What the Revocation of Executive Order 11246 and DEI Programs Means for Federal Contractors and Subcontractors

A Fundamental Shift in Federal Contracting Compliance

On January 21, 2025, the White House issued a Presidential Action titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which revoked Executive Order 11246 and other affirmative action-related regulations. This action officially eliminates federal mandates requiring contractors to implement affirmative action programs for minorities and females in federal contracting.

Additionally, this revocation signals a formal rejection of Diversity, Equity, and Inclusion (DEI) programs at the federal level. While DEI was never a legal requirement, it became a widely used political acronym meant to encourage proactive engagement in fostering diversity, equity, and inclusion in the workplace. However, Equal Employment Opportunity (EEO) remains a legal requirement and continues to be enforced under Title VII of the Civil Rights Act of 1964.

For federal construction and service & supply contractors, the regulatory framework has changed, but compliance obligations remain—particularly regarding non-discrimination and EEO protections in employment practices.

Key Impacts of the Revocation for Federal Contractors

1. The End of Mandated Affirmative Action Programs

• Federal contractors are no longer required to develop and maintain Affirmative Action Plans (AAPs) for minorities and females as part of compliance with federal contracts.
• However, affirmative action obligations remain in place for protected veterans (VEVRAA) and individuals with disabilities (Section 503 of the Rehabilitation Act).

2. DEI Programs No Longer Backed by Federal Policy

• While DEI initiatives were widely encouraged in corporate and government settings, there was never a legal basis requiring them in federal contracting.
• The repeal of EO 11246 reinforces a shift toward merit-based employment practices rather than policies or practices aimed at achieving diversity benchmarks and goals.
• Contractors must ensure that any workforce management programs do not violate non-discrimination principles by creating preferential treatment based on race or gender.

3. Equal Employment Opportunity (EEO) Is Still a Legal Requirement

• Despite the repeal of affirmative action regulations, EEO laws remain fully intact under:
  • Title VII of the Civil Rights Act of 1964 (prohibiting employment discrimination based on race, color, religion, sex, or national origin)
  • The Americans with Disabilities Act (ADA)
  • The Age Discrimination in Employment Act (ADEA)
  • The Equal Pay Act of 1963 (EPA)
  • Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA)
  • Section 503 of the Rehabilitation Act
• Federal contractors must continue to ensure EEO compliance in every aspect of HR management, including:
  • Recruiting and Outreach
  • Selection and Placement
  • Transfers and Promotions
  • Compensation and Benefits
  • Terminations and Layoffs
  • Workplace Environment and Culture

4. OFCCP Audits Will Likely Shift Focus

• Contractors should expect OFCCP compliance evaluations to continue, but with an emphasis on:
  • Non-discriminatory hiring and employment practices
  • Pay equity and transparency
  • Handling and resolving discrimination complaints
• Companies must maintain proper recordkeeping and documentation to demonstrate compliance with EEO laws, even in the absence of affirmative action requirements.
• It is also possible that the OFCCP becomes merged with the EEOC. The Presidential Action issues a mandate for the Secretary of Labor and the Attorney General to conduct an evaluation and make recommendations to the President based on their findings. We’ll have to wait and see what comes of this evaluation.

5. Good-Faith Efforts: Should Contractors Continue Them?

• Good-Faith Efforts (GFE) were previously required for federal contractors to demonstrate proactive outreach to underrepresented groups. While no longer mandated, continuing strong outreach and fair hiring practices can:
  • Reduce the risk of discrimination claims and EEOC/OFCCP scrutiny
  • Strengthen recruitment pipelines in a competitive labor market
  • Enhance business reputation in both government and private sector partnerships

How Federal Contractors Should Adapt

• Review and Update HR Policies – Ensure policies align with EEO requirements rather than outdated affirmative action mandates.
• Conduct Internal Compliance Audits – Implement regular audits to demonstrate non-discriminatory hiring and employment practices.
• Train HR and Hiring Managers – Educate internal teams on legal EEO requirements and how to comply with the new non-discrimination framework.
• Prepare for Changes in OFCCP Enforcement – Expect a shift in focus toward EEO protections and individual discrimination complaints.
• Adopt Dyas HRD’s Non-Discrimination Plan of Action – Our compliance framework provides customized solutions to help federal contractors meet EEO obligations and reduce compliance risks.

Dyas HRD Is Here to Help

The regulatory landscape has changed, but compliance remains critical. Federal contractors must continue to demonstrate equal opportunity in employment and maintain policies that align with Title VII and other federal regulations.

Dyas HRD provides expert guidance in navigating this new era of federal contracting compliance. Our Non-Discrimination Plan of Action ensures your company meets legal requirements while maintaining fair and equitable workplace practices.

Contact Dyas HRD today to schedule a consultation and ensure your business is prepared for the future of federal contractor compliance.

‍