BLOG OVERVIEW: The Department of Labor’s Section 503 final rule—published August 21, 2026 and effective September 21, 2026—rescinds disability self-identification, the 7 percent utilization goal, and the data collection analysis at 41 CFR 60-741.44(k). Nearly every other obligation survives. Covered federal contractors must still maintain an affirmative action program, review physical and mental qualification standards on a schedule, conduct outreach and assess its effectiveness annually, and run an audit and reporting system. Qualification standards, the annual assessment, and audit systems now carry the most compliance risk.
On August 21, 2026, the Department of Labor published its final rule modifying the regulations implementing Section 503 of the Rehabilitation Act (Section 503), effective September 21, 2026. Although the final rule removes, adds, or modifies some requirements, many core obligations under Section 503 remain in place. It is important to understand what covered contractors and subcontractors still must do to comply.
The requirement to develop an affirmative action program (AAP) is unchanged. Contractors meeting the applicable threshold must still prepare and maintain a Section 503 AAP, and every element of 41 CFR 60-741.44 other than paragraph (k) survives intact. The table below outlines remaining Section 503 obligations.
| Obligation | Citation | Current Requirement |
|---|---|---|
| Maintain an affirmative action program | 60-741.40(a) | Requirement is unchanged, but narratives should be revised after September 21, 2026, plan dates to align to updated components. |
| Make the AAP available and post its availability | 60-741.41 | Requirement is unchanged. The full program should be available to any employee or applicant on request; location and hours posted at each establishment. |
| Equal opportunity policy statement | 60-741.44(a) | Top U.S. executive endorsement, protections for protected activity, and the notice provided in a form accessible to individuals with disabilities. |
| Review of personnel processes | 60-741.44(b) | Periodic review, with the review and any modifications described in the AAP, and equal access to processes implemented through information and communication technologies. Note: this was often achieved through annual review of personnel data including employment data, hires, promotions and terminations. |
| Physical and mental qualification standards | 60-741.44(c) | A schedule for reviewing all such standards, contained in the AAP and adhered to, with the burden on the contractor to show job-relatedness and business necessity. |
| Reasonable accommodation | 60-741.44(d); 60-741.21(a)(6) | Unchanged, including the affirmative duty to confidentially raise performance concerns with an employee who has a known disability where the difficulty may be disability related. |
| Harassment prevention | 60-741.44(e) | Procedures to ensure employees are not harassed on the basis of disability. |
| Outreach and positive recruitment | 60-741.44(f)(1)–(2) | Appropriate outreach and positive recruitment activities, plus written notification of policy to subcontractors, vendors, and suppliers. |
| Annual assessment of outreach effectiveness | 60-741.44(f)(3); 60-741.44(l) | Annual review of the prior twelve months, documenting the criteria used and a conclusion for each effort. |
| Documentation and retention | 60-741.44(f)(4); 60-741.80(b) | Documentation of all outreach activities, retained three years. |
| Internal dissemination of policy | 60-741.44(g) | Inclusion in the policy manual or equivalent, and notification to union officials or employee representatives where applicable. |
| Audit and reporting system | 60-741.44(h) | A system meeting all six elements at (h)(1)(i)–(vi), with documentation, and remedial action where the program is deficient. |
| Responsibility for implementation | 60-741.44(i) | A named official with senior management support and the staff to manage the program. |
| Training | 60-741.44(j) | Training for all personnel involved in recruitment, screening, selection, promotion, disciplinary, and related processes. |
| Nondiscrimination and medical inquiry rules | 60-741.21; 60-741.23(a), (b), (d) | Unchanged. Only paragraph (c) was removed; inquiry timing, entrance examination uniformity, screen-out limits, and confidentiality and file segregation all remain. |
| Equal opportunity clause flow-down | 60-741.5(a)(6) | Now at the $20,000 threshold. |
Three of these items warrant particular attention:
Section 60-741.44(f)(3) survives almost entirely. The only substantive change is the deletion of one sentence related to the former requirement that the criteria include the 44(k) data for the current year and the two preceding years. Everything else stands: (1) the annual review; (2) the obligation to document the criteria applied and a conclusion as to whether each effort was effective; (3) the requirement that the conclusion be “reasonable as determined by OFCCP;” and (4) the duty to identify and implement alternative efforts from paragraphs (f)(1) or (f)(2) where the totality of efforts was not effective.
Section 60-741.44(c)(1) requires the AAP to contain, and the contractor to adhere to, a schedule for reviewing all physical and mental job qualification standards. Paragraph (c)(2) places the burden on the contractor to demonstrate that any standard tending to screen out qualified individuals with disabilities is related to the specific job and consistent with business necessity. Neither provision was touched by the final rule. For contractors whose qualification standards have not been systematically reviewed in some years, this is now among the more substantive exposures in the program and one in which robust documentation will be critical.
Section 60-741.44(h) requires a system that measures the effectiveness of the AAP, indicates any need for remedial action, determines the degree to which objectives have been attained, determines whether known individuals with disabilities have had the opportunity to participate in company-sponsored educational, training, recreational, and social activities, measures compliance with the program’s specific obligations, and documents the actions taken to comply with each of those elements. Where the program is found deficient, paragraph (h)(2) requires action to bring it into compliance. With utilization removed, this is the structural spine of the program and will deserve thoughtful consideration on the continued assessment of personnel information.
The companion final rule for the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), also effective September 21, 2026, largely leaves the existing rule unchanged, with only technical revisions. Veteran self-identification at 41 CFR 60-300.42, the data collection analysis at 60-300.44(k), and the hiring benchmark at 60-300.45 remain unchanged. The substantive change is the coverage threshold, which increases from $150,000 to $200,000 to reflect the inflationary adjustment.
For those looking for more information, DCI is hosting a complimentary webinar to discuss the impact of the Section 503 Final Rule on the self-identification process for individuals with disabilities and the requirements federal contractors have moving forward.
*Contractors with plan years already underway should note that the rule contains no transition provision in either direction; the new regulations simply apply on September 21, 2026. Please reach out to your DCI consultant with questions about how these changes affect your program if you have a plan date after September 21, 2026.