What is Section 503 and VEVRAA?

August 2026 Update: A final rule issued in August 2026 made some changes to Section 503 and VEVRAA requirements. However, underlying obligations including completing written plans for both remains in place. Here is what changed: Section 503: Disability self-identification obligations and the 7% utilization goal were eliminated.

Do you know what Section 503 of the Rehabilitation Act and the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA) mean for your organization? These two regulations are key to ensuring fair hiring practices and fostering inclusive workplaces, especially when it comes to IWD and protected veterans. If you're curious as to how these laws might impact your compliance strategy, read on! 

Either way, understanding Section 503 and VEVRAA is a must, not only to remain compliant, but also to help build a workplace that values inclusion, equity, and opportunity for all. 

Let’s get into more specifics on all of this and how trusted partners like OutSolve can help. Here are three key takeaways you’ll learn in this article: 

1. An overview of Section 503 and VEVRAA  
2. HR’s responsibilities when it comes to Section 503 and VEVRAA 
3. How you can stay ahead of upcoming changes in enforcement  

Section 503: Supporting Individuals with Disabilities in the Workforce 

What It Is: Section 503 of the Rehabilitation Act of 1973 is a federal law that prohibits employment discrimination against individuals with disabilities and requires affirmative action to recruit, hire, promote, and retain them. 

This threshold of who needs to comply with this was law was updated in October 2025. You must comply if you meet the following:

• Basic Coverage: Any number of employees + a contract of more than $20,000.
• Affirmative Action Plan Requirements: 50 of more employees + a contract of $50,000 or more

Here are the Key Requirements: 

1. Recordkeeping and Metrics: Contractors must collect and analyze data on: 
   • The number of applicants and hires who self-identify 
   • Total job openings and number of applicants 
   • Effectiveness of outreach efforts 
   This data must be retained for three years, making solid HRIS and applicant tracking systems (ATS) records a key part of your compliance process. 
2. Outreach and Recruitment: Contractors are expected to reach out to organizations that support individuals with disabilities, such as local vocational rehabilitation centers, community organizations, or disability-focused job boards. You’ll also need to assess the effectiveness of your efforts annually and document the results. 

VEVRAA: Ensuring Opportunity for Protected Veterans 

What It Is: VEVRAA is a federal law that that was originally enacted in 1974 to assist returning Vietnam veterans but has expanded to cover other categories of veterans. VEVRAA aims to protect veterans from employment discrimination and ensure they receive equal opportunities in the workplace, by requiring federal contractors and subcontractors to take affirmative action to employ and advance qualified protected veterans. These include: 

• Disabled veterans 
• Recently separated veterans 
• Armed Forces service medal veterans 
• Active-duty wartime or campaign badge veterans 

The threshold for VEVRAA requirements was also changed in October 2025. You must comply if you meet the following:

• Basic Coverage: Any number of employees + a contract of $200,000 or more
• Affirmative Action Plan Requirements: 50 of more employees + a contract of $200,000 or more

Here are the Key Requirements: 

1. Annual Hiring Benchmark: The OFCCP publishes an updated hiring benchmark for protected veterans every 1-2 years. The current benchmark, as of July 30, 2025, of 5.1% is applied to the entire workforce, not per job group. Contractors have the option to use the national benchmark as prescribed or calculate their own based on local labor data. 
2. Self-Identification Requirements: Much like Section 503, VEVRAA requires contractors to invite applicants to self-identify their veteran status: 
   • At the pre-offer stage 
   • At the post-offer stage 
   • Periodically for current employees 
   These forms help you track progress toward your hiring goals while maintaining confidentiality and voluntary participation. 
3. Mandatory Job Listings: One of VEVRAA’s more specific mandates is the requirement to list job openings with the appropriate Employment Service Delivery System (ESDS), which is usually your state workforce agency. HR must ensure job postings are: 
   • Provided in a format accepted by the state 
   • Timely and accurate 
   • Reflective of all open positions (with limited exceptions) 
4. Veteran Outreach: Like Section 503, VEVRAA requires outreach to veteran-focused organizations. This may include local veterans’ service organizations (VSOs), job fairs, or community groups that support veteran reintegration. 
5. Three-Year Record Retention: Contractors must retain records related to outreach, self-identification, job listings, and applicant data for at least three years.