Updated Regulations Regarding Sex Discrimination Applicable to Federal Contractors
On June 14, 2016, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced updated guidelines applicable to federal contractors and subcontractors relating to sex discrimination. The Final Rule is expected to be published in the Federal Register on June 15, 2016, and will become effective on August 15, 2016.
The regulations will apply to federal contractors and subcontractors, including those performing work under federally-assisted construction contracts and those who apply for federal assistance involving a construction contract, who are otherwise subject to Executive Order 11246. Thus, contractors will be subject to the new regulation if they: (1) hold a single federal contract or subcontract in excess of $10,000; (2) hold multiple federal contracts or subcontracts that have a combined total in excess of $10,000; or (3) hold government bills of lading, serve as a depository of federal funds, or are an issuing and paying agency for U.S. savings bonds and notes in any amount. The good news, however, is that if you currently comply fully with Title VII of the Civil Rights Act of 1964, as amended, there are likely few, if any, changes that will be necessitated by the new regulations.
Unlike many OFCCP regulations that impose new or additional obligations on federal contractors, this Final Rule is primarily intended to update previous OFCCP guidance regarding sex discrimination to bring it in line with current Title VII case law and guidance issued by the U.S. Equal Employment Opportunity Commission. For example, the Final Rule states explicitly that discrimination on the basis of “sex” includes discrimination due to: pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and/or sex stereotyping. The Final Rule also makes explicit that sex-based harassment is prohibited, as under Title VII, when submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, or such conduct unreasonably interferes with an individual’s work performance or creates an intimidating, hostile or offensive working environment.
The Final Rule does offer some helpful guidance to contractors in the form of examples of conduct that will generally be considered sex discrimination. Such examples of unlawful sex discrimination include:
- Steering women into lower-paying or less desirable jobs on the basis of sex;
- Restricting job classifications on the basis of sex;
- Making any facilities or employment-related activities available only to members of one sex, except that if the contractor provides restrooms, changing rooms, showers, or similar facilities, the contractor must provide same-sex or single-user facilities;
- Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify;
- Relying on recruitment or promotion methods, such as “word of mouth” recruitment or “tap-on-the-shoulder” promotion, that have an adverse impact on women where the contractor cannot establish that they are job-related and consistent with business necessity;
- Limiting pregnant employees’ job duties based solely on the fact that they are pregnant, or requiring a doctor’s note in order for a pregnant employee to continue working;
- Providing employees with health insurance that does not cover hospitalization and other medical costs for pregnancy, childbirth or related medical conditions to the same extent that hospitalization and other medical costs are covered for other medical conditions;
- Failing to provide alternative job assignments, modified duties, or other accommodations to employees who are unable to perform some of their job duties because of pregnancy, childbirth or related medical conditions if such accommodations are provided to others whose abilities or inabilities to perform their job duties are similarly affected (such as individuals with on-the-job injuries);
- Failing to provide job-guaranteed family leave, including any paid leave, for male employees on the same terms that family leave is provided for female employees;
- Failing to provide fringe benefits (such as medical or life insurance, profit-sharing plans, and bonus plans) equally to members of both sexes – even if such fringe benefits might cost more for members of one sex; and
- Treating applicants or employees adversely based on actual or perceived gender identity or transgender status, or because the individual does not comply with gender norms and expectations for dress, appearance and/or behavior.
The Final Rule also provides several examples of “best practices” for contractors, although the Final Rule makes clear these are just suggestions and are not required. Such “best practices” include:
- Avoiding the use of gender-specific job titles such as “foreman” or “lineman” when gender-neutral alternatives are available;
- Designating single-user restrooms, changing rooms, showers, or similar single-user facilities as sex-neutral;
- Providing, as part of their broader accommodations policies, light-duty, modified job duties or assignments, or other reasonable accommodations to employees who are unable to perform some of their job duties because of pregnancy, childbirth, or related medical conditions;
- Providing appropriate time off and flexible workplace policies for men and women;
- Encouraging men and women equally to engage in caregiving-related activities;
- Fostering a climate in which women are not assumed to be more likely to provide family care than men; and
- Fostering an environment in which all employees feel safe, welcome, and treated fairly by developing and implementing procedures to ensure that employees are not harassed because of sex.
Additional examples of discriminatory conduct are identified in the Final Rule, which can be found here.
 For several years, the OFCCP has focused on investigating possible “steering discrimination” during compliance reviews. Under this theory, a contractor hires comparable percentages of male and female applicants, or comparable percentages of minority and non-minority applicants, but then “steers” the individuals hired into either lower-paying or higher-paying positions based on gender or race.