Defensible Decisions: Section 503 and VEVRAA Updated Thresholds Explained

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Scott Kelly: Hello everyone, and welcome to Defensible Decisions. I’m Scott Kelly, an employment lawyer at Ogletree Deakins. And for the last 25 years, I’ve helped employers design and defend fair, effective workforce systems across hiring, pay, promotion, retention, and now artificial intelligence systems using legal insights, analytics, and audit-ready documentation. Each episode is going to blend employment law developments with rigorous workforce analytics, so your decisions are defensible, compliant, and effective. We translate evolving enforcement priorities and regulations into practical steps you can apply before the lawsuit, or the investigation arrives.

You’re going to hear from attorneys, other experts such as data scientists, labor, economists, social scientists, and hopefully, some governmental officials. Together, we’ll cover recruiting and selection, pay equity, systemic discrimination, DEI compliance, posts, students for fair admissions, artificial intelligence bias and audits, and federal contracting and reporting. Subscribe to Defensible Decisions. This podcast is for informational purposes only and does not constitute legal advice. Listening does not create an attorney-client relationship. The opinions expressed are those of the speakers and do not necessarily reflect the views of their employers or clients.

Welcome everyone. Thanks for joining us and welcome back to Defensible Decisions. I’m your host, Scott Kelly. Let’s turn law and analytics into actions that withstand scrutiny. I’m joined today by Chris Near, a colleague of mine and shareholder in our Ogletree’s Columbia, South Carolina office. Chris is a member of our Government Contracting and Reporting, Workplace Safety and Health, and our Workforce Analytics and Compliance practice groups. Today, we’re breaking down the OFCCP’s new jurisdictional thresholds under Section 503 of the Rehabilitation Act, and also under VEVRAA, effective October 1 of 2025. Chris, tell us what’s changed.

Chris Near: Hey, and thanks so much, Scott, and thanks to all of you who are joining us. So, on November 25th, 2025, OFCCP sent out a notice that, effective October 1st of 2025, the basic coverage threshold under Section 503 of the Rehabilitation Act increased from $15,000 to $20,000. And for the Vietnam Era Veterans’ Readjustment Assistance Act, or VEVRAA, as it’s commonly referred to, the coverage threshold also increased from $150,000 to $200,000. Now, these are inflation-based adjustments tied to the periodic review of acquisition-related thresholds done by the Federal Acquisition Regulation Council, the FAR Council, as it’s referred to.

Scott Kelly: Okay. So, for listeners, if they’re wondering if they’re covered under these and have these obligations, how should they think about AAP requirements under these two statutes?

Chris Near: Well, first off, the increase to $20,000 for Section 503 is just for compliance coverage. For Section 503 AAPs, the requirement still applies if you have at least 50 employees and a single covered contract of $50,000 or more. So, no change there for Section 503 AAPs. For VEVRAA AAPs, the requirement still applies if you have 50 or more employees, but the contract threshold has now increased to needing a single covered contract of $200,000 or more. Now, just to clarify, separate from AAPs, basic coverage for compliance purposes applies with any number of employees under both Section 503 and VEVRAA, and with a contract of more than $20,000 for Section 503 or at least $200,000 for VEVRAA. So, this means that compliance obligations will be required if those thresholds are met. These compliance coverage thresholds, they trigger core non-discrimination and affirmative action provisions, which I think we’re going to get to in just a little bit. But remember too, subcontractors can also be covered if their work is necessary to the performance of a covered federal contract.

Scott Kelly: Okay. So, I know there’s been a lot going on, especially in the new administration, dealing with regulations and proposed changes and things like that. So, for the listeners, are the regulations themselves updated yet, or is this being applied by guidance from the OFCCP?

Chris Near: So, OFCCP right now is applying the FAR Council’s adjusted thresholds. Even though the sections in the code of federal regulations for both Section 503 and VEVRAA haven’t yet been updated to reflect those new dollar amounts. So, if you go to the CFR, you’re going to see the old numbers. If you go to the FAR Council’s adjusted thresholds, you’ll see those new numbers.

