OFCCP Rule on Sex Discrimination Frequently Asked Questions

Transcription

1 June 15, 2016 OFCCP Rule on Sex Discrimination Frequently Asked Questions On June 15, 2016, the Office of Federal Contract Compliance Programs within the U.S. Department of Labor issued a final rule that updates its sex discrimination rule for the first time in 40 years. The new regulation details the rules that almost all contractors and subcontractors on federal and federally-assisted construction must meet to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that applicants and employees are treated without regard to their sex. This Frequently Asked Questions is intended to give ASA members a greater understanding of this new rule that takes effect on Aug. 15, Which employers are covered by the OFCCP final rule? The OFCCP final rule generally applies to any business or organization that (1) holds a single federal contract, subcontract or federally-assisted construction contract or subcontract in excess of $10,000; (2) holds federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or (3) holds government bills of lading, serves as a depository of federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount. Which individuals are covered by this rule? OFCCP s new rule protects the millions of employees and applicants, both male and female, who work or seek to work for federal contractors and subcontractors. Generally, it is not necessary that employees work on a federal contract to be covered; they need only work for a company that holds a covered federal contract or subcontract. If I am already a federal contractor, do I have to make any changes before the effective date of the rule? Because these regulations align with already existing law and legal interpretations, OFCCP says that it expects that contractors are already complying with most, if not all, of these obligations. If they are not, contractors should come into compliance immediately with already existing law and legal interpretations. When does the new rule take effect? The new rule takes effect on Aug. 15, AMERICAN SUBCONTRACTORS ASSOCIATION, INC Duke Street, Alexandria, VA Phone: (703) CNelson@asa-hq.com Web:

2 What are contractors required to do differently as a result of OFCCP s new rule? OFCCP s new rule generally aligns the Agency s regulations with Title VII of the Civil Rights Act of 1964, as interpreted by courts and the Equal Employment Opportunity Commission. Because most covered contractors are subject to Title VII or to similar state laws, most contractors are already subject to many of these provisions and must continue complying with these laws, regulations and court rulings. The new rule clarifies contractors obligations, brings them up to date, and aligns them with antidiscrimination law, eliminating the confusion and ambiguity that resulted from the former OFCCP guidelines. Under the new rule, do federal contractors have to make changes to the Equal Opportunity Clause? No. The new rule does not require any changes to the Equal Opportunity Clause. The new rule includes a best practices appendix. Are contractors required to comply with this section? No. The OFCCP rule s best practices appendix recommends a number of practices for contractors to consider. OFCCP says that, if adopted, these practices can contribute to the establishment and maintenance of workplaces that are free of unlawful sex discrimination. But adoption of these practices is not required. The new OFCCP rule includes many definitions that covered employers need to understand in order to comply. What are some of those definitions? Sex discrimination includes, but is not limited to, discrimination on the basis of sex; pregnancy, childbirth or related medical conditions; gender identity; transgender status; and sex stereotyping. The term gender identity refers to one s internal sense of one s own gender. It may or may not correspond to the sex assigned to a person at birth, and may or may not be made visible to others. The rule defines the term fringe benefits based on the EEOC s Guidelines for Discrimination Because of Sex. This definition of fringe benefits includes, but is not limited to, medical, hospital, accident, life insurance, and retirement benefits; profit sharing and bonus plans; leave; and other terms, conditions, and privileges of employment. The term harassment because of sex includes sexual harassment (including sexual harassment based on gender identity); harassment based on pregnancy, childbirth or related medical conditions; and harassment that is not sexual in nature but that is because of sex or sex-based stereotypes. What does the OFCCP rule say about contractors obligations to provide accommodations for pregnancy and related conditions? To reflect the Supreme Court s decision in Young v. United Parcel Service, the OFCCP rule specifies that denying accommodations for pregnancy, childbirth or related medical 2

