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The OFCCP’s Final Rule on Sex Discrimination took effect last month, on August 15, 2016. Many of you already know that sex discrimination has been illegal since at least 1964, when the Civil Rights Act was enacted. Pay discrimination based on sex has been illegal since at least 1963. Most employers know they cannot base employment decisions and practices on sex. Yet the OFCCP has issued new rules on sex discrimination. Why? The OFCCP says its previous guidelines and regulations were “outdated”. The goals of this Final Rule: “[H]armonizing OFCCP’s outdated regulations with current Title VII jurisprudence” and facilitating “contractor understanding and compliance, potentially reduc[ing] contractor costs, and increase labor-market efficiency”. Let’s have a look at those new rules then, shall we?

Here is what the Final Rule provides:

  • Accommodations to workers with conditions related to pregnancy/childbirth: Required accommodations include without limitation extra bathroom breaks, light-duty assignments, in those situations where contractors provide similar accommodations to similarly-situated non-pregnant workers (e.g. individuals with disabilities).
  • Fair Pay Practices: Most of you know that employers can’t pay workers differently based on sex. What you may not know is what practices could actually constitute pay discrimination. Here are some: denying opportunities for overtime, training, higher-paying jobs, based on a worker’s sex, or based on assumptions about a worker because of their sex or gender stereotypes (not conforming to particular gender norms and expectations about their appearance, attire, or behavior). The new rules state these and other points clearly, whereas the old rules did not. Under this Rule, workers can recover lost wages whenever an employer pays wages resulting from discrimination and not just when the underlying decision is/was made.
  • Equal benefits from fringe-benefit plans, to male and female employees: Fringe benefits include without limitation medical, hospital, accident, life insurance and retirement benefits as well as profit-sharing and bonus plans, leave and other terms and conditions of employment.
  • Forbids sexual harassment: Expand scope of harassment training to include pregnancy/sex-stereotyping/child rearing/sexual orientation and/or transgender modules. As we know, sexual harassment includes without limitation unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, and other verbal or physical conduct of a sexual nature when the conduct interferes with the person’s work performance, forms the basis for employment decisions or otherwise creates a hostile working environment.
  • Equal access to jobs and workforce development opportunities for men and women: Contractors cannot establish different requirements based on sex unless it can show that such requirements are a bona fide occupational qualification. (This is a very high standard and therefore a very narrow exception.) Different job requirements based on sex must be job-related and consistent with business necessity.
  • Protection for workers with caregiving responsibilities: This provision addresses the common practice of basing treatment on stereotypical assumptions that women are more likely to have caregiving responsibilities and then denying employment opportunities on that basis. It reinforces the prohibition against denying opportunities to any employee based on his or her sex. Conversely, if a father requests flexible arrangements for caregiving, it must afford those accommodations if it makes similar accommodations for working mothers.
  • Protections for transgender workers: This does one thing that Title VII does not: it clearly states that sex discrimination includes discrimination based on gender identity. It also requires that workers be allowed to use bathrooms, changing rooms, showers and similar facilities consistent with their gender identity. It also explicitly states that contractors cannot exclude coverage for care related to gender dysphoria or gender transition.
  • Protection against discrimination based on sex stereotypes: Contractors cannot discriminate in any way against employees or applicants who fail to comply with gender stereotypes about how men and women act or types of jobs they “should” do.
  • Protections for religiously affiliated contractors under the Religious Freedom Restoration Act (RFRA): The RFRA allows religiously affiliated contractors, such as religious corporations, educational institutions or societies to favor people of a particular religion when making employment decisions, and follows Supreme Court precedent, which recognizes the First Amendment’s requirement of a “ministerial exception” from employment discrimination laws. The ministerial exception prohibits the government from interfering with the religious organization making employment decisions about its so-called ministers. (This alone could probably be a separate topic).

As you can see, this Rule is fairly comprehensive. It not only takes Title VII and its amendments, and cases interpreting those laws and incorporates them into one Final Rule, it goes even further. How so? Title VII itself, along with its amendments, and along with most cases interpreting them, is silent on the issues of gender identity and to some extent, on gender stereotypes. We see here another example of President Obama using the OFCCP to advance those parts of his agenda that he has not been able to push through Congress and make all his employers subject to it.

