On December 3, 2014, the United States Department of Labor’s Office of Federal Contract Compliance Program (“OFCCP”) announced a final rule implementing President Obama’s Executive Order 13672 (“EO 13672”) which prohibits discrimination on the bases of sexual orientation and gender identity in the federal contracting workforce. EO 13672 does not directly impact employment considerations outside the federal contracting context. The OFCCP also updated its “Frequently Asked Questions” document concerning the changes implemented, as well as addressing employer exemptions under the new rule. The rule goes into effect 120 days after its publication in the Federal Register and applies to federal contracts entered into or modified on or after that date.
The OFCCP designed the new rule to address problems associated with employment discrimination on the basis of sexual orientation and gender identity and to ensure a fair and inclusive work environment in the context of Federal contractors. The OFCCP noted that contractor employees who face discrimination on the basis of sexual orientation or gender identity on the job may experience lower self-esteem, greater anxiety and conflict, less job satisfaction, receive less pay and have less opportunity for advancement. The OFCCP designed the new rule to address these issues.
The new rule implements EO 13672, by amending certain sections within Title 41 of the Code of Federal Regulations. The new rule requires contractors to incorporate new language into the equal opportunity clauses currently used in covered subcontracts and purchase orders. Additionally, the new rule requires contractors to notify job applicants and employees of their non-discrimination policy by posting specific notices, provided by OFCCP, in conspicuous places.
When soliciting for employees, the new rule requires federal contractors to expressly state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, “sexual orientation, gender identity,” or national origin. Contractors must also ensure that facilities provided for employees are not segregated by any of the covered basis which now includes sexual orientation and gender identity.
Although designed to safeguard against sexual orientation and gender identity discrimination, this rule does not require contractors to set goals for employing persons on the basis of sexual orientation or gender identify, collect and maintain statistics on applicants or employee on the basis of sexual orientation or gender identity, or conduct statistical analysis of applicants or employees on the basis of sexual orientation or gender identity.
Most importantly, the new rule makes no changes to the existing religious exemption allowing religiously affiliated contractors (religious corporations, associations, educational institutions, or societies) to favor individuals of a particular religion when making certain employment decisions.
Until its publication in the Federal Register, non-exempt employers should prepare for the new rule and its changes by updating its current contracts and purchase orders to include the necessary language; update job applications and job postings to comply with the new rule; and watch for the notice posting issued by OFCCP to publish in the workplace.