The Employer's Legal Resource: OFCCP Issues Final Sex Discrimination Guidelines That Include Protections for Female and Transgender Employees of Federal Contractors

On June 14, 2016, the DOL's Office of Federal Contract Compliance Programs (OFCCP) issued final regulations updating its gender anti-discrimination guidelines for the first time since they were originally published in 1970. The OFCCP noted that, "[s]ince 1970, employer policies and practices, the nature and extent of women's participation in the labor force, and applicable statutes and case law have changed significantly, leaving those guidelines outdated and inaccurate" and the updated rules are "necessary to address present-day workplace practices and issues and to align contractors' obligations with current law." Generally speaking, the final rules are intended simply to formalize existing obligations; the OFCCP explains that "these regulations generally align with current law under Title VII of the Civil Rights Act of 1964, as interpreted by courts and the EEOC, [and] most contractors are already subject to many of these provisions." The regulations take effect on August 15, 2016.

Covered Employers

The regulations prohibit discrimination on the basis of sex by covered federal government and subcontractors and federal assisted construction contractors and subcontractors. Non-contractor private employers are not affected. The regulations generally apply to any business or organization that (a) holds a single federal contract, subcontract, or federally assisted construction contract or subcontract in excess of $10,000; (b) holds federal contracts or subcontracts that have a combined total in excess of $10,000 in any 12-month period; or (c) 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. The final rule does not apply to grant recipients or non-construction recipients of federal financial assistance. 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 fed eral contract or subcontract in order for the regulations to apply.

Prohibited Practices

Disparate Treatment. Unless sex is a bona fide occupational qualification that is reasonably necessary to the normal operation of a contractor's particular business or enterprise (a high bar for the employer to meet), the contractor may not treat an employee or applicant differently or make any distinction based on sex in recruitment, hiring, firing, promotion, compensation, hours, job assignments, training, benefits, or other terms, conditions, or privileges of employment. The term sex includes but is not limited to discrimination against any employee or applicant because or on the basis of: sex or gender; pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping. In keeping with Title VII, the final rule prohibits sex-based discrimination against both women and men.

Disparate Impact. Additionally, employment policies or practices that are facially neutral but nonetheless have an adverse impact on the basis of sex are also prohibited unless they are job-related and consistent with business necessity. 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 the regulations even in the absence of proof of intentional bias.

Discriminatory Compensation

Contractors cannot pay workers differently based on their sex. Nor may contractors engage in any employment practice that discriminates in wages, benefits, or any other forms of compensation or denies access to earnings opportunities because of sex (on either an individual or systematic basis). Unlawful compensation discrimination can result from job segregation or classification on the basis of gender, not just unequal pay for unequal work. For example, contractors cannot grant or deny higher-paying wage rates, salaries, positions, job classifications, work assignments, shifts, development opportunities, training, apprenticeships, overtime, or other opportunities that may lead to advancement to higher-paying positions on the basis of sex.

Pregnancy Discrimination

Federal contractors cannot discriminate against individuals on the basis of pregnancy, childbirth, or related medical conditions, including childbearing capacity. Related medical conditions include: lactation; disorders directly related to pregnancy such as preeclampsia (pregnancy-induced high blood pressure), placenta previa, and gestational diabetes; symptoms such as back pain; complications requiring bed rest; and the after-effects of delivery. For all employment-related purposes, contractors must treat these individuals the same as it treats others who are similar in their ability or inability to work but not of childbearing capacity or affected by pregnancy, childbirth, or related medical conditions.

Accommodations. The regulations require that federal contractors provide workplace accommodations such as extra bathroom breaks and light duty assignments to employees who need such accommodations because of pregnancy, childbirth, or related medical conditions. It is unlawful for a federal contractor to deny alternative job assignments, modified duties, or other accommodations to employees who are unable to perform some of their job duties because of pregnancy related issues if the contractor denies accommodations only to those employees, or if an intent to discriminate on a pregnancy-related basis is otherwise shown (for example, by evidence of discriminatory statements made by managers when denying requested accommodations). Additionally, contractors cannot deny assignments, modifications, or other accommodations to employees with pregnancy related issues when similar accommodations are provided, or required by applicable law or company policy to be pr ovided, to other employees whose ability or inability to perform their job duties is similarly affected by non-pregnancy related issues (such as disabilities or occupational injuries), if doing so would impose a significant burden on pregnant employees and the employer's asserted reasons for denying accommodations do not justify that burden.

Leave. To the extent that a federal contractor provides family, medical, or other leave, such leave cannot be denied or provided differently on the basis of sex. A contractor must provide job-guaranteed medical leave (including paid sick leave) for employees' pregnancy, childbirth, or related medical conditions on the same terms that medical or sick leave is provided for other medical conditions similar in their effect on employees' ability to work. Additionally, such employers must provide job-guaranteed family leave (including any paid leave) for male employees on the same terms that family leave is provided for female employees. Contractors that have employment policies or practices under which insufficient or no medical or family leave is available must ensure that such policies or practices do not have an adverse impact on the basis of sex unless they are shown to be job-related and consistent with business necessity.

