On December 3, 2014, the Office of Federal Contract Compliance Programs (OFCCP) published a Final Rule changing the OFCCP’s regulations to add gender identity and sexual orientation to the classes it protects. The final rule stems from an executive order signed by President Obama on July 21, 2014, tasking the OFCCP with revising its regulations to prohibit discrimination based on, and require treatment of applicants and employees without regard to, sexual orientation or gender identity. 

Prior to the issuance of the executive order, the OFCCP prohibited employment discrimination by federal contractors on the bases of race, color, religion, sex, and national origin and required those companies to take affirmative steps to ensure that they did not discriminate on those grounds. The executive order added sexual orientation and gender identity to the list of protections that apply to federal contractors and added gender identity as a protected category that applies to federal employees, who are already protected from discrimination based on sexual orientation. Further, it directed the OFCCP to prepare regulations to implement the requirements of the executive order within 90 days of the date of the order. 

The rule announced Wednesday reflects the OFCCP’s adherence to the executive order’s directive.  It goes into effect 120 days from the date of publication in the Federal Register and applies to federal contractors who enter into or modify federal contracts after that date that are worth $10,000 or more in a year. 

According to a fact sheet released by the White House, more than four in 10 lesbian, gay, and bisexual people and 90 percent of transgender employees have experienced some form of employment discrimination based on their sexual orientation at some point in their lives. Recognizing this epidemic, currently 18 states and the District of Columbia (as well as hundreds of local governments) prohibit employment discrimination on the basis of sexual orientation or gender identity. Further, 91 percent of Fortune 500 companies already prohibit discrimination based on sexual orientation, and 61 percent already prohibit discrimination based on gender identity. With the issuance of the executive order and passage of the Final Rule, those smaller companies and closely-held corporations that do not already prohibit sexual orientation discrimination will be forced to comply with their terms if they enter into federal contracts in the future. 

Ballard Spahr’s Labor and Employment Group routinely helps employers comply with their obligations as federal contractors. For more information, please contact Constantinos G. Panagopoulos at 202.661.2202 or cgp@ballardspahr.com, Ashley L. Wilson at 215.864.8364 or wilsona@ballardspahr.com, or the member of the Group with whom you work. 



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