The OFCCP’s Final Rule on Sex Discrimination took effect this week, on August 15, 2016. Many of you already know that sex discrimination has been illegal since at least 1964, when the Civil Rights Act was enacted. Pay Discrimination based on sex has been illegal since at least 1963. Most employers know they cannot base employment decisions and practices on sex. Yet the OFCCP has issued new rules on sex discrimination – why? The OFCCP says its previous guidelines and regulations were “outdated”.

The goals of this Final Rule:

“[H]armonizing OFCCP’s outdated regulations with current Title VII jurisprudence” and facilitating “contractor understanding and compliance, potentially reduc[ing] contractor costs, and increase labor-market efficiency changes”.

Let’s have a look those new rules, then, shall we?

Here is what the Final Rule provides:

  • Accommodations to workers with conditions related to pregnancy/childbirth:

Required accommodations include without limitation extra bathroom breaks, light-duty assignments, in those situations where contractors provide similar accommodations to similarly-situated non-pregnant workers (e.g. individuals with disabilities).

  • Fair Pay Practices:

Most of you know that employers can’t pay workers differently based on sex. What you may not know is what practices could actually constitute pay discrimination. Here are some: denying opportunities for overtime, training, higher-paying jobs, based on a worker’s sex, or based on assumptions about a worker because of their sex or gender stereotypes (not conforming to particular gender norms and expectations about their appearance, attire, or behavior). The new rules state these and other points clearly, whereas the old rules did not.  Under this Rule, workers can recover lost wages whenever an employer pays wages resulting from discrimination, and not just when the underlying decision is/was made.

  • Equal benefits from fringe-benefit plans, to male and female employees:

Fringe benefits include without limitation medical, hospital, accident, life insurance and retirement benefits as well as profit-sharing and bonus plans, leave and other terms and conditions of employment.

  • Forbids sexual harassment:

Expand the scope of harassment training to include pregnancy/sex-stereotyping/child rearing/sexual orientation and/or transgender modules. As we know, sexual harassment includes without limitation unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, other verbal or physical conduct of a sexual nature when the conduct interferes with the person’s work performance, forms the basis for employment decisions or otherwise creates a hostile working environment.

  • Equal access to jobs and workforce development opportunities for men and women:

Contractors cannot establish different requirements based on sex unless it can show that such requirements are a bona fide occupational qualification (this is a very high standard, and therefore a very narrow exception). Different job requirements based on sex must be job-related and consistent with business necessity.

  • Protection for workers with caregiving responsibilities:

This provision addresses the common practice of basing treatment on stereotypical assumptions that women are more likely to have caregiving responsibilities and then denying employment opportunities on that basis. It reinforces the prohibition against denying opportunities to any employee based on his or her sex. Conversely, if a father requests flexible arrangements for caregiving, it must afford those accommodations if it makes similar accommodations for working mothers.

  • Protections for transgender workers:

This does one thing that Title VII does not: it clearly states that sex discrimination includes discrimination based on gender identity. It also requires that workers be allowed to use bathrooms, changing rooms, showers and similar facilities consistent with their gender identity. It also explicitly states that contractors cannot exclude coverage for care related to gender dysphoria or gender transition.

  • Protection against discrimination based on sex stereotypes:

Contractors cannot discriminate in any way against employees or applicants who fail to comply with gender stereotypes about how men and women act or the types of jobs they “should” do.

  • Protections for religiously affiliated contractors under the Religious Freedom Restoration Act (RFRA):

The RFRA allows religiously affiliated contractors, such as religious corporations, educational institutions or societies to favor people of a particular religion when making employment decisions, and follows Supreme Court precedent, which recognizes the First Amendment’s requirement of a “ministerial exception” from employment discrimination laws. The ministerial exception prohibits the government from interfering with the religious organization making employment decisions about its so-called ministers (this alone could probably be a separate topic).

As you can see, this Rule is fairly comprehensive. It not only takes Title VII and its amendments, and cases interpreting those laws and incorporates them into one Final Rule, it goes even further. How so?

Title VII itself, along with its amendments, and along with most cases interpreting them, is silent on the issues of gender identity and to some extent, on gender stereotypes.

We see here another example of President Obama using the OFCCP to advance those parts of his agenda that he has not been able to push through Congress and make all his employers subject to it.

If you are a federal contractor, what has changed for you? Theoretically nothing. Practically speaking, the changes may be significant. This Final Rule gives the OFCCP a specific tool to use to go after contractors who continue to engage in sex discrimination. It also makes it harder for you as a federal contractor to claim you  “didn’t know” that certain behaviors constitute sex discrimination, and puts more greater onus on you to ensure equal employment opportunities for men and women. Finally, you cannot argue that the protections don’t apply to transgender employees, the way non-contractor employers might with regard to Title VII.

Suppose you are not a federal contractor. Don’t get complacent! The issue of protection to transgender employees will probably reach the US Supreme Court in the not-too-distant future. Moreover, the fact that the EEOC and the OFCCP and the President (at least until the end of 2016) are on the same page on this and other sex-related issues does create some pressure to  keep the tide moving in that direction. Therefore, non-contractor employees would do well to get ahead of the issue by reviewing the Final Rule and acting accordingly.  Are there specific steps you can take? Stay tuned, as we reserve the right to cover that in an upcoming post!

For more information, contact Ahmed Younies at (714) 426-2918, ext. 1, or [email protected].