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New OFCCP Discrimination Rules on the Horizon for Federal Contractors

Published by on July 17, 2015

Federal contractors should be on the lookout for new OFCCP rules this fall and winter instituting new reporting requirements for federal contractors and updating federal contractor regulations regarding sex and gender discrimination. These new rules demonstrate significant changes to contractors’ obligations to applicants and employees under federal law. First up, the OFCCP is scheduled to […]

Federal contractors should be on the lookout for new OFCCP rules this fall and winter instituting new reporting requirements for federal contractors and updating federal contractor regulations regarding sex and gender discrimination. These new rules demonstrate significant changes to contractors’ obligations to applicants and employees under federal law.

First up, the OFCCP is scheduled to release a final rule requiring some federal contractors to submit an “Equal Pay Report” as a supplement to their required annual EEO-1 report. The Report should include the salary or pay rate of every employee broken down by sex, race, and ethnicity.

Contractors are also required to include specific job categories and other relevant data about the employee, such as hours worked and the contractor’s total number of employees. The original NPRM was released in August 2014, however the implementation period was extended into 2015. The final rule is expected in November 2015.

The OFCCP is also expected to release a related rule in August 2015 prohibiting contractors from retaliating or discriminating against employees who disclose their compensation rate, or inquire about other contractors’ compensation rates. According to Executive Order 13665, such a rule will assist in the review of contractors’ equal pay reports.

The OFCCP’s most significant rule discussed herein is simply titled, “Discrimination on the Basis of Sex.” The agency published its NPRM for this rule on January 30, 2015, and the final rule is expected in December of this year. This rule is essentially an update and modernization of the rules and guidelines regarding sex and gender discrimination. The agency notes that the rules had not been updated since 1978, and the significant changes in both the employment landscape and the discrimination laws require a significant revision of federal contractors’ anti-discrimination obligations.

Of the many changes, the most notable is the combination of several employee protections established by statute or legal precedent under one regulatory umbrella. The proposed rule begins with a general prohibition on discrimination on the basis of sex, gender, pregnancy and any medical needs associated with childbirth. The rest of the rule requires contractors to provide all employees with equal treatment, benefits and employment consideration.

For example, the old rule required contractors to provide separate bathroom facilities for both genders, unless the cost would be excessive or space was too limited. The new rule requires facilities for both genders or single-use facilities that could accommodate all sexes and genders. Further, contractors are to make no distinction between the reason for an accommodation or medical leave and the employee’s condition.

For instance, contractors must provide pregnant employees with reasonable accommodations for their pregnancy or pregnancy-related conditions and needs using the same accommodation analysis that would also be applied to non-pregnant employees requesting an accommodation. The NPRM lists several acceptable pregnancy-related accommodations, including increased bathroom breaks, temporary leave or temporary light duty.

Laconic Lookout:

Federal government contractors should review and update their employment policies and pay scales before these new rules go into effect this year. Further, contractors should evaluate the benefits provided to employees and the facilities where their employees work to ensure that their employees’ sex and gender-specific needs are being met.

Contractors should be aware that these rules generally do not create a higher burden for federal contractors than that of any other business in the general marketplace.

That said, the key is equality. The new rules also mean that policies regarding family and pregnancy-related leave must be equally applied to male employees. If male employees are not permitted to take leave or receive some other accommodation related to childbirth, such an act would violate the new rules.

With respect to the Equal Pay Report requirement, contractors should review the pay rates for each position type to determine if any disparity in pay exists based on gender. It is much easier to adjust employees’ pay now than to face an OFCCP audit or lawsuit later.

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