On January 21, 2025, the White House announced the rescission of Executive Order 11246, a longstanding directive that required federal contractors to uphold non-discrimination policies and implement affirmative action programs. Originally signed in 1965, Executive Order 11246 prohibited employment discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin. With its rescission, federal contractors and subcontractors may experience significant shifts in compliance requirements and workforce policies.
Key Changes for Employers
The rescission of Executive Order 11246 eliminates federal mandates for non-discrimination policies and affirmative action programs specific to federal contractors. However, existing federal laws, such as Title VII of the Civil Rights Act, continue to prohibit workplace discrimination. Employers should assess their compliance strategies and adjust policies as needed.
Key areas affected include:
- Affirmative Action Plans (AAPs): Federal contractors are no longer required to develop AAPs, removing previous obligations to set formal diversity benchmarks for hiring and promotion.
- Record-Keeping and Reporting: Compliance with reporting obligations to the Office of Federal Contract Compliance Programs (OFCCP) may no longer be necessary, impacting demographic and hiring reports.
- Diversity and Inclusion Programs: While not federally mandated, employers may voluntarily maintain diversity initiatives to align with corporate goals or industry standards.
- State and Local Compliance: Many state and local jurisdictions have separate non-discrimination and affirmative action laws that remain enforceable, regardless of changes to Executive Order 11246.
How This Change Affects Non-Federal Contractors
While the rescission of Executive Order 11246 primarily affects federal contractors, private employers who do not hold federal contracts may also feel indirect effects:
- Diversity and Inclusion Programs: Many private employers have voluntarily adopted affirmative action and diversity programs. Some may choose to reassess these efforts based on industry expectations and competitive hiring practices.
- State and Local Compliance: Certain states and municipalities have their own affirmative action and non-discrimination laws that still apply to private employers, even if federal mandates have changed.
- Reputational and Employee Expectations: Employees and job seekers increasingly expect employers to prioritize diversity and inclusion. Companies scaling back their DEI initiatives may face challenges in attracting and retaining talent.
- Future Legal and Policy Changes: Employment laws and regulations evolve. Even with this rescission, new policies could be introduced in the future, requiring ongoing attention to compliance strategies.
Potential Business Impacts for Federal Contractors
For companies with federal contracts, the rescission of Executive Order 11246 may reduce compliance burdens but does not remove broader workplace discrimination protections. Employers should:
- Review and update policies to reflect changes in federal contractor obligations while ensuring alignment with existing labor laws.
- Assess workforce diversity strategies to determine if voluntary affirmative action programs still align with business objectives.
- Monitor state and local regulations to maintain compliance with applicable non-discrimination law
Resources for Employers
For guidance on how the rescission of Executive Order 11246 affects compliance, employers can refer to:
- U.S. Department of Labor (DOL): The DOL website provides official guidance on compliance for federal contractors and general employment law updates.
- Office of Federal Contract Compliance Programs (OFCCP): The OFCCP offers information on employer responsibilities, reporting requirements, and best practices.
- Equal Employment Opportunity Commission (EEOC): The EEOC enforces anti-discrimination laws and provides information on employee rights and employer obligations.
- Legal and HR Consultants: Companies should consult with legal or HR professionals to ensure they remain compliant with all applicable employment laws and adjust their internal policies as needed.
FAQ about the Recission of Executive Order 11246
Q: Does the rescission mean federal contractors can now discriminate in hiring?
A: No. Federal anti-discrimination laws, including Title VII of the Civil Rights Act, still prohibit workplace discrimination. Employers must continue to comply with these existing laws.
Q: Do businesses need to discontinue their affirmative action programs?
A: No, businesses can still voluntarily maintain diversity and inclusion programs if they choose, but they are no longer mandated by this executive order.
Q: What happens to existing affirmative action plans?
A: Federal contractors are no longer required to maintain AAPs, but organizations may continue them voluntarily based on internal policy or other legal requirements.
Q: Are there state-level requirements that businesses should be aware of?
A: Yes. Some states and local jurisdictions have affirmative action or non-discrimination policies that remain in effect. Employers should review state laws to ensure compliance.
Q: Where can businesses get additional legal guidance?
A: Employers can consult the Department of Labor, the EEOC, OFCCP, or legal professionals specializing in employment law for further guidance.
What Employers Should Do Now
As agencies adjust to the rescission of Executive Order 11246, employers should stay informed about any additional guidance from the Department of Labor and OFCCP. Businesses with federal contracts may also want to consult legal and HR professionals to evaluate the best approach for maintaining inclusive workplace practices while ensuring regulatory compliance.
For now, while the rescission marks a significant policy change, its immediate impact on workplace discrimination protections is limited, as key federal employment laws remain in effect. Employers should remain proactive in monitoring changes and adjusting their policies accordingly.
