Disability Bias Audits in Limbo as Trump Seeks DOL Office’s End

A budget proposal to transfer the responsibility of policing federal contractors for disability bias from a nearly-defunct Labor Department office to the EEOC would leaves enforcement gaps as the commission lacks explicit authority to audit companies for now.

The DOL’s fiscal year 2026 budget justification released May 30 would eliminate the Office of Federal Contract Compliance Programs and rehouse enforcement of Section 503 of the Rehabilitation Act within the Equal Employment Opportunity Commission.

The proposal, part of President Donald Trump’s dismantling of the OFCCP, will have to reconcile the contrasting enforcement powers of the two agencies. Whereas the OFCCP was structured for proactive reviews to mitigate employment bias, the EEOC’s charge-driven system largely doesn’t permit investigations until workers come forward.

“I understand if you don’t want two agencies to have similar functions, but it’s not the same function. And the notion that giving Section 503 to the EEOC means merging two of the same functions is not true,” said Larry Lorber, labor and employment counsel at Seyfarth Shaw LLP and former OFCCP director.

Both agencies enforce anti-discrimination laws protecting disabled workers. The EEOC uses the 1990 Americans with Disabilities Act, passed roughly 17 years after the OFCCP received Section 503 authority.

The ADA requires workers to file charges alleging discrimination with the EEOC or state agencies. Section 503 allows federal contractors’ workers to file complaints, but also requires businesses with significant federal contracts to take affirmative action to employ and promote qualified individuals with disabilities.

Specific requirements for affirmative action plans and the power to audit them, though, are not included in Section 503’s text. They were established through rulemaking, which may not survive an inter-agency transfer of authority.

John Fox, a partner at Fox, Wang & Morgan P.C., said he believes it’s unlikely the EEOC will keep in place regulations to conduct further audits or establish requirements for affirmative action plans.

“Those will be history,” he said.

Congressional Action

Congress will likely need to act to shift the enforcement authority to the EEOC. If Trump’s budget is approved, Congress would have to reauthorize Section 503 since it grants enforcement explicitly to DOL as written, attorneys and former labor officials said.

“That’s a very significant step still in the process. It seems to be a giant leap at this moment in time,” said Lauren Hicks, a shareholder at Ogletree Deakins.

The OFCCP’s responsibilities requiring contractors to submit affirmative action plans or conduct audits for race and sex-based discrimination were eliminated when Trump previously rescinded decades-old Executive Order 11246. This left only Section 503 along with the Vietnam Era Veterans’ Readjustment Assistance Act, which the budget proposal seeks to move elsewhere in the DOL.

Keeping affirmative action obligations under Section 503 in place is critical, since the ADA doesn’t have the same auditing mechanism to incentivize compliance, Hicks said.

“There’s not as much of a proactive push to be detailed, and thorough, and robust, in evaluating yourself and your programs and ensuring they are actually working successfully,” she said.

The OFCCP audited hundreds of companies annually. Roughly 2,000 had been slated for OFCCP evaluations this fiscal year, according to a Biden administration list.

Although the EEOC lacks those audit powers, the agencies share information, and complaints at the OFCCP were sometimes considered dual-filed under the ADA. Both agencies accept complaints from workers, though the OFCCP is not structured to lean on them for enforcement.

Obama-era rules added to Section 503 also set in place a utilization goal of 7% individuals with disabilities in contractors’ affirmative action programs.

It’s unclear if the EEOC would keep that goal in place, as it has revoked support for diversity programs based on race and gender under its Acting Chair Andrea Lucas.

EEOC’s Scope

The EEOC deferred requests for comment on how it would handle Section 503 to the Office of Management and Budget, which did not respond.

But if the EEOC should choose to pursue adoption of the OFCCP’s auditing power alongside Section 503 authority, enforcement implications could be significant.

“If I was Andrea Lucas, I would almost be chomping at the bit to get 503 to now launch all of these audits, get all this data, and see what else I can find,” said David Cohen, founder and president of DCI Consulting.

The EEOC could use that power to investigate diversity, equity, and inclusion programs, by using hiring information gleaned during Section 503 audits to justify an expansion into an investigation under Title VII of the 1964 Civil Rights Act, Cohen said.

The EEOC’s budget justification document includes funding to fold in Section 503, but did not say which regulations it would adopt or modify in the process.

Hicks said if the audit power is granted to EEOC it would likely be initially limited to disability issues, but would open the door for a future administration to bring back requirements for race and sex-based affirmative action plans under EO 11246, using the EEOC for relevant enforcement.

But the EEOC is less likely to adopt audit functions not mentioned in the Rehabilitation Act following the US Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, said Fox. The 2024 decision overturned the requirement that judges defer to agencies where statutes are silent or ambiguous.

The EEOC does have directed investigation power to review companies for potential discrimination without a charge filed, but it is limited to the Age Discrimination in Employment Act and the Equal Pay Act.

Despite differences in the agencies’ investigatory approaches, the transfer of duties seems like a “pretty natural add-on” said Victoria Lipnic, a partner at Resolution Economics and former acting EEOC chair.

“We’ll have to see if there’s any kind of regulatory development in terms of a similar kind of proactive analysis, I think that remains to be seen,” Lipnic said, adding that disability law expertise is in “the EEOC’s wheelhouse.”