New final rule updates sex discrimination guidelines for federal contractors

June 14, 2016 - by: Tammy Binford 0 COMMENTS

Federal contractors are getting a look at a new regulation aimed at preventing sex discrimination in employment, and while many contractors already are in line with its provisions, the new rule may create tension in some areas.

The U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) released a final rule on June 14 replacing sex discrimination guidelines from 1970 with new regulations that align with current law.

The rule deals with sex-based issues related to equal employment and compensation and outlines provisions of Executive Order 11246, which prohibits federal contractors and subcontractors that do over $10,000 in government business in one year from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. The rule does not affect employers that don’t do government business.

The OFCCP released a fact sheet explaining the rule’s key points as well as a frequently asked questions document.

H. Juanita M. Beecher, counsel to Fortney & Scott, LLC, in Washington, D.C., said the new rule’s language prohibiting discrimination based on gender identity may spark tension with state laws such as North Carolina’s recently enacted law that, among other things, requires school districts and government agencies to require individuals to use bathrooms designated for the sex listed on an individual’s birth certificate.

The OFCCP’s new final rule makes clear that sex discrimination includes discrimination based on an employee’s gender identity. It requires federal contractors to allow workers to use bathrooms, changing rooms, showers, and other facilities consistent with the gender a worker identifies with.

In another area, the OFCCP’s fact sheet says the new rule is consistent with the Religious Freedom Restoration Act and other protections for religiously affiliated contractors. The fact sheet explains that Executive Order 11246 “specifically allows religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making employment decisions.”

The fact sheet also says the OFCCP recognizes that the First Amendment to the U.S. Constitution “requires a ‘ministerial exception’ from employment discrimination laws, which prohibits the government from interfering with the ability of a religious organization to make employment decisions about its ‘ministers.’”

Discrimination related to pregnancy is another area covered in the new rule, an area that wasn’t included in the old contractor guidelines since it wasn’t covered as sex discrimination until 1978, Beecher said.

The rule provides protections related to pregnancy, childbirth, and related medical conditions by requiring that “contractors provide workplace accommodations, such as extra bathroom breaks and light-duty assignments, to an employee who needs such accommodations because of pregnancy, childbirth, or related medical conditions, in certain circumstances where those contractors provide comparable accommodations to other workers, such as those with disabilities or occupational injuries,” the fact sheet states.

The rule also outlines requirements related to compensation, which is a “huge focus” for President Barack Obama, Beecher said. The fact sheet states that under the rule, contractors may not pay workers differently because of their sex. “For instance, contractors may not deny opportunities for overtime work, training, better pay, or higher-paying positions because of a worker’s sex,” the fact sheet says. It also explains that the rule prohibits discrimination on the basis of sex with regard to fringe benefits.

The new rule also says contractors may not set requirements for jobs or training that are based on an applicant’s or employee’s sex “unless the contractor can meet the high bar of demonstrating that such requirements are a bona fide occupational qualification,” according to the fact sheet.

Beecher said the final rule contains nothing “extraordinarily different” from what was in the proposed rule and is actually a little more employer-friendly in the compensation area than the proposed regulation. “Generally, we commend the OFCCP for the job they did in taking over 500 comments on the regulations and making sense out of them all,” she said.

Many contractors, particularly the larger ones, already do what the new rule requires, but some may see the new requirements as being a little broader than what they thought they would be, although they are in line with everything they’ve heard from the Obama administration, Beecher said.

The new final rule—“Discrimination on the Basis of Sex”—takes effect August 15.

About Tammy Binford:
Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications. In addition, she writes for HR Hero Line and Diversity Insight, two of the ezines and blogs found on HRHero.com.
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