3 conditions is unlawful disparate treatment where (i) the contractor denies accommodations only to employees affected by pregnancy, childbirth or related conditions; (ii) the contractor provides accommodations to other employees whose ability or inability to perform their job duties is similarly affected, the denial of accommodations to employees affected by pregnancy, childbirth or related medical conditions imposes a significant burden on those employees, and the contractor s asserted reasons for denying accommodations do not justify that burden; or (iii) intent to discriminate is otherwise shown, for example, by evidence of discriminatory statements made by managers when denying requested accommodations. The OFCCP rule also addresses contractors accommodations policies and practices that have a disparate impact on employees affected by pregnancy, childbirth or related medical conditions. It requires contractors that deny accommodations to employees who are unable to perform some of their job duties because of pregnancy, childbirth or related medical conditions to ensure that such policies or practices do not have an adverse effect on women unless they are shown to be job-related and consistent with business necessity. For example, where a contractor s policy of offering light duty only to employees with on-the-job injuries results in men being offered accommodations when they cannot perform their duties, but women affected by pregnancy, childbirth or related medical conditions not being accorded accommodations, the policy would be impermissible unless the contractor could show that limiting accommodations in this way was job-related and consistent with business necessity. How does this OFCCP rule relate to Executive Order and OFCCP s recent final rule implementing that E.O.? On July 21, 2014, President Obama signed E.O , amending E.O to prohibit federal contractors and subcontractors from discriminating on the bases of sexual orientation and gender identity. On December 9, 2014, the Department of Labor published a final rule in the Federal Register, changing OFCCP s regulations to prohibit discrimination on the basis of sexual orientation or gender identity. The amended regulations took effect on April 8, E.O already included sex as a separate protected category. OFCCP s new rule clarifies contractors obligations with regard to sex discrimination based on legal developments before and since issuance of the 1970 guidelines. It defines sex to include gender identity and transgender status; therefore, discrimination on those bases is unlawful under the new rule as well as under E.O and the implementing regulations. As stated in its preamble, this new rule does not include all forms of sexual orientation discrimination under the definition of sex discrimination. However, sexual orientation discrimination is already expressly prohibited under E.O , as discussed above, so regardless of the interpretation of sex discrimination, OFCCP has the ability to investigate and take enforcement action in response to claims of sexual orientation discrimination. OFCCP reports it will continue to monitor the developing law on sexual 3

4 orientation discrimination as sex discrimination under Title VII and, if appropriate, will issue additional guidance in the future. How does the new rule relate to OFCCP s directive implementing the EEOC s decision in Macy v. Holder regarding discrimination based on gender identity or transgender status? Both OFCCP s new rule and the EEOC s decision in Macy v. Holder clarify that discrimination on the basis of sex includes discrimination on the basis of gender identity or transgender status. On Aug. 19, 2014, OFCCP issued Directive on Gender Identity and Sex Discrimination, which stated that OFCCP will investigate and seek to remedy instances of sex discrimination that occur because of an employee s gender identity or transgender status. OFCCP s inclusion of gender identity and transgender status in the OFCCP s rule s definition of sex is consistent with the agency s interpretation of E.O in that Directive. How does the OFCCP rule address transition-related health benefits? Discrimination on the basis of gender identity in the provision of fringe benefits already falls within the scope of E.O and its existing regulations. Since issuance of its Directive on Gender Identity and Sex Discrimination in Aug. 2014, it has been OFCCP s position that prohibited sex discrimination includes discrimination on the basis of gender identity or transgender status. E.O subsequently amended E.O to explicitly prohibit discrimination on the basis of gender identity, and OFCCP amended its regulations accordingly. E.O and its regulations have long banned discrimination in rates of pay and other forms of compensation, which include all manner of employee benefits, such as health benefits. The nondiscrimination requirements of E.O obligate contractors to ensure that coverage for health-care 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 recorded gender. For example, where a transgender man needs medical treatment for ovarian cancer, a contractor may not deny coverage based on the individual s identification as male. In addition, an explicit, categorical exclusion of coverage for all care related to gender dysphoria or gender transition is facially discriminatory because such an exclusion singles out services and treatments for individuals on the basis of their gender identity or transgender status, which violates E.O s prohibitions on both sex and gender identity discrimination. In evaluating whether the denial of coverage of a particular service where an individual is seeking the service as part of a gender transition is discriminatory treatment, OFCCP will apply the same basic principles of antidiscrimination law as it does with other terms and benefits of employment. For example, OFCCP could inquire whether there is a legitimate, nondiscriminatory reason for such denial or limitation that is not a pretext for discrimination, for example. How will OFCCP enforce the obligation to provide health benefits that do not discriminate on the basis of gender identity or transgender status? 4

