8.13.18

Craig Leen, Acting Director of the Office of Federal Contract Compliance Programs, issued two new Directives on August 10, 2018.  One applies to federal contractors claiming religious exemption and the other relates to focused compliance evaluations.

Directive 2018-03 – Religious Exemptions

Executive Order 11246 prohibits contractors from discriminating against applicants or employees because of their religion, among other things.  However, the Executive Order does not apply to “a Government contractor or subcontractor that is a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on . . . of its activities.”  Directive 2018-03 discusses recent legal developments regarding religious organizations and instructs OFCCP staff to act consistently in enforcement and compliance assistance activities.

The Directive notes several recent court decisions that “have addressed the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals under the United States Constitution and federal law,” citing Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission and Trinity Lutheran Church of Columbia, Inc. v. Comer.

The Directive explicitly states that it supersedes any prior guidance that does not reflect these new legal developments, including the OFCCP’s Frequently Asked Questions on sexual orientation and gender identity discrimination.  Presumably, this calls into question the following FAQ:

How does EO 11246’s exemption for religious organizations operate in light of the addition of the new protected categories?

In general, this exemption allows religious organizations to prefer to employ only members of a particular faith, but it does not allow religious organizations to discriminate in employment on the basis of race, color, sex, sexual orientation, gender identity, or national origin.

In addition, the Directive specifically advises agency staff that they must take these new legal principles into consideration, including that “[t]hey ‘cannot act in a manner that passes judgment upon or presupposes that illegitimacy of religious beliefs and practices’ and must ‘proceed in a manner neutral toward and tolerant of . . . religious beliefs.’”

This Directive reflects this Administration’s position expressed in other recent Executive Orders that the federal government should protect, not impede, religious beliefs and practices.

Directive 2018-04 – Focused Reviews

Directive 2018-04 describes the agency’s initiative to conduct “focused” reviews – or compliance evaluations aimed solely at one area of the OFCCP’s enforcement authority.  The OFCCP anticipates that, going forward, some contractors will be selected for a compliance evaluation focused entirely on compliance with one of the three laws it enforces:  Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act.

As described in the Directive:

In the focused reviews anticipated by this Directive, OFCCP would go onsite and conduct a comprehensive review of the particular authority at issue.  For example, in a Section 503 focused review, the compliance officer would review policies and practices of the contractor related solely to Section 503 compliance.  The review would include interviews with managers responsible for equal employment opportunity and Section 503 compliance (such as the ADA coordinator) as well as employees affected by those policies.  OFCCP would also seek to evaluate hiring and compensation data, as well as the handling of accommodation requests, to ensure that individuals with disabilities are not being discriminated against in employment.

To implement this new process, the Directive instructs the staff at OFCCP to ensure that a portion of compliance evaluations scheduled in FY 2019 include focused reviews under all three laws, to develop a standard protocol for conducting the compliance evaluations, and to make that information publicly available prior to the next round of scheduling letters.

This affords contractors the time to conduct a thorough internal review of their processes and procedures to ensure that they are fully compliant in some of the areas that the OFCCP does not frequently delve.

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