On January 21, 2025, a new Executive Order was issued, revoking Executive Order 11246 and eliminating affirmative action requirements for California contractors and other federal contractors nationwide. This change impacts businesses with federal contracts, particularly those with at least 50 employees and contracts exceeding $50,000. While affirmative action plan obligations have been removed, California contractors must still comply with nondiscrimination laws under Title VII of the Civil Rights Act and the Fair Employment and Housing Act (FEHA). Understanding these changes is essential for maintaining compliance and adapting workplace policies accordingly.
Executive Order 11246 and Its Requirements
Since 1965, Executive Order 11246 has required federal contractors and subcontractors to include nondiscrimination clauses in their contracts, prohibiting discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin. Contractors with at least 50 employees and contracts exceeding $50,000 were also obligated to create a written affirmative action plan.
Revocation of Executive Order 11246
On January 21, 2025, President Trump’s executive order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” revoked Executive Order 11246, which significantly affects affirmative action reporting requirements. Contractors have a 90-day period during which they may continue to follow the previous regulations but should stay informed about any updates to ensure ongoing compliance.
Impact on Federal California Contractors
For federal contractors in California with at least 50 employees and contracts over $50,000, the requirement to create affirmative action plans—which included workforce analysis, assessments of underrepresentation, and goals to address disparities—has been removed. Contractors must still comply with nondiscrimination laws under Title VII of the Civil Rights Act and California’s Fair Employment and Housing Act (FEHA).
Remaining Federal Compliance Requirements
It is also important to note that federal regulations such as VEVRAA (Vietnam Era Veterans’ Readjustment Assistance Act) and Section 503 of the Rehabilitation Act remain in effect, requiring affirmative action for veterans and individuals with disabilities. Contractors should monitor federal guidance and legal developments that could impact their compliance obligations.
Ongoing Compliance Considerations for California Contractors
The revocation of Executive Order 11246 represents a significant shift for federal contractors, including those in California. While the obligation to develop affirmative action plans has been lifted, compliance with existing nondiscrimination laws under Title VII and FEHA remains in force.
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