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OFCCP’s New Sex Discrimination Rule Expands Employee Protections Based on Pregnancy, Caregiver Status, and Gender Identity
Wednesday, June 15, 2016

This week, the OFCCP updated its sex discrimination guidelines on topics such as accommodations for pregnant workers, gender identity bias, pay discrimination, and family caregiving discrimination. Intended to align the OFCCP’s regulations with the current interpretation of Title VII’s prohibitions against sex discrimination, the new rule will require federal contractors to examine their employment practices, even those that are facially neutral, to make sure that they do not negatively affect their employees. The new rule takes effect on August 15, 2016.

Overview of New Sex Discrimination Rule

The existing OFCCP sex discrimination guidelines date back to the 1970s. The new rule is designed to meet the realities of today’s workplaces and workforces. Today, many more women work outside the home, and many have the financial responsibility for themselves and their families. Many women have children while employed and plan to continue work after giving birth to their children. Women sometimes are also the chief caregivers in their families. The updated regulations are meant to offer women and men fair access to jobs and fair treatment while employed.

The new rule defines sex discrimination to include discrimination on the basis of sex, pregnancy (which includes childbirth or related medical conditions), gender identity, transgender status and sex stereotyping. The rule specifies that contractors must provide accommodations for pregnancy and related conditions on the same terms as are provided to other employees who are similarly able or unable to perform their job duties. For example, contractors must provide extra bathroom breaks and light-duty assignments to an employee who needs such an accommodation due to pregnancy where the contractor provides similar accommodations to other workers with disabilities or occupational injuries.

The new rule also incorporates President Obama’s July 2014 Executive Order that prohibits federal contractors from discriminating on the basis of sexual orientation and gender identity. In addition, contractors that provide health care benefits must make that coverage available for transition-related services and must not otherwise discriminate in health benefits on the basis of gender identity or transgender status.

The rule prohibits pay discrimination based on sex. It recognizes the determination of “similarly situated” employees is case-specific and depends on a number of factors, such as tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. Notably, the OFCCP rule says that employees can be “similarly situated” where they are comparable on some of the factors, but not all of them.

Unlawful compensation discrimination can result not only from unequal pay for equal work, but also from other employer decisions. Contractors may not grant or deny opportunities for overtime work, training, apprenticeships, better pay, or higher-paying positions or opportunities that may lead to higher-paying positions because of a worker’s sex. Employees may recover lost wages for discriminatory pay any time a contractor pays compensation that violates the rule, even if the decision to discriminate was made long before that payment. 

The new rule also prohibits facially neutral employment policies and practices that have a disparate impact on the basis of sex. Accordingly, job requirements -- such as height, weight, and strength minimums -- must not disproportionately exclude women (or indeed, men) from employment opportunities, except to the extent that such policies are job-related and consistent with business necessity.

Harassment because of sex is also prohibited under the OFCCP’s new rule, including sexual harassment based on gender identity, sex stereotypes or pregnancy.

Covered Contractors and Employees

The final rule applies to any business or organization that:

  1. has a single federal contract, subcontract, or federally assisted construction contract or subcontract in excess of $10,000;

  2. has two or more federal contracts or subcontract in any 12-month period that combine to total $10,000; 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.

If a federal contractor falls under one of the definitions above, all of its applicants and employees are protected by the new rule, not just those who work on the federal contract.

Best Practices

With the new rule scheduled to take effect on August 15, 2016, the OFCCP included an appendix of best practices that are designed to help contractors prevent sex discrimination in their workplaces. Although not binding, the best practices address specific scenarios to help employers comply with the regulations. Examples include avoiding the use of gender-specific job titles, such as “foreman,” providing single-user restrooms or changing rooms that are sex-neutral, and avoiding the assumption that women are more likely to provide family care than men. The final rule, including the best practices appendix, may be found here. The OFCCP’s website also provides resources on the new rule, including a fact sheet and frequently asked questions.

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