- with readers working within the Oil & Gas and Retail & Leisure industries
The U.S. Department of Labor's Office of Federal
Contract Compliance Programs (OFCCP) has announced inflation-based
increases to the jurisdictional thresholds under Section 503 of the
Rehabilitation Act and the Vietnam Era Veterans' Readjustment
Assistance Act (VEVRAA), effective October 1, 2025.
The basic coverage threshold for Section 503 increased from
$15,000 to $20,000, and the VEVRAA threshold increased from
$150,000 to $200,000. These changes stem from an inflationary
adjustment statute permitting the Federal Acquisition Regulatory
(FAR) Council to review and adjust acquisition-related statutory
thresholds applicable to federal procurement.
Quick Hits
- The coverage threshold for Section 503 increased from $15,000 to $20,000, and VEVRAA's threshold increased from $150,000 to $200,000, effective October 1, 2025.
- Section 503 AAPs apply to contractors and subcontractors with at least fifty employees and a single covered contract of $50,000 or more.
- VEVRAA AAPs apply to contractors and subcontractors with fifty or more employees and a single covered contract of $200,000 or more.
OFCCP also noted corresponding Affirmative Action Program (AAP) thresholds remain or now apply as follows: for Section 503, AAP requirements continue to apply to contractors and subcontractors with at least fifty employees and a single contract of $50,000 or more; for VEVRAA, AAP requirements now apply to contractors and subcontractors with at least fifty employees and a single contract of $200,000 or more. As part of its compliance assistance efforts, OFCCP also published an updated "Jurisdictional Thresholds" infographic, as well as updated its web page to assist stakeholders in determining coverage.
Background
Congress authorized inflation-based adjustments to acquisition-related statutory thresholds through Section 807 of the Ronald Reagan National Defense Authorization Act, codified at 41 U.S.C. 1908. Under that framework, the FAR Council periodically reviews and adjusts applicable thresholds. In 2025, the FAR Council increased the Section 503 threshold from $15,000 to $20,000, and the VEVRAA threshold from $150,000 to $200,000 ("Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds," 90 FR 41872 (2025)). While OFCCP's regulations at 41 C.F.R. parts 60–741 and 60–300, have not yet been updated to reflect these amounts, OFCCP is applying the FAR Council's adjusted thresholds when determining coverage.
For contractors maintaining VEVRAA AAPs, OFCCP requires an annual hiring benchmark for protected veterans, which may be satisfied by either adopting OFCCP's national benchmark or setting an individualized benchmark; the current national benchmark is 5.1% (effective July 30, 2025).
Next Steps
Employers may want to review current and anticipated federal contracts and subcontracts against the updated thresholds to assess coverage and AAP implications, as well as verify whether their organizations meet the employee-count and single-contract triggers for Section 503 and VEVRAA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
