Affirmative action requirements still exist with respect to two groups of individuals under federal law – veterans and individuals with disabilities – notwithstanding a recent Trump Executive Order that revoked the underpinnings of affirmative action with respect to other groups.

This is the third in a series of articles on the Trump Executive Orders on affirmative action (AA) and diversity, equity and inclusion (DEI) issued on January 20 and 21, 2025, that collectively outline how we got here, what has been eliminated, what new mandates have been issued, what has survived intact, and what employers can do going forward if diversity remains an important value for them.  This article focuses on why these two groups remain protected when so much has been eliminated, and what that means for private sector employers who are federal government contractors.

It All Goes to the Foundation of Legal Protection

The Trump Executive Order expressly states that it does not apply to employment and contracting preferences for veterans of the U.S. armed forces or a federal law that provides employment opportunities for blind individuals.  While it may be that the current administration is particularly sympathetic to veterans and those who are blind, from a legal perspective, the president also lacks the power to eliminate existing affirmative action programs for veterans and disabled individuals because they both arise from statutes passed by Congress and signed into law, and therefore rest on a much stronger legal foundation.

As we discussed in the first article in this series, legal protections based on a presidential executive order can be revoked by any sitting president.  Subsequent to the 1965 Executive Order introducing affirmative action, Congress applied discrimination protections and affirmative action requirements first to disabled individuals under the Rehabilitation Act of 1973, and then to veterans under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).

Protections for Individuals with Disabilities

The Rehabilitation Act is largely focused on prohibiting employment discrimination against federal government applicants and employees based on a disability, but section 503 of the law also prohibits any employer with a federal contract in excess of $10,000 from discriminating against individuals with disabilities.  Section 503 further requires those federal contractors to take affirmative action to recruit, hire, promote, and retain individuals with disabilities.

Regulations implemented by the Office of Federal Contract Compliance Programs (OFCCP) require federal contractors with 50 or more employees and a contract of $50,000 or more to have an affirmative action program in place.  OFCCP also establishes a goal that qualified individuals with disabilities should generally comprise at least a certain percentage of the contractor’s workforce.  Currently that goal is seven percent.

Protections for Veterans

VEVRAA prohibits federal contractors from discriminating against veterans in employment and provides that an employer operating under a federal contract for $100,000 or more must engage in affirmative action to recruit, hire, promote and retain qualified covered veterans.  Although passed in response to the Vietnam War, VEVRAA applies more broadly to those U.S. veterans who were disabled, recently separated, served on active duty in the armed forces during wartime or a campaign, or received an Armed Forces service medal.  VEVRAA grants such “covered veterans” priority in referral for most available positions with federal government contractors.   Federal contractors are required under VEVRAA to report annually on their hiring data for covered veterans.

OFCCP regulations further require that each federal contractor covered by VEVRAA develop a written affirmative action program and establish a “hiring benchmark” for protected veterans each year.  OFCCP describes the hiring benchmark as a tool to assess the effectiveness of their recruiting efforts, as contrasted with the goal required under the Section 503 regulations, which is meant to be an attainable hiring objective.

Continuing Obligations for Federal Contractors

At present, federal government contractors remain subject to all the requirements of Section 503 and VEVRAA.  Both of those statutes specifically require “affirmative action” be taken by federal contractors with regard to employment of the individuals protected by the respective laws.  Notably, though, the workforce placement “goal” for individuals with disabilities, and the “hiring benchmark” for veterans, arise solely under regulations set by OFCCP.  Neither they nor the specifics of what is meant by “affirmative action” are stated in the laws themselves.

There is, therefore, a potential for the new administration to direct that the regulations be revised to remove all goals and benchmarks, and to redefine “affirmative action” as meaning something other than the program of policy statements, data collection, analysis, outreach, and proactive measures that OFCCP has required as components of an affirmative action program.  That some new federal agency action may be brewing is suggested by a cease and desist order issued on January 24, 2025, by Acting Secretary of Labor Vince Micone, which had ended all reviews and investigations being conducted by the Department of Labor with regard to Executive Order 11246, but announced that those involving Section 503 and VEVRAA compliance should be “held in abeyance pending further guidance.”

Regulatory changes are generally required to follow a well-ordered process, in accordance with a different federal law, the Administrative Procedure Act, which additionally requires that changes to existing regulations be predicated on some reasonable basis that furthers the purposes of the congressional legislation they are intended to be interpreting and enforcing.  A federal agency’s failure to comply with the Administrative Procedure Act, and the appropriateness of its regulatory modifications, can be challenged in court.

Federal contractors should continue to monitor for news of changes to their compliance obligations under VEVRAA and Section 503.  The changes in this area likely will not happen overnight, but a new regulatory approach may begin to evolve over the coming months.

By Tracey I. Levy