The Equal Employment Opportunity Commission (EEOC) and the Department of Labor released their 2026 Congressional Budget Justifications (CBJ) on May 30, 2025, providing valuable information related to the EEOC’s enforcement intentions and the future of the Office of Federal Contract Compliance Programs (OFCCP). A CBJ is the annual budget justification materials of a federal agency or a component of a federal agency that are submitted in conjunction with the President’s annual budget submission. The CBJ provides a detailed description of each program and information about how the agency will use funds, including increases and decreases in spending. The EEOC CBJ identifies four enforcement priorities and anticipated investigations into systemic intentional discrimination using the pattern or practice method of proof. Additionally, the EEOC CBJ and the Department of Labor’s Budget in Brief confirm that the OFCCP will be extinguished with its remaining two programs distributed to the EEOC and the Veterans Employment Training Service.
EEOC Enforcement Priorities
In the Chair’s CBJ message and in the discussion of various programs, Acting Chair Andrea Lucas emphasizes that the EEOC will focus on four substantive areas to prevent and remedy discrimination in the workplace:
- unlawful race discrimination in DEI programs, policies, and practices;
- unlawful national origin discrimination involving preferences for foreign workers;
- defending the immutable binary nature of biological sex and women’s rights to single – sex spaces at work; and
- protecting workers from religious bias and harassment, including anti-Semitism and anti-Christian bias, as well as defending the right to religious accommodations at work.
According to the CBJ, the “systemic team” of the EEOC will pursue large-scale violations that focus on the four above-described areas and is “on the forefront of the Acting Chair’s focus on multiple Administration priorities” in combating systemic discrimination. The EEOC defines systemic discrimination cases as “pattern or practice, policy and/or class cases where the discrimination has a broad impact on an industry, profession, company, or geographic location;” or “bias that is built into systems, originating in the way work is organized;” or “patterns of behavior that develop with organizations that disadvantage certain employees and become harmful to productivity.” To investigate systemic cases, the EEOC may rely on multiple resources, including annual EEO-1 reports and the Office of Enterprise Data and Analytics (OEDA), which is the Commission’s principle statistical office that can assist with the development of class investigations, data requests, and data analysis for pattern and practice disparate treatment cases.
The CBJ contemplates that future lawsuits addressing systemic disparate treatment will be resource intensive. With respect to workplace DEI policies, practices and programs that are alleged to violate Title VII’s prohibitions of discrimination based on race, sex, or other protected characteristics, the EEOC anticipates the use of expert witnesses and discovery of large-scale selection data to prove the existence of a pattern or practice of discrimination and to identify aggrieved individuals. We note the 2026 budget for the EEOC Litigation division remains unchanged from fiscal year (FY) 2025, and the 2025 and proposed 2026 budgets represent a decrease in spending from FY 2024. Similarly, the EEOC’s proposed FY 2026 budget for private sector enforcement decreased by $15,776,000 from FY 2025.
Additionally, the EEOC anticipates filing lawsuits based on national origin and religious discrimination related to the antisemitic violence and discrimination arising out of the 2023 terrorist attack on Israel. The focus of such lawsuits will likely be on educational institutions.
Finally, the agency also is poised to focus on religious discrimination arising out of implementation of government and corporate COVID-19 mandates to the extent the mandates infringed on workers’ religious beliefs.
Elimination of the OFCCP and Transfer of Remaining Regulatory Authority
The 2026 Department of Labor Budget in Brief proposes to eliminate the OFCCP. It states that Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”) “provided a clear message to federal contractors that illegal DEI practices will not be tolerated.” With the recission of Executive Order 11246, the “primary basis for the OFCCP’s enforcement authority and program work,” the FY 2026 Budget eliminates the OFCCP. Executive Order 14173 revoked Executive Order 11246, the authority for the OFCCP to impose affirmative action obligations and to enforce anti-discrimination laws on federal contractors and subcontractors. EO 11246 required federal contractors to proactively ensure non-discrimination and equal employment opportunities for women and minorities.
