Title VI Shift: DOL Rescinds Disparate Impact Rules for Funding Recipients

Authors: Scott M. Pechaitis & Jeremy S. Schneider

The Department of Labor (DOL) has issued a final rule rescinding portions of its Title VI regulations that addressed disparate impact liability for recipients of federal financial assistance. The rule took effect 2 July 2026.

Title VI of the Civil Rights Act of 1964 prohibits discrimination based on race, colour, and national origin in programmes and activities receiving federal financial assistance. The DOL’s recent final rule amends its Title VI regulations to remove provisions the agency says extended beyond intentional discrimination and imposed obligations based on unintentional disparate impact.

Among other changes, the rule removes language prohibiting recipients from using criteria or methods of administration that have the effect of subjecting individuals to discrimination. It also removes references to “effect” in provisions addressing site or facility selection, rescinds certain affirmative action language, and revises provisions related to employment practices in federally assisted programmes.

The DOL said these amendments are intended to align its Title VI regulations with the statute’s original public meaning, reduce constitutional and other legal concerns, lower compliance costs, and provide greater clarity for recipients of federal financial assistance. The agency also noted the rule follows broader federal efforts, including Executive Order 14281, to eliminate the use of disparate impact liability in certain civil rights enforcement contexts.

For federal contractors and other entities that receive or administer federal funds, the rule narrows the DOL’s Title VI regulations but does not eliminate all disparate impact risks. Other federal, state, and local laws may impose separate non-discrimination obligations, and some may continue to recognise disparate impact theories. Employers should review federally funded programmes, grant-related assurances, related policies, and neutral employment practices to ensure they remain job-related and consistent with equal employment opportunity principles.

If you have questions about the DOL’s Title VI final rule and how it could affect your organisation, contact a Jackson Lewis attorney to discuss.