By Joanna Colosimo
BLOG OVERVIEW: The proposed FY 2027 White House budget includes the elimination of OFCCP—transferring Section 503 and VEVRAA enforcement to a new Office of Civil Rights within the Department of Labor—and increased EEOC funding, signaling a broader shift toward consolidated civil rights enforcement. While the budget is unlikely to pass as written, it reveals the administration’s enforcement priorities and philosophy. Federal contractors and large employers should note that compliance obligations remain enforceable, and organizations should prepare for continued enforcement through EEOC and any future Office of Civil Rights structure.
The White House’s proposed Fiscal Year (FY) 2027 budget includes a restructuring of federal employment enforcement: the transfer of Section 503 of the Rehabilitation Act (Section 503) and Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) enforcement to a newly proposed Office of Civil Rights within the Department of Labor.
In turn, it proposes the elimination of the Office of Federal Contract Compliance Programs (OFCCP), setting the agency's requested funding and staffing levels at zero. The justification for such is tied directly to Executive Order (EO) 14173, which rescinded Executive Order 11246 and permanently removed the legal foundation for OFCCP’s race and sex-based affirmative action enforcement. With EO 11246 no longer in place, the administration argues that OFCCP’s mission has narrowed to a point where maintaining a separate agency is no longer warranted.
This proposal to remove funding for OFCCP is not new; it mirrors the White House’s FY2026 budget request for OFCCP’s funding. This reappearance reinforces the administration’s views on the agency’s prior enforcement history.
While it is unlikely that this budget is enacted as written, particularly given the political environment and the strong possibility of a continuing resolution later in the year, the proposal is still important to consider. Presidential budgets are both fiscal documents and policy roadmaps, and this particular one gives us a clear view into this administration's philosophy on civil rights enforcement moving forward.
New Office of Civil Rights and a Shift in Enforcement Philosophy
While the initial FY2026 budget proposal also included provisions for the elimination of OFCCP, the FY2027 budget proposal differs from its predecessor with its proposed transfer of Section 503 and the VEVRAA to a new Office of Civil Rights within the Department of Labor.
This structural change is notable. Section 503 and VEVRAA are statutory requirements, not executive order-based programs, and the administration is explicit that enforcement would continue, albeit under a different organizational model. Rather than deregulation, the move seems to be about consolidation; it would result in fewer agencies, fewer overlapping mandates, and a move towards a more centralized civil rights enforcement framework instead of the currently existing contractor-specific framework.
While the OFCCP proposal is the most striking element of the labor budget materials, it is best understood alongside the FY2027 budget’s proposal to add $20 million to the Equal Employment Opportunity Commission’s (EEOC) budget, signaling the agency’s continued role as the primary federal enforcer of Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act.
This reinforces a key point: the risk landscape does not disappear because OFCCP enforcement is eliminated or moved to a different part of the Department of Labor such as EEOC or the proposed new Office of Civil Rights. It shifts toward investigations, charges, and litigation grounded in discrimination statutes.
Will This Budget Actually Pass?
Given the current political environment, it is likely that the FY2027 budget will not be enacted for the next fiscal year. From a practical standpoint, most observers expect a continuing resolution or negotiated compromise, not wholesale adoption of the FY 2027 proposal. Congress has historically resisted eliminating OFCCP outright, and even lawmakers skeptical of affirmative action have expressed concern about weakening disability and veteran protections.
In any case, focusing solely on whether this budget passes misses the larger takeaway. Even if (or when!) OFCCP survives another budget cycle, the administration’s priorities are clear:
For federal contractors and any employers navigating pay equity, disability compliance, veteran outreach, and discrimination risk, this means the smartest strategy is to remain proactive and prepare for continued enforcement, particularly through EEOC and any future Office of Civil Rights structure. Organizations should maintain compliance efforts—including the continued observation of Section 503 and VEVRAA—continue to monitor the greater compliance landscape.
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