TL;DR

The Office of Federal Contract Compliance Programs (OFCCP) is a US Department of Labor agency that enforces equal employment opportunity and affirmative action obligations for federal contractors and subcontractors. Staffing agencies that supply workers to federal contractors are themselves subject to OFCCP requirements if they meet the contract value and workforce size thresholds. In 2025, the Trump administration moved to rescind EO 11246 (the affirmative action executive order for women and minorities), but OFCCP enforcement of Section 503 (disability affirmative action) and VEVRAA (veterans affirmative action) has resumed after a temporary pause.

Key Takeaways

• OFCCP jurisdiction covers contractors and subcontractors with a federal contract or subcontract worth $10,000 or more; the affirmative action plan (AAP) requirement applies to contractors with 50 or more employees and a contract of $50,000 or more
• As of 2025, EO 11246 affirmative action obligations for women and minorities are being rescinded through proposed rulemaking; however, Section 503 of the Rehabilitation Act (disability) and VEVRAA (Vietnam Era Veterans' Readjustment Assistance Act, for protected veterans) remain in force and enforcement has resumed
• OFCCP conducts compliance reviews (audits) that require covered contractors to produce their AAPs, applicant flow data, compensation data, and hiring records — staffing agencies supplying to federal contractors can be audited as supply-chain subcontractors
• OFCCP's Internet Applicant Rule (41 CFR Part 60-1) defines who counts as an "Internet Applicant" for recordkeeping purposes; staffing agencies using ATS or job boards for federal contractor roles must maintain records of all expressions of interest that meet the definition, and track disposition codes

FAQ

Q: Does OFCCP apply to staffing agencies that place workers with federal contractors? A: It can. A staffing agency becomes a covered federal contractor or subcontractor if it has a contract or subcontract with a federal contractor to supply labor, and the contract value meets the applicable threshold ($10,000 for basic EEO obligations, $50,000 for AAP requirements, 50+ employees). If the agency is providing workers under a staffing agreement to a company that holds a federal contract, the staffing agency is typically treated as a first-tier subcontractor and must maintain its own AAPs for covered establishments.

Q: What records must a staffing agency keep for OFCCP compliance? A: Covered agencies must maintain AAPs for each establishment with 50 or more employees. They must also keep applicant flow logs — records of each person who expresses interest in a position, their disposition (hired, rejected, withdrew), and the demographic information collected through voluntary self-identification. Under the Internet Applicant Rule, only individuals who meet all four criteria (basic qualifications, does not withdraw, position exists) count as "Internet Applicants," but the agency must retain records of all expressions of interest for at least two years (three years for larger contractors).

Q: What are the current OFCCP affirmative action requirements after the 2025 EO changes? A: In early 2025, an executive order effectively suspended EO 11246 affirmative action requirements for women and minorities, and OFCCP proposed to rescind the implementing regulations. Section 503 (disability) and VEVRAA (protected veterans) affirmative action requirements were also briefly paused but enforcement was resumed by July 2025 per a court order and agency announcement. Contractors should continue to maintain disability and veterans AAPs and meet the 7% utilization goal for qualified individuals with disabilities and the 6.9% benchmark for protected veterans.

What OFCCP Requires of Staffing Agencies

A staffing agency becomes subject to OFCCP requirements when it has a written contract or subcontract with a federal contractor to supply labor — provided the contract value meets the applicable threshold. At $10,000 or more, the agency must comply with EEO nondiscrimination obligations. At $50,000 or more with 50 or more employees, the agency must maintain written Affirmative Action Plans (AAPs). The agency's AAP obligations apply separately for each establishment with 50 or more employees, meaning a large multi-office agency may need dozens of distinct AAPs.

The AAP has three sections. The workforce analysis section documents the demographic composition of the agency's workforce by job group and grade. The job group analysis section compares the percentage of women and minorities in each job group against their availability in the relevant labor market. The placement goals section sets targets where incumbency falls short of availability — the goal is not a quota, but rather an annual target for good-faith efforts. Under the disability AAP required by Section 503, covered contractors must set a 7% utilization goal for qualified individuals with disabilities in each job group; the veterans AAP required by VEVRAA carries a 6.9% hiring benchmark for protected veterans.

Agencies must also collect voluntary self-identification data from applicants and employees. For EEO purposes, this covers race and ethnicity. For Section 503 compliance, contractors must invite applicants and employees to self-identify as having a disability using OFCCP-prescribed forms (CC-305). For VEVRAA, candidates must be invited to self-identify as protected veterans. Self-identification is voluntary, and the data may only be used for AAP and reporting purposes.

How OFCCP Compliance Reviews Work

OFCCP selects contractors for compliance reviews using a scheduling list generated from the Federal Contractor Selection System (FCSS), which uses a combination of random selection and data-driven targeting. When an agency receives a scheduling letter, it typically has 30 days to submit its AAP — or the current-year AAP if more than 120 days have elapsed since the AAP period began. OFCCP then conducts a desk audit: the compliance officer reviews the AAP for completeness and conducts statistical analysis of the applicant flow data and compensation data.

If the desk audit identifies potential problems — statistically significant underutilization of a protected group, or anomalies in hiring or compensation data — OFCCP may request additional documentation or schedule an on-site review. The on-site review can include employee interviews, personnel file reviews, and meetings with HR leadership. If violations are found, OFCCP pursues conciliation — a negotiated agreement specifying remedial steps, including back pay for identified victims, prospective goals, and reporting obligations. If conciliation fails, OFCCP can refer the case to the Solicitor of Labor for litigation, or recommend debarment.

2025 Changes to OFCCP and the Status of Affirmative Action

In January 2025, an executive order effectively suspended EO 11246, which since 1965 has required affirmative action for women and minorities by covered federal contractors. OFCCP published a notice of proposed rulemaking to rescind the implementing regulations, meaning the affirmative action program requirement for women and minorities is in the process of being eliminated. However, the nondiscrimination requirements of EO 11246 — prohibiting discrimination on the basis of race, color, religion, sex, national origin, disability, and veteran status — remain enforceable through their other statutory bases (Title VII, Section 503, VEVRAA).

Section 503 and VEVRAA affirmative action obligations were briefly paused in early 2025 following the executive order, but OFCCP resumed enforcement of both after federal court intervention and agency announcements. Contractors and subcontractors — including staffing agencies — must continue to maintain disability and veterans AAPs, meet the 7% disability utilization goal and 6.9% veterans hiring benchmark, invite self-identification, and cooperate with OFCCP audits. Agencies should not assume that the EO 11246 changes have eliminated all affirmative action obligations; the obligations for disability and veterans remain intact.

Penalties and Enforcement

The most severe OFCCP sanction is debarment — being prohibited from holding federal contracts or subcontracts. Debarment effectively ends a staffing agency's ability to supply workers to any federal contractor client, which can represent a substantial portion of revenue for agencies in government contracting, defense, technology, and professional services sectors. OFCCP seeks debarment only when conciliation has failed and the contractor has demonstrated a pattern of noncompliance or bad faith.

In most cases, OFCCP enforcement results in a conciliation agreement requiring the contractor to pay back wages to identified victims, implement prospective hiring and outreach programs, and submit regular compliance reports. Monetary settlements in OFCCP cases have ranged from tens of thousands of dollars to several million, depending on the size of the violation and the number of affected individuals. Staffing agencies that supply to federal contractors should treat OFCCP compliance as a continuous operational obligation — not a periodic reporting exercise — and should designate an internal compliance officer or retain outside counsel to manage AAP updates and compliance review responses.