The OFCCP also enforced Section 503 of the Rehabilitation Act of 1973 (Section 503) and the Vietnam Veterans Era Readjustment Assistance Act of 1974 (VEVRAA). These statutes impose hiring, recruitment, data collection, and record-keeping rules on covered federal contractors and subcontractors with respect to individuals with disabilities and protected veterans, respectively. Enforcement responsibilities under VEVRAA, which the DOL’s Brief in Budget describes as “monitoring,” will be transferred to the Veterans’ Employment and Training Service, an agency within the Department of Labor.
The EEOC’s CBJ, as well as the DOL’s Budget in Brief, proposes transfer of the enforcement responsibilities under Section 503 of the Rehabilitation Act to the EEOC. Section 503 prohibits discrimination based on disability and requires federal contractors and subcontractors to take affirmative action to hire and advance the employment of qualified individuals with a disability. The EEOC CBJ emphasizes that it is the most appropriate entity to assume enforcement responsibilities under Section 503 because it already enforces Sections 501 and 505 of the Rehabilitation Act (nondiscrimination and affirmative action in the employment of individuals with disabilities in the federal sector). Congress, however, specifically authorized the DOL to enforce the provisions of Section 503, granting the Department of Labor the authority to investigate complaints and to take actions consistent with the applicable regulations. See 29 U.S.C. § 793(b). The implementing regulations published by the OFCCP authorize the OFCCP to conduct compliance evaluations or audits to evaluate contractor compliance with Section 503 and the OFCCP’s regulations. The EEOC currently lacks any statutory authority to enforce the provision of Section 503 as well as the auditing authority previously held by the OFCCP to evaluate compliance. Consequently, until Congress amends the law and authorizes the EEOC to enforce Section 503 and the EEOC engages in rulemaking and adopts implementing regulations, it lacks the authority to enforce the provisions of Section 503.
What this Means for Employers
Employers should remain cognizant of the EEOC’s focus on litigation that advances administration priorities, particularly relating to DEI programs and requests to provide reasonable accommodations for sincerely held religious beliefs. It is likely that the EEOC will rely on whistleblowers to identify the larger systemic disparate treatment cases. The latest technical assistance issued by the EEOC jointly with the Department of Justice is directed at employees and stakeholders of businesses in the private sector and encourages whistleblowers to file discrimination, retaliation, and harassment charges with the EEOC related to DEI policies, programs, or practices.
The EEOC’s focus on large complex cases alleging systemic intentional discrimination also is consistent with the presidential directives to each agency to identify a plan of specific steps or measures to deter DEI programs or principles that the administration contends constitute violations of federal anti-discrimination laws. In addition, the EEOC CBJ provides that it has “renewed its effort to remedy large-scale violations of religious accommodation rights stemming from the implementation of government and corporate COVID-19 vaccine mandates…which significantly harmed…workers…with religious beliefs that conflicted with those vaccine mandates.” It is unclear from this statement whether the EEOC is referring to future vaccine mandates. The EEOC, however, recently announced a settlement on May 20, 2025, arising out of the termination of an employee who requested an exemption from the COVID-19 vaccine mandate due to a sincerely held religious belief, as discussed in our recent blog post. Employers still addressing Charges of Discrimination from that period should be aware that the EEOC continues to pursue these cases, even if company policies have changed. Additionally, other vaccine mandates, such as the flu shot, may also face scrutiny by the EEOC.
A proactive posture is recommended to ensure HR managers and relevant staff understand the key concepts related to Title VII and other applicable federal anti-discrimination laws. Preferences based on sex or race of any kind, including in pipeline programs, could constitute “illegal DEI” and subject the employer to risk of a complaint filed with the EEOC. Similarly, if presented with requests for religious accommodations, employers must 1) evaluate the request, 2) engage in an interactive dialogue, 3) determine whether the accommodation would impose substantial increased costs on the operation of the business, 4) consider alternative reasonable accommodations, and 5) document each step of the process.
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