America’s government officials describe our country as a land of opportunity, while simultaneously removing tools to provide equal opportunity for disabled workers.
For Immediate Release: September 7, 2026
Contact: Jess Davidson, jdavidson@aapd.com
WASHINGTON, DC – The United States federal government has long been recognized as the largest employer of Americans with disabilities, through a combination of direct hires, federal contractors, subcontractors, and federally funded programs. However, an unrelenting series of actions by the Department of Labor (DOL) has reversed or weakened the many bipartisan gains in disability employment earned over decades.
The American Association of People with Disabilities (AAPD) strongly condemns the latest regulations in a series of harmful, anti-disability employment actions taken by the federal government: A new final rule issued by the US Department of Labor on August 21, 2026, modifies and reverses disability employment regulations under Section 503 of the Rehabilitation Act.
“The recent decision by the Department of Labor to reverse key regulations that incentivize employers to hire individuals with disabilities and to track disability employment data is the latest in a concerted federal effort to roll back decades of progress towards workforce opportunity for disabled Americans,” said Maria Town, AAPD President and CEO.
The August 21 changes to Section 503 will, effective September 21, 2026:
- End the disability employment goal for federal contractors, which previously strongly encouraged contractors to set a goal to ensure at least 7% of their workforce is made up of qualified individuals with disabilities
- End certain forms of mandatory data collection and disability self-identification practices, meaning employers with federal contracts will no longer be required to invite job applicants to voluntarily self-identify as individuals with disabilities at three points in the application and hiring process (called self-identification requirements)
- Increase the amount of a federal contract award before contractors are required to meet 503’s most basic requirement, that federal contractors may not discriminate against employees with disabilities, from $15,000 to $20,000 or more, meaning employers with small-dollar federal contracts will not be held accountable by DOL for following disability nondiscrimination law
Data show real momentum in disability employment over the past decade: The percentage of working-age people with disabilities employed rose from 19.2% in 2009 to 22.5% in 2023, which is the highest rate of disability employment since data collection began in 2008 (Bureau of Labor Statistics). Labor force participation for people with disabilities also climbed from 22.4% in 2009 to 24.2% in 2023, again reaching a record high (Bureau of Labor Statistics).
Future data will likely be less comprehensive and accurate as a result of this regulation and others like it that remove the primary mechanism for tracking disability participation across the contractor workforce.
“Recent gains in disability employment are no accident – they are the result of deliberate, measurable strategies like voluntary self-identification and workforce utilization goals. When working-age people with disabilities experience roughly double the unemployment rate and half the labor force participation rate of their nondisabled peers, the need for such tools is clear. Now, those measurable strategies will no longer be enforced as requirements for federal contractors by the Department of Labor,” AAPD Vice President of Public Policy, Michael Lewis, explained.
Section 503 itself remains in effect, including the requirement to prepare an annual written Affirmative Action Plan for hiring and conducting outreach to disabled job candidates. Federal contractors with contracts over $20,000 will be held accountable by DOL to continue to comply with Section 503’s nondiscrimination requirements. Federal contractors with contracts over $20,000 are technically still required to make affirmative efforts to employ and advance candidates and employees with disabilities; however, the employers no longer need to track those efforts or the data those efforts would produce, nor do they need to try to meet a participation goal (like the previous 7% requirement). This means most federal contractors will be held accountable by DOL for compliance with a weakened Section 503.
Part of a Broader Pattern Undermining Disabled Workers
The August 21 regulation is part of an extremely concerning pattern across the federal government to end policies and programs that promote equitable employment for disabled workers. Last year, the federal government proposed reversing a similar participation policy requiring apprenticeship programs to ensure at least 7% of their participants were people with disabilities. As of August 12, 2026, a final rule on this proposal was received for review by the White House and the Office of Management and Budget, according to the Federal Register.
Also in July 2025, DOL formally withdrew a nearly finalized proposed regulation that would have ended DOL’s program that allows employers to pay people with disabilities less than the federal minimum wage, also known as subminimum wage. The Fair Labor Standards Act of 1938 still allows employers to pay employees with disabilities subminimum wages by applying for certificates referred to as “14(c) certificates,” which are issued by the DOL. As of 2019, a majority of 14(c) employees earned less than $3.40 an hour, $53.44 per week, and only $213.76 per month. Many are paid as little as $0.25 an hour. These workers are often segregated from their nondisabled colleagues and do not receive opportunities for career advancement or development.
For more information, read AAPD’s 2025 statement condemning these proposals, as well as other changes that, together, threaten disability employment and workforce participation. AAPD also submitted comments on all of these regulations and provided relatively easy tools for people with disabilities to submit their own comments and perspectives to be considered in the rulemaking process.
“As the richest nation in the world, the United States of America should have one of the world’s most prosperous and opportunity-filled workforces. This should be especially true for populations like disabled people, who face discrimination all over the world, but also benefit greatly from federal civil rights protections if they live in the United States. That makes it all the more painful when elected officials describe us as a land of near-limitless economic opportunity, while simultaneously removing the tools that would promote such opportunity for disabled workers,” Town noted.
It’s Not Just Disability Civil Rights
Recent changes to Section 503 on August 21 also came as part of a broader deregulation package that repeats these actions for other protected groups. One regulation in the package pertained to the implementation of the now-overturned Executive Order 11246, which prohibited federal contractors and subcontractors from discriminating against disabled people in hiring. Now, data collection for all federal contractors has not just ended for disability, but also for race, gender, sexuality, religion, and other protected classes.
Other changes to the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) similarly increased the amount threshold at which a federal contractor is required to follow VEVRAA to create an affirmative action hiring environment for veterans, from $150,000 to $200,000. As with 503, this means that federal contractors with small federal contracts will not be monitored by, nor held to account by DOL for, compliance with VEVRAA. The new VEVRAA regulatory update also ends cross-referencing to track data on disabled veterans under multiple affirmative action laws.
“By removing the regulatory tools that expose inequality, the administration is ensuring that existing disparities in the employment of disabled people, women, and people of color remain invisible – if you can’t track it, you cannot prove that it is insufficient or identify pain points. If you cannot identify the problem, you certainly cannot improve it,” explained AAPD Senior Director of Communications Jess Davidson.
“No matter what data do or do not exist, disabled workers have always and will continue to make invaluable contributions to their workplaces and to our nation’s economy. Disability employment data serve to highlight these essential contributions, “Town concluded.
New Rules Don’t Prevent Employment Allyship
While the patterns across these regulatory changes are gravely concerning to AAPD, and we strongly oppose them, these new final rules are by no means a requirement for federal contractors to end their own inclusive hiring practices. There is nothing to stop companies and organizations from going far beyond federal minimum requirements towards disability inclusion – compliance should be a floor, not a ceiling.
Hiring and conducting meaningful outreach to qualified disabled candidates is not just the morally right way to do business, but it is also strategic and impactful for the bottom line: 2023 research by Accenture found that companies that lead in disability inclusion drive more revenue, net income, and profit.
As the federal regulatory environment continues to change, AAPD encourages employers to remain steadfast in their commitment to hiring, conducting outreach to, and tracking hiring data for qualified disabled candidates and employees.