June 29, 2016  |  By: Patrick W. McGovern, Esq.

On June 15, 2016 the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) published its Final Rule updating federal contractor the requirements to ensure nondiscrimination on the basis of sex in the workplace and to take affirmative steps to review and revise hiring and employment policies and procedures so that they do not discriminate against applicants or employees, intentionally or inadvertently, based on sex. This marks the OFCCP’s first substantive revision to its guidance on sex discrimination since 1970. The Final Rule takes effect August 15, 2016 and interprets Executive Order 11246, which became law in 1964 and prohibits sex discrimination in employment, among other things. The new Rule makes the OFCCP’s sex discrimination guidelines consistent in many ways with court decisional law under Title VII and EEOC regulations. However, the Final Rule makes clear that OFCCP is not at this time incorporating EEOC regulations. The Rule extends not only to gender and pregnancy discrimination, but also to workplace rights to use restrooms corresponding to gender identity.

The Final Rule’s guidance explicitly prohibits discrimination on the basis of pregnancy, childbirth and related medical conditions, gender identity, transgender status and sex stereotyping (e.g., making or withholding job assignments based on preconceived notions of one sex’s supposed or expected capabilities, behaviors, manner of dress, or appearance). The Final Rule expressly makes disparate treatment and disparate impact discrimination analyses applicable to sex discrimination. The Rule highlights that contractors “may not hire and employ employees on the basis of sex unless sex is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the contractor’s particular business or enterprise.” However, the OFCCP notes that gender will rarely qualify as a BFOQ. Furthermore, the Final Rule mandates equal benefits to male and female employees participating in fringe benefit plans (i.e. increased cost of providing a fringe benefit to members of one sex is not a defense to a contractor’s failure to provide equal benefits to members of the other sex), and gender-neutral access to jobs and workforce development opportunities.

While many of these guidelines are familiar, the provisions dealing with gender identity and gender stereotyping will likely face resistance from some contractors. Federal contractors and subcontractors should immediately begin reviewing their workplace practices in order to ensure compliance with the guidelines in the Final Rule. The OFCCP Final Rule offers best practices to guide employers through the process. Suggested best practices include designating single-user restrooms or similar facilities as sex-neutral, making a reasonable accommodation to an employee who is unable to perform job duties because of pregnancy or related medical conditions (e.g., providing modified job duties or assignments during pregnancy), and providing flexible work arrangements for child care obligations on a gender-neutral basis. Failure to comply with the Final Rule risks agency administrative enforcement actions and, in an extreme case, debarment from federal contracts.

For any assistance regarding the OFCCP’s Final Rule on sex discrimination, including whether your organization is a covered federal contractor, or any other OFCCP compliance issues, please contact Patrick W. McGovern, Esq. at 973-535-7129 or pmcgovern@genovaburns.com, or Nicole L. Leitner, Esq. at 973-387-7897 or nleitner@genovaburns.com.

Allison Benz, a summer associate at Genova Burns LLC, assisted in the preparation of this blog post.

Tags: GeneralDepartment of Labor