Congress Funds Labor Watchdog Gutted of Core Antibias Powers (1)

Lawmakers cleared a spending bill that will fund the Labor Department’s contractor watchdog despite a drastic cut to its key responsibilities.

The Office of Federal Contract Compliance Programs will receive about $100 million for fiscal year 2026, roughly $11 million less than the previous year, marking a significant change from the White House’s budget proposal to cut the agency’s funding entirely, under legislation headed to President Donald Trump’s desk Tuesday.

The OFCCP is left without the bulk of its staff or its core mandate to police and audit race and sex bias at federal contractors after Trump rescinded a key executive order from the 1960s.

The overall Department of Labor would get $13.7 billion in discretionary funding, a 2.6% increase from fiscal year 2025.

Trump’s rescission of EO 11246 last year, which established most of the agency’s power, kicked off a series of actions aimed at gutting the agency. The DOL proposed rescinding the regulations to implement Trump’s directives, and most of the agency’s staff has been reassigned after layoffs were blocked in courts.

The OFCCP is left only to enforce portions of Section 503 of the Rehabilitation Act as well as the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA).

“The budget allocation means that OFCCP’s ability to continue its mission of enforcing equal employment opportunity for veterans and individuals with disabilities will continue for the foreseeable future,” said Alissa A. Horvitz, a member attorney and co-founder of Roffman Horvitz.

The White House budget proposed rehousing VEVRAA enforcement elsewhere in DOL, and moving Section 503 enforcement to the Equal Employment Opportunity Commission. Moving that authority to the EEOC, however, would likely require Congressional approval.

David Cohen, founder and president of DCI Consulting, said the agency doesn’t require $100 million for Section 503 and VEVRAA enforcement alone, especially given the small remaining OFCCP staff.

The DOL may reallocate some of the funds away from OFCCP to other places within DOL, or use the agency to police diversity, equity, and inclusion programs the government deems discriminatory, Cohen said.

In the same executive order where Trump rescinded EO 11246, he also directed agencies to require federal contractors certify they are not operating any discriminatory DEI programs.

“Bottom line is that the only thing we can conclude as of today is that OFCCP is alive and will survive at least another year. What in fact they will be doing is still unclear,” Cohen said.