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OFCCP Announces Final Rule on Sex Discrimination

On June 14, 2016, the OFCCP announced its final rule, “Discrimination on the Basis of Sex” (Final Rule), replacing the OFCCP’s 1970 Sex Discrimination Guidelines. The Final Rule goes into effect on August 15, 2016, giving federal contractors and subcontractors 60 days to comply with the changes. A link to the Final Rule can be found here. The Final rule applies to federal contractors and subcontractors covered by Executive Order 11246.

In general, the Final Rule incorporates provisions from Title VII, Lily Ledbetter, the Family and Medical Leave Act, and the Pregnancy Discrimination Act. The OFCCP’s stated purpose is to align OFCCP requirements with the “developments and interpretations of existing Title VII principles and to clarify OFCCP’s corresponding interpretations of the Executive Order [11246].”  Some of the key developments include equal treatment for employees affected by pregnancy, childbirth and related medical conditions, workplace protections for caregivers, fair pay practices, protections for transgender workers and prohibition of discrimination based on sex stereotypes. The Final Rule defines “sex” as including, but not limited to “pregnancy, childbirth, or related medical conditions; gender identity; transgender status; and sex stereotyping.” 

Highlights of the changes include:

  • Pregnancy discrimination/Accommodation

    • Family Caregiver Protections

  • Language from the Pregnancy Discrimination Act requiring contractors to “treat people of childbearing capacity and those affected by pregnancy, childbirth, or related medical conditions the same for all employment-related purposes, including receipt of benefits under fringe-benefit programs, as other persons not so affected, but similar in their ability or inability to work[,]” is incorporated.
  • Fair Pay (not Equal Pay)

  • The OFCCP adopts the Lilly Ledbetter Fair Pay Act language regarding compensation discrimination.

  • Protections for Transgender Employees and LGBT

    • Contractors cannot deny transgender employees access to the restrooms, changing rooms, showers, and similar facilities designated for use by the gender with which they identify.

    • Contractors are not required to cover gender identity related health care services and procedures, but are prohibited from categorically excluding coverage for gender dysphoria treatment or gender transition procedures, or otherwise denying health care due to gender identity discrimination.  This provision will generally take effect in 2017.

  • The OFCCP adopts the Title VII “bona fide occupational qualification (“BFOQ”)” language to determine whether sex is a BFOQ.

  • Religious Freedom Restoration Act (RFRA). Contractors can seek RFRA exemptions from the Final Rule.

  • Some OFCCP recommended best practices include:

    • Avoid use of gender-specific job titles

    • Designate single-user restrooms, changing rooms, showers

    • Provide anti-harassment training

    • Encourage men and women equally to engage in caregiver-related activities

  • Review Policies and Practices and eliminate those which have a disparate impact

    • Example: relying on “word-of-mouth” recruitment or “tap-on-the-shoulder” promotion methods that have an adverse impact on women and are not job-related or consistent with business necessity.       

The Final Rule is not meant to conflict with contractors’ good faith efforts in executing affirmative action plans. The Final Rule does not include any new reporting, posting or listing requirements or changes in affirmative action plans. Rather, the Final Rule is directed at prohibiting discrimination based on sex.

The OFCCP notes that full compliance may take longer than the August 15, 2016 effective date. However, contractors and subcontractors should be taking good faith steps toward compliance to avoid enforcement sanctions.

©2022 MICHAEL BEST & FRIEDRICH LLPNational Law Review, Volume VI, Number 188

About this Author

Farrah Rifelj, Michael Best Law Firm, Labor and Employment Attorney

Farrah serves Michael Best in two capacities: as Deputy General Counsel and as a partner in the Labor and Employment Relations Practice Group. Her practice focuses on employment counseling and employment litigation, with a particular emphasis on discrimination, noncompetition, and Federal Contract Compliance Programs (OFCCP).

Farrah provides management with astute advice on employment topics such as:

  • Affirmative action

  • Disability accommodation

  • ...
Kirk Pelikan, Michael Best Law Firm, Labor and Employment Attorney

Kirk’s practice focuses on legal issues related to all aspects of the employment cycle, from hiring through termination and severance. Substantially experienced in both benefits and employment law, Kirk is well positioned to help clients respond to the opportunities, vulnerabilities and benefit ramifications of particular employment decisions.

Kirk’s focus includes:

  • Developing and maintaining effective compliance strategies related to defined benefit plans, defined contribution plans, executive...

Elizabeth N. Larson, Michael Best, Employment Discrimination Lawyer, Affirmative Action Compliance Attorney

Elizabeth focuses on employment discrimination, affirmative action, and Office of Federal Contract Compliance Programs (OFCCP) matters. Clients value her responsiveness, as well as her attention to detail, in these areas. They also look to her for support with trade secret and non-compete litigation.

Elizabeth previously served as a law clerk for MillerCoors where she researched a variety of legal matters including wage garnishments, disability discrimination, immigration law, alcohol and beverage law, privacy, and intellectual property. She...

Marion Smith, Michael Best Law Firm, Director of Employment Relations and Compliance
Director of Employment Relations and Compliance

Marion applies her extensive experience to a broad range of complex labor and employment and strategic planning issues, working with our lawyers on behalf of Michael Best clients.

Clients turn to Marion for comprehensive executive search services and placement for public and private entities, as well as targeted search services assistance in areas ranging from background and reference checking to preparation and negotiation of initial employment agreements.

She also provides comprehensive management training in...