Friday, June 17, 2016

OFCCP Revises Sex Discrimination Regulation for Government Contractors for First Time Since 1970

On Wednesday, the OFCCP formally promulgated a final regulation governing government contractor obligations under Executive Order 11246 concerning sex discrimination.  It will become effective on August 15.  It was the first time it had substantively revised the regulation since 1970.  As part of this final rule, OFCCP has also replaced a significant part of the Guidelines at 41 C.F.R. 60-20.  OFCCP has not eliminated that Uniform Guidelines on Employee Selection Procedures, but has added an Appendix of “Best Practices.” 

As the OFCCP explained its objective:
OFCCP replaces in significant part the Guidelines at part 60–20 with new sex discrimination regulations that set forth Federal contractors’ obligations under E.O. 11246, in accordance with existing law and policy. The final rule clarifies OFCCP’s interpretation of the Executive Order as it relates to sex discrimination, consistent with title VII case law and interpretations of title VII by the EEOC. It is intended to state clearly contractor obligations to ensure equal employment opportunity on the basis of sex.
The final rule removes outdated provisions in the current Guidelines. It also adds, restates, reorganizes, and clarifies other provisions to incorporate legal developments that have arisen since 1970 and to address contemporary problems with implementation.
Sex is now defined to include “pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping.”  Except when “sex is a bona fide occupational qualification reasonably necessary to the normal operation of a contractor’s particular business or enterprise,”  discriminatory practices will include:  

(12) Making any facilities and employment-related activities available only to members of one sex, except that if the contractor provides restrooms, changing rooms, showers, or similar facilities, the contractor must provide same-sex or single-user facilities; 
(13) Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify; and
(14) Treating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth.
Disparate impact discrimination by otherwise facially neutral practices or policies is also prohibited and can include use of
recruitment or promotion methods, such as ‘‘word-of mouth’’ recruitment or ‘‘tap-on-the shoulder’’ promotion, that have an adverse impact on women where the contractor cannot establish that they are job-related and consistent with business necessity.
An entire subsection is devoted to discriminatory compensation: 
Contractors may not pay different compensation to similarly situated employees on the basis of sex. For purposes of evaluating compensation differences, the determination of similarly situated employees is case specific. Relevant factors in determining similarity may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. In some cases, employees are similarly situated where they are comparable on some of these factors, even if they are not similar on others.
As for pregnancy discrimination, contractors may not, among other things, “[l]imit[] pregnant employees’ job duties based solely on the fact that they are pregnant, or require[e] a doctor’s note in order for a pregnant employee to continue working.”   Similarly, contractors must accommodate employees “who are unable to perform some of their job duties because of pregnancy, childbirth, or related medical conditions” in most circumstances.

A contractor must provide job-guaranteed medical leave, including paid sick leave, for employees’ pregnancy, childbirth, or related medical conditions on the same terms that medical or sick leave is provided for medical conditions that are similar in their effect on employees’ ability to work.
 A contractor must provide job guaranteed family leave, including any paid leave, for male employees on the same terms that family leave is provided for female employees.
Employers are also required to maintain equality in fringe benefits, including medical insurance programs.  In the lengthy preamble, OFFCP notes, among other things that:
some insurance plans have explicit exclusions of coverage for all health services associated with gender dysphoria or gender  transition. Such categorical exclusions are facially discriminatory because they single out services and treatments for individuals on the basis of their gender identity or transgender status, and would generally violate E.O. 11246’s prohibitions on both sex and gender identity discrimination.
The OFFCP notes, among other things, that:
Implicit in the provisions prohibiting discrimination on the basis of sex is the principle that distinctions for other reasons, such as differences in capabilities, are not prohibited. Distinguishing among employees based on their relevant job skills, for example, does not constitute unlawful discrimination.
The OFCCP recognized that some contractors may qualify for exemptions based on religion or First Amendment grounds and deleted an explicit requirement to provide contraception coverage on this ground:
OFCCP declines to implement a blanket exemption from these provisions because claims under RFRA are inherently individualized and fact specific. There is no formal process for invoking RFRA specifically as a basis for an exemption from E.O. 11246. Insofar as the application of any requirement under this part would violate RFRA, such application shall not be required. 
If a contractor seeks an exemption to E.O. 11246 pursuant to RFRA, OFCCP will consider that request based on the facts of the particular case. OFCCP will do so in consultation with the Solicitor of Labor and the Department of Justice, as necessary. OFCCP will apply all relevant case law to the facts of a given case in considering any invocation of RFRA as a basis for an exemption.
OFCCP also notes that the Supreme Court has recognized 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,’’ a category that includes, but is not limited to, clergy. OFCCP follows this precedent. 
Finally, OFCCP notes that E.O. 11246 contains an exemption that specifically allows religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making employment decisions. The regulation implementing that exemption states that the nondiscrimination obligations of E.O. 11246 ‘‘shall not apply to a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities. Such contractors and subcontractors are not exempted or excused from complying with the other requirements contained in this Order.’’ OFCCP has already published guidance regarding the application of the religious exemption in Executive Order 11246 in connection with the recent Executive Order 13672 rulemaking. If, however, a contractor is unsure about whether its employment practices are shielded by this exemption, it can seek guidance from OFCCP.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.