OFCCP Updates in the Fall 2018 Regulatory Agenda

On October 17, 2018, the Trump administration issued its Fall 2018 Unified Agenda of Regulatory and Deregulatory Actions, which reports on actions administrative agencies plan to issue within the next year. The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has two planned updates identified in the agenda.

According to the agenda, OFCCP will release one planned notice of proposed rulemaking (NPRM) titled Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious-Organization Exemption in December 2018. The agenda has identified this proposed update as “[d]eregulatory.” The purpose of the update is “to comply with current law regarding protections for religion-exercising organizations.” The agenda notice comes on the heels of OFCCP’s Directive 2018-03, issued in August, which provides new guidance on the religious exemption provisions of Executive Order 11246. Specifically, the directive proposes updates in light of recent Supreme Court decisions and executive orders in order to ensure that the federal government “permit[s] individuals and organizations . . . to participate in a government program ‘without having to disavow [their] religious character.’” Accordingly, OFCCP staff have been instructed to take these legal developments into account “when providing compliance assistance, processing complaints, and enforcing the requirements of [Executive Order] 11246” until a final rule is issued. All eyes are on this update to address the conflict between the executive order and OFCCP regulations prohibiting discrimination on the basis of sex, including “sexual orientation” and “gender identity,” and the principles of the recent Supreme Court decisions permitting religious organizations to make employment decisions based on religion.    

The other regulatory item is titled Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE and Certain Other Healthcare Providers and is set for a tentative release in June 2019. This NPRM “would revise 41 CFR part 60 implementing the nondiscrimination and affirmative action provisions of Executive Order 11246 (as amended), section 503 of the Rehabilitation Act (as amended), and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (as amended) concerning the obligations of TRICARE or certain other healthcare providers as federal contractors and subcontractors” and “would include limiting and otherwise altering the obligations of TRICARE and other healthcare providers covered by these authorities.” This regulation has been widely anticipated based on OFCCP’s Directive 2018-02, issued in May, which extends the moratorium on enforcement of the affirmative action obligations required of TRICARE subcontractors.