Discrimination on the Basis of Sex, 5245-5279 [2015-01422]

Download as PDF Vol. 80 Friday, No. 20 January 30, 2015 Part III Department of Labor asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Office of Federal Contract Compliance Programs 41 CFR Part 60–20 Discrimination on the Basis of Sex; Proposed Rule VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\30JAP2.SGM 30JAP2 5246 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules DEPARTMENT OF LABOR Office of Federal Contract Compliance Programs 41 CFR Part 60–20 [01 14 15 OFCCP] RIN 1250–AA05 Discrimination on the Basis of Sex Office of Federal Contract Compliance Programs, Labor. ACTION: Notice of proposed rulemaking. AGENCY: The U.S. Department of Labor’s (‘‘DOL’’) Office of Federal Contract Compliance Programs (‘‘OFCCP’’) is proposing regulations that would set forth requirements that covered Federal Government contractors and subcontractors and federally assisted construction contractors and subcontractors must meet in fulfilling their obligations under Executive Order 11246, as amended, to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex. This proposal would substantially revise the existing Sex Discrimination Guidelines, which have not been substantively updated since 1970, and replace them with regulations that align with current law and legal principles and address their application to current workplace practices and issues. Most of the proposed provisions in this NPRM would clarify wellestablished case law or applicable requirements from other Federal agencies and therefore would not change existing requirements for entities affected by this rule. The NPRM’s approach with respect to pregnancy accommodation is consistent with the interpretation of the Pregnancy Discrimination Act adopted by the Equal Employment Opportunity Commission (EEOC) and by the Government in Young v. United Parcel Serv., Inc., 707 F.3d 437 (4th Cir. 2013), cert. granted (U.S. No. 12–1226, July 1, 2014). DATES: To be assured of consideration, comments must be received on or before March 31, 2015. ADDRESSES: You may submit comments, identified by RIN number 1250–AA05, by any of the following methods: • Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments. • Fax: (202) 693–1304 (for comments of six pages or less). asabaliauskas on DSK5VPTVN1PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 • Mail: Debra A. Carr, Director, Division of Policy, Planning, and Program Development, Office of Federal Contract Compliance Programs, Room C–3325, 200 Constitution Avenue NW., Washington, DC 20210. Receipt of submissions will not be acknowledged; however, the sender may request confirmation that a submission has been received by telephoning OFCCP at (202) 693–0104 (voice) or (202) 693–1337 (TTY) (these are not tollfree numbers). All comments received, including any personal information provided, will be available for public inspection during normal business hours at Room C–3325, 200 Constitution Avenue NW., Washington, DC 20210, or via the Internet at https://www.regulations.gov. Upon request, individuals who require assistance to review comments will be provided with appropriate aids such as readers or print magnifiers. Copies of this Notice of Proposed Rulemaking (NPRM) will be made available in the following formats: Large print, electronic file on computer disk, and audiotape. To schedule an appointment to review the comments and/or to obtain this NPRM in an alternate format, please contact OFCCP at the telephone numbers or address listed above. FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of Policy, Planning and Program Development, Office of Federal Contract Compliance Programs, 200 Constitution Avenue NW., Room C–3325, Washington, DC 20210. Telephone: (202) 693–0104 (voice) or (202) 693– 1337 (TTY). SUPPLEMENTARY INFORMATION: Executive Summary Purpose of the Regulatory Action The U.S. Department of Labor’s (‘‘DOL’’) Office of Federal Contract Compliance Programs (‘‘OFCCP’’) is proposing regulations that would set forth requirements that covered 1 Federal Government contractors and 1 41 CFR 60–1.5 exempts certain Federal and federally assisted contractors and subcontractors from coverage. That section exempts contracts and subcontracts not exceeding $10,000 (§ 60–1.5(a)(1)); certain contracts and subcontracts for indefinite quantities (§ 60–1.5(a)(2)); work performed outside the United States by employees who were not recruited within the United States (§ 60–1.5(a)(3)); contracts with certain religious entities and educational institutions (§ 60–1.5(a)(5) and (6)); specific contracts and facilities exempted by the Director of the OFCCP when required by ‘‘special circumstances in the national interest’’ (§ 60– 1.5(b)(1)) or because they are ‘‘separate and distinct from activities . . . related to the performance of the contract or subcontract’’ (§ 60–1.5(b)(2); and contracts determined to be essential to the national security (§ 60–1.5(c)). PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 subcontractors and federally assisted construction contractors and subcontractors must meet in fulfilling their obligations under Executive Order 11246, as amended, to ensure nondiscrimination in employment on the basis of sex and to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex. The OFCCP is charged with enforcing Executive Order 11246, as amended (‘‘Executive Order’’), which prohibits covered Federal Government contractors and subcontractors and federally assisted construction contractors and subcontractors (‘‘contractors’’) from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.2 The Executive Order also requires contractors to ensure equal employment opportunity for employees and applicants for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin and to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to the enumerated bases. OFCCP interprets the nondiscrimination provisions of the Executive Order consistent with the principles of title VII of the Civil Rights Act of 1964 (‘‘title VII’’),3 which is enforced, in large part, by the Equal Employment Opportunity Commission (‘‘EEOC’’), the agency responsible for coordinating the Federal government’s enforcement of all Federal statutes, Executive Orders, regulations, and policies requiring equal employment opportunity.4 The Sex Discrimination Guidelines at 41 CFR part 60–20 (‘‘Guidelines’’) set forth interpretations and guidelines for implementing the Executive Order’s nondiscrimination and affirmative action requirements related to sex. These Guidelines have not been substantively updated since they were 2 Executive Order 13672, issued on July 21, 2014, added sexual orientation and gender identity to Executive Order 11246 as prohibited bases of discrimination. It applies to contracts entered into on or after April 8, 2015, the effective date of the implementing regulations promulgated thereunder. 3 Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e–2000e–17; U.S. Department of Labor, Office of Federal Contract Compliance Programs, Federal Contract Compliance Manual, ch. 2, § 2H01(c), available at https://www.dol.gov/ofccp/ regs/compliance/fccm/FCCM_FINAL_508c.pdf (last accessed June 6, 2014) (hereinafter FCCM). 4 Executive Order 12067, 43 FR 28967, 3 CFR, 1978 Comp., p. 206. The U.S. Department of Justice also enforces portions of title VII, as do state Fair Employment Practice Agencies (FEPA). E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS first promulgated in 1970,5 and fail to conform to or reflect current title VII jurisprudence or to address the needs and realities of the modern workplace. Since 1970, there have been historic changes to sex discrimination law, in both statutory and case law, and to contractor policies and practices as a result of the nature and extent of women’s participation in the labor force. Because the existing guidelines are so outdated, they may cause some Federal contractors to incur unnecessary legal and/or management expenses to resolve confusion about possibly conflicting obligations; updating the regulations will reduce the costs that such contractors may now incur. It is long overdue for part 60–20 to be updated. Consequently, OFCCP proposes in this NPRM to revise the Sex Discrimination Guidelines to align the sex discrimination standards under Executive Order 11246 with developments and interpretations of existing title VII principles and OFCCP’s corresponding interpretation of the Executive Order. Statement of Legal Authority Issued in 1965, and amended several times in the intervening years— including once in 1967, to add sex as a prohibited basis of discrimination, and most recently in 2014, to add sexual orientation and gender identity to the list of protected bases 6—Executive Order 11246 has two purposes. First, it prohibits covered Federal contractors and subcontractors from discriminating against employees and applicants because of race, color, religion, sex, sexual orientation, gender identity, or national origin. Second, it requires covered Federal contractors and subcontractors to take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. The nondiscrimination and affirmative action obligations of Federal contractors and subcontractors cover all aspects of employment. The requirements of the Executive Order promote the goals of economy and efficiency in Government contracting, and the link between them is well established. See, e.g, Executive Order 10925, 26 FR 1977 (March 8, 1961) (nondiscrimination and affirmative employment programs ensure ‘‘the most efficient and effective 5 35 FR 8888, June 9, 1970. The Guidelines were reissued in 1978 without substantive amendment. 43 FR 49258, October 20, 1978. 6 Executive Order 13672, 79 FR 42971 (July 23, 2014). VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 utilization of all available manpower’’). Executive Order 11246 regulations require government contractors to conduct outreach to broaden the qualified applicant pool; to identify and eliminate any discriminatory practices; to apply merit principles; to choose applicants for employment without regard to race, sex, or national origin; and to report their results. See, e.g., 41 CFR 60–2.10, 60–2.11, 60–2.14, 60–2.16, 60–2.17, 60–20.6. The sex discrimination regulations proposed herein outline the sex-discriminatory practices that contractors must identify and eliminate, and clarify how contractors must choose applicants for employment without regard to sex. See, e.g., proposed § 60–20.2 (clarifying that sex discrimination includes discrimination on the bases of pregnancy, childbirth, related medical conditions, gender identity, and transgender status, and that disparate treatment and disparate impact analyses apply to sex discrimination); § 60–20.3 (clarifying application of the bona fide occupational qualification (BFOQ) defense to the rule against sex discrimination); § 60–20.4, § 60–20.5, § 60–20.6, and § 60–20.8 (clarifying that discrimination in compensation; discrimination based on pregnancy, childbirth, or related medical conditions; discrimination in other fringe benefits; and sexual harassment, respectively, can be unlawful sexdiscriminatory practices); and § 60– 20.7(c) (clarifying that contractors must not choose applicants based on sex stereotypes such as ‘‘a sex-based assumption that [a female employee] . . . will have . . . family caretaking responsibilities [that] will interfere with her work performance’’). Each of these requirements ultimately reduces the government’s costs and increases the efficiency of its operations by ensuring that all employees and applicants, including women, are fairly considered and that, in its procurement, the government has access to, and ultimately benefits from, the best qualified and most efficient employees. Cf. Contractors Ass’n of E. Pa. v. Sec’y of Labor, 442 F.2d 159, 170 (3d Cir. 1971) (‘‘[I]t is in the interest of the United States in all procurement to see that its suppliers are not over the long run increasing its costs and delaying its programs by excluding from the labor pool available minority workmen.’’). The proposed regulations’ requirements to eliminate discrimination and to choose applicants without regard to sex also are consistent with the purposes of Title VII to eliminate discrimination in employment. PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 5247 The requirements in Executive Order 11246 generally apply to any business or organization that (1) holds a single Federal contract, subcontract, or federally assisted construction contract in excess of $10,000; (2) has Federal contracts or subcontracts that, combined, total in excess of $10,000 in any 12-month period; or (3) holds Government bills of lading, serves as a depository of Federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount. Pursuant to Executive Order 11246, receiving a Federal contract comes with a number of responsibilities. Section 202 of this Executive Order requires every covered contractor to agree to comply with all provisions of the Executive Order and the rules, regulations, and relevant orders of the Secretary of Labor. A contractor in violation of Executive Order 11246 may be subject to suit for make-whole and injunctive relief and to having its contracts canceled, terminated, or suspended or to debarment after the opportunity for a hearing.7 Major Proposed Revisions For the reasons stated above, OFCCP proposes to revise the Guidelines at part 60–20 to create new sex discrimination regulations that set forth Federal contractors’ obligations under Executive Order 11246, in accordance with existing law and policy. This proposal updates the Guidelines to address current issues in the workplace, and clarifies existing title VII law as it relates to sex discrimination, including developments and interpretations of existing law by the EEOC and OFCCP’s corresponding interpretation of the Executive Order. It is intended to state clearly the existing principles applicable to a contractor’s obligation to refrain from discrimination in its employment policies and practices because of sex and to ensure equal employment opportunity on the basis of sex. The proposal removes a number of outdated provisions in the current Guidelines; restates, reorganizes, and clarifies others; and adds new ones that address legal developments that have arisen since 1970. Where current provisions of the Guidelines are uncontradicted by the proposed part 60–20, but are omitted because they are, as a practical matter, outdated, their omission does not mean that they are not still good law. For example, paragraph 60–20.2(b) currently states that ‘‘[a]dvertisement in newspapers 7 Executive Order 11246, § 209(5); 41 CFR 60– 1.27. E:\FR\FM\30JAP2.SGM 30JAP2 5248 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules and other media for employment must not express a sex preference unless sex is a bona fide occupational qualification for the job.’’ This is a correct statement of the law, but does not have much practical effect, because few job advertisements today express a sex preference.8 OFCCP seeks comments on whether any of the provisions proposed for deletion continue to be useful. The proposed amendments to part 60–20 offered herein do not in any way alter a contractor’s obligations under all other OFCCP regulations. In particular, a contractor’s obligations to ensure equal employment opportunity and to take affirmative action, as set forth in parts 60–1, 60–2, 60–3, and 60–4 of this title, remain in effect. Similarly, inclusion of a provision in part 60–20 does not in any way alter a contractor’s obligations to ensure nondiscrimination on the basis of race, color, religion, national origin, sexual orientation, and gender identity, under the Executive Order; on the basis of disability under Section 503 of the Rehabilitation Act of 1973 (‘‘Section 503’’); 9 or on the basis of protected veteran status under 38 U.S.C. 4212 of the Vietnam Era Veterans’ Readjustment Assistance Act.10 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Benefits of the Proposed Rule The proposed rule would benefit both Federal contractors and their employees in several ways. First, by consolidating, updating, and clearly and accurately stating the existing principles of applicable law, including developments and interpretations of existing law by the EEOC and OFCCP’s corresponding interpretation of the Executive Order, the proposed rule will facilitate contractor understanding and compliance and thus reduce contractor costs. As discussed above, the existing guidelines are extremely outdated and therefore do not provide sufficient or even accurate guidance to contractors regarding their nondiscrimination obligations. In fact, because OFCCP’s interpretations of a contractor’s nondiscrimination mandate on the basis of sex follow title VII principles, OFCCP no longer enforces part 60–20 to the extent that it departs from existing law. Maintenance of these outdated and inaccurate guidelines in the regulations may cause Federal contractors to incur unnecessary legal and/or management expenses to resolve confusion about possibly conflicting obligations. Thus, 8 Recruitment for individuals of a certain sex for particular jobs, including recruitment by advertisement, is covered in proposed § 60–20.2(g). 9 29 U.S.C. 793. 10 38 U.S.C. 4212. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 the NPRM will directly reduce the costs that some contractors may now incur when attempting to comply with part 60–20. OFCCP requests comment on the amount of cost savings covered entities may realize because of this rule. The NPRM would also benefit the employees and job applicants of Federal contractors and subcontractors. In general, by making it easier for Federal contractors to comply with the law, this regulation would increase equality of employment opportunity for the millions of women working for Federal contractor establishments. Sixty-five million employees work for the Federal contractors and other recipients of Federal monies that are included in the General Service Administration’s System for Award Management (SAM) database.11 Based on Bureau of Labor Statistics data showing that 47 percent of the workforce is female,12 OFCCP estimates that 30.6 million of the employees who work for the Federal contractors and other recipients of Federal monies are women. More specifically, the NPRM would advance the employment status of female employees of Federal contractors in several ways. First, it would address both quid pro quo and hostileenvironment sexual harassment. Second, it would clarify that adverse treatment of an employee because of gender-stereotyped assumptions about family caretaking responsibilities is discrimination. It would clarify that childcare leave must be available to fathers on the same terms as they are to mothers. It would also confirm the requirement that contractors provide equal retirement benefits to male and female employees, even if doing so costs more for one sex than the other. In addition, by clarifying when pregnant workers are entitled to workplace accommodations, this rulemaking will protect pregnant employees who work for Federal contractors from losing their jobs, wages, and health care coverage. OFCCP estimates that 2,046,850 women in the Federal contractor workforce are likely to become pregnant each year. Moreover, by clarifying that discrimination against an individual because of her or his gender identity is unlawful sex discrimination, the NPRM would ensure that contractors are aware 11 U.S. General Services Administration, System for Award Management, Legacy CCR Extracts Public (‘‘FOIA’’) Data Package, May 2014, available at https://www.sam.gov/portal/public/SAM/ (last accessed June 14, 2014). 12 Women in the Labor Force: A Databook 2, BLS Reports, available at https://www.bls.gov/cps/wlfdatabook-2012.pdf (last accessed Oct. 6, 2014) [hereinafter Women in the Labor Force]. PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 of their nondiscrimination obligations with respect to transgender employees and would assure equality of opportunity for transgender employees, the vast majority of whom report that they have experienced discrimination in the workplace.13 Finally, the NPRM would benefit public understanding of the law. Removing an ‘‘outmoded’’ and ‘‘ineffective’’ rule from the Code of Federal Regulations is in the public interest. This public interest is reflected in Section 6 of Executive Order 13563, which requires agencies to engage in retrospective analyses of their rules ‘‘and to modify, streamline, expand, or repeal [such rules] in accordance with what has been learned.’’ Costs of the Proposed Rule A detailed discussion of the costs of the proposed rule is included in the section on Regulatory Procedures, infra. In sum, the proposed rule should create relatively minimal administrative and other cost burdens for contractors. The only new administrative burden the proposed rule would create for contractors would be the one-time cost of regulatory familiarization—the estimated time it takes for contractors to review and understand the instructions for compliance—calculated at just under $26 million, or $52 per contractor company, the first year. The only other new cost burden this rule would create for contractors would be the cost of pregnancy accommodations, which OFCCP calculates to be under $10 million annually, or $19 per contractor company, per year.14 13 Jaime M. Grant, Lisa M. Mottet, & Justin Tanis, National Center for Transgender Equality & National Gay and Lesbian Task Force, Injustice at Every Turn: A Report of the National Transgender Discrimination Survey, (2011), available at https:// transequality.org/PDFs/Executive_Summary.pdf (last accessed Oct. 3, 2014) [hereinafter Injustice at Every Turn]. 