Fed Contractors: Sex Discrimination Updates Could Cost You

Published on January 30, 2015

A proposed rule for federal contractors includes new provisions that address childcare leave, reasonable accommodation for pregnant workers, and gender identity discrimination. But the DOL estimates ongoing costs for employers.

The U.S. Department of Labor (DOL), announced a Notice of Proposed Rulemaking (NPRM) to clarify and overturn outdated guidelines on sex discrimination for federal contractors and subcontractors. The proposed rule:

• Updates sex discrimination rules for both female and male employees who may suffer sexual harassment or other forms of sex discrimination.
• Provides reasonable accommodations for pregnancy to the more than two million women in the federal contractor workforce who are likely to become pregnant each year.
• Provides clear and consistent regulatory protection to transgender employees.

The proposed rule could cost federal contractors approximately $26 million in one-time administrative costs and about $10 million a year to provide pregnancy-related accommodations. Public comments on the proposed rule are open until March 31, 2015.

Background on Sexual Discrimination for Federal Contractors

President Lyndon Johnson’s Executive Order 11246 prohibited discrimination by government contractors and subcontractors, but the requirements of the order remained relatively unchanged from 1965, a time when only 28 percent of the workforce were women with children under the age of 18. Today, that number has risen to 70 percent.

The proposed rule addresses current workplace practices and supports the economic interests of women, families, and others impacted by discrimination based on sex while removing conflicting regulatory provisions.

Pregnancy Discrimination Act

The Pregnancy Discrimination Act is an amendment to Title VII of the Civil Rights Act of 1964. This amendment states that women “affected by pregnancy or related conditions must be treated in the same manner as other applicants or employees who are similar in their ability or inability to work.”

Under the PDA:

“If an employee is temporarily unable to perform her job because of her pregnancy, the employer must treat her the same as any other temporarily disabled employee. For example, if the employer allows temporarily disabled employees to modify tasks, perform alternative assignments, or take disability leave or leave without pay, the employer also must allow an employee who is temporarily disabled because of pregnancy to do the same.”

Six states (Illinois, Delaware, Maryland, Minnesota, New Jersey and West Virginia) have passed legislation instructing employers to provide accommodations for pregnant workers.

Reasonable Accommodation

Reasonable accommodation as defined by the U.S. Department of Justice is “any modification or adjustment to a job or the work environment that will enable a qualified applicant or employee with a disability to participate in the application process or to perform essential job functions.”