On June 14, 2016, the U.S. Department of Labor adopted a final rule updating sex discrimination regulations for federal contractors. The final rule details the obligations under Executive Order 11246 (as amended by Executive Order 13672) for federal government contractors and subcontractors and federally assisted construction contractors and subcontractors.

Originally issued by President Lyndon Johnson in September 1965, Executive Order 11246 prohibits discrimination by a federal contractor against any employee or applicant for employment on the basis of race, color, religion, sex, or national origin. In July 2014, the Obama Administration amended Executive Order 11246 to include sexual orientation and gender identity. The final rule will take effect 60 days from its June 15 publication in the Federal Register and applies to employers with federal contracts or subcontracts totaling $10,000 or more over a 12-month period, unless they are otherwise exempt.

The 193-page final rule substantially revises the DOL’s existing Sex Discrimination Guidelines for federal contractors by including sexual origin and gender identity as protected classes and expanding protections for all covered employees. The final rule includes explicit protections against pay discrimination, sexually hostile work environments and pregnancy bias, as well as provisions against discrimination based on unlawful sex stereotypes and transgender status. These include discrimination resulting in disparate treatment based on nonconformity to gender norms and expectations, as well as an employee’s stated gender which might differ from his or her sex at birth. The final rule clarifies that consistent with this, contractor employees must be allowed to use bathrooms, changing rooms, and showers consistent with their identified gender even if that differs from their sex.

Further, the final rule clarifies that sick and/or family leave must be available to both mothers and fathers on the same terms, and that workplace accommodations must be provided to employees who need them because of pregnancy, childbirth or other related medical conditions. Other fringe benefits, such as medical, hospital, accident and life insurance, retirement benefits, profit-sharing and bonus plans, or any other leave, must also be given equally to both sexes.

The final rule also includes a section containing various “best practices” for ensuring a discrimination-free workplace, but states that those practices are not binding on federal contractors. The suggested practices include without limitation avoiding the use of gender-specific job titles such as “foreman” when gender-neutral alternatives are available and designating single-user restrooms, changing rooms and/or showers as sex-neutral. For pregnancy accommodations, the final rule recommends providing more frequent breaks, changes in schedules, changes in duties such as less lifting and more sitting or other adjustments that might reduce stress on a pregnant employee.

Due to the expansive changes for federal contractors, the final rule should be read carefully by employers in this industry.