14 OFCCP estimates approximately 2,046,850 women in the Federal contractor workforce would be pregnant in a year, of whom 21 percent work in job categories likely to require accommodations that might involve more than a de minimis cost. Because the incidence of medical conditions during pregnancy that require accommodations ranges from 0.5 percent (placenta previa) to 50 percent (back issues), OFCCP estimates that of the women in positions that require physical exertion or standing, half may require some type of an accommodation or light duty. Based on a study finding that the employers of 91 percent of pregnant women who needed and requested a change in duties such as less lifting or more sitting attempted to address their needs, the proposed rule would require covered contractors to accommodate the nine percent of women whose needs were not addressed or would not have been addressed had they requested accommodation. According to the Job Accommodation Network, the average cost of an accommodation is $500. Therefore, OFCCP E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Together, these costs amount to under $36 million, or $71 per contractor company, the first year; and under $10 million, or $19 per contractor company, each subsequent year. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Reasons for Amending the Current Sex Discrimination Guidelines, 41 CFR 60– 20 The existing statement of the purpose of the current Guidelines demonstrates their outdated nature. As the ‘‘title and purpose’’ section of current part 60–20 states, the Guidelines were first adopted because sex discrimination was perceived as presenting ‘‘special problems [of] implementation’’ that required ‘‘a definitive treatment beyond the terms of the [executive] order itself.’’ 41 CFR 60–20.1. Five sections, covering ‘‘recruitment and advertisement,’’ ‘‘job policies and practices,’’ ‘‘seniority system,’’ ‘‘discriminatory wages,’’ and ‘‘affirmative actions,’’ currently follow § 60–20.1. Since the Guidelines were promulgated in 1970, there have been dramatic changes in women’s participation in the workforce. Between 1970 and December 2013, women’s participation in the labor force grew from 43 percent to 57 percent.15 This included a marked increase in employment of mothers: The labor force participation of women with children under the age of 18 increased from 47 percent in 1975 to 70 percent in 2013.16 In 2013, both adults worked at least part time in 59 percent of married-couple families with children under 18, and 73 percent of mothers heading singleparent families with children under 18 worked at least part time.17 Since 1970, there have also been extensive changes in the law regarding estimates that the cost would be $9,671,000 (2,046,850 × 21% × 50% × 9% × $500). 15 U.S. Census Bureau, Civilian Population— Employment Status by Sex, Race, and Ethnicity: 1970–2009, The 2012 Statistical Abstract, available at https://www.census.gov/compendia/statab/2012/ tables/12s0588.pdf (last accessed Oct. 31, 2014); Bureau of Labor Statistics, U.S. Department of Labor Statistics, Data Retrieval: Labor Force Statistics (Current Population Survey, Household Data, Table A–1, Employment status of the civilian population by sex and age, available at https://www.bls.gov/ webapps/legacy/cpsatab1.htm (last accessed Oct. 3, 2014). 16 Bureau of Labor Statistics, U.S. Department of Labor, TED: The Economics Daily, Labor force participation rates among mothers,, available at https://www.bls.gov/opub/ted/2010/ted_20100507_ data.htm (last accessed Oct. 3, 2014) [hereinafter Labor Force Participation: Mothers—2010]; Press Release, Bureau of Labor Statistics, U.S. Department of Labor, Employment Characteristics of Families— 2013 (April 25, 2014), available at https:// www.bls.gov/news.release/famee.nr0.htm (last accessed Nov. 5, 2014) [hereinafter Employment Characteristics of Families—2013]. 17 Employment Characteristics of Families—2013, supra note 16. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 sex-based employment discrimination and in contractors’ policies and practices governing workers. For example: • Title VII, which generally governs the law of sex-based employment discrimination, has been significantly amended four times: Once in 1972, by the Equal Employment Opportunity Act; 18 once in 1978, by the Pregnancy Discrimination Act (‘‘PDA’’); 19 once in 1991, by the Civil Rights Act; 20 and finally in 2009, by the Lilly Ledbetter Act.21 • State ‘‘protective laws’’ that had explicitly barred women from certain occupations or otherwise restricted their employment conditions on the basis of sex have been repealed or are unenforceable.22 • In 1993, the Family and Medical Leave Act (‘‘FMLA’’) 23 was enacted, requiring employers of 50 or more employees to provide a minimum of 12 weeks of annual, unpaid, job-guaranteed leave to both male and female employees to recover from their own serious health conditions (including pregnancy, childbirth, or related medical conditions), to care for a newborn or newly adopted or foster child, or to care for a child, spouse, or parent with a serious health condition. • In 1970 it was not uncommon for employers to require female employees to retire at earlier ages than their male counterparts. However, the Age Discrimination in Employment Act was amended in 1986 to abolish mandatory 18 Equal Employment Opportunity Act of 1972, Public Law 92–261, 86 Stat. 103 (1972). 19 Amendment to Title VII of the Civil Rights Act of 1964 to Prohibit Sex Discrimination on the Basis of Pregnancy, Public Law 95–555, 995, 92 Stat. 2076 (1978). 20 Civil Rights Act of 1991, Public Law 102–166, 1745, 105 Stat. 1071 (1991). 21 Lilly Ledbetter Fair Pay Act of 2009, Public Law 111–2, 123 Stat. 5 (2009). 22 See, e.g., Conn. Gen. Stat. § 31–18 (repealed 1973) (prohibition of employment of women for more than nine hours a day in specified establishments); Mass. Gen. Laws ch. 345 (1911) (repealed 1974) (outright prohibition of employment of women before and after childbirth); Ohio Rev. Code Ann. § 4107.43 (repealed 1982) (prohibition of employment of women in specific occupations that require the routine lifting of more than 25 pounds); see also Nashville Gas Co. v. Satty, 434 U.S. 136, 142 (1977) (invalidating public employer requirement that pregnant employees take a leave of absence during which they did not receive sick pay and lost job seniority); Cleveland Bd. of Educ. v. LaFleur, 414 U.S. 632 (1974) (striking rules requiring leave from after the fifth month of pregnancy until three months after birth); Somers v. Aldine Indep. Sch. Dist., 464 F. Supp. 900 (S.D. Tex. 1979) (finding sex discrimination where school district terminated teacher for not complying with requirement that pregnant women take an unpaid leave of absence in their third month or be terminated). 23 29 U.S.C. 2601 et seq. PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 5249 retirement for all employees with a few exceptions.24 Moreover, since 1970 the Supreme Court has determined that numerous practices which were not then widely recognized as discriminatory constitute unlawful sex discrimination under title VII. See e.g., City of Los Angeles v. Manhart, 435 U.S. 702 (1978) (requiring equal retirement benefits for women and men, despite statistical differences in longevity); County of Washington v. Gunther, 452 U.S. 161 (1981) (holding that compensation discrimination is not limited to unequal pay for equal work within the meaning of the Equal Pay Act); Newport News Shipping & Dry Dock Co. v. EEOC, 462 U.S. 669 (1983) (holding that employer discriminated on the basis of sex by excluding pregnancyrelated hospitalization coverage for the spouses of male employees while providing complete hospitalization coverage for the spouses of female employees); Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986) (recognizing cause of action for sexually hostile work environment); California Federal S. & L. Assn. v. Guerra, 479 U.S. 272 (1987) (upholding California law requiring up to four months leave and reinstatement to pregnant employees and finding law not inconsistent with title VII); Price Waterhouse v. Hopkins, 490 U.S. 228, 250 (1989) (finding sex discrimination on basis of sex stereotyping); Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 78 (1998) (recognizing cause of action for ‘‘same sex’’ harassment); Int’l Union, United Auto., Aerospace and Agr. Implement. Workers of Am. v. Johnson Controls, Inc., 499 U.S. 187 (1991) (holding that possible reproductive health hazards to women of childbearing age did not justify sexbased exclusions from certain jobs); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775 (1998) (holding employers vicariously liable under title VII for the harassing activity of supervisors who create hostile working conditions for those over whom they have authority); and Burlington N. & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006) (clarifying broad scope of prohibition of retaliation for filing of charge of sex discrimination). In response to these legal and economic changes, employment policies and practices have also changed. Contractors rarely adopt or implement explicit rules that prohibit hiring of women for certain jobs; and jobs are no longer advertised in sex-segregated newspaper columns. Women have made major inroads into professions and 24 29 E:\FR\FM\30JAP2.SGM U.S.C. 621–634. 30JAP2 5250 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS occupations traditionally dominated by men. For example, women’s representation among doctors tripled, from nearly 12 percent in 1980 25 to 36 percent in 2013.26 Executive suites are no longer predominantly segregated by sex, with the executive positions all being occupied by men and women functioning as secretaries. Indeed, in many companies, it is hardly surprising for women to be in positions of considerable power and status. Moreover, the female-to-male earnings ratio for women and men working fulltime, year-round in all occupations increased from 59 percent in 1970 to 78 percent in 2013.27 In addition, employer-provided insurance policies that explicitly provide lower-value or otherwise less comprehensive hospitalization or disability benefits for childbirth than for other medical conditions are unlawful for employers of 15 or more employees.28 Generous leave and other family-friendly policies are increasingly common. As early as 2000, even employers that were not covered by the FMLA routinely extended leave to their employees for FMLA-covered reasons: Two-thirds of such employers provided 25 American Medical Association, Women in Medicine: An AMA Timeline 4, available at https://download.ama-assn.org/resources/doc/wps/ x-pub/wimtimeline.pdf (last accessed May 13, 2014). 26 Bureau of Labor Statistics, U.S. Department of Labor, Labor Force Statistics from the Current Population Survey, Table 11, Employed persons by detailed occupation, sex, race, and Hispanic or Latino ethnicity, Household Data Annual Averages, available at https://www.bls.gov/cps/cpsaat11.htm (last accessed June 5, 2014) [hereinafter BLS Labor Force Statistics 2013]. 27 U.S. Census Bureau, Income and Poverty in the United States: 2013, Current Population Reports 10 (2014), Table A–4, Number and real median earnings of total workers and full-time, year-round workers by sex and female-to-male earnings ratio: 1960–2013, available at https://www.census.gov/ content/dam/Census/library/publications/2014/ demo/p60-249.pdf (last accessed Nov. 2, 2014). 28 These practices, common before the PDA, were prohibited when that law became effective as to fringe benefits in 1979. As the EEOC explained in guidance on the PDA issued in 1979— A woman unable to work for pregnancy-related reasons is entitled to disability benefits or sick leave on the same basis as employees unable to work for other medical reasons. Also, any health insurance provided must cover expenses for pregnancyrelated conditions on the same basis as expenses for other medical conditions. Appendix to Part 1604—Questions and Answers on the Pregnancy Discrimination Act, 44 FR 23805 (Apr. 20, 1979), 29 CFR part 1604. EEOC’s recently issued guidance echoes this earlier interpretation and discusses recent developments on benefits issues affecting PDA compliance. U.S. Equal Opportunity Commission, Enforcement Guidance: Pregnancy Discrimination and Related Issues I.C.2– 4 (July 14, 2014), available at https://www.eeoc.gov/ laws/guidance/pregnancy_guidance.cfm (last accessed Oct. 3, 2014). OFCCP welcomes comments on the extent to which contractor-provided health insurance plans comply with the PDA. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 leave for an employee’s own serious health condition and for pregnancyrelated disabilities, and half extended leave to care for a newborn child.29 Eleven percent of employees have access to paid family leave, and most employees receive some pay during family and medical leave due to paid vacation, sick, or personal leave or temporary disability insurance.30 While these changes in policies and practices show a measure of progress, there is no doubt that sex discrimination remains a significant and pervasive problem. Indeed, the percentage of total annual EEOC charges that allege sex discrimination has remained nearly constant at around 30 percent since at least 1997.31 Additionally, occupational sex segregation remains widespread: In 2012, nontraditional occupations for women employed only six percent of all women, but 44 percent of all men. The same imbalance holds for occupations that are nontraditional for men; these employ only 5 percent of men, but 40 percent of women. Gender segregation is also substantial in terms of the broad sectors where men and women work: Three in four workers in education and health services are women, nine in ten workers in the construction industry and seven in ten workers in manufacturing are men.32 29 U.S. Department of Labor, Wage and Hour Division, The 2000 Survey Report ch. 5, Table 5– 1. Family and Medical Leave Policies by FMLA Coverage Status, 2000 Survey Report available at https://www.dol.gov/whd/fmla/chapter5.htm#5.1.1 (last accessed May 13, 2014). 30 Robert Van Giezen, Paid Leave in Private Industry over the Past 20 Years, Bureau of Labor Statistics, U.S. Department of Labor, Beyond the Numbers: Pay & Benefits Aug. 2013, available at https://www.bls.gov/opub/btn/volume-2/paid-leavein-private-industry-over-the-past-20-years.htm (last accessed Oct. 3, 2014). In addition, most employees taking family or medical leave had some access to paid leave: ‘‘48% report[ed] receiving full pay and another 17% receive[d] partial pay, usually but not exclusively through regular paid vacation leave, sick leave, or other ‘paid time off’ hours.’’ Jacob Klerman, Kelly Daley, & Alyssa Pozniak, Family and Medical Leave in 2012: Executive Summary ii, https://www.dol.gov/asp/evaluation/fmla/FMLA2012-Executive-Summary.pdf (last accessed Oct. 3, 2014). 31 This rate has varied from a low of 28.5 percent in FY 2011 to a high of 31.5 percent in FY 2000. U.S. Equal Employment Opportunity Commission, Enforcement and Litigation Statistics, Charge Statistics: FY 1997 Through FY 2013, available at https://eeoc.gov/eeoc/statistics/enforcement/ charges.cfm (last accessed Nov. 2, 2014). In FY 2013, the EEOC received 27,687 charges alleging sex discrimination. 32 Ariane Hegewisch & Heidi Hartmann, Institute for Women’s Policy Research, Occupational Segregation and the Gender Wage Gap: A Job Half Done (2014), available at https://www.iwpr.org/ publications/pubs/occupational-segregation-andthe-gender-wage-gap-a-job-half-done (last accessed Oct. 3, 2014) (citations omitted); see also Ariane Hegewisch et al., The Gender Wage Gap by Occupation, Fact Sheet #C350a, The Institute for Women’s Policy Research, available at https:// www.iwpr.org/publications/pubs/the-gender-wage- PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 Likewise, women continue to be underrepresented in higher level or more senior jobs within occupations. For example, in 2013, women were represented in only 38 percent of all manager positions.33 Women also accounted for only 27 percent of chief executive officer positions.34 As mentioned above, in 2013, women working full time earned 78 cents on the dollar compared with men, measured on the basis of median annual earnings.35 While this represents real progress, and discrimination may not be the cause of the entire gap, more than fifty years after passage of the Equal Pay Act, the size of the gap is still unacceptable. At the current rate of progress, researchers estimate it will take until 2057 to close the gender pay gap.36 The wage gap is also greater for women of color and women with disabilities. When measured by median full-time weekly earnings, in 2013 African-American women made approximately 69 cents and Latinas made approximately 61 cents for every dollar earned by a non-Hispanic, white man.37 In 2013, median annual earnings for women with disabilities were only 47 percent of median annual earnings for men without disabilities.38 Moreover, it appears that the narrowing of the pay gap has slowed since the 1990’s.39 gap-by-occupation-2/at_download/file/ (last accessed Oct. 3, 2014) [hereinafter IWPR Wage Gap By Occupation]. 33 BLS Labor Force Statistics 2013, supra note 26. 34 Id. 35 U.S. Census Bureau, Income and Poverty in the United States: 2013, Current Population Reports 10 (2014), available at https://www.census.gov/content/ dam/Census/library/publications/2014/demo/p60249.pdf (last accessed Nov. 2, 2014). 36 Institute for Women’s Policy Research, At Current Pace of Progress, Wage Gap for Women Expected to Close in 2057 (April 2013), available at https://www.iwpr.org/publications/pubs/atcurrentpace-of-progress-wage-gap-for-womenexpected-toclose-in-2057. 37 Bureau of Labor Statistics, U.S. Department of Labor, Household Data, Annual Averages, Table 37. ‘‘Median Weekly Earnings of Full-Time Wage and Salary Workers By Selected Characteristics’’ available at https://www.bls.gov/cps/cpsaat37.pdf (last accessed Oct. 6, 2014). 38 Calculation from U.S. Census Bureau, American Fact Finder, ‘‘Median earnings in the past 12 months (in 2013 inflation-adjusted dollars) by disability status by sex for the civilian noninstitutionalized population 16 years and over with earnings,’’ available at https://factfinder2. census.gov/faces/tableservices/jsf/pages/product view.xhtml?pid=ACS_13_1YR_B18140&prod Type=table (last accessed Nov. 6, 2014). 39 From 1980 to 1989, the percentage of women’s earnings relative to men’s increased from 60.2% to 66.0%; from 1990 to 1999, the percentage increased from 71.6% to just 72.2%. U.S. Census Bureau, Historical Income Tables: People, Table P–40: Women’s Earnings as a Percentage of Men’s Earnings by Race and Hispanic Origin, available at https://www.census.gov/hhes/www/income/data/ historical/people/ (last accessed Nov. 2, 2014). See E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS These disparities can be explained to some extent by differences in experience, occupation, and industry.40 However, decades of research show these wage gaps remain even after accounting for factors like the type of work people do and qualifications such as education and experience.41 Moreover, while some women may work fewer hours or take time out of the workforce because of family responsibilities, there is research suggesting that discrimination and not just choices can lead to women with children earning less; 42 to the extent that the potential explanations such as type of job or amount of continuous labor market experience are also influenced by discrimination, the ‘‘unexplained’’ difference may understate the true effect of sex discrimination.43 Male-dominated occupations generally pay more than femalealso Youngjoo Cha & Kim A Weeden, Overwork and the Slow Convergence in the Gender Gap in Wages, Am. Soc. Rev. 1–28 (2014), available at https:// www.asanet.org/journals/ASR/ChaWeeden June14ASR.pdf (last accessed Nov. 2, 2014); Francine D. Blau & Lawrence M. Kahn, The U.S. Gender Pay Gap in the 1990s: Slowing Convergence, 60 Indus. & Lab. Rel. Rev. 45 (2006) [hereinafter Slowing Convergence]. 40 Equal Pay for Equal Work? New Evidence on the Persistence of the Gender Pay Gap: Hearing Before United States Joint Economic Comm., Majority Staff of the Joint Econ. Comm., 111th Cong., Invest in Women, Invest in America: A Comprehensive Review of Women in the U.S. Economy 80 (Comm. Print 2010), 80, available at https://jec.senate.gov/public/?a=Files.Serve&File_ id=9118a9ef-0771-4777-9c1f-8232fe70a45c (last accessed Oct. 3, 2014) (statement of Randy Albelda, Professor of Economics and Senior Research Associate, University of Massachusetts-Boston Center for Social Policy). 41 A March 2011 White House report entitled Women in America: Indicators of Social and Economic Well-Being, found that while earnings for women and men typically increase with higher levels of education, male-female pay gap persists at all levels of education for full-time workers (35 or more hours per week), according to 2009 BLS wage data. Potentially nondiscriminatory factors can explain some of the gender wage differences. See, e.g., June Elliot O’Neill, The Gender Gap in Wages, Circa 2000, Am. Econ. Rev. (May 2003). Even so, after controlling for differences in skills and job characteristics, women still earn less than men. Explaining Trends in the Gender Wage Gap, A Report by the Council of Economic Advisers (June 1998). Ultimately, the research literature still finds an unexplained gap exists even after accounting for potential explanations, and finds that the narrowing of the pay gap for women has slowed since the 1980s. Joyce P. Jacobsen, The Economics of Gender 44 (2007); Slowing Convergence, supra note 39. 42 Shelley J. Correll, Stephen Benard, & In Paik, ‘‘Getting a Job: Is There a Motherhood Penalty?’’ 112 American Journal of Sociology 1297 (2007). 