U.S. Department of Labor Advances Regulatory Agenda with Final Rule Barring Federal Contractors from Discriminating against LGBT Workers

On December 3, 2014, the U.S. Department of Labor (DOL) released its final rule barring federal contractors from discriminating on the basis of sexual orientation and gender identity.  The final rule implements an Executive Order signed by President Obama in July 2014 amending Executive Order 11,246 to include sexual orientation and gender identity as prohibited bases of employment discrimination by federal contractors and subcontractors.

The final rule, which will be enforced by the DOL’s Office of Federal Contract Compliance Programs (OFCCP), requires federal contractors to:

  • Update the equal employment opportunity clause in new or modified contracts, subcontracts and purchase orders to state that applicants and employees will be treated without regard to their sexual orientation or gender identity; and
  • Similarly update the equal employment opportunity language used in job solicitations and posted workplace notices.

In contrast to the OFCCP’s final rules for veterans and disabled workers issued earlier this year, this rule does not change the affirmative action plan requirements for federal contractors.  Nor does it require federal contractors to set placement goals on the bases of sexual orientation or gender identity, collect and analyze any data on these bases, or request employees to self-identify.

The rule becomes effective April 8, 2015 and thus, will apply to contracts entered into or modified after that date.

For many multi-state employers, this new rule will not require new policies or practices since 21 states, plus the District of Columbia, already prohibit sexual orientation discrimination in employment and 17 states, plus the District of Columbia, prohibit gender identity discrimination in employment.

With this final rule, OFCCP advances another item in its active regulatory agenda.  Up next? Final regulations are expected next year on the proposed Equal Pay Report for federal contractors and the prohibition against pay secrecy policies, summarized in our earlier blog posts from August 20, 2014 and October 22, 2014.  Regulations implementing the Executive Order on Fair Pay and Safe Workplaces, discussed in a previous blog post, are not expected until 2016.  In the meantime, employers who are, or may become, a federal contractor, should consult with counsel as to how these new rules will impact their compliance obligations.