3 Things You Need to Know About OFCCP’s New Sex Discrimination Guidelines

This blog post was contributed by Lynn A. Clements, director of regulatory affairs at Berkshire Associates, Inc.

In conjunction with the White House Council on Women and Girls’ first United States of Women Summit on June 16, 2016, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued regulations on sex discrimination that covered federal contractors and subcontractors must follow to be in compliance with Executive Order 11246.

The final rule marks a significant rewriting of the OFCCP’s previous sex discrimination guidelines, which were published in 1970. The agency’s new regulations address a variety of issues which have arisen since then, including sexual harassment, accommodations for pregnancy, equal leave and benefits for men and women, gender identity and sex stereotyping.

Although the OFCCP’s announcement indicated that the new rule “generally aligns OFCCP’s regulations with Title VII of the Civil Rights Act of 1964, as interpreted by courts and the EEOC,” the new rule in fact codifies the government’s position on several issues that are still developing areas of law. Although the rule does not require any specific changes to a contractor’s written affirmative action plan or other implementation documents such as the Equal Opportunity Clause for subcontracts or the EEO tagline used in job postings, contractors will want to read the new rule carefully to ensure that their current practices are in line with the OFCCP’s requirements, a few of which are outlined below.

1) Transition-Related Healthcare Services
While not in the OFCCP’s proposal, the final rule makes clear that contractors may not maintain insurance coverage that includes “categorical exclusions” for health services associated with gender dysphoria or gender transition. The OFCCP explains that such an exclusion violates the nondiscrimination requirements of Executive Order 11246, which requires that healthcare services be made available “on the same terms for all individuals for whom the services are medically appropriate, regardless of sex assigned at birth, gender identity or record gender.”

In recognition of the fact that many health benefit plans may need to be updated, the OFCCP has stated that it will consider a contractor’s good faith progress towards implementing benefit changes when considering enforcement proceedings, particularly in the period immediately following the rule’s effective date of August 16, 2016.

2) Pregnancy Leave and Other Leave Policies
For the most part, the OFCCP regulations adopt the test set forth by the Supreme Court in Young v. UPS, which requires employers to provide pregnancy leave “on the same terms that medical or sick leave is provided for medical conditions that are similar in their effect on employees’ ability to work.” The final regulations make clear that men are also protected from sex-based discrimination, in that family leave, or caregiving leave, must be made available on the same terms to both women and men. 

The final rule cites several examples of when an employer’s practices might run afoul of this prohibition, such as the potential for sex stereotyping when a male employee is subject to adverse treatment because he cannot work weekends while caring for an elderly parent or because he wants to take leave “to care for his newborn or recently adopted or foster child.” Contractors should take this opportunity to review all of their leave policies to ensure that men and women are treated equally under those policies.

Federal contractors also will want to examine whether their policies result in “insufficient leave” for pregnant employees, treat pregnant employees differently than others who are similarly situated in their ability or inability to work, or otherwise cause a disparate impact on pregnant workers.

3) Treatment of LGBT Employees
The OFCCP’s final sex discrimination regulations state that sex discrimination includes “[a]dverse treatment of an employee or applicant for employment because of that individual’s … actual or perceived gender identity or transgender status.” Although the new rule does not specifically provide that discrimination on the basis of sexual orientation is also prohibited sex discrimination, federal contractors are prohibited by Executive Order 13672 from making employment decisions on this basis. 

In terms of gender identity issues, the new rule specifically forbids contractors from denying employees “access to the restrooms, changing rooms, showers or similar facilities designated for use by the gender with which they identify.” Contractors are also prohibited from discriminating against employees because they are planning to receive, are receiving or have received transition-related medical services.

Given the current legal challenges to some of the government’s positions on these issues and developing state law issues, employers need to tread carefully when developing or revising policies in these areas.

View the final rule, frequently asked questions, fact sheets and other helpful resources.