eLABORate: OFCCP Issues Final Rule Implementing Executive Order 13672, which Prohibits Discrimination on Basis of Sexual Orientation, Gender Identity

December 08, 2014

Executive Order (“EO”) 11246 prohibits discrimination by covered companies doing business with the federal government on the bases of race, color, religion, sex, and national origin, and requires those companies to take affirmative steps to ensure nondiscrimination on those grounds. As briefly mentioned in last August’s eLABORate, on July 21, 2014, President Obama signed EO 13672, which amended EO 11246 by adding sexual orientation and gender identity to the prohibited bases of discrimination. On December 3, 2014, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) issued the final rule (“the Rule”) implementing EO 13672, which is expected to be published in the Federal Register on December 9, 2014. A link to the Rule can be found here: http://www.dol.gov/ofccp/lgbt.html.

The Rule applies to covered federal contracts entered into or modified on or after the effective date of the Rule. The effective date is expected to be early April 2015 (i.e., 120 days after the publication of the Rule). The Rule specifically revises the following sections of Chapter 60 of Title 41 of the Code of Federal Regulations by replacing the words “sex, or national origin” with the words “sex, sexual orientation, gender identity, or national origin”: §§ 60-1.1, 60-1.4(a)(1), 60-1.4(a)(2), 60-1.4(b)(1)(1), 60-1.4(b)(1)(2), 60-1.8, 60-1.10, 60-1.20, 60-1.41(a), 60-1.41(c), 60-1.42(a), 60-2.16(e)(2), 60-2.35, 60-4.3(a)(10), and 60-50.5.

The majority of the changes relate to federal contractors’ duties under 41 C.F.R. part 60-1, and particularly involving the Equal Opportunity Clause. Contractors must satisfy their obligations as follows:

  1. Contractors must ensure that applicants and employees are not discriminated against on the basis of their sexual orientation and gender identity.
  2. Contractors must include “sexual orientation and gender identity” as protected traits in the equal opportunity language used in job solicitation tag lines (or, they may simply continue to use the phrase “Equal Opportunity Employer”).
  3. Contractors must post updated required notices (e.g., the “EEO is the Law” poster) including these additional protected classes, or incorporate them by reference.
  4. Contractors must also incorporate these classes into new or modified subcontracts and purchase orders.
  5. Contractors are required to ensure that facilities provided for employees are not segregated on the basis of sexual orientation and gender identity.
  6. If a contractor suspects that it cannot obtain a visa for an employee (to a country in which or with which it is doing business) because of the employee’s sexual orientation or gender identity, then it must immediately report this to the OFCCP and the Department of State.

Executive Order 11246 Section 204(c)’s exemption for religious organizations was not amended by EO 13672. Therefore, federal contractors who are religious corporations, associations, educational institutions or societies may still favor individuals of a particular religion when making employment decisions. The Rule does not make any changes to contractors’ EEO-1 reporting obligations (41 C.F.R. § 60-1.7) or obligations to collect gender, race, and ethnicity information (41 C.F.R. § 60-1.12). The Rule does not change the regulations regarding written affirmative action programs.  Finally, the Rule does not require contractors to set goals for employing persons on the basis of sexual orientation or gender identity, or collect and maintain statistics or conduct statistical analysis on applicants or employees on the basis of sexual orientation or gender identity.

Now that the Rule has been promulgated, employers who contract with the federal government should review their existing employment and hiring practices, posted notices, job postings, and contracts to ensure compliance with the Rule, particularly because OFCCP has indicated that it will accept complaints of employment discrimination on the basis of sexual orientation and gender identity.