On June 14, 2016, the Office of Federal Contract Compliance Programs (OFCCP) announced the finalization of the sex discrimination rules for federal contractors, interpreting Executive Order 11246. The final rules were announced in conjunction with the White House's announcement of its ongoing commitment to expand opportunities for women and girls.
"We have made progress as a country in opening career opportunities for women that were, for decades, the province of men. Yet, there is more work that lies ahead to eradicate sex discrimination. This is why it is important that we bring these old guidelines from the ?Mad Men' era to the modern era, and align them with the realities of today's workplaces and legal landscape," said director of the OFCCP Patricia A. Shiu.
Significant changes in the final rules, which take effect August 15, 2016, includes the addition of sex stereotyping, gender identity, and transgender status to the list of prohibited sex discrimination. Under the new rules, "sex includes, but is not limited to pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping." 41 CFR § 60-20.2(a).
Gender Identity or Transgender Status
The new rules made clear that discrimination on the basis of a person's actual or perceived gender identity or transgender status is unlawful and included some examples of unlawful discriminatory practices on the basis of gender identity or transgender status, such as:
- "Making any facilities and 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;" 41 CFR § 60-20.2(b)(12).
- "Denying transgender employees access to the restrooms, changing rooms, showers, or similar facilities designated for use by the gender with which they identify; and" 41 CFR § 60-20.2(b)(13).
- "Treating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designated to facilitate the adoption of a sex or gender other than the individuals designated sex at birth." 41 CFR § 60-20.2(b)(14).
As part of federal contractors' obligation not to discriminate on the basis of sex with regard to fringe benefits, which include medical benefits, federal contractors must ensure that their health insurance plans do not discriminate on the basis of gender identity or transgender status. For instance, such unlawful discrimination might occur when transgendered individuals are denied coverage for medically appropriate sex-specific health-care services because of their gender identity or an insurance plan explicitly excludes coverage for all health services associated with gender dysphoria or gender transition. Coverage for a particular service may be denied or limited only if it is based on the nondiscriminatory application of neutral criteria (e.g., service is not medically necessary, qualified provider is unavailable, or inadequate medical documentation has been provided).
Sex-Based Stereotypes
Also included in the regulations are examples of prohibited sex-based stereotypes about how male and female employees are expected to appear, speak, or behave. In addition to identifying as discriminatory adverse treatments based on gender norms for appearance and behavior (e.g., a woman does not wear make-up or high heels), the rules also recognize adverse treatments based on sex-based stereotypes about caregiver responsibilities. For instance, unlawful discrimination based on sex-based stereotypes about caregiving responsibilities may occur when a male employee who is unavailable for overtime work because of care for his elderly father suffers adverse treatment based on the sex-based stereotype that men do not have family caregiving responsibilities that affect their availability for work. Or, this may occur when mothers of children are denied opportunities because of the sex-stereotyped belief that women with children should not or will not work long hours, regardless of whether the contractor believes that this is in the best interest of the child or the employee.
Compensation
With regard to discriminatory compensation, the new rules make clear that compensation includes not only wages and benefits, but also access to earnings opportunities, which may include work assignments, shifts, development opportunities, or other opportunities on the basis of sex. Whether unlawful compensation discrimination occurred will be determined on a case-by-case basis with consideration of factors such as tasks performed, skills, effort, level of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors.
Consistent with the Lilly Ledbetter Fair Pay Act, compensation discrimination occurs "any time" the federal contractor issues wages, benefits, or other compensation. This new language essentially sets the 180-day statute of limitations for individual complaint investigations each time the employer issues the discriminatory wage, benefit, or other compensation, as opposed to when the discriminatory decision is made.
Pregnancy, Childbirth, or Related Medical Conditions
The new rules essentially follow the Pregnancy Discrimination Act by prohibiting discrimination on the basis of pregnancy, childbirth, or related medical conditions, including childbearing capacity. Also included is a list of nonexclusive examples of unlawful pregnancy discrimination such as: requiring employees to go on leave because of their pregnancy or childbearing capacity; limiting pregnant employees' job duties based solely on the fact that they are pregnant, or requiring a pregnant employee to present a doctor's note to continue working. Workplace accommodations and leaves for pregnancy-related disabilities are required and will be analyzed under both the disparate treatment and disparate impact analyses.
Fringe Benefits
Fringe benefits must be provided without discrimination on the basis of sex, even if the cost of providing a fringe benefit to members of one sex is greater than the cost of providing it to members of the other sex. "Fringe benefits" is defined as including "medical, hospital, accident, life insurance, and retirement benefits; profit-sharing and bonus plans; leave; and other terms, conditions, and privileges of employment." 41 CFR § 60-20.6(b).
Best Practices
The Appendix of the final rule sets forth practices that are suggested, but not required, to avoid discrimination on the basis of sex under the new rules. Best practices listed for consideration by contractors include: avoiding gender-specific job titles (such as "foreman"); designating single-user restrooms as sex-neutral; offering flexible work policies; providing light duty to pregnant employees; encouraging equally men and women to engage in caregiving activities; fostering a climate in which women are not assumed to be more likely to provide family care than men; and implementing procedures to ensure employees are not harassed because of sex.
OFCCP Resources
To learn more information about OFCCP's final rules regarding sex discrimination under EO 11246, federal contractors may access OFCCP's website, Fact Sheet, FAQ, and a comparison of the 1970 guidelines with the 2016 final rules.