On June 14, 2016, the Office of Federal Contract Compliance Programs (OFCCP) announced publication of a Final Rule in the Federal Register that sets forth the requirements that covered contractors must meet under the provisions of Executive Order 11246 prohibiting sex discrimination in employment. This Final Rule updates sex discrimination guidelines from 1970 with new regulations that align with current law and address the realities of today’s workplaces. The Final Rule deals with a variety of sex–based barriers to equal employment and fair pay, including compensation discrimination, sexual harassment, hostile work environments, failure to provide workplace accommodations for pregnant workers, and gender identity and family caregiving discrimination.

The Final Rule addresses the following subjects:

  • Brings the sex discrimination guidelines up to date. The Final Rule aligns OFCCP’s regulations with current law and addresses the realities of today’s workplaces. It, therefore, provides more accurate and relevant guidance to contractors than the outdated guidelines.
  • Provides protections related to pregnancy, childbirth, and related medical conditions. The Final Rule protects employees against discriminatory treatment because of pregnancy, childbirth, or related medical conditions, including loss of jobs, wages, or health care coverage. The Final Rule requires 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.Beth-West-15_web

  • Promotes fair pay practices. 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 rule also includes a provision that enables employees to recover lost wages any time a contractor pays compensation that is the result of discrimination, not only when the decision to discriminate is made.
  • Provides equal benefits to male and female employees participating in fringe-benefit plans. The rule prohibits discrimination on the basis of sex with regard to fringe benefits such as medical, hospital, accident, life insurance, and retirement benefits; profit-sharing and bonus plans; leave; and other terms, conditions, and privileges of employment.
  • Prohibits sexual harassment. The rule prohibits unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, and other verbal or physical conduct of a sexual nature when such conduct unreasonably interferes with an individual’s work performance, becomes the basis for employment decisions, or creates a hostile working environment.
  • Gives men and women equal access to jobs and workforce development opportunities. A contractor 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. Additionally, a contractor may not set requirements, such as height or weight qualifications, that adversely affect applicants because of their sex unless it demonstrates that the qualifications are job-related and consistent with business necessity.
  • Safeguards workers who provide caregiving to their loved ones. Contractors may not treat female or male employees or applicants differently based on the stereotypical assumption that women are more likely to have caregiving responsibilities. For instance, contractors may not deny mothers employment opportunities that are available to fathers based on the faulty assumption that mothers’ childcare responsibilities will conflict with their job performance. Similarly, contractors may not deny fathers flexible workplace arrangements that are available to mothers based on the faulty assumption that men do not have and do not assume childcare responsibilities.
  • Protects transgender workers. The rule makes clear that sex discrimination includes discrimination because of an employee’s gender identity. Also, the rule requires contractors to allow workers to use bathrooms, changing rooms, showers, and similar facilities consistent with the gender with which the workers identify. In addition, the preamble to the rule notes that an explicit, categorical exclusion of coverage for all care related to gender dysphoria or gender transition is facially discriminatory because such exclusion singles out services and treatments for individuals on the basis of their gender identity or transgender status.
  • Prohibits discrimination based on sex stereotypes. Contractors may not treat employees or applicants adversely because they fail to comply with expectations about how women and men should look or act or what kinds of jobs they should do.
  • The Final Rule is consistent with the Religious Freedom Restoration Act and other protections for religiously affiliated contractors. While there is no formal process for invoking the Religious Freedom Restoration Act (“RFRA”) as a basis for an exemption from E.O. 11246, the preamble to the Final Rule states that insofar as the application of any requirement under this part would violate RFRA, such application shall not be required. OFCCP also notes that E.O. 11246 specifically allows religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making employment decisions. In addition, OFCCP follows Supreme Court precedent recognizing that the First Amendment to the 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.”

The Final Rule becomes effective on August 15, 2016.  A copy of the Final Rule can be obtained at https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-13806.pdf.

Take Away:  All employers who are federal contractors (or subcontractors to a federal contractor) should review their EEO and Affirmative Action documents and work with their legal counsel to take the necessary steps to ensure they comply with the OFCCP’s Final Rule on Sex Discrimination by the August 15, 2016 effective date.