Trump Budget Proposes to Eliminate OFCCP

Trump administration budget for federal fiscal year 2027 proposes to eliminate OFCCP

The Trump administration's budget for federal fiscal year (FY) 2027 proposes to eliminate the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP). FY 2027 begins on October 1, 2026. The budget proposal for FY 2027 would move OFCCP's responsibilities to a new Office of Civil Rights within the Department of Labor (DOL).

OFCCP Responsibilities and Proposed Office of Civil Rights

OFCCP is currently responsible for the enforcement of two laws.

• The Vietnam Era Veterans Readjustment Assistance Act (VEVRAA), which requires federal contractors and subcontractors to take affirmative action to employ certain classes of veterans.

• Section 503 of the Rehabilitation Act (Section 503), which requires federal contractors and subcontractors to take affirmative action to employ individuals with disabilities.

Under the Trump administration's budget proposal for DOL, the new DOL Office of Civil Rights would enforce both VEVRAA and Section 503. The Office of Civil Rights would also absorb the responsibilities of the current DOL Civil Rights Center and manage certain whistleblower responsibilities assigned to the Occupational and Health Administration. The proposed Office of Civil Rights would have a budget of $35.4 million and 110 employees.

FY 2026 Budget Had Also Proposed to Eliminate OFCCP

The administration's budget for FY 2026 had also proposed to eliminate OFCCP. Much of OFCCP's enforcement authority ended when Executive Order 11246 was rescinded in January of 2025. A memo released in February of 2025 had anticipated that OFCCP would eliminate 90% of its workforce as a part of restructuring at the agency.

The FY 2026 budget proposal expected to move OFCCP's responsibilities to two other agencies.

• Responsibilities under VEVRAA were to be transferred to the DOL's Veterans' Employment and Training Service (VETS).

• Responsibilities under Section 503 were to be transferred to the Equal Employment Opportunity Commission (EEOC).

A final FY 2026 budget for the Department of Labor was not signed into law until February of 2026. That budget kept funding for OFCCP at a level similar to funding for FY 2025. However, staffing at OFCCP decreased significantly during 2025. The agency had approximately 480 employees in January of 2025. The latest figures from the Office of Personnel Management suggest that OFCCP has 78 employees.

An Uncertain Future for OFCCP

OFCCP was formally funded at over $100 million for FY 2025 and FY 2026, but the Trump administration has not used these resources to retain employees or develop new programs at the agency. While the agency recently has been involved in some complaint investigations, it appears that the agency has conducted no compliance reviews since Executive Order 11246 was rescinded in January of 2025.

It is not clear what will happen to OFCCP in FY 2027. In order to effectuate the Trump administration's budget proposal regarding OFCCP for FY 2027, Congress would need to authorize the creation of the proposed Office of Civil Rights within DOL and eliminate any funding for OFCCP. If Congress does follow the Trump administration's budget proposal, DOL would then need to amend its regulations to transfer responsibilities under VEVRAA and Section 503 to the new Office of Civil Rights. The publication of new regulations and various other actions required of DOL could take months to accomplish.

Regardless of what happens to OFCCP, federal contractors and subcontractors continue to have obligations under VEVRAA and Section 503. Contact us if you would like to understand your organization's responsibilities under these laws.