Affirmative action is one of the most contested concepts in US employment law, and the regulatory landscape around it changed more in 2025 and 2026 than in the previous thirty years combined. For federal contractors, the core framework that had governed affirmative action hiring since 1965 was rescinded in January 2025, and follow-up executive orders in March 2026 reshaped federal contractor obligations again. For private employers, the legal ceiling on voluntary affirmative action programs is also lower than it used to be. Here's where things stand for HR and compliance teams heading into the rest of 2026.
What Affirmative Action Traditionally Required Federal affirmative action in employment originated with Executive Order 11246, signed by President Johnson in 1965. It required federal contractors (and by extension most large employers doing business with the federal government) to take affirmative steps to ensure equal employment opportunity regardless of race, color, religion, sex, or national origin. The Office of Federal Contract Compliance Programs (OFCCP) enforced it, with periodic audits, required written affirmative action plans, and compliance reviews.
Two other affirmative action obligations sit alongside EO 11246 and are still in effect: Section 503 of the Rehabilitation Act (affirmative action for people with disabilities) and the Vietnam Era Veterans' Readjustment Assistance Act, or VEVRAA (affirmative action for covered veterans). These apply to most federal contractors at a specific dollar threshold and require separate written plans.
What Changed: Executive Order 14173 and the March 2026 Order In January 2025, Executive Order 14173 rescinded EO 11246 entirely. OFCCP was directed to stop promoting diversity and holding federal contractors responsible for affirmative action under the Johnson-era framework. Investigations, pending cases, and conciliation agreements tied to EO 11246 were halted.
On March 26, 2026, a follow-up executive order titled "Addressing DEI Discrimination by Federal Contractors" added new restrictions. Federal contracts must now include a clause prohibiting contractors from engaging in "racially discriminatory DEI activities," defined as disparate treatment based on race or ethnicity in recruitment, employment, contracting, program participation, or resource allocation. Contracts are subject to cancellation for non-compliance, and subcontractor violations must be reported.
What Federal Contractors Still Have to Do Despite the rescissions, affirmative action obligations have not disappeared. Section 503 of the Rehabilitation Act and VEVRAA remain in full force for federal contractors meeting the applicable dollar thresholds. That means required written affirmative action plans for people with disabilities and protected veterans, including utilization goals, outreach efforts, and recordkeeping. OFCCP continues to enforce both.
Federal contractors should also expect continued enforcement under Title VII of the Civil Rights Act and the Age Discrimination in Employment Act, which prohibit employment discrimination regardless of the separate affirmative action framework. These laws predate EO 11246 and are unaffected by the rescissions.
Can Private Employers Still Run Voluntary Affirmative Action Programs? Private employers can still run voluntary programs, but the legal analysis is more constrained than it used to be. The 2023 Supreme Court decision in Students for Fair Admissions v. Harvard narrowed race-conscious decision-making in higher education admissions, and the reasoning has been extended into employment contexts by some courts. Programs that are structured around broad, race-neutral criteria (socioeconomic background, first-generation status, geographic underrepresentation) face less exposure than those that use protected class membership as a direct criterion. Documentation of the business necessity or legal justification for any race-conscious practice is now essential.
What HR Teams Need to Review in 2026 For HR and compliance teams, the 2026 checklist is real. Review and update federal contractor flow-down clauses to reflect the new DEI discrimination language. Audit any internal programs described with DEI labels to confirm they aren't structured in ways that could be characterized as disparate treatment under the new EO. Keep Rehabilitation Act and VEVRAA affirmative action plans current, since those obligations did not change. Document the rationale and criteria for any hiring, promotion, or outreach program that could attract scrutiny.
When internal concerns or formal complaints emerge (an employee alleges reverse discrimination , a contractor raises compliance questions, a former employee cites an abandoned affirmative action plan), the response has to be documented. An HR case management platform like AllVoices gives People Teams a single system of record for each complaint, investigation, and resolution, which becomes critical evidence if a matter goes to OFCCP, the EEOC, or litigation. Paired with investigations management workflow, the documentation chain stays intact through a regulatory environment that is still evolving.
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