Federal Contractor Guidance on Prohibiting LGBT Discrimination Arrives Amid Heated Congressional Debate

Latest guidance on the issue comes just days after the terrorist attack at a gay club in Orlando, Fla., that killed 49 people and wounded at least 53. Latest guidance on the issue comes just days after the terrorist attack at a gay club in Orlando, Fla., that killed 49 people and wounded at least 53. Phelan M. Ebenhack / AP

The Labor Department on Wednesday will publish detailed guidance to help federal contractors comply with an executive order that prohibits companies from discriminating against LGBT employees.

The June 15 final rule updates existing anti-discriminatory guidelines already on the books to include sexual orientation and gender identity and explains contractors’ obligations and potential costs related to implementing the amended Executive Order 11246, which President Obama issued in July 2014. The original E.O., issued by President Lyndon B. Johnson in the 1960s, prohibited federal contractors from discriminating against any employee or applicant for employment because of race, color, religion, sex or national origin. Obama updated it to include the language related to LGBT employees and applicants, and added protections against retaliation for employees who openly discuss or disclose compensation.

The E.O. applies to federal contractors and subcontractors who do more than $10,000 in business with the government in one year. 

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Labor already has published regulations implementing the amended E.O., but the nearly 200-page June 15 rule seeks to clarify the new requirements, get rid of outdated provisions, remind contractors of existing case law, and provide examples of discriminatory practices that contractors must avoid. For instance, the rule “clarifies that adverse treatment of an employee resulting from gender-stereotypical assumptions about family caretaking responsibilities is discrimination. It also confirms the requirement that contractors provide equal retirement benefits to male and female employees, even if the contractor incurs greater expense by doing so.”

The department said in the final rule that the regulation “will impose relatively modest administrative and other cost burdens for contractors to ensure a workplace free of sex-based discrimination.” The government calculated that the one-time cost to companies related to understanding compliance would be $83 per contractor for the first year. Another cost contractors might incur included pregnancy accommodations, which the department estimated at a maximum of $19 annually per contractor.

The latest guidance on the issue comes just days after the terrorist attack at a gay club in Orlando, Fla., that killed 49 people and wounded at least 53. It also arrives amid contentious floor fights in the House over protecting the rights of LGBT (lesbian, gay, bisexual and transgender) people and also religious organizations when it comes to federal contracting. The issue is having a major impact on the annual appropriations process, as both Republican and Democratic lawmakers try to attach amendments to the must-pass spending legislation funding federal agencies.

Rep. Sean Patrick Maloney, D-N.Y., late last month successfully added an amendment to the fiscal 2017 energy and water spending bill that prevents federal contractors from discriminating against employees based on sexual orientation and gender identity. Maloney previously tried to get that measure into the MilCon-VA spending bill, but Republicans blocked it and the back-and-forth devolved into shouting matches on the House floor. The New York congressman, who is openly gay, introduced the amendment in response to a provision included in the defense authorization bill that federal contract recipients could not be discriminated against on a religious basis. Critics said that language would enable federal contractors to ignore the Obama executive order to prohibit the recipients from discriminating against LGBT employees.

That, however, didn’t settle the issue. Rep. Bradley Byrne, R-Ala., then added a successful amendment to the energy and water spending bill that exempts religious groups from Obama’s executive order related to federal contractors, essentially undermining Maloney’s measure. The competing amendments were enough to bring down the entire energy and water spending bill, which failed to pass on May 26.

And there’s still the defense authorization legislation to hammer out. The Senate passed its fiscal 2017 Defense authorization bill on Tuesday, which does not include the provision related to faith-based federal contractors that is in the House version. Obama has threatened to veto both the House and Senate versions of the NDAA.

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