On August 19, 2014, the Director of the Office of Federal Contract Compliance Programs ("OFCCP") issued Directive 2014-02 clarifying that discrimination based on gender identity and transgender status constitutes sex discrimination under Executive Order 11246. This is an interim step by the Department of Labor ("DOL") to issue regulations implementing Executive Order 13672 issued by President Obama in July 2014. The Directive provides that the OFCCP will investigate "individual and systematic" complaints of gender identity or transgender discrimination against applicants, employees and former employees rather than transfer these cases to the EEOC for investigation and will continue to seek remedies for sex discrimination in connection with compliance reviews. 

Federal contractors should respond to the Directive by revising their policies as necessary and training their managers and supervisors on the inclusion of gender identity and transgender as protected categories.

Earlier this month on August 6, 2014, the DOL announced a proposed rule that requires that most contractors and sub-contractors submit annual reports stating: 

  • The total number of employees in each EEO-1 category by race, ethnicity and sex;
  • The total W-2  wages for all employees in each job category by race, ethnicity and sex; and
  • The total number of hours worked by each employee by race, ethnicity and sex.

The proposed rule states that the OFCCP will publish summary pay data by industry and EEO-1 job category, which will enable federal contractors to review their pay data using the same metrics as the OFCCP.  It is anticipated that this rule will be finalized by OFCCP in early 2015.

In anticipation of the proposed pay reporting rule being finalized, federal contractors should review their current compensation systems and practices in an effort to proactively identify and address compensation issues.