Hunton Employment & Labor Perspectives

On February 25, 2025, Acting Director Michael Schloss of the Office of Federal Contract Compliance Programs (OFCCP) issued a memorandum addressing the OFCCP’s proposed strategy for reducing its workforce by 90 percent, as instructed by the Office of the Secretary.

The proposed strategy aims to shift the OFCCP’s focus to the work required by Section 503 of the Rehabilitation Act (“Section 503”) and the Vietnam Era Veterans Readjustment Assistance Act (“VEVRAA”). Federal contractors are still obligated to comply with these statutes, the outline requirements related to veterans and individuals with disabilities, following President Trump’s revocation of Executive Order 11246.

As part of its proposed reduction, the OFCCP will close 51 of its current 55 offices, keeping one office in four designated regions. The proposal also cuts the OFCCP’s staff down to 50 employees. Those 50 employees would prioritize carrying out the Section 503 and VEVRAA compliance requirements.

Further, the OFCCP’s National Office, which establishes all policy and program operations implemented by the regions, would be reduced to 14 employees. Those remaining employees would be scattered across four divisions: the Front Office, the Policy Division, the Operations and Enforcement Division, and the Administrative Division.

Finally, to achieve its desired reduction, the OFCCP used the proposal memorandum to ask permission to use the Voluntary Early Retirement Authority (“VERA”) and the Voluntary Separation Incentive Program (“VSIP”). The OFCCP proposed offering VSIP to all retirement eligible and early retirement eligible employees.

The OFCCP’s proposal will surely see movement in the coming weeks as it seeks to abide by the Office of the Secretary’s mandate to reduce its workforce, which could have big implications for federal contractors. Employers should work with their counsel to assess compliance strategies in response to the myriad of changes and enforcement priorities at federal agencies.