On January 28, 2015, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a Notice of Proposed Rulemaking (NPRM) that would rescind existing sex discrimination guidelines and propose provisions that address current workplace practices and issues and align with the contractors’ obligation with current law and legal interpretation. For federal contractors already covered by Title VII of the Civil Rights Act of 1964 (i.e., contractors with 15 or more employees), or the Family Medical Leave Act (i.e., contractors with 50 or more employees) the NPRM generally aligns with existing case law. For contractors with fewer than 15 employees, the proposed rules will mean additional compliance obligations related to accommodations for pregnant employees and extending leave to male employees.

The NPRM specifies that sex discrimination includes discrimination on the basis of gender identity and transgender status and provides various examples of disparate treatment discrimination, such as denying transgender employees access to the bathrooms used by the gender with which the employee identifies; and treating an employee or applicant adversely because he or she has undergone, is undergoing, or is planning to undergo sex-reassignment surgery or other processes or procedures designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth. Employment policies or practices that have a disparate impact on the basis of sex and are not job related or consistent with business necessity, will violate Executive Order 11246. Examples include minimum height and/or weight qualifications not related to job performance and negatively impact women substantially more than men; a policy prohibiting large equipment operators from using a restroom on the job, which adversely impacts women, who may require the use of restrooms more than men.

The OFCCP’s focus on compensation practices is also reflected in the NPRM. Section 60-20.4 prohibits contractors from paying different compensation to similarly situated employees on the basis of sex, and determining whether employees are “similarly situated” will be case specific. If the application of any compensation practice (including a performance review process) has an adverse impact on the basis of sex, contractors will be subject to liability.

The NPRM incorporates the protections of the Pregnancy Discrimination Act, which prohibits employers from treating employees differently on the basis of pregnancy and the language of the proposed rule aligns with the EEOC’s recent enforcement guidance on the topic. The OFCCP acknowledged in the preamble of the NPRM that the issue regarding reasonable accommodations for pregnancy related conditions is currently before the Supreme Court, as discussed here, and noted that the final rule will be consistent with the high court’s ruling in that case.

Section 60-20.7 of the NPRM prohibits sex-based stereotyping such as stereotypes about how males and/or females are expected to look, speak, or act.  Examples of adverse treatment include failure to promote a woman, or otherwise subjecting her to adverse employment treatment, based on sex stereotypes about dress, including wearing jewelry, make-up or high heels; and harassment of a man because he is considered insufficiently masculine, or effeminate. Adverse treatment of an employee or applicant based on sex-based stereotypes about caregiver responsibilities is also prohibited, such as adverse treatment of a female employee because of a sex-based assumption that she has (or will have) family caretaking responsibilities and those responsibilities will interfere with her work performance or denying opportunities to mothers of children on the sex-stereotyped belief that women with children should not or will not work long hours, regardless of whether the contractor is acting out of hostility or belief that it is acting in the employee’s or her children’s best interest.

The NPRM also incorporates the EEOC’s guidelines relative to quid pro quo and hostile-environment sexual harassment and recommends the following best practices for contractors: communicating to all personnel that harassing conduct will not be tolerated; providing anti-harassment training to all personnel; and establishing and implementing procedures for handling and resolving complaints about harassment and intimidation based on sex.