OFCCP Announces Increase in the Contract Amounts Triggering Federal Affirmative Action Obligations

Employers doing business with the federal government may be required to maintain affirmative action programs for individuals with disabilities and veterans depending on the dollar value of their contracts.

The obligation to maintain an affirmative action program for individuals with disabilities is established by Section 503 of the Rehabilitation Act of 1973. Originally these requirements applied to employers with at least one federal contract in the amount of $10,000. However, Congress later authorized adjustments to the jurisdictional amounts to reflect inflation. These adjustments are made every five years by the Federal Acquisition Regulation Council by means of amendments to the Federal Acquisition Regulation.

Effective October 1, 2025, the jurisdictional amount increased to $20,000. Employers with a federal contract of $20,000 or more are subject to some of the requirements of Section 503. Employers with a contract of $50,000 or more are required to maintain a formal affirmative action program for individuals with disabilities.

The obligation to maintain an affirmative action program for veterans is established by the Vietnam Era Veterans Readjustment Assistance Act. Originally these requirements applied only to contracts in excess of $100,000. As with Section 503, Congress later authorized adjustments to this amount to reflect inflation. Effective October 1, 2025, VEVRAA applies only to contracts in excess of $200,000. Covered contractors must maintain a formal affirmative action program for veterans and annually file VETS-4212 Reports.

Employers subject to these laws should consult with their legal counsel for more information regarding compliance requirements. Importantly, President Trump’s revocation of Executive Order 11246 does not change the obligation of federal contractors to continue to maintain affirmative action programs for individuals with disabilities and protected veterans as required by Section 503 and VEVRAA.