OFCCP Issues Final Rule Prohibiting Sexual Orientation and Gender Identity Discrimination by Federal Contractors

The Office of Federal Contract Compliance Programs (OFCCP) has announced a Final Rule implementing changes made to the affirmative action requirements by Executive Order 13672, which prohibits discrimination based on sexual orientation and gender identity. The Final Rule requires contractors to ensure that applicants and employees are treated without regard to their sexual orientation or gender identity and replaces the words “sex, or national origin” with the words “sex, sexual orientation, gender identity, or national origin” wherever they appear in the current regulations. This Final Rule follows OFCCP’s August Directive 2014-02, which made clear that discrimination “based on sex” includes discrimination on the bases of gender identity and transgender status.

The Final Rule modifies current regulations and obligations of federal contractors in several ways:

• Contractors must amend the Equal Opportunity Clause in subcontracts or purchase orders for new or modified contracts, but the modification may be incorporated by reference (e.g., “To the extent not exempt, this contractor complies with Executive Order 11246, as amended, and the applicable regulations contained in 41 C.F.R. Parts 60-1 through 60-60”).
• Contractors must state in solicitations for employees that qualified applicants will receive consideration for employment without regard to protected characteristics, including sexual orientation and gender identity. This can be accomplished by stating that the contractor is an “equal opportunity employer.” (Note, however, that contractors covered by disability and veterans laws should expand this tagline to include those categories, such as “Equal Opportunity Employer/Disabled/Veterans.”)
• A new supplement to the “EEO Is the Law” poster must be posted as soon as it is available on OFCCP’s website or provided by a contracting officer.

Significantly, the Final Rule does not

• define “sexual orientation” or “gender identity” (OFCCP contends it will rely on the definitions established by the Equal Employment Opportunity Commission (EEOC) and existing Title VII law);
• mention “transgender status,” as does OFCCP’s Directive 2014-02, but the Final Rule does make clear that transgender status is a form of sex discrimination;
• require any changes to the text of written affirmative action programs (AAPs) under Executive Order 11246, which will continue to be limited to gender, race, and ethnicity;
• change the existing religious exemption contained in Executive Order 11246 and the implementing regulations;
• require voluntary self-identification of sexual orientation or gender identity; or
• require contractors to set placement goals, collect statistical data, or perform any statistical analysis on the bases of sexual orientation or gender identity (although contractors are generally not prohibited from voluntarily soliciting this information).

While the official publication of the Final Rule is expected on December 9, 2014, OFCCP published a Notice requesting comments by February 6, 2015, on the implementation of the revised regulations. The Final Rule protecting sexual orientation and gender identity as prohibited bases of sex discrimination is effective 120 days from publication and applies to all covered contracts entered into or modified after the effective date. In contrast, OFCCP’s Directive 2014-02, protecting gender identity and transgender status, applies to current contracts.

Further information on the Final Rule, Executive Order 13672, OFCCP’s Frequently Asked Questions, and additional details are available at OFCCP’s web page announcing the Final Rule. OFCCP will also host a technical assistance webinar on December 9, 2014, explaining the Final Rule.