Scott Kelly: All right. Anything new employers should keep an eye on in terms of benchmarks?

Chris Near: Yeah. So, for contractors maintaining a VEVRAA AAP, the annual hiring benchmark for protected veterans remains required. So, what that means is employers can do one of two things. One, they can adopt OFCCP’s national benchmark, or the other thing they can do is set an individualized one. If you want to set an individualized one, OFCCP’s website has some details about how to go about doing that. If you use the national benchmark, though, OFCCP has set that benchmark at 5.1%, which became effective on July 30th, 2025. Now that’s VEVRAA. For Section 503, there’s a separate utilization goal that remains 7% across all job groups.

Scott Kelly: Okay. Thanks. That’s really helpful. And I think another clarification would be useful for the listeners as well, because we get these questions a lot. Given all the changes, do covered contractors still need to prepare AAPs right now under Section 503 and VEVRAA?

Chris Near: Absolutely, yes. And not just AAPs, but also, ensure that compliance is taking place under both Section 503 and VEVRAA. On July 2nd, 2025, the U.S. Department of Labor issued Secretary’s Order 08-2025. And what that did is it lifted OFCCP’s abeyance on OFCCP’s processing of those two laws and confirming that contractor obligations under both Section 503 and VEVRAA, including preparing and maintaining AAPs, remained in effect.

Scott Kelly: Okay. So, what’s the status about complaint investigations under Section 503 and VEVRAA? Are those starting back up? Do you have any insights on that?

Chris Near: And I know that there’s some questions right now about the agency and also about the federal budget, which we’ll find out, at least from when we’re recording this podcast, a little bit into 2026. But as of right now, Section 503 and VEVRAA complaints do seem to be moving forward as we’re starting to see a little more activity from the agency.

Scott Kelly: Okay. So, what’s the quick action plan for contractors here? What’s the takeaway?

Chris Near: Great question. So, first off, review your current and anticipated federal contracts and subcontracts against these updated thresholds. Doing that, you’ll be able to confirm whether or not you meet the employee count, and the contract dollar triggers for both Section 503 and VEVRAA. And then from there, you can align your AAP obligations accordingly. If you’re covered, and in addition to the AAPs, make sure you’re complying with the various required obligations under those two laws. And that could mean a lot of different things. The regulations have a lot of different things in them, but it could include, but certainly not be limited to, things like listing your jobs with the state ESDS for VEVRAA, including required EEO taglines and postings, inviting self-identification for veteran and disability status. Could be maintaining separate records, conducting outreach and recruitment, along with evaluating the effectiveness of those efforts, or even just looking at your processes, ensuring, for example, reasonable accommodation processes are working as they should. So, a lot to think about there.

Scott Kelly: Yeah, definitely. All right. Well, before we wrap up, any quick resources contractors can use to check coverage and next steps?

Chris Near: Yeah. So, we do have an article outlining all of these details we’re talking about today on Ogletree’s Insights website. But also, along with the announcement of these threshold changes, OFCCP posted an updated one-page infographic on its website titled Jurisdictional Thresholds that gives you a quick guide as to where these different coverages for basic coverage and for AAP coverage. Something very quick and easy to look at. Also, along with that, on their website, there’s also kind of a detailed narrative along with some hyperlinks to supporting authority on its webpage titled Jurisdiction Thresholds and Inflationary Adjustments. So, that’s also very helpful for these changes. And then finally, and just generally, for anyone looking for other compliance information under Section 503 and VEVRAA, OFCCP does have on its website currently some additional contractor guidance and resource materials as well. So, feel free to take a look at that.

Scott Kelly: All right, Chris, that’s really helpful and concise. Thanks for walking us through all these updates, and appreciate your time today. For our listeners, thank you all for tuning in to Defensible Decisions. For more information on employment law and workforce analytics, follow this show and share this episode. And just as a reminder, this podcast is for informational purposes only and does not constitute legal advice. We’ll talk to you next time.

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