43 Strengthening the Middle Class: Ensuring Equal Pay for Women: Hearing Before H. Comm. on Educ. and Labor, 110th Cong. (2007), available at https:// www.cepr.net/index.php/strengthening-the-middleclass-ensuring-equal-pay-for-women-testimony/ (last accessed Oct. 3, 2014) (statement of Heather Boushey, Senior Economist, Center for Economic and Policy Research). VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 dominated occupations at similar skill levels. But even within the same occupation, women earn less than men on average. For example, in 2012, fulltime women auditors’ and accountants’ earnings were less than 74 percent of the earnings of their male counterparts.44 Retail salespersons faced the largest wage gap, among whom women made only 64 percent of what men made.45 Likewise, in the medical profession, women earn less than their male counterparts. On average, male physicians earn 13 percent more than female physicians at the outset of their careers and as much as 28 percent more eight years later.46 This gap could not be explained by practice type, work hours, or other characteristics of employees’ work situations.47 Despite enactment of the PDA, women continue to report that they have experienced discrimination on account of pregnancy. Between FY 1997 and FY 2011, the number of charges of pregnancy discrimination filed with the EEOC and state and local agencies was significant, ranging from a low of 3,977 in 1997 to a high of 6,285 in 2008.48 A 2011 review of reported ‘‘family responsibility discrimination’’ cases (brought by men as well as women) found that low-income workers face ‘‘extreme hostility to pregnancy.’’ 49 44 IWPR Wage Gap by Occupation, supra note 32. 45 Id. 46 Constanca Esteves-Sorenson & Jason Snyder, The Gender Earnings Gap for Physicians and its Increase Over Time 1 (2011), available at https:// faculty.som.yale.edu/ConstancaEstevesSorenson/ documents/Physician_000.pdf (last accessed October 3, 2014). 47 Id. A 2008 study on physicians leaving residency programs in New York State also found a $16,819 pay gap between male and female physicians. Anthony T. LoSasso, Michael R. Richards, Chiu-Fang Chou & Susan E. Gerber, The $16,819 Pay Gap For Newly Trained Physicians: The Unexplained Trend Of Men Earning More Than Women, 30 Health Affairs 193 (2011), available at https://content.healthaffairs.org/content/30/2/ 193.full.pdf+html (last accessed May 13, 2014). 48 U.S. Equal Employment Opportunity Commission, Pregnancy Discrimination Charges, EEOC & FEPAs Combined: FY 1997–FY 2011, available at https://www.eeoc.gov/eeoc/statistics/ enforcement/pregnancy.cfm (last accessed Nov. 2, 2014); U.S Equal Employment Opportunity Commission, Charge Statistics: FY 1997 Through FY 2013, available at https://www.eeoc.gov/eeoc/ statistics/enforcement/charges.cfm (last accessed Nov. 2, 2014) (hereinafter ‘‘EEOC Charge Statistics: FY 1997–2013’’). FY 2011 is the last year for which comparable data are available. For FY 2012 and FY 2013, four percent of the charges filed with the EEOC alleged pregnancy discrimination. OFCCP calculations made from data from U.S Equal Employment Opportunity Commission, Pregnancy Discrimination Charges, FY 2010–FY 2013, available at https://www.eeoc.gov/eeoc/statistics/ enforcement/pregnancy_new.cfm (last accessed Nov. 2, 2014) and EEOC Charge Statistics: FY 1997– 2013. 49 Stephanie Bornstein, Center for WorkLife Law, UC Hastings College of the Law, Poor, Pregnant and PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 5251 In addition, some pregnant workers face a serious and unmet need for workplace accommodations, which are vital to their uninterrupted, seamless, and continued employment and, ultimately, to their health and that of their children. OFCCP is aware of a number of situations in which women have been denied accommodations with deleterious health consequences. For example: In one instance, a pregnant cashier in New York who was not allowed to drink water during her shift, in contravention of her doctor’s recommendation to stay wellhydrated, was rushed to the emergency room after collapsing at work. As the emergency room doctor who treated her explained, because ‘‘pregnant women are already at increased risk of fainting (due to high progesterone levels causing blood vessel dilation), dehydration puts them at even further risk of collapse and injury from falling.’’ Another pregnant worker was prohibited from carrying a water bottle while stocking grocery shelves despite her doctor’s instructions that she drink water throughout the day to prevent dehydration. She experienced preterm contractions, requiring multiple hospital visits and hydration with IV fluids. . . . [Another] woman, a pregnant retail worker in the Midwest who had developed a painful urinary tract infection, supplied a letter from her doctor to her employer explaining that she needed a short bathroom break more frequently than the store’s standard policy. The store refused. She later suffered another urinary tract infection that required her to miss multiple days of work and receive medical treatment.50 ‘‘Pregnant workers in physically demanding, inflexible, or hazardous jobs are particularly likely to need accommodations at some point during their pregnancies to continue working safely.’’ 51 Meanwhile, more women Fired: Caregiver Discrimination Against Low-Wage Workers 2 (2011), available at https:// worklifelaw.org/pubs/PoorPregnantAndFired.pdf (last accessed Oct. 3, 2014). 50 Brief of Health Care Providers, the National Partnership for Women & Families, and Other Organizations Concerned with Maternal and Infant Health as Amici Curiae in Support of Petitioner in Young v. United Parcel Service, supra, available at https://www.americanbar.org/content/dam/aba/ publications/supreme_court_preview/BriefsV4/121226_pet_amcu_hcp-etal.authcheckdam.pdf, at 9– 10, 11 [citations omitted]. See also Wiseman v. WalMart Stores, Inc., No. 08–1244–EFM, 2009 WL 1617669 (D. Kan. June 9, 2009) (pregnant retail employee with recurring urinary and bladder infections caused by dehydration alleged she was denied permission to carry a water bottle despite doctor’s note), available at https://www.gpo.gov/ fdsys/pkg/USCOURTS-ksd-6_08-cv-01244/pdf/ USCOURTS-ksd-6_08-cv-01244-0.pdf. 51 National Women’s Law Center & A Better Balance, It Shouldn’t Be a Heavy Lift: Fair Treatment for Pregnant Workers 5 (2013), available at https://www.nwlc.org/sites/default/files/pdfs/ pregnant_workers.pdf (last accessed Dec. 30, 2014) [hereinafter Heavy Lift]. E:\FR\FM\30JAP2.SGM 30JAP2 5252 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS today continue to work throughout their pregnancies and therefore are more likely to need accommodations of some sort. Of women who had their first child between 1966 and 1970, 49 percent worked during pregnancy; of those, 39 percent worked into their last month. For the period from 2006 to 2008, the proportion working increased to 66 percent, and the proportion of those working into the last month increased to 82 percent.52 In some ways, the nature of sex discrimination has also changed since OFCCP promulgated the Sex Discrimination Guidelines. Explicit sex segregation, such as the facial ‘‘male only’’ hiring policies that part 60–20 specifically addresses, has been replaced in many workforces by less overt mechanisms that nevertheless present real equal opportunity barriers. One of the most significant barriers is the role of sex-based stereotyping. Decades of social science research have documented the extent to which sexbased stereotypes about the roles of women and men and their respective capabilities in the workplace can influence decisions about hiring, training, promotions, pay raises, and other conditions of employment.53 As the Supreme Court recognized in 1989, an employer engages in sex discrimination if its female employees’ chances of promotion depend on whether they fit their managers’ preconceived notions of how women should dress and act.54 Research clearly demonstrates that widely held social attitudes and biases can lead to discriminatory decisions, even where there is no formal sex-based (or racebased) policy or practice in place.55 Sex52 U.S. Census Bureau, Maternity Leave and Employment Patterns of First-Time Mothers: 1961– 2008 4, 7 (2011), available at https:// www.census.gov/prod/2011pubs/p70-128.pdf (last accessed Nov. 2, 2014) (tables 1 and 3). 53 See, e.g., Susan Fiske et al., Controlling Other People: The Impact of Power on Stereotyping, 48 a.m. Psychol. 621 (1993); Marzarin Banaji, Implicit Social Cognition: Attitudes, Self-Esteem and Stereotypes, 102 Psychol. Rev. 4 (1995); Brian Welle & Madeline Heilman, Formal and Informal Discrimination Against Women at Work in Managing Social and Ethical Issues in Organizations 23 (Stephen Gilliland, Dirk Douglas Steiner & Daniel Skarlicki eds., 2007); Susan ¨ Bruckmuller et al., Beyond the Glass Ceiling: The Glass Cliff and Its Lessons for Organizational Policy, 8 Soc. Issues & Pol. Rev. 202 (2014) (describing the role of sex-based stereotypes in the workplace). 54 Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). Men, too, can experience adverse effects from sex-based stereotyping. 55 See, e.g., Kevin Lang & Jee-Yeon K. Lehmann, Racial Discrimination in the Labor Market: Theory and Empirics (NBER Working Paper No. 17450, 2010), available at https://128.197.153.21/jee/Lang_ Lehmann_jel_disc.pdf (last accessed Oct. 3, 2014); Marianne Bertrand & Sendhil Mullainathan, Are VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 based stereotyping may have even more severe consequences for transgender, lesbian, gay, and bisexual applicants and employees, many of whom report that they have experienced discrimination in the workplace.56 With the marked increase of women in the labor force, the changes in employment practices, and numerous key legal developments since 1970, the ‘‘special problems . . . [of] implementation’’ of the Executive Order’s prohibition of sex discrimination referred to in current § 60–20.1 have changed significantly as well. As a result, many of the provisions in the Guidelines are outdated, inaccurate, or both. At the same time, there are important and current areas of law that the Guidelines fail to address at all. For example, while the existing regulations touch upon leave for childbearing, they are completely silent about refusals to hire pregnant women or women of childbearing age, restricted duty during pregnancy, health insurance or other benefits, and other applications of the law prohibiting pregnancy discrimination. Section-by-Section Analysis The NPRM recommends a quite different organization of the topics covered in current part 60–20. For example, discussion of the BFOQ defense is repeated in several different sections of the current guidelines; the proposal consolidates this discussion into one section covering BFOQs. In addition, the proposal does not address some topics that are addressed in current part 60–20 but are outdated; includes some topics that are covered by the current guidelines but in revised form to align them with current law; and adds some provisions not contained in the current guidelines to address contemporary problems with implementation. This Section-by-Section Analysis identifies and discusses all proposed changes in each section. OFCCP Emily and Brendan More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination, 94(4) American Econ. Rev. (2004); Ian Ayres & Peter Siegelman, Race and Gender Discrimination in Bargaining for a New Car, 85(3) Am. Econ. Rev. (1995); Marc Bendick, Charles Jackson & Victor Reinoso, Measuring Employment Discrimination Through Controlled Experiments, 23 Rev. of Black Pol. Econ. 25 (1994). 56 Injustice at Every Turn, supra note 13; Brad Sears & Christy Mallory, The Williams Institute, Documented Evidence of Employment Discrimination & Its Effects on LGBT People (2011), available at https://williamsinstitute.law.ucla.edu/ wp-content/uploads/Sears-Mallory-DiscriminationJuly-20111.pdf (last accessed Nov. 5, 2014). Further discussion of discrimination on the basis of sexual orientation and gender identity can be found infra in the passages on § 60–20.2(a) and § 60–20.7. PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 welcomes comments on each of the provisions discussed below. Title of the Regulations The current title of part 60–20 is ‘‘Sex Discrimination Guidelines.’’ OFCCP proposes to change this title to ‘‘Discrimination on the Basis of Sex,’’ to make clear that the provisions in part 60–20 are regulations implementing Executive Order 11246 with the full force and effect of law. Section 60–20.1 Purpose The NPRM proposes a few minor changes to this section. First, it deletes the words ‘‘Title and’’ from the heading of current § 60–20.1, because the proposed section does not set out a title. Second, it deletes the second sentence of current § 60–20.1, which explains the reason that this part was promulgated in 1970, because the reasons for amending this part are contained in the preamble of the NPRM. Finally, the proposal modifies the last sentence of current § 60–20.1, which notifies the public that part 60–20 is ‘‘to be read in connection with existing regulations, set forth in part 60–1 of this chapter.’’ For completeness and to prevent any confusion, this change clarifies that contractors are subject to all the relevant parts related to the implementation of Executive Order 11246, by listing them specifically. Therefore, the proposed rule states that part 60–20 is to be read in conjunction with parts 60–1, 60–2, 60–3, 60–4, and 60–30 of this title. Section 60–20.2 General Prohibitions OFCCP proposes removing current § 60–20.2 entitled ‘‘Recruitment and advertisement,’’ which addresses both the nondiscrimination requirements related to recruiting and advertising and the BFOQ defense. Unlawful practices related to recruitment and advertising contained in current § 60–20.2 are subsumed in a new subparagraph of this section. See proposed paragraph 60– 20.2(b)(7). The BFOQ defense is now addressed in proposed § 60–20.3. In place of current § 60–20.2, OFCCP proposes a new section entitled ‘‘General prohibitions.’’ Paragraph (a) of this new section articulates the general prohibition against sex discrimination in employment. Paragraph (b) expressly prohibits disparate treatment discrimination; subparagraphs (b)(1) through (b)(10) apply the general prohibition of disparate treatment discrimination to specific practices. Paragraph (c) prohibits discrimination under disparate impact analysis. The general statement prohibiting sex discrimination in paragraph (a) clarifies that discrimination based on pregnancy, E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS childbirth, or related medical conditions is a form of sex discrimination. This principle has been the law since Congress enacted the Pregnancy Discrimination Act amendments to title VII in 1978. This form of discrimination is also treated separately in proposed § 60–20.5. In addition, paragraph (a) clarifies that discrimination based on gender identity or transgender status is also a form of sex discrimination. See OFCCP Directive 2014–02, ‘‘Gender Identity and Sex Discrimination’’ (August 19, 2014). As Directive 2014–02 explains, ‘‘Under current Title VII case law principles, discrimination based on gender identity or transgender status . . . is discrimination based on sex.’’ The Directive relied on the EEOC’s decision in Macy v. Holder, 2012 WL 1435995 (EEOC April 20, 2012), in which the EEOC commissioners unanimously concluded that discrimination because a person is transgender is sex discrimination in violation of title VII, by definition, because the discriminatory act is ‘‘related to the sex of the victim.’’ 57 The EEOC cited both the text of title VII and the reasoning in Schroer v. Billington, 577 F. Supp. 2d 293 (D.D.C. 2008), for its conclusion.58 See also Memorandum from Attorney General Eric Holder to United States Attorneys and Heads of Department Components (Dec. 15, 2014) (citing EEOC’s decision in Macy v. Holder as support for DOJ’s positon that ‘‘[t]he most straightforward reading of Title VII is that discrimination ‘because of . . . sex’ includes discrimination because an employee’s gender identification is as a member of a particular sex, or because the employee is transitioning, or has transitioned, to another sex’’). Note that discrimination on the basis of gender identity or transgender status can arise regardless of whether a transgender individual has undergone, is undergoing, or plans to undergo sexreassignment surgery or other processes or procedures designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth. 57 Macy at *7. Macy also held that discrimination on the basis of transgender status could be unlawful under title VII as sex stereotyping. That form of sex stereotyping is separately addressed in proposed § 20.7. 58 Consistent with Macy, this NPRM defines discrimination on the basis of gender identity as a form of sex discrimination. Gender identity is also a stand-alone protected category (along with sexual orientation) under Executive Order 13672. Executive Order 13672 amends Executive Order 11246 to add sexual orientation and gender identity as protected bases, and applies to contracts entered into or modified on or after April 8, 2015, the effective date of the implementing regulations promulgated thereunder. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Many of the examples included in this proposed section are presently listed in § 60–20.3, ‘‘Job policies and practices,’’ of the current part 60–20. For instance, proposed paragraph 60– 20.2(b)(1) identifies making a distinction between married and unmarried persons that is not applied equally to both sexes as an example of a sex-based discriminatory practice, and proposed paragraph 60–20.2(b)(2) provides that denying women with children an employment opportunity that is available to men with children is an unlawful sex-based discriminatory practice. These proposed provisions can be found in current paragraph 60– 20.3(d). Other examples of practices listed in this proposed rule that, absent a BFOQ, would constitute sex-based discriminatory treatment include: Treating unmarried female parents differently than unmarried male parents (proposed paragraph 60–20.2(b)(3)); imposing differences in retirement age or other terms, conditions, or privileges of retirement based on sex (proposed paragraph 60–20.2(b)(4)); restricting job classifications on the basis of sex (proposed paragraph 60–20.2(b)(5)); maintaining seniority lines and lists based on sex (proposed paragraph 60– 20.2(b)(6)); recruiting or advertising for members of one sex for a certain job, including through use of gender-specific terms for jobs (proposed paragraph 60– 20.2(b)(7)); and distinguishing on the basis of sex in apprenticeship or other formal or informal training programs; in other opportunities such as networking, mentoring, sponsorship, individual development plans, rotational assignments, and succession planning programs; and in performance appraisals that may provide the basis of subsequent opportunities (proposed paragraph 60–20.2(b)(8)). Specific enumeration of these types of programs ensures that the forms of career development and advancement opportunities that contractors currently use are included. Proposed paragraph 60–20.2(b)(9) states that making any facilities or employment-related activities available only to members of one sex is an example of an unlawful sex-based discriminatory practice, with the condition that if a contractor provides restrooms or changing facilities, the contractor must provide separate or single-user restrooms or changing facilities to assure privacy between the sexes.59 59 This provision aligns with an existing affirmative action requirement applicable to Federal and federally-assisted construction contractors at 41 PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 5253 This proposed paragraph replaces current § 60–20.3(e), which requires contractors to provide ‘‘appropriate physical facilities’’ to both men and women ‘‘unless the employer is able to show that the construction of the facilities would be unreasonable for such reasons as excessive expense or lack of space.’’ Under existing law, unreasonable cost is not acceptable as a defense to sex discrimination in employment.60 Moreover, current § 60– 20.3(e) is inconsistent with other OFCCP regulations, which require contractors to provide separate or single-user restrooms and changing facilities to assure privacy between the sexes without exception for cost or lack of space. See 41 CFR 60–1.8 (supply and service contractors); 41 CFR 60–4.3(a) 7n (construction contractors).61 Proposed paragraph 60–20.2(b)(10) describes another example of sex-based discriminatory practices: Denying transgender employees access to the bathrooms used by the gender with which they identify. Proposed paragraph 60–20.2(b)(11) addresses discrimination against transgender individuals who have undergone, are undergoing, or plan to undergo sex-reassignment surgery or other processes or procedures designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth. Disparate treatment for this reason has been classified as both discrimination on the basis of sex-based stereotypes and as discrimination on the basis of sex. Schroer v. Billington, supra, at 304–08 (D.D.C. 2008) (concluding that an employer’s decision to withdraw a job offer from a transgender applicant CFR 60–4.3(a) 7n (‘‘Ensure that all facilities and company activities are nonsegregated except that separate or single-user toilet and necessary changing facilities shall be provided to assure privacy between the sexes.’’). 