5 OFCCP recognizes that there has been some uncertainty among contractors who may not have understood this nondiscrimination obligation under existing authorities, given that the agency has received questions and comments from stakeholders. Some contractors may recognize a need to update their benefit plans in light of the guidance provided in this final rule, but some plan changes may be difficult to implement immediately. While the specific facts of each case will vary, OFCCP will consider, for example, good faith progress to take steps to change benefits policies and practices in this area in analyzing whether enforcement action is appropriate, particularly in the period immediately following the rule s effective date. Does the OFCCP rule require contractors to conduct any data analysis regarding compensation or other practices as they relate to gender identity or transgender status? No. The OFCCP rule does not require contractors to conduct any data analysis with respect to the gender identity or transgender status of their applicants or employees. Does the OFCCP rule require contractors to ask applicants or employees to voluntarily self-identify their gender identity or transgender status? No. The OFCCP rule does not require contractors to collect any information about applicants or employees gender identity or transgender status. May a contractor ask a transgender applicant or employee for documentation to prove his or her gender identity or transgender status? No. A contractor may not ask any applicants or employees to prove their gender identity or transgender status. When a transgender applicant or employee is planning to undergo transition, may a contractor ask for documentation about the transition? Contractors may not ask transgender applicants or employees for any documentation they do not request from other employees under similar circumstances. For example, if a transgender employee is requesting medical leave in connection with his or her transition, a contractor may request the same documentation it requires from other employees seeking medical leave. Does the OFCCP rule prohibit facially-neutral employment policies and practices that have a disparate impact on the basis of sex? Yes. The OFCCP rule prohibits facially-neutral employment policies that have a disparate impact on the basis of sex if the policies or practices are not job-related and consistent with business necessity. This disparate-impact analysis is firmly established in employment discrimination law and is expressly incorporated in OFCCP regulations, including the new OFCCP rule. Where a contractor s policy or practice has the effect of disproportionately excluding women from employment opportunities, the contractor has the burden of proving that the policy or practice is job-related and consistent with business necessity. If the contractor cannot make this showing, its policy or practice will be found to violate its non-discrimination obligations under E.O even in the absence of proof of intentional bias. 5

6 Does the OFCCP rule prohibit sex discrimination against men? Yes. In keeping with Title VII, E.O prohibits sex-based discrimination against women and men. How does the OFCCP rule affect employers in state or local jurisdictions that have their own laws that prohibit discrimination on the basis of sex? As with state and local laws prohibiting employment discrimination on other bases, the OFCCP rule s prohibition of discrimination on the basis of sex does not preempt state and local prohibitions of discrimination on the basis of sex. OFCCP s new rule sets a floor in terms of protection against discrimination on the basis of sex. If state or local law provides greater protections to applicants or employees, the OFCCP rule does not generally relieve a contractor from its obligations under that law. How does the Religious Freedom Restoration Act (RFRA) apply to OFCCP s new rule? The Religious Freedom Restoration Act (RFRA) applies to all federal laws. If a contractor seeks an exemption to E.O pursuant to RFRA, OFCCP will consider that request based on the facts of the particular case. OFCCP will do so in consultation with the Solicitor of Labor and the Department of Justice, as necessary. There is no formal process for invoking RFRA specifically as a basis for an exemption from E.O Insofar as the application of any requirement under this part would violate RFRA, such application shall not be required. 6