On January 30, 2015, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) issued proposed regulations updating the rules on sex discrimination for federal government contractors covered by Executive Order (“EO”) 11246. The public will have 60 days to provide comments, after which the OFCCP will review the comments and may make changes in response.

EO 11246, as amended, bans discrimination and requires federal contractors and subcontractors to take affirmative action to ensure applicants and employees have equal opportunity for employment without regard to race, color, religion, sex, or national origin. The proposed regulations make clear that the sex discrimination and affirmative action obligations extend to protection of individuals without regard to sexual orientation and gender identity.

The stated purpose of the proposed regulations is to revise the OFCCP’s guidelines regarding sex discrimination to align with other applicable laws, court decisions, and societal changes since they were originally issued in 1970. The proposed regulations address pay discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy, and gender identity and family care-giving discrimination.

The stated focus of the proposed rules is noteworthy.

  • Clarify that adverse treatment of an employee based on gender-stereotype assumptions about family caretaking responsibilities is prohibited discrimination.
  • Clarify that leave for childcare must also be available for men on the same terms as it is available to women.
  • Confirm that contractors must provide workplace accommodations, ranging from extra bathroom breaks to light-duty assignments, to women affected by pregnancy, childbirth, and related medical conditions comparable to the accommodations that they provide to other workers similar in their ability or inability to work, such as with disabilities or workplace injuries.
  • Clarify that compensation discrimination can result from job segregation or classification on the basis of gender, not just unequal pay for equal work.
  • Confirm that contractors must provide equal benefits and equal contributions for male and female employees participating in fringe-benefit plans.
  • Address both hostile work environment and quid pro quo sexual harassment, and identify as a best practice that contractors implement procedures to ensure an environment in which all employees are not harassed based on sex.
  • Clarify that adverse treatment of employees because they do not conform with gender norms and expectations about appearance, attire, and behavior is unlawful sex discrimination.
  • Clarify that discrimination based on an individual’s gender identity is unlawful sex discrimination.
  • Change the sex discrimination “guidelines” to regulations to make clear that they have the force and effect of the law.

The OFCCP’s position is that most contractors already comply with the proposed rules by adhering to the same or “similar” standards under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Pregnancy Discrimination Act (“PDA”), and other federal anti-discrimination laws. However, there are a few key differences between the proposed new rules and existing laws and cases. While Title VII does not explicitly prohibit discrimination based on sexual orientation or gender identity, the rules incorporate the Equal Employment Opportunity Commission (“EEOC”)’s position that Title VII prohibits discrimination against applicants and employees based on their sexual orientation or gender identity.

The proposed rules also incorporate the EEOC’s position that the PDA requires employers to provide reasonable accommodations to pregnant employees including alternative assignments and/or light duty when circumstances so require. This is a question currently pending before the U.S. Supreme Court in UPS v. Young. The Court’s decision on the issue may have an impact on the OFCCP’s proposed rules for contractors.

With respect to compensation analysis, the OFCCP’s position on “similarly-situated” employees for purposes of comparing equal pay for equal work is noteworthy. The OFCCP’s position, which is explicitly set forth in the proposed regulations, is that to be similarly-situated for purposes of a compensation analysis, workers simply need to be “comparable on some . . .factor, even if they are not similar on others.”

According to the OFCCP, the proposed rules would benefit 65 million employees who work for federal contractors by updating the sex discrimination rules. It is clear that contractors will see questions during an OFCCP audit of their affirmative action plans which focus on company accommodations for pregnant workers, as well as company policies and practices addressing gender identity and gender norms. Additionally, contractors will undergo closer scrutiny of their compensation systems.

The text of the proposed regulations is available online at www.dol.gov/ofccp/SDNPRM/.