New Nondiscrimination and Affirmative Action Requirements for Contractors

The Department of Labor's Office of Federal Contract Compliance Program (OFCCP) has proposed new regulations that will require "covered" Federal Government contractors and subcontractors and federally assisted construction contractors and subcontractors to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that applicants are employed, and treat employees are treated during employment, without regard to their sex.

Now at this point, you might be thinking ho-hum, this requirement has been around forever. Not really. The main purpose of these new regulations is to implement the President's Executive Order (EO) 13672 from last July. That EO, for the first time, added sexual orientation and gender identity as prohibited bases of discrimination.

The EO prohibits contractors from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. It also requires contractors to ensure equal employment opportunity for employees and applicants for employment without regard to those attributes. It goes further in requiring contractors to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to the race, color, religion, sex, sexual orientation, gender identity, or national origin.

So, who is to be covered under these new regulations? Practically everyone. The requirements apply to any business or organization that holds a $10,000 contract or contracts totaling more than $10,000 in a 12-month period. The penalties for violating the EO and the forthcoming rules are substantial. A contractor in violation may be subject to suit for make-whole and injunctive relief and to having its contracts canceled, terminated, or suspended or to debarment after the opportunity for a hearing.

These new rules are intended to advance the employment status of female employees of Federal contractors in several ways. First, the rules address both quid pro quo and hostile-environment sexual harassment. Second, they clarify that adverse treatment of an employee because of gender-stereotyped assumptions about family care-taking responsibilities is discrimination. They clarify that childcare leave must be available to fathers on the same terms as they are to mothers. And finally, the rules will also confirm the requirement that contractors provide equal retirement benefits to make and female employees, even if doing so costs more for one sex than the other.

Quite possibly the most significant and costly aspect to this new rule concerns compliance. In this regard, contractors have affirmative duties to maintain data, conduct internal reviews, and monitor pay practices for potential discrimination, as well as comply with the ban on discrimination in the payment of wages, salaries, and other forms of compensation. Read that again. "Contractors have affirmative duties to maintain data, conduct internal reviews, and monitor pay practices ..."

If you care to read the new 100 plus page draft of the new rules, you may do so by clicking here.