratively closed all pending compliance reviews. DOL published the final rule rescinding the Executive Order 11246 regulations on August 21, 2026, effective October 26, 2026. OFCCP also says the Section 503 and VEVRAA affirmative action program certification period "will remain closed"; the written program duty itself remains in the regulations.

The SFFA decision. In Students for Fair Admissions v. President and Fellows of Harvard College (June 29, 2023), the Supreme Court held that the race-conscious admissions programs at Harvard and the University of North Carolina violate the Equal Protection Clause. The case concerned college admissions, not employment, and it did not decide a Title VII claim. DOL's 2026 rescission rule agrees that SFFA arose in the college admissions context but relies on its equal protection principles. Employers should not read SFFA as a direct ruling on workplace programs; Title VII remains the employment rule.

Section 503 of the Rehabilitation Act. The statute (29 U.S.C. 793) requires covered federal contracts to include a provision that the contractor will take affirmative action to employ and advance in employment qualified individuals with disabilities. Discrimination complaints are judged by the standards of Title I of the ADA. Under 41 CFR 60-741.4, contracts and subcontracts in excess of $20,000 are covered. A DOL final rule effective September 21, 2026 removed the invitation to self-identify (60-741.42), the related applicant and hire data collection (60-741.44(k)), and the 7 percent utilization goal and analysis (60-741.45). DOL said it viewed the invitation as an employer disability inquiry the ADA restricts. A new paragraph, 60-741.44(l), says contractors are not required to consider quantitative data on referrals, applicants or hires when assessing outreach and program effectiveness.

VEVRAA. The Vietnam Era Veterans' Readjustment Assistance Act (38 U.S.C. 4212) requires covered contractors to take affirmative action to employ and advance qualified protected veterans: disabled veterans, recently separated veterans (within three years of discharge), active duty wartime or campaign badge veterans, and Armed Forces service medal veterans. Under 41 CFR 60-300.4, contracts and subcontracts of $200,000 or more are covered. Contractors must list job openings with the appropriate employment service delivery system, except executive and senior management jobs, internal fills and jobs lasting three days or less. Under 60-300.42, contractors subject to the written program requirement (50 or more employees and a $200,000 contract) invite applicants to self-identify as protected veterans before an offer, and again after an offer by specific category.

The VEVRAA hiring benchmark. Under 41 CFR 60-300.45, a contractor sets a hiring benchmark each year, either the national percentage of veterans in the civilian labor force that OFCCP publishes, or a figure based on five listed factors, including state veteran labor force data and its own applicant and hiring ratios. The regulation says the benchmark is not a quota, ceiling or floor, and that "quotas are expressly forbidden." Check OFCCP for the current national figure.

VETS-4212 report. Under 41 CFR part 61-300, covered contractors report each year the number of employees and new hires who are protected veterans, by job category and hiring location. Reports are filed between August 1 and September 30. As of 2026, DOL's VETS-4212 page states the current reporting threshold is $200,000.

The written affirmative action program (AAP). A written program, often called an affirmative action plan, is required for a contractor with 50 or more employees and a contract of $50,000 or more under Section 503 (41 CFR 60-741.40), or a contract of $200,000 or more under VEVRAA (60-300.40). It must be prepared within 120 days of the start of a contract, kept at each establishment, and reviewed and updated annually by the official responsible for it. The two programs may be combined or kept separate. A contractor must submit its program within 30 days of an OFCCP request and make it available on-site.

What the program must contain. Sections 60-741.44 and 60-300.44 list the required elements: an equal opportunity policy statement showing the top U.S. executive's support, posted on bulletin boards in accessible form; a periodic review of personnel processes; a schedule for reviewing physical and mental job qualifications so that any that screen people out are job-related and consistent with business necessity; reasonable accommodation; anti-harassment procedures; outreach and recruitment, with written notice of the policy to subcontractors and vendors; internal dissemination, including the policy manual and notice to any union; an audit and reporting system; a named responsible official; and training for everyone involved in recruiting, selection, promotion and discipline. The VEVRAA program also documents applicant and hire data each year (60-300.44(k)) and the hiring benchmark.

The annual outreach assessment. Each year the contractor reviews the past twelve months of outreach, documents the criteria it used and whether each effort worked, and tries alternatives if the efforts as a whole were not effective. For VEVRAA, the criteria must include the 60-300.44(k) data for the current and two prior years.

Who can see the plan. The full Section 503 program must be available to any employee or applicant on request (60-741.41). The VEVRAA program must be available too, minus the 60-300.44(k) data metrics (60-300.41). Each establishment posts where and when it can be seen.

Recordkeeping and enforcement. Personnel records are generally kept two years, or one year if the contractor has fewer than 150 employees or lacks a contract of at least $150,000 (Section 503) or $200,000 (VEVRAA). Outreach records, VEVRAA data and benchmark records are kept three years (60-741.80, 60-300.80). Applicants and employees may file complaints with OFCCP within 300 days. Sanctions under 60-741.66 include withholding progress payments, contract termination and debarment, after an opportunity for a hearing.

Worked example 1. A firm with 45 employees holds a $500,000 contract. Both equal opportunity clauses apply because $500,000 is over $20,000 and at least $200,000, so it lists openings with the state job service. With fewer than 50 employees, it needs no written program and is outside the program rules, including the veteran self-identification invitations. It files a VETS-4212 because the contract is at least $200,000.

Worked example 2. A supplier with 120 employees holds a $120,000 subcontract. With 50 or more employees and a contract of $50,000 or more, it prepares a Section 503 program within 120 days. VEVRAA does not apply because $120,000 is below $200,000. Having fewer than 150 employees, its Section 503 minimum retention period is one year.

Worked example 3. A contractor with 300 employees and a $1 million contract prepares both programs, sets a VEVRAA hiring benchmark each year, keeps personnel records for two years, and files a VETS-4212 between August 1 and September 30.

EEO-1 reports. DOL's rescission rule removes 41 CFR 60-1.7, the contractor EEO-1 provision, but says this does not affect the EEOC's actions on the EEO-1 report. See the EEO-1 report tracking page.

Where states differ. State contracting laws can carry their own affirmative action rules. As one example, Minnesota Statutes section 363A.36 bars state agencies from signing a contract over $100,000 with a business that had 40 or more full-time employees in Minnesota, or in its home state, on a single day in the prior 12 months, unless it holds a workforce certificate from the Commissioner of Human Rights; certificates last four years, carry a $250 fee, and can be suspended for failing to make a good faith effort to implement an approved affirmative action plan. Other states differ; check the state contracting or civil rights agency.

FAQ: Must a private employer with no federal contracts have an AAP? No federal statute or regulation reviewed here requires one; Title VII section 703(j) says Title VII does not require preferential treatment to fix an imbalance. State or local contracts may impose their own rules.

FAQ: Is the disability self-identification form still required? No. The Section 503 invitation at 60-741.42 was removed effective September 21, 2026. The VEVRAA veteran invitations at 60-300.42 remain.

FAQ: Is the VEVRAA benchmark a quota? No. Section 60-300.45 says it is a yardstick for measuring progress, and quotas are expressly forbidden.

FAQ: Did SFFA end affirmative action at work? The decision addressed college admissions. Employer obligations come from Title VII, Executive Order 14173 and the Section 503 and VEVRAA rules described above.

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