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California Will Offer Three Gender Options On Birth Certificates Starting 2018

Published by and on February 8, 2018

What does California’s nonbinary gender option mean for California employers?

In October 2017, California passed the Gender Recognition Act, Senate Bill 179 (the “Act”), under which Californians who do not identify as either female or male will be able to apply for a “gender neutral” birth certificate beginning September 1, 2018. The law no longer requires individuals seeking to change their legal gender to show they have undergone clinical treatment for the purpose of gender transition in order to petition a court to recognize a legal gender change. Under the new law, an individual seeking to legally identify with another gender would attest, under penalty of perjury, that the request is to conform the person’s legal gender to the person’s gender identity and not for any fraudulent purpose. By court order, an individual may change gender to female, male, or nonbinary. Additionally, beginning January 1, 2019, California’s Department of Motor Vehicles will offer female, male, or nonbinary gender options on driver’s licenses and identification cards for the purpose of providing information regarding organ and tissue donation. Though the law procedurally frees individuals to identify with their chosen gender, the law may leave employers wondering how to address new gender designations in the workplace.

The California Department of Fair Employment and Housing (“DFEH”) recently passed Regulations Regarding Transgender Identity and Expression. Under the regulations, gender identity and gender expression are protected characteristics, which means that employers may not discriminate against prospective or current employees because they identify as transgender or gender non-conforming. Employers are permitted, however, to use employees’ gender or legal name as indicated on a government-issued identification document only if it is necessary to meet a legally mandated obligation, but otherwise must identify employees in accordance with employees’ gender identities and preferred names. If an employee requests to be identified with a preferred gender, name, and/or pronoun, including gender-neutral pronouns, an employer who fails to abide by the employee’s stated preference may be liable for violations of the regulations.

Even further, under the DFEH rules, employers cannot directly or indirectly inquire as to the identity of an individual on the basis of sex, including gender, gender identity, or gender expression, unless the employer establishes a permissible defense, such as a bona fide occupational qualification (“BFOQ”). The text of the rules sets out the following three considerations when justifying a BFOQ: (1) the job requires an employee to observe other individuals in a state of nudity or to conduct body searches; (2) it would be offensive to prevailing social standards to have an individual of a different sex present; and (3) it is detrimental to the mental or physical welfare of individuals being observed or searched to have an individual of a different sex present. For recordkeeping purposes in accordance with the regulation, an employer may request an applicant to provide this information solely on a voluntary basis.

While the DFEH regulations seem harmonious with the Act, discussed above, herein lies the rub: federal contractors and certain private employers are legally required to collect certain employment data and file annual EEO-1 Reports with the U.S. Equal Employment Opportunity Commission (“EEOC”). Among other requirements, covered employers are required to provide company employment data categorized by race, ethnicity and gender. When it comes to race and ethnicity identification, the EEOC instructs employers that the preferred method of identifying race and ethnic information is self-identification by employees on a voluntary basis. If the employee declines, then employment records or observer identification may be used. The EEOC further instructs that there are no “other” or “unknown” race/ethnicity categories. No similar instruction or guidance is given with regard to sex or gender identification.

Under the Act, California now recognizes a third nonbinary gender. And under the DFEH regulations, employers must accept employees’ gender self-identification without regard to birth certificate, driver’s license, or identification card designation. An employer may only use employees’ gender or legal name as indicated in a government-issued identification document only if it is necessary to meet a legally mandated obligation. As established above, federal contractors and certain private employers are obligated to provide such information to the EEOC, however, there is no way to report California’s nonbinary gender option on EEO-1 reports. Employers may find it difficult to permissibly inquire as to an employee’s gender preference or binary gender designation if the employee did not voluntarily submit such information to the employer.

While the DFEH regulations attempt to carve out an exception for legally mandated obligations, the federal government’s limitation to two gender options confuses the newly enacted state system, which provides three options. As California lawmakers have given no advice as to compliance under federal requirements such as EEO-1 reporting, employers may have a difficult time collecting accurate employment data without impermissibly inquiring into an employee’s gender identity or expression under the DFEH regulations.

Welter Insight

Ultimately, employers who are required to be compliant under DFEH regulations and file EEO-1 reports will need to make good-faith observations if an employee declines self-identification as either male or female, as suggested by the EEOC’s instructions for reporting race and ethnicity. Equally, California employers must also be mindful of employee workplace preference as to gender identity and expression, including nonbinary or gender neutral preference.

Human Resources Departments should also be aware that under the DFEH regulations, any recordkeeping as to gender identity or expression information may solely be submitted by employees on a voluntary basis. Tracking this information in a Human Resources Information System (“HRIS”), outside of EEO-1 employment data, may run eschew of state anti-discrimination laws if the data being analyzed disparately impacts potential or current employees on the basis of their gender identity or gender expression.

Employers affected by California’s new laws should review any gender reporting programs for compliance under the new rules. California employers should also establish EEO-1 reporting plans regarding how the required employment data on sex should be collected and reported in compliance with the state laws. Lastly, California employers should update workplace training regarding discrimination in the workplace to include issues surrounding gender identity and expression.

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