60 See Int’l Union, United Auto., Aerospace and Agric. Implement Workers of Am. v. Johnson Controls, Inc., 499 U.S. 187, 210–11 (1991), in which the plaintiff challenged defendant’s policy prohibiting women of childbearing age from working in jobs involving exposure to lead because of potential health dangers to fetuses that they may be carrying. The Supreme Court held that the cost of eliminating the health dangers cannot be a BFOQ that justifies the exclusion of women workers. 61 In addition, OSHA regulations require employers to provide employees with toilets, except for ‘‘mobile crews, which must have] ‘‘transportation readily available to nearby toilet facilities.’’ 29 CFR 1926.51(c) (OSHA construction sanitation standard); OSHA Standard Interpretation regarding 29 CFR 1926.51(c) (June 7, 2002), https://www.osha.gov/pls/oshaweb/owadisp.show_ document?p_table=INTERPRETATIONS&p_ id=24369 (interpreting the provision pertaining to mobile crews as requiring prompt access to toilets that are less than 10 minutes away and recognizing that women may need bathroom facilities more often than men). E:\FR\FM\30JAP2.SGM 30JAP2 5254 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS constituted both sex-stereotyping discrimination and sex discrimination in violation of title VII). The EEOC has recognized this principle as well. Macy v. Holder, supra. Finally, proposed paragraph 60– 20.2(c) provides that employment policies or practices that state a claim of disparate impact discrimination violate Executive Order 11246 and the regulations at 41 CFR part 60–20. Proposed paragraph 60–20.2(c) identifies several examples of employment practices that may have an adverse impact on women. Traditionally, disparate impact claims have involved selection criteria that are not necessary to the performance of the job, but which instead reflect stereotypical notions about the skills required for the position in question. See, e.g., Blake v. City of Los Angeles, 595 F.2d 1367 (9th Cir. 1979) (striking down height requirements by the Los Angeles police department because they were not job related and had a disparate impact on women, who in general are shorter than men); EEOC v. Dial Corp., 469 F.3d 735 (8th Cir. 2006) (striking down a strength test used in a sausage factory because the test was more physically demanding than the job in question and had a significant disparate impact on women). This sex discrimination analysis may also apply to policies or practices that are unrelated to selection procedures. For instance, an employer policy requiring crane operators to urinate off the back of the crane instead of using a restroom was held to be a neutral employment policy that was not justified by business necessity and that produced an adverse effect on women, who, the court found, have ‘‘obvious anatomical and biological differences’’ that require the use of bathrooms. Johnson v. AK Steel Corp., 2008 WL 2184230, *8 (S.D. Oh. May 23, 2008). Section 60–20.3 Sex as a Bona Fide Occupational Qualification OFCCP proposes removing current § 60–20.3 entitled ‘‘Job policies and practices,’’ which addresses a variety of topics, including a contractor’s general obligations to ensure equal opportunity in employment on the basis of sex (paragraphs 60–20.3(a), 60–20.3(b), and 60–20.3(c)); provides examples of discriminatory treatment (paragraph 60– 20.3(d)); and sets forth contractor obligations with respect to the provision of physical facilities, including bathrooms (paragraph 60–20.3(e)), the impact of state protective laws (paragraph 60–20.3(f)), leave for childbearing (paragraph 60–20.3(g)), and specification of retirement age VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 (paragraph 60–20.3(h)). Current paragraph 60–20.3(i) clarifies that differences in capabilities for job assignments among individuals may be recognized by the employer in making specific assignments. As explained earlier in the preamble, OFCCP proposes moving the general obligation to ensure equal employment opportunity and the examples of discriminatory treatment to proposed § 60–20.2. To improve coherence and clarity, OFCCP proposes to move (and revise in some instances) the remaining obligations set forth in paragraphs (e) through (i) to their own separate sections or to incorporate them as illustrations of discriminatory treatment in proposed § 60–20.2. Specifically, current paragraph 60– 20.3(e) regarding provision of physical facilities is now addressed in proposed § 60–20.2. See the discussion earlier in this preamble for information regarding this proposed provision. Current paragraph 60–20.3(f), which addressed state protective laws, has been removed entirely because it is unnecessary and anachronistic. While in 1970 there may have been some legal question whether state protective laws provided a defense to discriminatory employment policies, in 2014 it is beyond dispute that they do not. See Int’l Union, United Auto., Aerospace and Agr. Implement. Workers of Am. v. Johnson Controls, Inc., supra (holding that possible reproductive health hazards to women of childbearing age did not justify sex-based exclusions from certain jobs). Proposed paragraph 60–20.2(b)(5), prohibiting sex-based job classifications, clearly states the underlying principle that no job, absent a job-specific BFOQ, is the separate domain of any sex. OFCCP invites comment from stakeholders as to the current scope of state protective laws, whether those that exist are enforced, and what practical effect, if any, they have on contractors. Current paragraph 60–20.3(g) regarding leave for childbearing is now addressed in its own section: discrimination on the basis of pregnancy, childbirth, or related medical conditions. See the discussion of proposed § 60–20.5 later in this preamble. Current paragraph 60–20.3(h) prohibits differential treatment between men and women with regard to retirement age. It is restated and broadened, prohibiting the imposition not only of sex-based differences in retirement age but also in ‘‘other terms, conditions, or privileges of retirement,’’ in proposed paragraph 60–20.2(b)(4). OFCCP invites comments on whether PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 such differential treatment continues today. Current paragraph 60–20.3(i) states, in its first sentence, that the Sex Discrimination Guidelines allow contractors to recognize differences in capabilities for job assignments in making specific assignments. The second sentence reiterates that the purpose of the guidelines ‘‘is to insure that such distinctions are not based upon sex.’’ This paragraph is omitted from the proposal because it is unnecessary and because its second sentence is repetitive of proposed § 60– 20.1. Implicit in the provisions prohibiting discrimination on the basis of sex is the principle that distinctions for other reasons, such as differences in capabilities, are not prohibited.62 Making distinctions among employees based on their relevant job skills, for example, does not constitute unlawful discrimination. Proposed § 60–20.3 entitled ‘‘Sex as a bona fide occupational qualification’’ is new and consolidates in one provision the current references to the BFOQ defense available to employers in paragraphs 60–20.3(b) and 60–20.3(f)(2), and adopts the BFOQ language set forth in title VII, 42 U.S.C. 2000e–2(e). OFCCP expects that this proposed reorganization will make the regulations more user-friendly and will help facilitate a better understanding of the Executive Order requirements with respect to sex discrimination. Section 60–20.4 Discriminatory compensation Current § 60–20.4 relating to seniority systems would be removed because its subject matter—the interaction of seniority systems and sex discrimination—is addressed in proposed § 60–20.2 at paragraph (b)(6). Proposed § 60–20.4 would replace the current requirements related to discriminatory wages in current § 60– 20.5. In general, the existing text focuses on particular kinds of jobs and fact patterns that may have posed significant limitations on equal opportunity in compensation at the time the Guidelines were adopted. However, the continued increase of women into the workforce, their robust participation in a wide variety of occupations and positions, ranging from entry-level to senior management, and the significant representation of women in both the hourly and salaried workforce require a more comprehensive statement 62 Of course, discrimination based on other reasons that are independently prohibited by law— such as race, religion, color, national origin, disability, sexual orientation, gender identity, and protected veteran status—is prohibited. E:\FR\FM\30JAP2.SGM 30JAP2 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules addressing sex discrimination in wages and other terms of compensation. For example, paragraph (a) of current § 60–20.5 provides only a cursory description of sex discrimination in wages and other forms of compensation and fails to give useful guidance to contractors in evaluating their compensation programs for potential sex discrimination. The one clarifying example provided in the Note in current § 60–20.5(a) tracks the Equal Pay Act rather than title VII. OFCCP enforces the Executive Order’s nondiscrimination provisions, including the ban on compensation discrimination, consistent with title VII. Courts have concluded that title VII uses a broader and more flexible approach to comparing jobs and defining similarly situated workers than the Equal Pay Act, see, e.g., Cnty. of Washington v. Gunther, 452 U.S. 161 (1981); Miranda v. B & B Cash Grocery, 975 F.2d 1518 (11th Cir. 1992). For that reason, the Note has the potential to create unnecessary confusion, and the proposed rule omits it entirely. Similarly, current paragraph (b) appears to contemplate only workplaces that are completely or explicitly segregated by gender. However, title VII also bars other, more subtle forms of discriminatory compensation that can result from de facto job segregation or classification on the basis of sex. For example, a retail chain might disproportionately steer women into lower paying cashier jobs—even though the women are qualified and available for higher paying positions—based on the outdated, stereotypical notion that men, and not women, are the primary wage earners. These forms of discriminatory compensation remain a potential concern that should be, and are, addressed by the proposed regulation. Current paragraph (c) has been superseded by the transfer of Equal Pay Act jurisdiction to the EEOC and is therefore removed. The proposed new text in § 60–20.4 provides a clearer general statement of the contractor’s obligation to provide equal opportunity with respect to wages and other forms of compensation. The Executive Order and the implementing regulations specifically require contractors to ensure pay equity. Thus, Federal contractors have affirmative duties to maintain data, conduct internal reviews, and monitor pay practices for potential discrimination, as well as comply with the Executive Order’s ban on discrimination in the payment of wages, salaries, and other VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 forms of compensation.63 The section generally restates the agency’s casespecific approach to evaluating contractor pay systems and practices for sex discrimination, where the agency tailors the investigative and analytic methods to the facts of the case.64 This may include conducting multiple regression analyses and applying other formal statistical tests as well as using comparative and circumstantial evidence. As this approach is grounded in well-established principles of title VII law,65 it also would apply when evaluating contractor pay systems and practices for discrimination based on other protected categories. Furthermore, OFCCP does not require anecdotal evidence to support a pay violation. Identifying individuals harmed by pay discrimination is particularly difficult.66 Many workers do not know that they are underpaid.67 If OFCCP finds evidence of pay discrimination by Federal contractors through its review of data, the agency should not permit that discrimination to continue simply because the contractor had successfully hidden it from its employees. Federal contractors have special obligations to avoid discrimination, monitor their pay practices and submit to reviews to make certain they are in compliance, regardless of whether any individual applicant or employee actually has knowledge of discrimination. Section 60–20.4 substitutes the general and more modern term ‘‘compensation’’ for the outdated term ‘‘wage schedules’’ and clarifies that both systemic and individual forms of such 63 Section 202 of Executive Order 11246, as amended; 41 CFR 60–1.12; 60–1.4; 60–2.17(b)–(d). 64 OFCCP’s case-by-case investigation procedures implement the title VII principles applicable to enforcing discrimination in any employment practice under Executive Order 11246. The agency provides this very general description of its approach for purposes of clarification and consistency with its other statements of policy in this area. 65 Interpreting Nondiscrimination Requirements of Executive Order 11246 with Respect to Systemic Compensation Discrimination and Voluntary Guidelines for Self-Evaluation of Compensation Practices for Compliance with Nondiscrimination Requirements of Executive Order 11246 with Respect to Systemic Compensation Discrimination: Notice of Final Rescission, 78 FR 13508, Feb. 28, 2013 (hereinafter Notice of Rescission). 66 Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 645 (2007) (Ginsburg, J., dissenting). 67 On April 8, 2014, President Obama issued Executive Order 13655, which provides that a Federal contractor may not discharge or otherwise discriminate against any employee or applicant because such person has inquired about, discussed, or disclosed the compensation of the person or another employee or applicant. OFCCP published an NPRM on Sept. 17, 2014 to implement this executive order. 79 FR 55712. The comment period closed on Dec. 16, 2014. PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 5255 discrimination are barred by the Executive Order. Proposed amendments to Section 60–1.3 to implement Executive Order 13655 would define compensation as follows: Compensation means any payments made to, or on behalf of, an employee or offered to an applicant as remuneration for employment, including but not limited to salary, wages, overtime pay, shift differentials, bonuses, commissions, vacation and holiday pay, allowances, insurance and other benefits, stock options and awards, profit sharing, and contributions to retirement. That same definition would apply to any assessment of compensation discrimination under EO 11246, including when evaluating sex discrimination in compensation under this section. To provide more guidance to contractors about the kinds of practices they should review and analyses they should undertake to assess their compliance, new paragraphs (a), (b), and (c) specify a variety of ways pay discrimination may occur. For example, proposed paragraph (a) states that contractors may not pay different compensation to similarly situated employees on the basis of sex. Proposed paragraph (b) prohibits contractors from, among other things, granting or denying training, work assignments, or other opportunities that may lead to advancement on the basis of sex, and proposed paragraph (c) states that contractors may not provide or deny earnings opportunities because of sex, for example by denying women equal opportunity to obtain regular and/or overtime hours, commissions, pay increases, incentive compensation, or any other additions to regular earnings. The revised text in proposed paragraph (a) also addresses the question of determining ‘‘similarly situated’’ employees for purposes of analyzing compensation differences. The determination of similarly situated employees is case specific. Relevant factors in determining similarity may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. In some cases, employees are similarly situated where they are comparable on some of these factors, even if they are not similar in other 68 In employment discrimination cases, courts generally consider whether the workers being compared are similar in aspects relevant to the case. See, e.g., McGuinness v. Lincoln Hall, 263 F.3d 49, 53–54 (2d Cir. 2001); Ercegovich v. Goodyear Tire and Rubber Co., 154 F.3d 344 (6th Cir. 1998); McNabola v. Chicago Transit Authority, 10 F.3d 501 (7th Cir. 1993). E:\FR\FM\30JAP2.SGM 30JAP2 5256 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules factors.68 For example, when evaluating a job assignment issue, workers are similarly situated when their qualifications are comparable, but they are assigned to jobs at different levels.69 Employees are similarly situated when they are comparable on factors relevant to the compensation issues presented. Identification of similarly situated employees for purposes of an individual analysis or review of a single specific employment decision may be determined based on different criteria than when conducting a systemic discrimination analysis. In analyzing compensation, title VII permits comparing workers within the same or similar jobs or within specific units or locations, and also permits consideration of pay differences more broadly—for example, across jobs or locations or units—as long as the workers are comparable under the employer’s wage or salary system.70 New paragraph (d) prohibits contractors from implementing compensation practices, including performance review systems, that discriminate on the basis of sex under the disparate impact analysis of discrimination.71 New paragraph (e) restates longstanding OFCCP principles regarding the circumstances under which pay discrimination is a continuing violation under the Executive Order. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Section 60–20.5 Discrimination on the Basis of Pregnancy, Childbirth, or Related Medical Conditions Current § 60–20.5 entitled ‘‘Discriminatory wages’’ has been revised and moved to § 60–20.4 as discussed earlier in the preamble. This proposed section is new; however, it incorporates certain obligations already set forth in the current part 60–20 at paragraph 60– 20.3(g) regarding the provision of leave to employees who require time away from work on account of childbearing. 69 See, e.g., Beckman v. CBS, 192 FRD. 608 (D. Minn. 2000); Stender v. Lucky Stores, 803 F.Supp. 259 (N.D. Cal. 1992); OFCCP v. St. Regis Corp. 78– OFC–1, ALJ’s Recommended Decision (Dep’t. of Labor Dec. 28, 1984). 70 Notice of Rescission, supra note 65, 78 FR at 13511–13513. 71 Lewis v. City of Chicago, 560 U.S. 205, 212 (2010) (finding title VII places no limit on the types of employment practices that may be challenged under disparate impact analysis). 72 This is true even though ‘‘pregnancy itself is not an impairment within the meaning of the [Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended], and thus is never on its own a disability.’’ EEOC, Enforcement Guidance: Pregnancy Discrimination and Related Issues, sec. II.A (July 14, 2014) (footnote omitted), available at https://www.eeoc.gov/laws/guidance/pregnancy_ guidance.cfm (last accessed December 12, 2014). VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Proposed paragraph (a) of this section incorporates the principle set forth in the Pregnancy Discrimination Act that discrimination on the basis of sex includes ‘‘because of or on the basis of pregnancy, childbirth, or related medical conditions.’’ It requires that contractors treat employees and job applicants of childbearing capacity and those affected by pregnancy, childbirth, or related medical conditions the same for all employment-related purposes as other persons not so affected but similar in their ability or inability to work and defines the term ‘‘related medical conditions.’’ Further, it incorporates the provision in the PDA, codified in 42 U.S.C. 2000e(k), that exempts employers from having to pay for health insurance benefits for abortion ‘‘except where the life of the mother would be endangered if the fetus were carried to term, or except where medical complications have arisen from an abortion,’’ and the further proviso that nothing in that exemption ‘‘preclude[s] a contractor from providing abortion benefits or otherwise affect[s] bargaining agreements in regard to abortion.’’ Proposed paragraph (b) sets forth some of the most common applications of the general principle of nondiscrimination on the basis of pregnancy, childbirth, or related medical conditions. These examples include refusing to hire applicants because of pregnancy or childbearing capacity (paragraph (b)(1)); firing employees or requiring them to go on leave because they become pregnant or have a child (paragraph (b)(2)); limiting a pregnant employee’s job duties based on pregnancy or requiring a doctor’s note in order for the employee to continue employment while pregnant (paragraph (b)(3)); and providing employees with health insurance that does not cover hospitalization and other medical costs for pregnancy, childbirth, or related medical conditions, including contraception coverage, to the same extent that such costs are covered for other medical conditions (paragraph (b)(4)). Paragraph (b)(5) includes, as another common example of discrimination based on pregnancy, childbirth, or related medical conditions, failure to provide reasonable workplace accommodations to employees affected by such conditions when such accommodations are provided to other workers similar in their ability or inability to work.72 Without such workplace accommodations, many pregnant workers are forced to go on 70 Notice of Rescission, supra note 65, 78 FR at 13511–13513. PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 leave. Unfortunately, insufficient jobprotected leave, time-limited temporary disability insurance, and minimal sick leave often fail to cover the entire period of pregnancy-related work limitations. Consequently, some pregnant workers who need reasonable accommodations lose their jobs, wages, and health care coverage.73 The range of accommodations to address the temporary limitations of a pregnant worker may include simple things that involve little or no cost, such as permitting more frequent bathroom breaks and allowing the pregnant worker to sit down during a shift.74 Other temporary limitations, however, may require a temporary light-duty assignment to accommodate lifting or bending restrictions that a pregnant worker may have. Denying an alternative job assignment, modified duties, or other accommodations to a pregnant employee who is temporarily unable to perform some job duties because of pregnancy, childbirth, or a related medical condition is sex discrimination when such assignments, modifications, or other accommodations are provided, or are required to be provided, by a contractor’s policy or other relevant laws, to other employees whose abilities to perform some of their job duties are similarly affected (paragraph (b)(5)). Thus, for example, a contractor that permits light-duty assignments for employees who are unable to work their regular assignments due to on-the-job injuries or disabilities must also permit light-duty assignments for employees who are unable to work their regular assignments due to pregnancy. The approach set forth here with respect to pregnancy accommodation is intended to align OFCCP’s regulations implementing Executive Order 11246 with EEOC guidance in this area and with the position taken by the Federal government in Young v. United Parcel Serv., Inc., 707 F.3d 437 (4th Cir. 2013), cert. granted (U.S. No. 12–1226, July 1, 2014), a case currently before the Supreme Court. Should the Supreme Court rule contrary to our interpretation, OFCCP’s final rule will be revised consistent with the ruling. The EEOC has long interpreted the PDA in this way, stating as early as 1979 72 This is true even though ‘‘pregnancy itself is not an impairment within the meaning of the [Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended], and thus is never on its own a disability.’’ EEOC, Enforcement Guidance: Pregnancy Discrimination and Related Issues, sec. II.A (July 14, 2014) (footnote omitted), available at https://www.eeoc.gov/laws/guidance/pregnancy_ guidance.cfm (last accessed December 12, 2014). 73 Heavy Lift, supra note 51, at 1, 4, 6, 8, 9–10, 11, 15, 18. E:\FR\FM\30JAP2.SGM 30JAP2 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules that ‘‘[a]n employer is required to treat an employee temporarily unable to perform the functions of her job because of her pregnancy-related condition in the same manner as it treats other temporarily disabled employees.’’ 29 CFR pt. 1604, App. ¶ 5 (emphasis added). It reaffirmed this position in its 2014 PDA enforcement guidance. EEOC, Enforcement Guidance: Pregnancy Discrimination and Related Issues I.C.1.b (July 14, 2014), https:// www.eeoc.gov/laws/guidance/ pregnancy_guidance.cfm; see also 9 CFR pt. 1604, App. ¶ 5 (‘‘[a]n employer is required to treat an employee temporarily unable to perform the functions of her job because of her pregnancy-related condition in the same manner as it treats other temporarily disabled employees.’’) (emphasis added); id. (‘‘If other employees temporarily unable to lift are relieved of these functions, pregnant employees also unable to lift must be temporarily relieved of the function.’’). As the Government has argued in its brief before the Supreme Court in Young, nothing in the plain language of the PDA or any EEOC guidance suggests that the underlying reason for the inability to work is relevant; as long as the employees are ‘‘similar in their inability to work,’’ those affected by pregnancy, childbirth, or related medical conditions must be provided the same accommodation as those not so affected, regardless of the reasons for the inability to work. See Brief for the United States as Amicus Curiae Supporting Petitioner in Young v. United Parcel Service, Inc., No. 12–1226 (U.S.), 2014 WL 4536939, at *16 (‘‘Nothing in the PDA indicates that a pregnant employee faces discrimination . . . only when she receives less favorable treatment than every other employee who is similar in his or her ability or inability to work. The plain text of the statute prohibits treating pregnant employees less favorably (for any ‘employment-related purpose[ ]’) than ‘other persons not so affected but similar in their ability or inability to work.’’’) (citation omitted); id. at *26 (‘‘Recognizing that petitioner has established a violation of the PDA is consistent with the longstanding position of the EEOC.’’).75 See also International Union v. Johnson Controls, Inc., 499 U.S. 187, 204–05 75 The EEOC further explained its position in EEOC v. Horizon/CMS Healthcare Corp., 220 F.3d 1184 (10th Cir. 2000) (decided on other grounds). The EEOC argued in Horizon that ‘‘the Charging Parties are most appropriately compared to all temporarily-disabled, non-pregnant employees whether they sustained their injuries on or off the job.’’ Id. at 1194–1195 (emphasis added). VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 (1991) (‘‘[u]nless pregnant employees differ from others in their ability or inability to work, they must be treated the same as other employees for all employment-related purposes’’ (citation and internal quotation marks omitted; emphases added)); Ensley-Gaines v. Runyon, 100 F.3d 1220 (6th Cir. 1996); Raciti-Hur v. Homan, No. 98–1218, 1999 U.S. App. LEXIS 9551, 1999 WL 331650 (6th Cir. May 13, 1999) (unpublished); Latowski v. Northwoods Nursing Center, No. 12–2408, 2013 U.S. App. LEXIS 25738, at *10–*11 (6th Cir. December 23, 2013) (unpublished).76 The phrase ‘‘or are required to be provided by a contractor’s policy or other relevant laws’’ is included to cover the situation where a contractor’s policy or a relevant law (such as the Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended (ADA), and section 503) would require an alternative job assignment or job modification to be provided to an employee not affected by pregnancy, childbirth, or related medical condition but who is similarly restricted in his or her ability to perform the job. In such a situation, the existence of the policy or law (e.g., the ADA and Section 503) requiring reasonable accommodation or job modifications for the one class of employees—employees with disabilities who are not affected by pregnancy, childbirth, or related medical conditions—requires that the contractor similarly provide such accommodations to pregnant employees who are similar in their ability or inability to work. Failure to do so is disparate treatment in violation of Executive Order 11246. The list in § 60–20.5(b) is by no means exhaustive, but rather, contains a few illustrative examples. The relevant provisions of the EEOC’s 2014 enforcement guidance on pregnancy discrimination as well as its Guidelines on Discrimination Because of Sex (29 CFR 1604.10) and Questions and Answers on the Pregnancy Discrimination Act (Appendix to part 76 Other Sixth Circuit opinions appear to suggest a different interpretation of the PDA. Reeves v. Swift Transp. Co., 446 F.3d 637 (6th Cir. 2006); Tysinger v. Police Dept., 463 F.3d 569 (2006). In addition, other circuits have held that the reason for employees’ inability to work does make a difference to the determination whether employees affected by pregnancy, childbirth, or related medical conditions are similarly situated to those not so affected for purposes of receiving accommodations for their inability to work. Young v. United Parcel Serv., Inc., 707 F.3d 437 (4th Cir. 2013), cert. granted (U.S. No. 12–1226, July 1, 2014); Serednyj v. Beverly Healthcare, LLC, 656 F.3d 540, 548–549 (7th Cir. 2011); Spivey v. Beverly Enters., Inc., 196 F.3d 1309, 1312–1313 (11th Cir. 1999); Urbano v. Continental Airlines, Inc., 138 F.3d 204, 207–208 (5th Cir.), cert. denied, 525 U.S. 1000 (1998); Troupe v. May Dep’t Stores Co., 20 F.3d 734, 738 (7th Cir. 1994). PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 5257 1604 of 29 CFR) provide additional instruction. Proposed paragraph (c) addresses the provision of leave related to pregnancy, childbirth, or related medical conditions. Paragraph (c)(1) sets forth the general title VII principle that neither family nor medical leave, including family or medical leave related to pregnancy, childbirth, or related medical conditions, may be denied or provided differently on the basis of sex. Paragraph (c)(2) elaborates on this general principle. Paragraph (c)(2)(a) requires that employees affected by pregnancy, childbirth, or related medical conditions be granted medical leave, including paid sick leave, on the same basis that such leave is granted to other employees unable to work for other medical reasons. An employer may not impose requirements on pregnancy leave not imposed on other employees similar in their ability or inability to work. For example, employers may not impose a shorter maximum amount of pregnancy leave as compared to the maximum time off allowed for other types of medical or short-term disability leave. Paragraph (c)(2)(b) requires that family leave be provided to men on the same terms that it is provided to women. Consistent with the EEOC’s Guidelines on Discrimination Because of Sex, 29 CFR 1604.10(c), and Section I.B.2 of its recent enforcement guidance on pregnancy discrimination, proposed paragraph (c)(3) applies disparate impact analysis to contractor leave policies that are inadequate such that they have a disparate impact on members of one sex. Thus, a contractor that provides workers who are temporarily unable to work due to pregnancy, childbirth, or related medical conditions with no parental or medical leave at all, or with insufficient leave, may be held liable for discrimination based on sex, if such a practice is found to have an adverse impact on such workers, unless the contractor can demonstrate that the failure to provide leave or sufficient leave is job related and consistent with business necessity. It should be noted that this provision is different from current § 60–20.3(g), which requires contractors to provide maternity leave whether or not their failure to do so has a disparate impact on women. However, OFCCP has not enforced this requirement in § 60– 20.3(g) for some time. Instead, as was stated in its previous Federal Contractor Compliance Manual (FCCM), issued in 1988, OFCCP has: E:\FR\FM\30JAP2.SGM 30JAP2 5258 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules consistent with the PDA, [current] 41 CFR 60–1.4(a), and the EEOC Guidelines on Discrimination Because of Sex, . . . implement[ed] the following policies: i. . . . ii. If the contractor’s leave policy, or lack thereof, has an adverse impact on employees of one sex and is not justified by business necessity, it violates the Executive Order.77 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Similarly, the current FCCM requires Compliance Officers to ‘‘examine whether the contractor’s leave policy, or lack thereof, has an adverse impact on employees of one sex and is not justified by business necessity.’’ Section 2H01(b). Thus, proposed paragraph (c)(3) is consistent both with OFCCP’s current and long-standing practice. OFCCP welcomes comments from stakeholders about current practices and policies regarding workplace accommodations and leave for pregnancy, childbirth, or related medical conditions; for care for newborn or newly adopted or foster children; and for an employee’s serious health conditions (other than those related to pregnancy and childbirth). Section 60–20.6 Other Fringe Benefits Current § 60–20.6 entitled ‘‘Affirmative action’’ has been removed because the requirements related to affirmative action programs are set forth in parts 60–2 and 60–4 of this title. This proposed section is new and is divided into three paragraphs. Proposed paragraph (a) states the general principle that contractors may not discriminate on the basis of sex in the provision of fringe benefits. Proposed paragraph (b) defines ‘‘fringe benefits’’ broadly to encompass a variety of such benefits that are now provided by contractors. In proposed paragraph (c), OFCCP replaces the inaccurate statement found at current § 60–20.3(c) that a contractor will not be considered to have violated the Executive Order if its contributions for fringe benefits are the same for men and women or if the resulting benefits are equal. In 1978, the Supreme Court held that under title VII, an employer must provide equal benefits to men and women, even if doing so costs more for one sex than the other. City of Los Angeles v. Manhart, 435 U.S. 702 (1978); see also Ariz. Governing Comm. v. Norris, 463 U.S. 1073 (1983).78 77 U.S. Department of Labor, Office of Federal Contract Compliance Programs Federal Contract Compliance Manual (1988), ch. 3, § 3G01(h)(2) (on file with OFCCP) (hereinafter Previous FCCM). A version of this Manual (dated 1993, but containing the same language) is available at https:// www.docstoc.com/docs/8387063/Federal-Contract (last accessed Oct. 7, 2014). 78 Indeed, the FCCM follows current law, providing that ‘‘if the contractor is not providing VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Section 60–20.7 Employment Decisions Made on the Basis of SexBased Stereotypes This proposed section is new. It states the well-recognized principle that employment decisions made on the basis of stereotypes about how males and/or females are expected to look, speak, or act are a form of sex-based employment discrimination. As the Supreme Court stated in Price Waterhouse v. Hopkins, 490 U.S. at 251, ‘‘we are beyond the day when an employer can evaluate employees by assuming or insisting that they match the stereotype associated with their . . . [sex].’’ In Price Waterhouse, the Court held that an employer’s failure to promote a female senior manager to partner because of the sex-stereotyped perceptions that she was too aggressive and did not ‘‘walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry’’ was unlawful sex-based employment discrimination.79 The principle that sexbased stereotyping is a form of sex discrimination has been applied consistently in Supreme Court and lower-court decisions. See, e.g., Nevada Dep’t of Human Res. v. Hibbs, 538 U.S. 721 (2003) (stereotype-based beliefs about the allocation of family duties on which state employers relied in establishing discriminatory leave policies held to be sex discrimination under the Constitution); Chadwick v. Wellpoint, Inc., 561 F.3d 38 (1st Cir. 2009) (making employment decision based on the belief that women with young children neglect their job responsibilities is unlawful sex discrimination); Prowel v. Wise Bus. Forms, Inc., 579 F.3d 285 (3d Cir. 2009) (harassment based on a man’s effeminacy); Terveer v. Billington, 2014 WL 1280301 (D. DC March 31, 2014) (hostile work environment based on stereotyped beliefs about the appropriateness of same-sex relationships).80 Cf. U.S. v. Virginia, 518 equal fringe benefits and/or not making equal contributions to insurance plans or pensions for men and women, this may constitute discrimination.’’ FCCM, ch. 2, § 2L03. The Previous FCCM also noted the discrepancy between OFCCP’s regulations and title VII law, providing (in chapter 3, § 3G01(h)(3)) that because— OFCCP’s policy is to interpret the nondiscrimination provisions of the Executive Order consistent with Title VII principles. . . , if [an OFCCP compliance officer] becomes aware of a situation where a contractor is either not paying equal fringe benefits and/or not making equal contributions to fringe benefits for men and women, the matter should be brought to the attention of RSOL [the Regional Solicitor of Labor]. 79 Price Waterhouse, 490 U.S. at 235. 80 See also Centola v. Potter, 183 F. Supp. 2d 403 (D. Mass. 2002) (‘‘Sexual orientation harassment is PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 U.S. 515, 533 (1996) (in making classifications based on sex, state governments ‘‘must not rely on overbroad generalizations about the different talents, capacities, or preferences of males and females’’).81 Specific examples of such stereotyping follow in proposed paragraphs (a) through (c). Proposed paragraphs 60–20.7(a), (b), and (c) address stereotyping based on an employee’s nonconformity with norms about how people with the employee’s assigned sex at birth should look, speak, and act. Paragraph (a) sets forth three examples of such stereotyping: in proposed paragraph 60–20.7(a)(1), failure to promote female employee because she did not wear jewelry, makeup, or high heels (see Price Waterhouse, supra); in proposed paragraph 60– 20.7(a)(2), harassment of a man because he is too effeminate, (see Prowel v. Wise Bus. Forms, Inc., supra); and in proposed paragraph 60–20.7(a)(3), adverse treatment of an employee because he or she does not conform to sex-role expectations by being in a often, if not always, motivated by a desire to enforce heterosexually defined gender norms. In fact, stereotypes about homosexuality are directly related to our stereotype about the proper roles of men and women.’’); Heller v. Columbia Edgewater Country Club, 195 F. Supp. 2d 1212 (D. Or. 2002) (‘‘[A] jury could find that Cagle repeatedly harassed (and ultimately discharged) Heller because Heller did not conform to Cagle’s stereotype of how a woman ought to behave. Heller is attracted to and dates other women, whereas Cagle believes that a woman should be attracted to and date only men.’’). The EEOC has recognized in a long line of federal sector decisions that adverse actions taken on the basis of sex stereotypes related to sexual orientation violate Title VII. Castello v. U.S. Postal Service, EEOC Request No. 0520110649, 2011 WL 6960810 (Dec. 20, 2011) (sex-stereotyping evidence entailed offensive comment by manager about female subordinate’s relationships with women); Veretto v. U.S. Postal Service, EEOC Appeal No. 0120110873, 2011 WL 2663401 (July 1, 2011) (complainant stated plausible sex-stereotyping claim alleging harassment because he married a man); Culp v. Dep’t of Homeland Security, EEOC Appeal 0720130012, 2013 WL 2146756 (May 7, 2013) (Title VII covers discrimination based on associating with lesbian colleague); Couch v. Dep’t of Energy, EEOC Appeal No. 0120131136, 2013 WL 4499198, at *8 (Aug. 13, 2013) (complainant’s claim of harassment based on his ‘‘perceived sexual orientation’’); Complainant v. Department of Homeland Security, EEOC Appeal No. 0120110576, 2014 WL 4407422 (Aug. 20, 2014) (‘‘While Title VII’s prohibition of discrimination does not explicitly include sexual orientation as a basis, Title VII prohibits sex discrimination, including sex-stereotyping discrimination and gender discrimination’’ and ‘‘sex discrimination claims may intersect with claims of sexual orientation discrimination.’’). 81 The U.S. Court of Appeals for the Seventh Circuit articulated this principle as early as 1971. Sprogis v. United Air Lines, Inc., 444 F.2d 1194, 1198 (7th Cir. 1971) (‘‘In forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.’’) (emphasis added). E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS relationship with a person of the same sex (see Veretto v. U.S. Postal Service and Castello v. U.S. Postal Service, supra note 80). Paragraph (b) addresses disparate treatment based on gender identity. As noted above, disparate treatment of a transgender employee may constitute discrimination because of the individual’s non-conformity to sexbased stereotypes. Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 2005) (holding that transgender woman was a member of a protected class based on her failure to conform to sex-based stereotypes and thus her title VII claim was actionable); Smith v. City of Salem, 378 F.3d 566, 574 (6th Cir. 2004) (‘‘discrimination against a plaintiff who is a transsexual [sic]—and therefore fails to act and/or identify with his or her gender—is no different from the discrimination directed against [the plaintiff] in Price Waterhouse who, in sex-stereotypical terms, did not act like a woman’’); Schroer v. Billington, supra, at 305–06 (D.D.C. 2008) (withdrawal of a job offer from a transgender applicant constituted sex-stereotyping discrimination in violation of title VII). In addition to these appellate cases, ‘‘[t]here has likewise been a steady stream of district court decisions recognizing that discrimination against transsexuals [sic] on the basis of sexbased stereotyping constitutes discrimination because of sex.’’ Macy v. Holder, supra. See also Glenn v. Brumby, 663 F.3d 1312 (11th Cir. 2011) (termination of a transgender employee constituted discrimination on the basis of gender non-conformity and sexstereotyping discrimination under Equal Protection Clause). Cf. Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 78 (1998) (same-sex harassment may be sex discrimination); Prowel v. Wise Bus. Forms, 579 F.3d 285 (3d Cir. 2009) (harassment of an ‘‘effeminate’’ man may be sex discrimination).82 This principle—that discrimination against a transgender individual is discrimination based on non-conformity to sex-based stereotypes, and thus sex discrimination—has also been adopted under the Gender-Motivated Violence Act,83 Schwenk v. Hartford, 204 F.3d 1187, 1201–02 (9th Cir. 2000), and the 82 See also Statement of Interest of the United States at 4, Apr. 4, 2014, in Burnett v. City of Philadelphia, No. 09–4348 (E.D. Pa.) (‘‘Since Price Waterhouse, in cases where the defendant’s action had been motivated by the plaintiff’s failure to conform with sex-based stereotypes, every Federal circuit court of appeals that has addressed the question has recognized that disparate treatment against a transgender plaintiff can be discrimination ‘because . . . of sex.’ ’’). 83 42 U.S.C. 13981. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Equal Credit Opportunity Act,84 Rosa v. Park W. Bank & Trust Co., 214 F.3d 213, 215–16 (1st Cir. 2000). Paragraph 60–20.7(c) addresses stereotyping based on specific expectations about the proper roles of women and men regarding caregiving. As noted above, the EEOC recognizes that adverse treatment of women stemming from sex-based assumptions about ‘‘childcare responsibilities that will make female employees less dependable than male employees’’ violates title VII.85 Even an employer’s perceptions of a caregiver’s work performance can, consciously or unconsciously, be affected by sex-based stereotypes that female caregivers are ‘‘less capable and skilled than their childless female counterparts or their male counterparts’’ (Caregiving Guidance, II.A.4). Moreover— Gender-based stereotypes may also influence how male workers are perceived: ‘‘Stereotypes about women’s domestic roles are reinforced by parallel stereotypes presuming a lack of domestic responsibilities for men. These mutually reinforcing stereotypes created a self-fulfilling cycle of discrimination.’’ Stereotypes of men as ‘‘bread winners’’ can further lead to the perception that a man who works part time is not a good father, even if he does so to care for his children. Thus, while working women have generally borne the brunt of genderbased stereotyping, unlawful assumptions about working fathers and other male caregivers have sometimes led employers to deny male employees opportunities that have been provided to working women or to subject men who are primary caregivers to harassment or other disparate treatment. For example, some employers have denied male employees’ requests for leave for childcare purposes even while granting female employees’ requests. Caregiving Guidance II.C [footnotes omitted]. In its introduction, the Caregiving Guidance also notes that discrimination against caregivers may also fall under the ADA, which prohibits discrimination based on an employee’s association with an individual with a disability. The same is true of section 503. Section 60–20.8 Harassment and Hostile Work Environments This proposed section is new. It has been well-recognized for many years that harassment on the basis of sex, including the existence of a work environment that is hostile to members 84 15 U.S.C. 1691. Enforcement Guidance: Unlawful Disparate Treatment of Workers with Caregiving Responsibilities II.A.3 (last modified Feb. 8, 2011), https://www.eeoc.gov/policy/docs/caregiving.html (last accessed Oct. 2, 2014). 85 EEOC, PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 5259 of one sex, may give rise to a violation of title VII.86 Moreover, sexual harassment continues to be a serious problem for women in the workplace 87 and a significant barrier to women’s entry into and advancement in many nontraditional occupations, including the construction trades and the computer and information technology industries. Yet, current part 60–20 does not include any references to sexual harassment or hostile work environments. Proposed § 20.8 remedies this omission.88 Proposed paragraph 60–20.8(a) incorporates the provision of EEOC’s Guidelines relating to sexual harassment virtually verbatim. See 29 CFR 1604.11(a). Inclusion of the EEOC language is intended to align the prohibitions of sexually harassing conduct under the Executive Order with the prohibitions under title VII. Proposed paragraph 60–20.8(b) defines harassment because of sex under the Executive Order broadly to include sexual harassment (including sexual 86 U.S. Equal Employment Opportunity Commission Guidelines on Discrimination Because of Sex, 41 CFR 1604.11 (1980) (provision on harassment); Harris v. Forklift Sys., 510 U.S. 17 (1993); Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986); Barnes v. Costle, 561 F.2d 983 (D.C. Cir. 1977). 87 In FY 2013, the EEOC received 7,256 sexual harassment charges (out of 93,727). U.S. Equal Employment Opportunity Commission, Enforcement & Litigation Statistics, Sexual Harassment Charges FY 2010—2013, available at https://www.eeoc.gov/eeoc/statistics/enforcement/ sexual_harassment_new.cfm (last accessed Nov. 2, 2014); U.S. Equal Employment Opportunity Commission, Enforcement and Litigation Statistics, Charge Statistics: FY 1997 Through FY 2013, available at https://eeoc.gov/eeoc/statistics/ enforcement/charges.cfm (last accessed Nov. 2, 2014). In FY 2011 (the last year for which combined data is available), the EEOC and state and local fair employment practices agencies together received just over 11,300 charges of sexual harassment. The average number of such claims filed per year from FY 2000 through FY 2011 was 13,446. OFCCP calculations from data in U.S. Equal Employment Opportunity Commission, Enforcement & Litigation Statistics, Sexual Harassment Charges: EEOC & FEPAs Combined: FY 1997—FY 2011, available at https://www.eeoc.gov/eeoc/statistics/enforcement/ sexual_harassment.cfm (last accessed Nov. 2, 2014). 88 The one reference to harassment in OFCCP’s current body of regulations implementing Executive Order 11246 is that construction contractors are required to ‘‘[e]nsure and maintain a working environment free of harassment, intimidation, and coercion at all sites.’’ 41 CFR 60–4.3(a) (subsections 7(a) and (n) of the required Equal Opportunity Clause for construction contracts). In addition, in chapter 3, § 2H01(d), the FCCM recognizes that ‘‘[a]lthough not specifically mentioned in the Guidelines, sexual harassment (as well as harassment on the basis of race, national origin or religion) is a violation of the nondiscrimination provisions of the Executive Order’’ and directs OFCCP compliance officers to ‘‘be alert for any indications of such harassment.’’ It goes on to state that ‘‘OFCCP follows Title VII principles when determining whether sexual harassment has occurred.’’ E:\FR\FM\30JAP2.SGM 30JAP2 5260 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS harassment based on gender identity), harassment based on pregnancy, childbirth, or related medical conditions, and harassment that is not sexual in nature but is because of sex (including harassment based on gender identity). This aligns the meaning of ‘‘because of sex’’ for purposes of sexual harassment with its meaning under current title VII and Executive Order law. See proposed § 60–20.2, which includes discrimination on the bases of pregnancy, childbirth, or related medical conditions and gender identity discrimination as types of sex discrimination. Proposed paragraph 60–20.8(c) suggests as best practices procedures that contractors may develop and implement ‘‘to ensure an environment in which all employees feel safe, welcomed, and treated fairly . . . [and] are not harassed because of sex.’’ The suggested procedures are: Broad dissemination of the message ‘‘that harassing conduct will not be tolerated’’ (paragraph 60–20.8(c)(1)); antiharassment training (paragraph 60– 20.8(c)(2)); and procedures for handling and resolving complaints ‘‘about harassment and intimidation based on sex’’ (paragraph 60–20.8(c)(3)). Contractors are not required to use such procedures and will not be found in violation of this part for not using such procedures. We note, however, that using such procedures may assist contractors in meeting their obligations with respect to harassment and hostile work environments. Procedures such as these are key to preventing harassment before it occurs. In addition, a contractor can avoid or reduce liability for certain sexually harassing acts committed by its supervisors if it can show that it has taken reasonable care to prevent and correct harassment.89 The activities listed in paragraph 60–20.8(c) are the kinds of activities that would help a contractor in making that showing. For example, taking reasonable care ‘‘generally requires establish[ing], disseminat[ing], and enforcing an antiharassment policy and complaint procedure.’’ 90 The law does not require 89 The Supreme Court established this affirmative defense in Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and Faragher v. City of Boca Raton, 524 U.S. 775 (1998). See also U.S. Equal Employment Opportunity Commission, Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors (July 18, 1999), available at https://www.eeoc.gov/ policy/docs/harassment.html (last accessed Oct. 7, 2014) [hereinafter EEOC Guidance on Vicarious Liability for Unlawful Harassment]. 90 EEOC Guidance on Vicarious Liability for Unlawful Harassment, supra note 89, § V(C). VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 such activities, but it does encourage employers to engage in them. Regulatory Procedures Executive Order 12866 (Regulatory Planning and Review) and Executive Order 13563 (Improving Regulation and Regulatory Review) Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives, and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects, distributive impacts, and equity). Executive Order 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; tailor the regulation to impose the least burden on society, consistent with obtaining the regulatory objectives; and in choosing among alternative regulatory approaches, select those approaches that maximize net benefits. Executive Order 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts. This proposed rule has been designated a ‘‘significant regulatory action’’ although not economically significant, under § 3(f) of Executive Order 12866. The NPRM is not economically significant, as it will not have an annual effect on the economy of $100 million or more. The Office of Management and Budget has reviewed the NPRM. The Need for the Regulation OFCCP’s longstanding policy is to follow title VII principles when conducting analyses of potential sex discrimination under Executive Order 11246. See Notice of Final Rescission, 78 FR 13508, February 28, 2013. However, the existing Sex Discrimination Guidelines, unchanged since their initial promulgation in 1970 and re-issuance in 1978, are no longer an accurate depiction of current title VII principles. Title VII has been significantly amended four times since that time, and the Supreme Court has issued several decisions clarifying that practices such as sexual harassment can be unlawful discrimination. In light of these changes, this proposed rule revises the current Guidelines, and PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 replaces them with new sex discrimination regulations that accurately set forth a contractor’s obligation not to discriminate on the basis of sex in accordance with current title VII principles. (A more detailed discussion of the need for the regulation is contained in Reasons for Amending the Current Sex Discrimination Guidelines, supra.) Discussion of Impacts In this section, OFCCP presents a summary of the costs associated with the new requirements in part 60–20. Comments are welcome on every aspect of the cost and burden calculations including but not limited to the amount of time contractors would spend on complying with the proposals in this NPRM, including those related to accommodations for light duty. The estimated labor cost to contractors and subcontractors is based on U.S. Department of Labor, Bureau of Labor Statistics (BLS) data in the publication ‘‘Employer Costs for Employee Compensation’’ issued in December 2013, which lists total compensation for Management, Professionals, and Related Occupations as $51.58 per hour.91 There are approximately 500,000 contractor firms, employing approximately 65 million employees, registered in the SAM. Therefore, OFCCP estimates that 500,000 contractor companies or firms may be affected by the proposed new provisions.92 The SAM number results in an overestimation for several reasons: the system captures firms that do not meet the $10,000 jurisdictional dollar threshold for this proposed rule; it captures inactive contracts, although OFCCP’s jurisdiction covers only active contracts; and it captures thousands of recipients of Federal grants and Federal financial assistance, which are not contractors.93 91 Press Release, Bureau of Labor Statistics, U.S. Department of Labor, Employer Costs for Employee Compensation—December 2013, at 4, available at https://www.bls.gov/news.release/pdf/ecec.pdf (last accessed Oct. 6, 2014). 92 U.S. General Services Administration, System for Award Management, Legacy CCR Extracts Public (‘‘FOIA’’) Data Package, May 2014, available at https://www.sam.gov/portal/public/SAM/(last accessed June 14, 2014). 93 In addition to these reasons to believe that the SAM data yield an overestimate of the number of entities affected by this rule, there is at least one reason to believe the data yield an underestimate: SAM does not necessarily include all subcontractors. But this data limitation is offset somewhat because of the overlap among contractors and subcontractors; a firm may be a subcontractor on some activities but have a contract on others and thus in fact be included in the SAM data. E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Cost of Regulatory Familiarization Agencies are required to include in the burden analysis the estimated time it takes for contractors to review and understand the instructions for compliance. See 5 CFR 1320.3(b)(1)(i). In order to minimize this burden, OFCCP will publish compliance assistance materials including, but not limited to, fact sheets and ‘‘Frequently Asked Questions.’’ OFCCP will also host webinars for the contractor community that will describe the new requirements and conduct listening sessions to identify any specific challenges contractors believe they face, or may face, when complying with the requirements. Based on its experience with Federal contractors’ compliance with the laws OFCCP enforces, OFCCP believes that human resources or personnel managers at each contractor establishment or firm will become responsible for understanding or becoming familiar with the new requirements. Therefore, OFCCP estimates that it will take 60 minutes or 1 hour for a management professional at each contractor establishment to either read the compliance assistance materials provided by OFCCP or participate in an OFCCP webinar to learn more about the new requirements. Consequently, the estimated burden for rule familiarization is 500,000 hours (500,000 contractor companies × 1 hour = 500,000 hours). Based on data from the Bureau of Labor Statistics, which lists total compensation for the Management, Professional, and Related Occupations group at $51.58,94 we calculate the total estimated cost as $25,790,000 (500,000 hours × $51.58/ hour = $25,790,000) or $52 per contractor company. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Cost of Proposed Provisions The NPRM proposes revising the current Sex Discrimination Guidelines to replace them with regulations that set forth requirements that Federal contractors and subcontractors and federally assisted construction contractors and subcontractors must meet in fulfilling their obligations under Executive Order 11246, as amended, to ensure nondiscrimination in employment on the basis of sex. In order to reduce the burden and increase understanding, the NPRM includes examples of prohibited employment practices with each of the provisions. The NPRM proposes changing the title of the regulation to provide clarity that the provisions in part 60–20 are 94 See supra note 91 and accompanying text. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 regulations implementing Executive Order 11246. The title change does not incur burden. The NPRM proposes minor edits to § 60–20.1, including deleting a sentence explaining the reason for promulgating this part of the regulation, and modifying the sentence notifying the public that part 60–20 is to be read in connection with existing regulations. These minor edits update the regulations and provide clarity. Because the edits do not cause additional action on the part of contractors, no additional burden is associated with this section. Section 60–20.2, General Prohibitions, of the NPRM proposes removing the current section ‘‘Recruitment and advertisement’’ section and replacing it with a section that articulates the general prohibition against sex discrimination in employment. The general prohibition against sex discrimination in employment is not a new provision and as such does not require any additional action on the part of Federal contractors, subcontractors, or federally assisted construction contractors or subcontractors. Thus no burden is assessed for this provision. The NPRM proposes replacing the current § 60–20.3 (Job policies and practices) with ‘‘Sex as a bona fide occupational qualification.’’ In this section, the NPRM proposes to consolidate in one provision the current references to the BFOQ defense available to employers and update the language set forth in title VII. This reorganization is intended to make it easier for Federal contractors, subcontractors, and federally assisted construction contractors and subcontractors to locate and understand the BFOQ defense. This section reorganizes existing information and does not incur additional burden. Thus no burden is assessed for this provision. Section 60–20.4 proposes to replace the current provision addressing seniority systems with a section addressing discrimination in compensation practices. The proposed section provides clear guidance to covered contractors on their obligation to provide equal opportunity with respect to compensation. It provides guidance on determining similarly situated employees and confirms that OFCCP follows title VII principles in investigating compensation discrimination. The provisions do not create new requirements; rather, they clarify existing provisions regarding compensation discrimination, thus reducing confusion that may have resulted in the analysis of compensation PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 5261 discrimination.95 Therefore no new burden or new benefit (beyond confusion reduction) is created by this provision. The NPRM proposes to address discrimination on the basis of pregnancy, childbirth, or related medical conditions in Section 60–20.5. Subsection 60–20.5(a) prohibits discrimination on the basis of pregnancy, childbirth, or related medical conditions, including childbearing capacity. This clarifies current law that discrimination based on any of these factors is prohibited under Executive Order 11246 and as such does not generate new burden or new benefits (with the exception of reduced confusion). Subsection 60–20.5(b) provides a nonexhaustive list of examples of unlawful pregnancy discrimination, including refusing to hire pregnant applicants; firing an employee or requiring an employee to go on leave because the employee becomes pregnant; limiting a pregnant employee’s job duties based on pregnancy or requiring a doctor’s note in order for a pregnant employee to continue employment; providing employees with health insurance that does not cover hospitalization and other medical costs related to pregnancy, childbirth, or related medical conditions when hospitalization is provided for other medical conditions; and denying an alternative job assignment, modified duties or other accommodations to a pregnant employee when such accommodations are provided or are required to be provided by a contractor’s policy or by other relevant laws to other employees whose abilities or inabilities to work are similar. The clarification, including the examples provided in subsection 60–20.5(b), reduces contractors’ confusion by harmonizing OFCCP’s outdated regulations with current title VII jurisprudence. Although OFCCP believes that Federal contractors are already required to provide accommodations and light duty under title VII, because some courts disagree with this interpretation, see supra note 76 and accompanying text, it estimates that there will be some burden associated with this provision for contractors that did not provide accommodations or light duty in the past. To determine the burden of this accommodations provision, OFCCP first estimated the number of workers who may need an accommodation or light 95 The existing § 60–20.5 addressed discriminatory wages. The proposed § 60–20.4 incorporates that existing requirement and updates it to be consistent with current title VII law. E:\FR\FM\30JAP2.SGM 30JAP2 5262 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules duty during pregnancy. No specific data sets detail the characteristics of Federal contractor and subcontractor workers relating to pregnancy. Thus OFCCP relied on the data sets available for the general population and general labor force. OFCCP believes that the characteristics of the general labor force are similar to the Federal contractor workforce. In estimating the burden associated with the accommodations provision, OFCCP determined that there are approximately 65 million employees who work for the Federal contractors and other recipients of Federal monies that are included in the SAM database. Because the data does not indicate gender demographics, OFCCP used data from the Bureau of Labor Statistics that indicates that 47 percent of the workforce is female.96 According to National Center for Health Statistics (NCHS) data, there were 6,127,000 pregnancies among women ages 18 to 44 in the United States in 2009 among the general population.97 When compared to data from the U.S. Census for the same time period, that number of pregnancies reflects a pregnancy rate of approximately 10.9 percent.98 OFCCP further refined this rate to reflect pregnancies of working women. NCHS’s pregnancy rate did not distinguish between working and nonworking women. Thus OFCCP turned to data from the U.S. Census. U.S. Census American Fact Finder does not report on pregnancy, but does report on births. Census data also shows whether the mother was in the labor force. As this is the best data available, OFCCP used the ratio of births among working and non-working mothers to determine the pregnancy rate of women in the workforce. Thus, OFCCP determined that the pregnancy rate for women in the workforce is approximately 61 percent of the rate for women in the general population, translating to a pregnancy rate of 6.7 percent of women in the Federal contractor workforce.99 96 Women in the Labor Force, supra note 12, at asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 2. 