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Major AAP Changes Arrive...What's Next for Federal Contractors?

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While some changes to the AAP for Women & Minorities are clear in President Trump's Executive Order, further clarification is needed for a complete picture. TAMS Group summarizes what we know so far.

On January 21, 2025, less than 48 hours after taking office, President Trump signed an Executive Order with a stated intention to “protect the civil rights of all Americans and expand individual opportunity.” In doing so, President Trump revoked Executive Order 11246 of September 24, 1965. That Executive Order (11246), signed by then President Lyndon B. Johnson, gave the Secretary of Labor the authority to ensure equal opportunity for people of color and women in federal contractors' recruitment, hiring, training and other employment practices.

Unfortunately, EO 11246 often gets lumped in with terms such as “DEI”, “quotas”, “targets” and the like, which shows a misunderstanding of the Executive Order itself. As TAMS Group often reminds clients, EO 11246 did not require federal contractors to hire females or minorities, only to refrain from employment discrimination and take affirmative action to ensure equal opportunity based on race, color, religion and national origin. “Equal Opportunity” is not the same proposition as “Equal Outcome”.

What Now?

 President Trump’s Executive Order is effective immediately, however, it states that Federal Contractors may continue to comply with the EO 11246 for 90 days. In fact, TAMS Group believes that Federal Contractors should continue to comply with EO 11246 minimally for the next 180 days, until further clarification is made by the Administration. As we discuss below, some aspects of a federal contractor’s yearly AAP will not change at all (see below). It bears repeating, a proper AAP never set quotas or dictated specific employment actions. Federal Contractors were meant to compare their current headcounts (utilization) of females and minorities to the relevant labor market availabilities of those groups and develop a recruitment strategy to increase applicant flow where gaps were identified. Federal Contractors, like all other employers, should always hire the best qualified candidate for the opening in question.
 

What is Required of Federal Contractors After the New Executive Order

 Portions of the normal yearly AAP process will remain the same. Qualifying federal contractors and subcontractors are still required to prepare an annual:

  1. Affirmative Action Plan for Individuals with Disabilities

  2. Affirmative Ation Plan for Protected Veterans

The reason these requirements are not revoked is because they were created by statute. The AAP for IWD’s stems from Section 503 of the Rehabilitation Act of 1973, and the AAP for Protected VETS stems from the Vietnam Era Veterans’ Readjustment Assistance Act. Neither of these AAPs has its source in Executive Order 11246 and is therefore unaffected by the revocation.

In addition, Federal Contractors and Subcontractors should continue to prepare Disparity Analyses and Salary Regression Analyses on an annual basis. President Trump’s Executive Order requires that every contractual counterparty or grant recipient agree that it is compliant “in all respects with all applicable Federal anti-discrimination laws” and to “certify that it [the contractor] does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws”. Among other questions is whether OFCCP will continue to enforce these laws when it comes to federal contractors and subcontractors? Or will OFCCP be absorbed into the DOL at large, or potentially merge with the EEOC (as some predicted would happen during President Trump’s first term)? To some extent, the new Executive Order creates more questions than it answers.

More to Come…

 Interestingly, President Trump’s Executive Order states that “within 120 days of this order, in consultation with the heads of relevant agencies and in coordination with the Director of OMB” a report must be submitted “containing recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” The new Executive Order actually reaches beyond federal contractors, and now contemplates private employer compliance as well.
 

Contact Us

 Given the vast number of changes arriving via Executive Order in the last 48 hours, TAMS Group expects the situation around AAPs to remain fluid. We will inform clients of developments surrounding this new Executive Order and are available via email for questions regarding not only AAPs, but immigration, I-9’s, child labor and state-specific Pay Data and AAP reporting - feel free to email us with questions you may have.
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