Fringe Benefits

It is unlawful discrimination for a federal contractor to discriminate on the basis of sex with regard to fringe benefits. Such employers must provide equal benefits and equal contributions for male and female employees participating in fringe benefits such as medical, hospital, accident, life insurance, and retirement benefits, as well as profit-sharing and bonus plans, leave, and other terms, conditions, and privileges of employment. An employer cannot defend or justify its failure to provide benefits equally to members of both sexes on the basis that there is a greater cost of providing a fringe benefit to members of one sex over the other.

Sex-Based Stereotyping

The regulations prohibit federal contractors from making employment decisions on the basis of sex-based stereotypes, which are a form of sex discrimination. Contractors may not treat employees or applicants adversely because they fail to comply with expectations about how women and men should look or act or what kinds of jobs they should do. Sex stereotyping and other forms of sex discrimination harm women and men, for example, by perpetuating the mistaken view that members of one sex are inherently better qualified or suited for certain kinds of jobs, or that only workers of one sex may need family leave or flexible work arrangements.

In particular, the regulations clarify that adverse treatment of an employee because of gender stereotyped assumptions relating to family caretaking responsibilities is unlawful discrimination, and that leave for childcare must be available to male employees on the same basis that it is available to female employees. For example, contractors may not deny mothers employment opportunities that are available to fathers based on the faulty assumption that mothers' childcare responsibilities will conflict with their job performance. Similarly, contractors may not deny fathers flexible workplace arrangements that are available to mothers based on the faulty assumption that men do not have and do not assume childcare responsibilities.

Gender Identity & Transgender Status

Notably, the regulations incorporate the Obama administration's current legal interpretations that discrimination based on sex includes discrimination based on gender identity and transgender status. The term "gender identity" refers to an individual's internal sense of one's own gender, and it may or may not correspond to the sex assigned to that person at birth and may or may not be visible to others. Thus, adverse treatment of employees or applicants on the basis of their failure to conform to particular gender norms and expectations about their appearance, attire, or behavior is considered unlawful sex discrimination. Accordingly, the rule requires federal contractors to allow workers to use bathrooms, changing rooms, showers, and similar facilities consistent with the gender with which the workers identify.

A further note that federal contractors may not ask any applicants or employees to prove their gender identity or transgender status. Contractors cannot ask transgender applicants or employees for any documentation they do not request from other employees under similar circumstances, even if a transgender applicant or employee is planning to undergo transition. 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. It is a best practice to have a policy for addressing human resources and cultural sensitivity issues for employees who are transitioning. Once an employee has voluntarily made a disclosure to human resources or the appropriate office within the company, the most successful policies provide for ongoing communication between the employee and the employer.

Additionally, the requirements of the final rules obligate contractors to ensure that coverage for healthcare services is 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.

Some federal contractors may recognize a need to update their benefit plans in light of the guidance provided in the final rules, but the OFCCP recognizes that certain plan changes may be difficult to implement immediately. While the specific facts of each case will vary, the OFCCP has indicated that it will consider 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 regulations' effective date.

Sexual Harassment

The regulations reiterate that harassment on the basis of sex is unlawful. Harassment on the basis of sex includes sexual harassment (including sexual harassment based on gender identity and transgender status), harassment based on pregnancy, childbirth, or related medical conditions, and sex-based harassment that is not sexual in nature but that is because of sex or sex-based stereotypes or where one sex is targeted for the harassment. Unwelcome sexual advances, requests for sexual favors, offensive remarks about an individual's sex, and other verbal or physical conduct of a sexual nature is prohibited sex-based harassment if (a) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment; (b) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual; or (c) such conduct has the purpose or effect of unreasonably interfering with an i ndividual's work performance or creating an intimidating, hostile, or offensive working environment.

Best Practices

The regulations also include an appendix of best practices, in which the OFCCP recommends a number of practices for federal contractors to consider. According to the OFCCP, "if adopted, these practices can contribute to the establishment and maintenance of workplaces that are free from unlawful sex discrimination." The suggestions include:

  • avoiding the use of gender-specific job titles such as "foreman" or "lineman" where gender-neutral alternatives are available
  • designating single-user restrooms, changing rooms, showers, or similar single-user facilities as sex-neutral
  • providing as part of 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
  • 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, examples of which include: (a) communicating to all personnel that harassing conduct will not be tolerated; (b) providing anti-harassment training to all personnel; and (c) establishing and implementing procedures for handling and resolving complaints about harassment and intimidation based on sex.

Although they are recommendations from the OFCCP, adoption of these best practices by federal contractors is not required by under the regulations.

By Rebecca D. Stanglein, RStanglein@dsda.com

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Rebecca D. Bullard

Rebecca D. Bullard

Rebecca represents clients primarily in labor and employment litigation and counsels clients regarding everyday employment matters. 

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