On June 14, 2016, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced a Final Rule setting forth the requirements that covered federal contractors and subcontractors must meet to fulfill their obligations under Executive Order 11246 to ensure nondiscrimination in employment on the basis of sex. The new rule updates prior, outdated guidelines to bring the requirements in line with case law interpreting Title VII of the Civil Rights Act of 1964 and the U.S. Equal Employment Opportunity Commission’s current interpretation of the statute (which sometimes goes beyond the current body of case law in finding worker protections). As a result, many covered contractors are already likely complying with most, if not all, of the requirements in the new rule.

Some of the more important features of the new rule include:

• Protections Relating to Pregnancy, Childbirth and Related Medical Conditions. The new rule indicates that discrimination on the basis of pregnancy, childbirth or related medical conditions, including childbearing capacity, is a form of unlawful sex discrimination. The rule also requires that contractors provide workplace accommodations, such as extra bathroom breaks and light-duty assignments, to an employee who needs such accommodations because of pregnancy, childbirth or related medical conditions in certain circumstances where those contractors provide comparable accommodations to other workers, such as those with disabilities or occupational injuries.
• Compensation Equality. The new rule makes clear that contractors may not pay workers differently because of their sex, including denying opportunities for overtime work, training, better pay or higher-paying positions because of a worker’s sex.
• Fringe Benefits. The new rule prohibits discrimination on the basis of sex for fringe benefits such as medical, hospital, accident, life insurance and retirement benefits; profit-sharing and bonus plans; leave; and other terms, conditions and privileges of employment.
• Prohibition of Sexual Harassment. The rule prohibits 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 such conduct unreasonably interferes with an individual’s work performance, becomes the basis for employment decisions or creates a hostile working environment.
• Equal Workforce Development Opportunities. The new rule makes clear that covered employers may not set requirements for jobs or training that are based on an applicant’s or employee’s sex unless the contractor can demonstrate that such requirements are a bona fide occupational qualification. Additionally, a contractor may not set requirements, such as height or weight qualifications, that adversely affect applicants because of their sex unless the employer demonstrates that the qualifications are job-related and consistent with business necessity.
• Equal Treatment Regarding Caregiving. The new rule explains that contractors may not treat female or male employees or applicants differently based on the stereotypical assumption that women are more likely to have caregiving responsibilities. For instance, contractors may not deny mothers employment opportunities that are available to fathers based on the faulty assumption that mothers’ childcare responsibilities will conflict with their job performance. Similarly, contractors may not deny fathers flexible workplace arrangements that are available to mothers based on the faulty assumption that men do not have and do not assume childcare responsibilities.
• Protections for Transgender Employees. The new rule makes clear that it is unlawful to deny transgender employees access to the restrooms, changing rooms, showers or similar facilities designated for use by the gender they identify with. The rule also explains that it is unlawful to take adverse action against an employee or applicant because he or she has received or plans to receive medical services relating to a gender transition.
• Prohibition on Sex Stereotyping. The new rule explains that contractors may not treat employees or applicants adversely because they fail to comply with expectations about how women and men should look or act or what kinds of jobs they should do.

The new rule also contains a separate section containing recommended best practices for employers to avoid sex discrimination in the workplace. Covered contractors are not, however, required to follow the recommended practices set forth in this section.

The new rule goes into effect on August 15, 2016. More information about the new rule can be found here.

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