Regulatory Review Could Shift How Federal Contractors Support People with Disabilities in the Workforce

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Proposed Changes to Federal Employment Requirements for People with Disabilities

People with disabilities in the United States continue to be employed at lower rates than people without disabilities. Although the Americans with Disabilities Act (ADA) prohibits discrimination based on disability, differences in employment outcomes have persisted. Researchers and advocates have pointed to a range of factors, including physical and digital accessibility barriers and unexamined attitudes about disability, as possible contributors.

One federal policy intended to support more inclusive employment practices is Section 503 of the Rehabilitation Act of 1973. This law requires companies and organizations that do business with the federal government—known as federal contractors—to take proactive steps to recruit, hire, retain, and promote qualified individuals with disabilities.

In 2014, the U.S. Department of Labor issued updated guidance to clarify how contractors could meet these responsibilities. The goal was to help organizations identify and reduce barriers that might limit participation by people with disabilities in the workforce. The updates introduced several key elements:

• Voluntary self-identification: Applicants and employees could choose to confidentially disclose that they have a disability. This information was intended to help contractors assess the effectiveness of their efforts to support people with disabilities in the workforce.
• Utilization goal: Contractors were encouraged to aim for people with disabilities to comprise at least 7% of each job group. This figure was not a quota, but a benchmark for self-assessment.
• Data tracking and analysis: Contractors collected information on the number of applicants, new hires, and employees with disabilities. The intent was to evaluate progress and make informed adjustments to outreach, training, or workplace policies.

These measures were designed to help organizations assess whether their practices were reaching and supporting people with disabilities, and to guide efforts to improve access and opportunity in the workplace.

From 2014 to 2023, employment indicators for people with disabilities improved. The employment-to-population ratio increased by over 11 percentage points, and the unemployment rate for people with disabilities reached its lowest recorded level in 2023.

Analysts attribute this progress to several factors, including a strong post-pandemic labor market, expanded remote work opportunities, and possible impacts of workplace policies focused on including people with disabilities.

In June 2025, the U.S. Department of Labor proposed changes to the Section 503 regulations. If finalized, these changes would remove the requirement for federal contractors to invite voluntary self-identification of disability status and eliminate the current 7% utilization goal.

The U.S. Department of Labor referenced a recent executive order instructing federal agencies to review and, where appropriate, reduce specific diversity and inclusion requirements. It also noted that the Americans with Disabilities Act (ADA) generally limits disability-related inquiries until after a job offer has been extended.

Although the ADA restricts pre-employment questions about disability, the Equal Employment Opportunity Commission (EEOC) has clarified that voluntary self-identification is allowed under current law if it is properly structured and not used in hiring decisions.

The proposed changes may have several implications:

• Limited workforce data: Without voluntary self-identification or data collection, contractors may have fewer insights into the representation and career advancement of individuals with disabilities.
• Elimination of a consistent benchmark: The 7% utilization goal offered a common standard for assessing inclusion efforts. Its removal may lead to differing practices and expectations among contractors.
• Decreased data uniformity: In the absence of standardized reporting, it may be more challenging to identify trends or compare outcomes across organizations.
• Unclear implementation pathways: Without the structure previously provided by Section 503, contractors may require additional guidance to support fair and inclusive employment practices.

Once the proposed rule is published in the Federal Register, a 60-day public comment period will begin. During this time, individuals, employers, researchers, and organizations can submit feedback through Regulations.gov.

Those interested in the issue may choose to:

• Share comments about how the changes might affect hiring or keeping employees.
• Let others know about the proposed rule.
• Stay up to date with news from the U.S. Department of Labor.
• Talk with colleagues about how to support people with disabilities at work using data.

The final outcome of this process may influence how federal contractors approach the recruitment, hiring, and advancement of people with disabilities in the years ahead.

The future of employment for people with disabilities will be shaped not only by federal regulations, but by how individuals, employers, and communities choose to participate in the process. Whether through submitting a comment, sharing information, or reviewing internal practices, each action contributes to a broader understanding of what inclusion can look like in the workplace.

At Wiley’s Walk, we believe that inclusion begins with the idea that everyone belongs—not just in public life, but in the decisions and systems that affect daily experience. When policies are informed by the voices of those they impact, they are more likely to meet real needs and reflect practical realities.

As the public comment period opens, this is a moment to consider how hiring practices, workplace systems, and access to opportunity can continue to improve. However the rule-making process unfolds, one thing remains clear: lasting progress depends on thoughtful participation and a shared commitment to making room for everyone.

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