SBA Drops Disparate Impact But Will Use Workforce Data to Prove Intent
SBA rescinded disparate impact enforcement but said workforce data can prove intentional discrimination.
Why it matters: Compliance officers and legal teams need to adjust discrimination risk assessments and reporting amid shifting SBA enforcement. SBA’s stance reshapes how workforce data informs discrimination claims under Title VI.
- On September 29, 2026, SBA removed disparate impact provisions and affirmative action requirements from 13 CFR Part 112.
- SBA now enforces only intentional discrimination under Title VI, not disparate impact liability.
- Workforce data showing statistical disparities can still support claims of intentional discrimination.
- This change aligns with similar rescissions by the Departments of Education and Transportation earlier in 2026.
On September 29, 2026, the U.S. Small Business Administration updated its Title VI enforcement by rescinding disparate impact provisions, stating Title VI prohibits only intentional discrimination. Ogletree Deakins reports that this move removes both affirmative action requirements and disparate impact liability from 13 CFR Part 112 immediately and without prior notice. Verdict News
Despite dropping disparate impact enforcement, the SBA clarified that workforce data evidencing statistical disparities remains a critical tool to demonstrate intentional discrimination, the only theory still enforceable. As Ogletree Deakins notes, "the federal government has not told funding recipients or employers that their data is safe to disregard," but rather that these statistics can now be used differently. Ogletree Deakins
This regulatory shift at SBA follows similar actions by federal counterparts: the Department of Transportation rescinded its disparate impact rule on June 10, 2026, and the Department of Education eliminated comparable tools by July 23, 2026. Washington Post Investing.com
Legal compliance officers and firms working with SBA or under Title VI grants must revise discrimination risk assessments and reporting practices to reflect the focus on intentional discrimination. Though the precise implementation of workforce data usage by SBA remains unclear, monitoring developments will be crucial for adherence and litigation readiness.
By the numbers:
- September 29, 2026 — SBA rescinds disparate impact provisions from Title VI regulations.
- 13 CFR Part 112 — Code of Federal Regulations section amended to remove affirmative action and disparate impact liability.
- June 10, 2026 — Department of Transportation rescinds its disparate impact regulation.
- July 23, 2026 — Department of Education eliminates disparate impact enforcement tools.
Yes, but: While disparate impact enforcement is dropped, workforce data showing disparities remains legally significant to prove intent, keeping compliance scrutiny high.
What's next: Watch for SBA guidance on applying workforce data to intentional discrimination claims and potential impacts on small business funding eligibility.