If you are a federal contractor, what has changed for you? Theoretically nothing. Practically speaking, the changes may be significant. This Final Rule gives the OFCCP a specific tool to use to go after contractors who continue to engage in sex discrimination. It also makes it harder for you as a federal contractor to claim you “didn’t know” that certain behaviors constitute sex discrimination, and puts greater onus on you to ensure equal employment opportunities for men and women. Finally, you cannot argue that the protections don’t apply to transgender employees, the way non-contractor employers might with regard to Title VII.

Suppose you are not a federal contractor. Don’t get complacent! The issue of protection to transgender employees will probably reach the US Supreme Court in the not-too-distant future. Moreover, the fact that the EEOC, the OFCCP and the President (at least until the end of 2016) are on the same page on this and other sex-related issues does create some pressure to keep the tide moving in that direction. Therefore, non-contractor employees would do well to get ahead of the issue by reviewing the Final Rule and acting accordingly.

There are certain steps you can take to ensure that you stay ahead of the curve. Here at HR Unlimited, we are all about proactive efforts. While we cannot exactly offer you a magic bullet, the time and resources you devote to ensuring your compliance now can save you so much time, money, and let’s not forget, heartache later. So, what can you do? Here are some starting points:

  1. Review and update compensation practices: Much of the Final Rules’ (and if you’re not a contractor, the EEOC’s) emphasis is on pay equity. If there are any disparities between what similarly situated men and women earn for similar jobs, then you will want to explore further. Why are there disparities? Take steps to correct them. Are the specific jobs actually similar? If not, you may want to update the job descriptions to show the differences.
  2. Review and update hiring practices and access to jobs and development opportunities: Is there a disproportionate number of men versus women in certain, higher-paying jobs? Do you have more male employees taking advantage of certain training and advancement opportunities than similarly-situated female employees? What efforts did you make to hire equally qualified women? Did you document those efforts? What could you do to increase your chances of hiring equally qualified female candidates? Whatever you do, make sure you don’t discourage female candidates, or suggest they apply for lower-paying jobs, if they are applying and qualified for one or more jobs that pay more. This practice is called job-steering and it is now on the OFCCP’s radar screen. Do your managers assume that equally qualified female candidates are either uninterested or unavailable based on assumptions about care giving responsibilities? These assumptions can lead to practices that could result in visits or other contact from the OFCCP. If you beef up your hiring practices in this respect, then you are less likely to be asked by the OFCCP (or the EEOC) about pay disparities or other discriminatory impact, later.
  3. Review and Update Sexual Harassment Policies and Training and Monitor Compliance: While all employers should already be on top of this issue, many, surprisingly, are not. That is why the OFCCP’s final rules once again target it. Now is a good time to look at reported incidents, how they were resolved and also to get an idea if there may have been other incidents that went unreported. If you do know or have reason to know of incidents that went unreported, this is a good time to investigate and to fine-tune your practices in an effort to ensure that incidents are reported. When was the last time you conducted sexual harassment training? Did incidents increase, decrease, or remain the same since then? If it has been a while since your last training, you will not only want to repeat the training, but you should also think about appropriate updates since your last training.
  4. Review and update practices regarding accommodations for transgender workers: Do your employees and managers know and understand that transgender employees must be afforded access to the bathroom/locker room/changing room that corresponds to his/her gender identity? Do your benefits administrators and insurance carriers understand that you have an obligation to provide medical coverage for care related to gender dysphoria and/or gender transition? If you have not made concerted efforts to communicate this information, now is the time to do so.
  5. Provide training: We are living in a brave new world, where previous assumptions and stereotypes about gender often get in the way of employee relations and result in illegal, discriminatory behavior and employment practices. Awareness is the first step toward ensuring that your employees and managers understand what behaviors and practices are and are not acceptable – or are downright illegal.
  6. Monitor compliance with and address violations of any policies or laws: Many employers have beautifully-written policies but fail to follow up and ascertain whether their employees are actually adhering to the policies. What’s worse, many employers fail to consistently enforce those policies. Failure to discipline those who violate your policies will undermine all your other efforts. It says to your employees that while they’re not supposed to discriminate, that you don’t really mean it. Not only can that actually cause discrimination to continue; not only could that mean that you end up incurring the very liability you are trying to minimize, but there is actually another likely, albeit unintended effect: Your employees may start to take you less seriously in other contexts, because you have allowed them not to take you seriously in this one. So stay on message!

This should hopefully be enough to get you started.

For more information, contact Ahmed Younies at (714) 426-2918 x 1 or [email protected].


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