Hunton Employment & Labor Perspectives

The federal compliance landscape is in flux. In a closely watched leadership transition, Catherine Eschbach is leaving her role as Director of the Office of Federal Contract Compliance Programs (OFCCP) to become Principal Deputy General Counsel at the EEOC. Starting Monday, Ashley Romanias will take the helm at OFCCP. But even as the baton passes, looming budget decisions at the Department of Labor (DOL) may reshape how, or even whether, OFCCP operates going forward.

Eschbach Moves to EEOC; Romanias to Lead OFCCP

Eschbach’s tenure at OFCCP has been notable for reorienting the agency’s agenda—particularly around affirmative action, diversity, equity, and inclusion (DEI), and contractor obligations under executive orders. Her transition to a top legal role at EEOC suggests potential for alignment between contractor oversight and discrimination enforcement.

• Ashley Romanias comes into the OFCCP role with a dual background in government policy and private practice:
• She served as a Senior Policy Advisor at the U.S. Department of Labor, working across agencies such as EBSA, OSHA, and MSHA.
• She practiced law as an associate at an AmLaw 100 firm, where she gained experience in employment and regulatory matters.
• Her mix of policy and legal experience may give her credibility in navigating internal DOL policies, enforcement priorities, and the expectations of federal contractors.

DOL’s Budget Proposal: Threats to OFCCP’s Future

Even as new leadership takes hold, the financial backdrop remains unsettled. The proposed FY 2026 DOL budget aims to eliminate discrete funding for OFCCP entirely and transfer its enforcement functions for veterans (VEVRAA) and disability (Section 503) to other agencies.

Key Budget Highlights & Risks:

• The FY 2026 budget justification shows a zero-dollar request for OFCCP and proposes that enforcement of Section 503 be moved to EEOC, and VEVRAA to the Veterans’ Employment and Training Service (VETS).
• DOL’s total discretionary funding request falls from ~$13.3 billion to ~$8.6 billion—a ~35 percent reduction.
• In the House Appropriations mark, the committee voted for no funding for OFCCP for FY 2026.
• The Senate appropriations version is less drastic, offering a reduction(approximately $5 million less than FY 2025) rather than zero funding.
• The gap between DOL’s proposed termination and Congressional pushback means the final funding outcome for OFCCP is therefore currently unresolved—and the agency’s operations may be suspended or scaled back during the budget negotiation period.

What This Means for OFCCP:

1. Symbolic vs. Real Authority — Even with Romanias installed as Director, she will have little ability to advance the OFCCP agenda if Congress removes the agency’s funding.
2. Transition vs. Undoing — The proposed transfer of enforcement responsibilities could reshape—or even shrink—the scope of what the “new” OFCCP does.
3. Uncertainty & Volatility — The difference between the House and Senate proposals means OFCCP could face cutbacks mid‑fiscal year.
4. Coordination Imperative — If Congress approves the transfer proposals, coordination between OFCCP, EEOC, and VETS will become critical.

What Employers & Contractors Should Watch (and Do)

• Follow the Budget Process Carefully: The House, Senate, and White House budgets differ significantly.
• Don’t Assume Relief from Enforcement: Even if funding is curtailed, existing audits, complaints, or compliance reviews may survive.
• Monitor Organizational Changes: As roles and responsibilities are reallocated, companies will need to adjust reporting lines and compliance strategies.
• Advocate & Engage: Stakeholders should engage with appropriations committees and consider submitting comments.
• Prepare for Dual Regimes: Contractors may need to navigate overlapping obligations—some from legacy OFCCP expectations, some from EEOC or VETS enforcement.

Concluding Thoughts

The leadership transition at OFCCP—Eschbach to EEOC and Romanias to Director—marks a turning point. But the fate of OFCCP may ultimately hinge on whether Congress grants additional funds for operation. If the proposed budget passes unchanged, Romanias’s tenure may involve managing the winding down of an agency rather than reimagining or rebuilding it.

In that environment, contractors should brace for ambiguity, stay close to developments in both the appropriations and regulatory arenas, and ensure their compliance controls remain robust regardless of who is in charge.