Labor Department Ends Disability Hiring Benchmark for Federal Contractors

By Terry Loerch

WASHINGTON — Beginning Sept. 21, federal contractors will no longer have to measure how many people with disabilities they employ, ask applicants and workers to voluntarily identify as disabled, or compare their workforce with a federal disability-employment benchmark.

The Labor Department's final rule, published Aug. 21, removes the central accountability system created under Section 503 of the Rehabilitation Act in 2013. The rule eliminates the 7% utilization goal, discontinues Form CC-305 and ends the requirement that covered contractors collect and analyze data on applicants and hires with disabilities.

The 7% figure was never a hiring quota. It was a benchmark. Contractors were expected to compare it with the share of people with disabilities in each job group, or across the entire workforce for smaller employers. Falling short was not itself a violation. It was supposed to trigger a closer look at whether barriers existed and whether recruitment and hiring efforts were actually working.

That distinction matters because federal contractors employ roughly one in five American workers. The rule does not merely remove paperwork from a small corner of government procurement. It ends the only uniform system used across that enormous workforce to ask a basic question: Are qualified people with disabilities getting through the door?

Disability advocates say the government is not simply changing a metric. It is removing the evidence needed to judge whether affirmative action exists anywhere beyond a written policy.

Charles-Edouard Catherine, vice president of corporate and government relations at the National Organization on Disability, called the final rule “another very concerning sign” in comments to Disability Scoop. He warned that disabled people are likely to face fewer employment opportunities as a result.

The Labor Department's Office of Federal Contract Compliance Programs, known as OFCCP, gives two principal reasons for the reversal.

First, the agency argues that the old self-identification requirement conflicts with the Americans with Disabilities Act. The ADA generally bars an employer from asking an applicant about disability before making a job offer. Under the 2013 rule, federal contractors were required to extend that invitation before an offer, even though answering was voluntary and the information had to be kept confidential and separate from hiring decisions.

OFCCP's new position is that the ADA regulates the employer's act of asking, not the applicant's decision to answer. Calling the response voluntary, the agency says, does not change the fact that the employer initiated a disability-related inquiry.

Second, the department argues that the utilization goal could push employers toward quota-like behavior even though the regulation expressly prohibited quotas. It also says the required analysis became unworkable after President Donald Trump revoked Executive Order 11246 in January 2025. The disability analysis relied on job groups created under that order, which had governed affirmative action involving race and sex among federal contractors.

The legal dispute is more complicated than the final rule's explanation suggests.

The Equal Employment Opportunity Commission, not OFCCP, administers and interprets Title I of the ADA. Since 1995, the EEOC's enforcement guidance has said employers may invite applicants to voluntarily identify as disabled when the information is used for legally required or voluntary affirmative action. The agency repeated the same position for current employees in 2000 guidance.

OFCCP did not create the 2013 requirement without consulting the agency responsible for the ADA. It asked the EEOC. In an Aug. 8, 2013, letter, the EEOC's Office of Legal Counsel concluded that the invitation to self-identify did not violate the law.

The Labor Department now dismisses that letter as the view of a single career attorney rather than a formal position approved by a vote of the Commission. It also says the EEOC's broader guidance is inconsistent with the best reading of the ADA and would not be entitled to controlling deference in court.

There is relevant court history, although it does not fully resolve the conflict now presented. In 2014, the U.S. Court of Appeals for the District of Columbia Circuit upheld the 2013 rule, including the pre-offer self-identification requirement and the 7% goal, against claims that OFCCP exceeded its authority and acted arbitrarily. The court relied on the deferential framework established by Chevron U.S.A. Inc. v. Natural Resources Defense Council.

The Labor Department now argues that the decision carries less weight after the Supreme Court overruled Chevron in 2024. The 2014 case also did not squarely decide the distinct theory OFCCP advances today: that a voluntary affirmative-action disclosure request itself violates the ADA. The final rule identifies no reported decision holding that it does.

The contradiction becomes harder to ignore because the federal government continues to collect disability information from its own workforce. The Office of Personnel Management still uses Standard Form 256, which tells federal employees that voluntary self-identification is essential to measuring the government's disability-employment efforts.

Section 503 itself is not disappearing. Contractors with at least 50 employees and a federal contract or subcontract of $50,000 or more must still maintain a written affirmative action program. They must still recruit and conduct outreach to qualified people with disabilities, document those efforts, and assess whether the work is effective. The final rule added language confirming that assessment duty after the proposed rule created confusion about whether it would survive.

The prohibition on disability discrimination remains. So do reasonable-accommodation obligations. Separate requirements involving protected veterans, including self-identification and job-listing duties under the Vietnam Era Veterans' Readjustment Assistance Act, also remain in place.

What disappears is the measurement.

OFCCP says contractors may still conduct their own utilization analyses. It also says the rule does not prohibit an employer from collecting disability information if the employer independently concludes that it has a lawful basis under the ADA. Yet the department simultaneously says the former inquiry process violates that law and refuses to keep providing the federal form.

In practice, the rule does not settle the question for employers. It transfers the legal risk to them. DCI Consulting described the result as an unusual conflict between the Labor Department's new position and the EEOC's longstanding guidance. Employer groups and management-side lawyers are advising contractors to review or end pre-offer disability questions unless they can defend them on some independent legal basis.

The rollback is arriving as OFCCP itself has been dramatically reduced. A February 2025 internal plan called for shrinking the agency from 55 offices to four and cutting its staff from 479 to 50. Administration budget proposals have also sought to eliminate the office and move its remaining enforcement responsibilities elsewhere in the Labor Department.

Opposition surfaced early. OFCCP proposed the change on July 1, 2025, extended the public-comment period through Sept. 17 and received 651 submissions. DCI later reviewed 612 unique comments and reported that 94% opposed the Section 503 revisions. The American Association of People with Disabilities, the American Bar Association's Commission on Disability Rights and a group of U.S. senators all urged the department not to dismantle the system.

Maria Town, president and chief executive of the American Association of People with Disabilities, called the ADA rationale “especially insulting” when the proposal was released. Her argument was straightforward: the 2013 requirements were designed to strengthen the ADA's promise by showing whether opportunity was reaching the people the law was written to protect.

The final rule lands against a stubborn employment divide. In 2025, 22.8% of people with a disability were employed, compared with 65.2% of people without a disability, according to the Bureau of Labor Statistics. The unemployment rate for people with disabilities rose 0.8 percentage point to 8.3%, twice the rate for those without a disability. About three-quarters of disabled people were outside the labor force entirely.

BLS cautioned that its 2025 annual figures were based on 11 months of data because the October survey was not collected during a federal government shutdown, making that year less directly comparable with earlier annual averages. Even with that limitation, the longer trend had been moving in a better direction. The disability employment-population ratio was 17.6% in 2013. It reached 22.5% in 2023, then 22.7% in 2024 and 22.8% in 2025.

No single regulation can claim credit for that improvement. A strong labor market, demographic change and the spread of remote work also shaped employment. But the 2013 rule clearly changed what many contractors did inside their own organizations. A Cornell University survey conducted several years after implementation found that more than 88% of responding contractors said the regulation had affected their affirmative-action goals for employing people with disabilities at least to some degree.

The Labor Department's own enforcement record shows that the machinery was not merely symbolic. Since fiscal 2020, OFCCP issued more than 75 violations involving failures to conduct the required utilization analysis or respond appropriately to underutilization. Missing the 7% goal was not the offense. Failing to look was.

Starting Sept. 21, the law will still tell federal contractors to take affirmative action for qualified people with disabilities. The government will simply stop requiring the largest covered employers to produce the numbers that show whether they did.