97 Centers for Disease Control and Prevention, National Center for Health Statistics, NCHS Data Brief No. 136: Pregnancy Rates for U.S. Women Continue to Drop 2 (2013) available at https:// www.cdc.gov/nchs/data/databriefs/db136.pdf (last accessed Oct. 6, 2014). 98 This may be an overestimation of the number of pregnant workers because there is limited data available regarding the age of employees of federal contractors. 99 U.S. Census Bureau, American Fact Finder, Women 16 to 50 Years Who Had a Birth in the Past 12 Months by Marital Status and Labor Force Status, 2009 to 2011 American Community Survey 3-Year Estimates, available at https:// factfinder2.census.gov/faces/tableservices/jsf/ pages/productview.xhtml?pid=ACS_11_3YR_ VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Based on the above, OFCCP estimates approximately 2,046,850 women (four women per SAM contractor firm) in the Federal contractor workforce would be pregnant in a year.100 Not every pregnant employee in the Federal contractor workforce will require an accommodation that might involve more than a de minimis cost. Many will have no medical condition associated with their pregnancies that require such accommodation. Even for those who do have such conditions, the positions that require such accommodation generally involve physical exertion or standing; such positions are likely to be found in the job categories of craft workers, operatives, laborers, and service workers. Based on data from the Employer Information Report EEO–1, OFCCP estimates that 21 percent of women in the Federal contractor workforce are in such job categories. Thus, of the 2,046,850 women who may be pregnant, 429,839 are in positions in the job categories likely to require accommodations that might involve more than a de minimis cost. Reports from NIH show that the incidence of medical conditions during pregnancy that require accommodations ranges from 0.5 percent (placenta previa) to 50 percent (back issues).101 Thus, OFCCP estimates that of the approximately 429,839 women in positions that require physical exertion or standing, half or 214,920 may require some type of an accommodation or light duty. The types of accommodations needed during pregnancy also vary. They range from time off for medical appointments and more frequent breaks to stools for sitting and assistance with heavy lifting.102 Reports from the W.K. Kellogg Foundation on women’s child bearing B13012&prodType=table (last accessed Aug. 1, 2014). The data table reports birth rates for women in labor force at 5.1 percent, compared to women not in the labor force at 8.4 percent. Comparing the two rates (5.1 percent to 8.1 percent), the birth rate of women in the labor force was 61 percent that of women not in the labor force. Therefore, multiplying the pregnancy rate among women of working age, 10.9 percent, by 61 percent results in a 6.7 percent pregnancy rate. 100 Id. 101 S. Malmqvist et.al., Prevalence of low back and pelvic pain during pregnancy (Abstract), J. Manipulative Physiological Therapy, National Center for Biotechnology Information (2012), available at https://www.ncbi.nlm.nih.gov/pubmed/ 22632586, (last accessed Oct. 6, 2014). 102 Unlawful Discrimination Against Pregnant Workers and Workers with Caregiving Responsibilities: Meeting of the U.S. Equal Emp. Opportunity Comm’n 8 (Feb. 15, 2012) (statement of Dr. Stephen Benard, Professor of Sociology, Indiana University), available at https:// www.eeoc.gov/eeoc/meetings/2-15-12/ transcript.cfm (last accessed Oct. 6, 2014). PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 experiences and the National Women’s Law Center on accommodating pregnant workers show that the costs associated with accommodating pregnant workers are minimal and generally involve schedule adjustments or modified work duties.103 One study found that when faced with a pregnancy-related need for accommodation, between 62 percent and 74 percent of pregnant women asked their employer to address their needs. The study further found that between 87 percent and 95 percent of the pregnant women who requested an adjustment to their work schedule or job duties worked for employers that attempted to address those requests. The study specifically found that 63 percent of pregnant women who needed a change in duties such as less lifting or more sitting asked their employers to address that need, and 91 percent of those women worked for employers that attempted to address their needs.104 Based on this study, OFCCP believes that most employers do provide some form of accommodation when requested. To determine the cost of accommodation or light duty imposed by the proposed rule, OFCCP considered the types of light duty or accommodations needed. Generally, providing light duty or accommodation for pregnancy involves adjusting work schedules or allowing more frequent breaks. OFCCP believes that these accommodations would incur little to no additional cost. Additional accommodations may involve either modifications to work environments (providing a stool for sitting rather than standing) or to job duties—for example, lifting restrictions. In making such an accommodation, Federal contractors have discretion regarding how they would make such modifications. For example, a contractor may provide an employee with an existing stool, or a contractor may have other employees assist when heavy lifting is required. To determine the cost of such accommodations, OFCCP referred to the Job Accommodation Network (JAN). JAN reports that the average cost of accommodation is $500.105 As stated above, 63 percent of pregnant women who needed a change in duties related to less lifting or more 103 Heavy Lift, supra note 51, at 12. Declerq et al., W.K. Kellogg Foundation, Listening to Mothers III: New Mothers Speak Out, 36, (2013). 105 Beth Loy, Job Accommodation Network, Workplace Accommodations: Low Cost, High Impact, available at https://askjan.org/media/ lowcosthighimpact.html (last updated Sept. 1, 2014) (last accessed Oct. 6, 2014). 104 Eugene E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS sitting requested such an accommodation from their employers. Thus, OFCCP estimates that 135,400 women (214,920 × 0.63) would have made such a request, and 91 percent, or 123,214 of those requests (135,400 × 0.91) would have been addressed. In addition, OFCCP assumes that of the 37 percent (79,520 women) who did not make such a request, had they made the request, the needs of 91 percent of them (72,364 women) would also have been addressed.106 Thus, this proposed rule would require covered contractors to accommodate the nine percent of women whose needs were not addressed. Therefore, OFCCP estimates that the cost, accounting for those pregnant women who made requests and those additional women who could make requests, would be $9,671,000 ((135,400 ¥ 123,214) + (79,520 ¥ 72,364) × $500). Accounting for women’s requests that could be made but may not be made is likely an overestimation of the cost of this accommodation. In addition, OFCCP believes that this cost estimate may also be an overestimate because contractors with 15 or more employees are covered by a similar requirement found in title VII and 36 states have requirements that apply to employers with fewer than 15 employees.107 Although OFCCP seeks comments on all aspects of its calculation of burden and costs, the agency specifically seeks comments on the burden associated with providing accommodations to pregnant workers. The NPRM proposes replacing the current § 60–20.6 (Affirmative action) with a new section titled ‘‘Other fringe benefits.’’ The current section on affirmative action is unnecessary because the requirements related to affirmative action programs are set forth in parts 60–2 and 60–4. In the new § 60– 20.6, the NPRM proposes to clarify the existing requirement of 106 OFCCP arrived at 79,250 by multiplying the 214,920 women by 37 percent. 107 State laws covering employers with one employee: Alaska, Colorado, Hawaii, Maine, Michigan, Minnesota, Montana, New Jersey, North Dakota, Oklahoma, Oregon, South Dakota, Vermont, and Wisconsin; state laws covering employers with two employees: Wyoming; state laws covering employers with three employees: Connecticut; state laws covering employers with four employees: Delaware, Iowa, Kansas, New Mexico, New York, Ohio, Pennsylvania, and Rhode Island; state laws covering employers with five employees: California and Idaho; state laws covering employers with six employees: Indiana, Massachusetts, Missouri, New Hampshire, and Virginia; state laws covering employers with eight or more employees: Kentucky, Tennessee, and Washington; state laws covering employers with nine or more employees: Arkansas; state laws covering employers with 12 or more employees: West Virginia. In addition, the District of Columbia and Puerto Rico’s laws cover employers with one employee. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 nondiscrimination in fringe benefits, specifically with regard to application of that principle to contributions to and distributions from pension and retirement funds. The proposed section reflects the current state of title VII law with regard to pension funds, imposing no additional burden on contractors covered both by Executive Order 11246, as amended, and by title VII (which, generally, covers employers of 15 or more employees) or by state or local laws that similarly prohibit sex discrimination (many of which have lower coverage thresholds 108). As to the remaining contractors—those that have fewer than 15 employees as defined by title VII, are not covered by state or local laws, and have at least $10,000 in Federal contracts or subcontracts—as noted in the discussion of this requirement elsewhere in the preamble, OFCCP’s publicly available FCCM has put them on notice that OFCCP follows current law with regard to providing equal benefits and making equal contributions to pensions funds for men and women. Thus, as an existing requirement, this does not generate any new benefits (beyond reduced confusion) or additional burden. The NPRM proposes a new section, § 60–20.7, titled ‘‘Employment decisions made on the basis of sex-based stereotypes.’’ This section explains the prohibition against making employment decisions on the basis of sex-based stereotypes, which the Supreme Court recognized in 1989 as a form of sex discrimination under title VII. This section clarifies that such discrimination includes disparate treatment based on nonconformity to stereotypical expectations about gender identity, gender expression, and sexual orientation and stereotyping based on specific expectations about the proper roles of women and men regarding caregiving. The proposed section reflects the current state of title VII law with regard to sex-based stereotyping, imposing no additional burden on contractors covered both by Executive Order 11246, as amended, and by title VII or by state or local laws that similarly prohibit sex discrimination, many of which have lower coverage thresholds.109 As to the remaining contractors—those that have fewer than 15 employees as defined by title VII, are not covered by state or local laws, and have at least $10,000 in Federal contracts or subcontracts—as noted in the discussion of this requirement elsewhere in the preamble, OFCCP’s publicly available FCCM has put them 108 See 109 See PO 00000 note 99, supra. note 99, supra. Frm 00019 Fmt 4701 Sfmt 4702 5263 on notice that OFCCP follows current law with regard to sex-based stereotyping. The FCCM provides that: COs must examine whether contractor policies make prohibited distinctions in conditions of employment based on sex, including the basis of pregnancy, childbirth or related medical conditions, or on the basis of sex-based stereotypes, including those related to actual or perceived caregiver responsibilities. Contractors must not make employment decisions based on stereotypes about how males and females are ‘‘supposed’’ to look or act. Such employment decisions are a form of sex discrimination prohibited by Executive Order 11246, as amended. FCCM, ch. 2, section 2H00(a).110 Thus, for these contractors as well, the proposed section imposes no additional burden and generates no new benefits for their employees. The NPRM proposes a new section, § 60–20.8, titled ‘‘Harassment and hostile work environments.’’ This section explains the circumstances under which sex-based harassment and hostile work environments violate the Executive Order, reflecting principles established in Supreme Court title VII decisions beginning in 1986. This section clarifies that such discrimination includes ‘‘sexual harassment (including harassment based on gender identity or expression), harassment based on pregnancy, childbirth, or related medical conditions,’’ and sex-based harassment that is not sexual in nature but that is because of sex or where one sex is targeted for the harassment. The proposed section describes best practices that contractors may follow to reduce and eliminate harassment and hostile work environments but explicitly states that such practices are ‘‘not required by this part.’’ The proposed section reflects the current state of title VII law with regard to sex-based harassment and hostile work environments, imposing no additional burden on contractors covered both by Executive Order 11246, as amended, and by title VII or by state or local laws that similarly prohibit sex 110 Another section of the FCCM also covers sexbased stereotyping: Sex-Based Stereotyping and Caregiver Discrimination. Differential treatment for an employment-related purpose based on sex-based stereotypes, including those related to actual or perceived caregiving responsibilities, is a violation of Title VII of the Civil Rights Act of 1964. For example, it is prohibited to deny advancement opportunities to similarly situated mothers that are provided to fathers or women without children, based on stereotypes about mothers in the workplace; it is also prohibited to deny to fathers access to family-friendly policies like workplace flexibility that employers provide to mothers, based on stereotypes about fathers’ roles in care giving. FCCM, ch. 2, section 2H01(e). E:\FR\FM\30JAP2.SGM 30JAP2 5264 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules discrimination (many of which have lower coverage thresholds 111). As to the remaining contractors—those that have fewer than 15 employees as defined by title VII, are not covered by state or local laws, and have at least $10,000 in Federal contracts or subcontracts—as noted in the discussion of this requirement elsewhere in the preamble, OFCCP’s publicly available FCCM has put them on notice that OFCCP follows current law with regard to sex-based harassment and hostile work environments. The FCCM provides that: Although not specifically mentioned in the Guidelines, sexual harassment, as well as harassment based on race, color, national origin or religion is a violation of the nondiscrimination provisions of EO 11246. During the onsite review, COs must be alert for any indications of such harassment. OFCCP follows Title VII principles when determining whether sexual harassment has occurred. FCCM, Chapter 2, Section 2H01(d). Thus, for these contractors as well, the proposed section imposes no additional burden and generates no new benefits for their employees. The total first year cost of the regulation is estimated at $35,461,000 or $71 per contractor company. Below, in Table 1, is a summary of the hours and costs: TABLE 1—CONTRACTOR PROPOSED NEW REQUIREMENTS Section Burden hours Estimated One-Time Burden: Regulatory Familiarization ................................................................................................................................ Total One-Time Burden .................................................................................................................................... Estimated Recurring Burden: 41 CFR 60–20.5: Light duty or accommodation .............................................................................................. Total Annual Recurring Burden ........................................................................................................................ Total Burden .............................................................................................................................................. Summary of Transfer and Benefits If the proposed rule decreases sexbased compensation discrimination, that effect may generate a transfer of value to employees from employers (if additional wages are paid out of profits) or taxpayers (if contractor fees increase to pay higher wages to employees). Contractors may also transfer any costs of providing pregnancy accommodations to employees, by not increasing wages or reducing other benefits (to the extent not prohibited by the Davis-Bacon and Service Contract Acts). However, OFCCP does not currently have sufficient information to reliably estimate the potential transfer payments resulting from this proposed rule, and it requests public comment on data and methods to do so. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Analysis of Rulemaking Alternatives OFCCP considered a range of regulatory alternatives that would enable the agency to encourage voluntary compliance and effectively enforce the prohibition against sex discrimination. In addition to the approach proposed in the NPRM, OFCCP considered two alternative approaches. First, OFCCP considered maintaining the current guidelines with no changes. Second, OFCCP considered rescinding the existing guidelines without proposing new regulations. Each of these alternatives is discussed in further detail below. OFCCP seeks comments from stakeholders on the proposal in the NPRM, as well as each 111 See alternative, including OFCCP’s assessment of the costs and benefits. Alternative 1: Maintaining the Current Guidelines OFCCP considered maintaining the Sex Discrimination Guidelines with no changes. This alternative would impose no new costs and achieve no new benefits. However, as discussed above, the existing guidelines are extremely outdated and therefore do not provide sufficient or even accurate guidance to contractors regarding their nondiscrimination obligations. Thus, retaining the existing guidelines would have the negative effect of continuing to impose compliance costs on compliant contractors. It is true that, as discussed elsewhere in this preamble, the FCCM provides updated guidance in the areas of maternity leave, sex-based stereotyping, sexual harassment, and pensions. But even in these areas, the provisions of the Guidelines conflict with the FCCM and thus potentially sow confusion among the contractor community. As mentioned above, current § 60– 20.3(c) provides that a contractor will not be considered to have violated the Executive Order if its contributions for fringe benefits are the same for men and women or if the resulting benefits are equal. But in 1978, the Supreme Court held that under title VII, an employer must provide equal retirement benefits to men and women even if the contributions necessary to do so cost more for one sex than the other. While the FCCM recognizes this Supreme 20:35 Jan 29, 2015 Jkt 235001 PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 500,000 500,000 $25,790,000 25,790,000 0 0 9,671,000 9,671,000 500,000 35,461,000 Court development, it is possible that contractors, especially new contractors confronted for the first time with the conflict between the outdated provisions in the Guidelines, on the one hand, and current title VII principles and the FCCM, on the other, may still be incurring legal fees or the cost of human resource professionals’ time to reconcile this conflict. Moreover, maintaining the Sex Discrimination Guidelines with no changes would be inconsistent with Section 6 of Executive Order 13563, which requires agencies to engage in retrospective analyses of ‘‘rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.’’ Alternative 2: Rescinding but Not Replacing the Current Guidelines OFCCP considered rescinding the Sex Discrimination Guidelines but not proposing regulations to replace them. This alternative would have the benefit of removing from the Code of Federal Regulations provisions that are inconsistent with current title VII principles, such as the fringe benefit provision discussed above. Contractors would no longer need to expend resources to reconcile conflicts between the Sex Discrimination Guidelines and the current requirements of title VII law. However, this alternative would create a vacuum of guidance for contractors, requiring them to expend resources for a different reason—for example, to pay for lawyers’ or human resource note 99, supra. VerDate Sep<11>2014 Costs E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS professionals’ time to provide guidance regarding their nondiscrimination obligations. That ad hoc approach would reduce consistency across contractors’ practices and could increase the incidence of unintended noncompliance, potentially harming job applicants and employees. Regulatory Flexibility Act and Executive Order 13272 (Consideration of Small Entities) The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq., establishes ‘‘as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and applicable statutes, to fit regulatory and informational requirements to the scale of the business organizations and governmental jurisdictions subject to regulation.’’ Public Law 96–354. To achieve that principle, the Act requires agencies promulgating proposed rules to prepare an initial regulatory flexibility analysis (IRFA) and to develop alternatives whenever possible, when drafting regulations that will have a significant impact on a substantial number of small entities. The Act requires the consideration for the impact of a proposed regulation on a wide-range of small entities including small businesses, not-for-profit organizations, and small governmental jurisdictions. Agencies must perform a review to determine whether a proposal or final rule would have a significant economic impact on a substantial number of small entities.112 If the determination is that it would, then the agency must prepare a regulatory flexibility analysis as described in the RFA.113 However, if an agency determines that a proposed or final rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. See 5 U.S.C. 605. The certification must include a statement providing the factual basis for this determination and the reasoning should be clear. OFCCP is publishing this initial regulatory flexibility analysis to aid stakeholders in understanding the small entity impacts of the proposed rule and to obtain additional information on the small entity impacts. OFCCP invites interested persons to submit comments on the following estimates, including the number of small entities affected by the NPRM, the compliance cost 112 See 5 U.S.C. 603. 113 Id. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 estimates, and whether alternatives exist that will reduce burden on small entities while still remaining consistent with the objective of the proposed rule. Why OFCCP is Considering Action: OFCCP is publishing this proposed rule in order to align its existing regulations related to sex discrimination with current law and address their application to current workplace practices and issues. Objectives of and Legal Basis for Rule: This proposed rule will provide guidance on how to comply with the nondiscrimination requirements of Executive Order 11246, as amended. Compliance Requirements of the Proposed Rule, Including Reporting and Recordkeeping: As explained in this proposed rule, the Sex Discrimination Guidelines at 41 CFR part 60–20 set forth interpretations and guidelines for implementing Executive Order 11246’s nondiscrimination and affirmative action requirements related to sex. The guidelines have not been updated in more than 40 years. This NPRM is intended to update the requirements to reflect current statutory and case law. The requirements in Executive Order 11246 generally apply to any business or organization that (1) holds a single Federal contract, subcontract, or federally assisted construction contract in excess of $10,000; (2) has Federal contracts or subcontracts that, combined, total in excess of $10,000 in any 12-month period; or (3) holds Government bills of lading, serves as a depository of Federal funds, or is an issuing and paying agency for U.S. savings bonds and notes in any amount. This NPRM contains several provisions that could be considered to impose compliance requirements on contractors. Generally, contractors are prohibited from making employment decisions based upon gender, including decisions regarding compensation and fringe benefits. The NPRM updates the existing regulations to address, inter alia, discrimination on the basis of pregnancy, harassment, and employment decisions made on the basis of sex-based stereotypes. These revisions and updates are intended to bring OFCCP’s regulations at part 60–20 in line with the current standards of title VII and thus reduce potential confusion among contractors, applicants and employees regarding which requirement applies to a particular situation. All small entities subject to Executive Order 11246 would be required to comply with all of the provisions of the NPRM. Such compliance requirements are more fully described above in other portions of this preamble. The following PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 5265 section analyzes the cost of complying with proposed requirements in the NPRM. Calculating Impact of the Proposed Rule on Small Business Firms: OFCCP must determine the compliance cost of this proposed rule on small contractor firms, and whether these costs will be significant for a substantial number of small contractor firms (i.e., small business firms that enter into contracts with the Federal Government). If the estimated compliance costs for affected small contractor firms are less than three percent of small contractor firms’ revenues, OFCCP considers it appropriate to conclude that this proposed rule will not have a significant economic impact on the small contractor firms covered by Executive Order 11246. While OFCCP has chosen three percent as our significance criterion, using this benchmark as an indicator of significant impact may overstate the significance of such an impact, since the costs associated with prohibiting sex discrimination against employees and job applicants are expected to be mitigated to some degree by the benefits of the proposed rule. The benefits are discussed more fully in the preamble of this NPRM. The data sources used in the analysis of small business impact are the Small Business Administration’s (SBA) Table of Small Business Size Standards,114 the Current Population Survey (CPS), and the U.S. Census Bureau’s Statistics of U.S. Businesses (SUSB).115 Since Federal contractors are not limited to specific industries, OFCCP assessed the impact of this NPRM across the 19 industrial classifications.116 Because data limitations do not allow OFCCP to determine which of the small firms within these industries are Federal contractors, OFCCP assumes that these 114 U.S. Small Business Administration, Firm Size Data, Statistics of U.S. Businesses, available at https://www.sba.gov/advocacy/849/12162#susb (last visited June 9, 2014). 115 U.S. Census Bureau, Statistics of U.S. Businesses: Latest SUSB Annual Data, available at https://www.census.gov/econ/susb/ (last accessed June 9, 2014). 116 Agriculture, Forestry, Fishing, and Hunting Industry (North American Industry Classification System (NAICS) 11, Mining NAICS 21, Utilities NAICS 22, Construction NAICS 23, Manufacturing, NAICS 31–33, Wholesale Trade NAICS 42, Retail Trade NAICS 44–45, Transportation and Warehousing NAICS 48–49, Information NAICS 51, Finance and Insurance NAICS 52, Real Estate and Rental and Leasing NAICS 53, Professional, Scientific, and Technical Services NAICS 54, Management of Companies and Enterprises NAICS 55, Administrative and Support and Waste Management and Remediation Services NAICS 56, Educational Services NAICS 61, Healthcare and Social Assistance NAICS 62, Arts, Entertainment, and Recreation NAICS 71, Accommodation and Food Services NAICS 72, Other Services NAICS 81. E:\FR\FM\30JAP2.SGM 30JAP2 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 5266 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules small firms are not significantly different from the small Federal contractors that will be directly affected by the proposed rule. OFCCP used the following steps to estimate the cost of the proposed rule per small contractor firm as measured by a percentage of the total annual receipts. First, OFCCP used Census SUSB data that disaggregates industry information by firm size in order to perform a robust analysis of the impact on small contractor firms. OFCCP applied the SBA small business size standards to the SUSB data to determine the number of small firms in the affected industries. Then OFCCP used receipts data from the SUSB to calculate the cost per firm as a percent of total receipts by dividing the estimated annual cost per firm by the average annual receipts per firm. This methodology was applied to each of the industries, and the results by industry are presented in the summary tables below (see Tables 2–20). In sum, the increased cost of compliance resulting from the proposed rule is de minimis relative to revenue at small contractor firms, no matter their size. All of the industries had an annual cost per firm as a percent of receipts of far less than three percent. For instance, the manufacturing industry cost is estimated to range from 0.00 percent for firms that have average annual receipts of approximately $985 million to 0.02 percent for firms that have average annual receipts of under $500,000. Management of companies and enterprises is the industry with the highest relative costs, with a range of 0.00 percent for firms that have average annual receipts of approximately $2 million to 0.30 percent for firms that have average annual receipts of under $24,000. Therefore, in no instance is the effect of the NPRM greater than three percent of total receipts, and in fact does not exceed 0.3 percent. Although OFCCP estimates the compliance costs are less than three percent of the average revenue per small contractor firm for each of the 19 industries, OFCCP seeks data and feedback from small firms on the factors and assumptions used in this analysis, such as the data sources, small business industries, NAICS codes and size standards, and the annual costs per firm as a percent of receipts. OFCCP seeks information about which data sources should be used to estimate the number of Federal small subcontractors. OFCCP also seeks information about the potential compliance cost estimates, such as any differences in compliance costs for small businesses as compared to larger businesses and any compliance VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 costs that may not have been included in this analysis. Estimating the Number of Small Businesses Affected by the Rulemaking: OFCCP now sets forth its estimate of the number of small contractor firms actually affected by the proposed rule. This information is not readily available. The best source for the number of small contractor firms that are affected by this proposed rule is GSA’s SAM. OFCCP used SAM data to estimate the number of affected small contractor firms since SAM data allow us to directly estimate the number of small contractor firms. Federal contractor status cannot be discerned from the SBA firm size data. It can only be used to estimate the number of small firms, not the number of small contractor firms. OFCCP used the SBA data to estimate the impact of the proposed regulation on a ‘‘typical’’ or ‘‘average’’ small firm in each of the 19 industries. OFCCP then assumed that a typical small firm is similar to a small contractor firm. OFCCP believes that this NPRM will not have a significant economic effect on a substantial number of small businesses. Based on the most current SAM data available, if OFCCP defined ‘‘small’’ as fewer than 500 employees, then there are 328,552 small contractor firms. If OFCCP defined ‘‘small’’ as firms with less than $35.5 million in revenues, then there are 315,902 small contractor firms. Thus, OFCCP established a range of 315,902 to 328,552 as the total number of small contractor firms. Of course, not all of these contractor firms will be impacted by the proposed rule; only those contractor firms that have active contracts of more than $10,000 and are not otherwise covered by title VII or similar state or local antidiscrimination laws will be impacted. Thus this range is an overestimate of the number of firms affected by the proposed rule. As the proposed regulation applies to contractors covered by Executive Order 11246, OFCCP estimates that the range of small firms impacted is from 315,902 to 328,552. Relevant Federal Rules Duplicating, Overlapping, or Conflicting with the Rule: As discussed in the preamble above, OFCCP recognizes that title VII, like the Executive Order, prohibits employers from discriminating against employees and job applicants on the basis of sex. Thus some overlap exists between the two laws.117 In fact, OFCCP is proposing in this NPRM to eliminate conflict with title VII and current case law. Alternatives to the Proposed Rule: As described above, OFCCP considered two alternatives. These alternatives would not be an effective or efficient way to enforce Executive Order 11246, as amended. Differing Compliance and Reporting Requirements for Small Entities: This NPRM provides for no differing compliance requirements for small entities. In its implementation of Executive Order 11246, as amended, OFCCP does provide different reporting requirements for small entities—for example, contractor companies with fewer than 50 employees are not required to submit an EEO–1 Report or develop affirmative action programs. See 41 CFR 1.7, 1.40, and 2.1. In addition, the record retention period for smaller contractors is reduced. See 41 CFR 60–1.12. Clarification, Consolidation, and Simplification of Compliance and Reporting Requirements for Small Entities: This NPRM was drafted to state clearly the compliance requirements for all contractors subject to Executive Order 11246, as amended. The proposed rule does not contain any new reporting or recordkeeping requirements. The compliance provisions apply generally to all businesses covered by Executive Order 11246, as amended; no rational basis exists for creating an exemption from compliance requirements for small businesses. OFCCP makes available a variety of resources to employers for understanding their obligations and achieving compliance. Use of Performance Rather Than Design Standards: This NPRM was written to provide clear guidelines to ensure compliance with the Executive Order requirements. Under the proposed rule, contractors may achieve compliance through a variety of means. OFCCP makes available a variety of resources to contractors for understanding their obligations and achieving compliance. Exemption from Coverage of the Rule for Small Entities: Executive Order 11246, as amended, establishes its own exemption requirements; therefore, OFCCP has no authority to exempt small businesses from the requirements of the Executive Order. 117 Unlike title VII, Executive Order 11246 contains the additional requirement that Federal contractors engage in affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, as well as their race, color, religion, sexual orientation, gender identity, or national origin. PO 00000 Frm 00022 Fmt 4701 Sfmt 4702 E:\FR\FM\30JAP2.SGM 30JAP2 5267 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Regulatory Flexibility Act and Executive Order 13272 (Consideration of Small Entities) BILLING CODE 4510–CM–P Table 2: Cost per small firm in the agriculture, forestry, fishing, and hunting industry. Agriculture, Forestry, Fishing, and Hunting Tndust million ~ $275 million Small Business Size Standard: Average Number of Number of Total Numbt'l' Annual Cost Annual Rer<'ipts per Finn Firms Fitms with sales 'n.:cciphkrcvcnuc bdo,.-v 5,1186 $247.056,()(Kl $71 $2,231 ,355,00{) $71 $2620,344,000 $71 Firn1s with sall:!sd·e~eipts/revljnUt;; SHlO.OOO to $499.999 $71 8.939 $100,000 S4.975.U7KOOO derived by of $!(J(l,OOO to $499,999, the annml oost per lim> as a percent of receipts ((Ul:l percent) ts )i:,'f fum ($249.620). Table 3: Cost per small firm in the mining industry. Mining Industry SmaH Bm:iness Size Stmdard: 500 ~mployecs A·,,.erage Numher of Finns ~umlwr of Total Numb€'r of Employees E:mplnyt'<$ per 1 Firm Annual Cu~t pet Firm . \vera~'t:' Annual Receipts Receipts per Firm 2 Annual Cost Firm as of Re.,.,in!s 3 Finns \V1th 0··4 employees 11.223 !7.874 1.6 $71 $6.809.517.000 $6!16,747 O.Ol~h 5~9 3.186 21.314 6.7 $71 S6.30UHUlOO SL\178.911 \U)(l% 2,451 33344 13.6 $71 ~'9.092,457,000 ' ' 7!N r,<n 0.00"·<> 2.775 !117.447 38.7 S71 $;12.035.288,000 $11,544,248 0.00"" 690 102,299 148.3 $71 $38,463.691.1000 $55,744.478 o.tlO"o Finns \Vith employees In the case of mining tlrms with 0-4 emp!oy..:s. the av<rago number of employees per tirm (!.6) was derived by di:viding the total numbor of employees (17.874) by the number of lirms (11.223 ). 0 1n the with \l-4 employees. the avemge receipts per tinn {S606.747) was dorived hy dit·iding the tntalannru•l rocei]>ts (S<i.809.517,001l) by the nnmbt.-r of tirms "'In the case of mining firm;, \Vith by the awrnge receipts per fim1 ($606, 7~7). VerDate Sep<11>2014 '"'"l 20:35 Jan 29, 2015 Frm 00023 Jkt 235001 PO 00000 '"cT t>nn a percent of receipt' (0.01 percent) was derived by dividing the annnal cost per tirm {$7!) Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.000</GPH> asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 1 5268 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 4: Cost per small Firm in the utilities industry. Utilities Industry Small Business Size Standard: 250 · LOOO employe<s Number of Total Numlwr _Ave!·ag:r Annual Cost of EmployCt,"S IEm p~~ye<:s per Firm Firms per Firm J\verage per Annual Ret:"eipt:s Annual Cost ~'inn as of Ret't'ipts Fi11:ns with ().4 ~'mployees :1,212 6.181 L9 $71 $7,238.51.9.000 $2.253,5&6 Firms 'with 5*9 G-mployees Ul20 6.546 6A $71 $4.373.888.000 $4,288,!25 Firms with 10·19cmployocs 513 6.722 BJ $7] $5.65725 !.000 $1 Ul27.7SO O.Oil"· 20~99 870 3K602 44A $71 s::nsl3.924,0M $31,625,200 0.00° 309 52,294 169,2 $71 $53.091,123,000 $!11.&15.932 199 512,412 2,574.9 $71 Firms with em-ployees Films·with 100-499 employees Fitms \Vith -e:mp1oye-t.--s 1 $475.894,489.000 $2.391.429.593 0. O.OO~ol 0.00" 'flte small husines~> size standard fOr !'levera1 suhsccton; within t11:e utilities industry is 750 or ] ,000 en1:ployoos: bov-vev.er. data are not disaggregated for ilrms \Vith more than 500 etnnlove"", 1 Table 5: Cost per small firm in the construction industry. Constmction Industry Small Business Size Standard: $15 millkm $36.5 million Average Total Numbe~' Number of of Employees : Emp:??'«'S per !'\umb<!rof F'irms Annual Cost per Firm Annual Receipts Average Re<-,ipts pet Firm Firm $1()(1,(1(10 Firms \\ilth ,.,,.....,,~,, SlOlUlOO to $499.999. Finn~ with S500Jl<l0 lo $999,999 Finns with "Y ;of :of s1revenue of S!.OOO.OOO lo S2.49'J.999 Firms \Vitb sales/J'tcdptslrevenue of S2,500,000 to $4, <)'19,999 Finns \Vith salc.:n·cceipt'll-ir~"vcnue nf $5.000,000 to $7.499.999 Finns \Vith saii!BiNt--cipts/re\'l;;nue of $7,500,0()0,$9,999, 999 Firm.s \VIth salcs··ft."Cdpts/rt,"\'Cnuc of SlO,OOO,OOO!o ~· 1 ooo ooo 1:mns witl1 salc:s/reccipts.irevenuc of $15,000.000 to~'" ooo noo F'inns \Yith salcs 1rccciptsircvcnuc of $20,()(10,00\J to "~· 1 000 oclO Fim1s \V.ith sale:si'rcccipt_"','rcvermc of ~~~·: nru1 rmn io <'1D rmo 0110 Finns with salcsncccipts<"rm'cnuc of asabaliauskas on DSK5VPTVN1PROD with PROPOSALS $30,000,\lOO to $34.999.999 F-inns with salt:s/n.::ceipts,'rcvenue of $35,000.0001<1 $39.999,999 IN/A.~ not available, not disclosed VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Percent of .Rereiots 151,986 N·i\ 316,475 776,8116 124,214 64282~ 110546 1,049.670 S7l 47,962 864,70! $71 16.992 492,370 29. $71 $!02.502.053,00\) $6,032.371 (). 7.801 308.512 39.5 $71 $66.977,650,000 $8.585,777 0,00% 8,259 427.159 ;t· S71 $99,174,146,000 $!2.008,009 (l,()(l"t 4,354 289A4l 66.5 $71 t7:URUlR9. 000 $16.%8.555 lUlO"<> 209.081 80.1 S71 :,754.00{) S2L803A29 tHlO"b 1,621 150.754 93.{ $71 $43,l!St720,00() ~~~ mn O,OO?o 1,171 121,928 104, $71 $36.84s,snooo $31,467,837 0.00% 83! 94,903 114.2 $71 $30.307,198,000 1.756 O.IJll% PO 00000 Frm 00024 Fmt 4701 N/A S71 $7.636. 718.0()() $50.246 (), 14"<> 2. S7l $8L 1W,428.0!Xl $256,293 lHH"•i: m~ Sfmt 4725 $173,054.6 $708,687 $!.565.454 $3.497,740 E:\FR\FM\30JAP2.SGM 30JAP2 ~o ~ ~ EP30JA15.001</GPH> Firms \Vith salt.'S"'rcccipts/rwcnue helm.Y AnnuaiCnsl per Firm as 5269 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 6: Cost per small firm in the manufacturing industry. ~urn bet· Averag~~ of Annual Receipts Firms Receipts por :Firm Annual Cost per Firm as Porcentof Ri.'c<'i ts Firms with 0-4 omployx:es Finns. \Vith 5-9 employ-ees Finns wi!h 10·19 employees 44,939 2D~99 ~mployce:s 55,603 Finns with Firms witl1 500+ employcos 1 TIH;: small business size standard fhr many suhscctors '''ithin the manufacturing industry i-; 750, 1,000, or L500 employees~ hmvevet\ data ate not {tisaggregated tOr firms with more than 500 em Table 7: Cost per small firm in the wholesale trade industry. Wholesale Trade Industry Small Business Size Standard: 100 cmplovccs Total Number of Employ<*" FJnployees l"'t Firm Firms Firms with JO. !9 emj>loyees ~9354 Finns with asabaliauskas on DSK5VPTVN1PROD with PROPOSALS ,\nnnal Cost Firm as Jkt 235001 PO 00000 325Al2 L7 $71 ~JQ7 '){;7 'II? WI SL56B07 6.6 $7! 't'MQ ~A') ')()ry ili\1 $4,355,233 525,2!6 D.3 $71 $325,24.1,478.001 $8,264.560 O.Otl 0·o 1.365,914 Firms with 5-9 empln)X:OS 20:35 Jan 29, 2015 Average Rect>ipts per Firtn .t\unual Cost per Firm 377,841 !90,153 VerDate Sep<11>2014 ~~:~;;:~:,. 37.1 $71 $8Q9A4H43,00! S24A52,705 o.oo~. Frm 00025 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 0.00% EP30JA15.002</GPH> Number of 5270 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 8: Cost per small firm in the retail trade industry. Retail Trade Industry Small Busin~ss Number of li'irnts $100.000 to $499.999 sales,-· receipts/revenue of ~lo$'99').999 Firms with "'''"'" '"" of $!.000,00(! to $2,499.\l<:J<) Firms -\,'lih ;:..u~;;~" oof 1!>2.500.000 to $4,999,999 Firn1s. with sales/receipts/revenue of $5.001JJlOO to $7,+99.999 oof ~;~~~;:;~,_, """ ~ Flrms with sa.lc:sin,..'x.:.eipts. 'revenue of $10,000,000 to $!4.999,999 Fim1s with salcsireccipts.irevcnuc of Sl5.000.00tl to ~19909.999 Finns. \Vlth salesvrecelpts.lrevenue of l1:1n non non to n• o<m ooo Finns with ''"v' oof Finns \Vith s.alcs/recdpts-/revenuc nf $30.000.0()0 to $34,999,999 Finns \Vith sales' receipts/revenue of S35,0l~l.OOO to $39.909,999 !t-:rA lR=~:~:g;er Annual Cost per Firm ns Prreenl of Reccjpts 91!,659 $100,000 Firms ,,-ith sales/i:cceipt.s:'rev\::mre of IFirms with Size Standard: $7,5 million~ $)8,5 million Avcraae Annual Co,,t Total :"orumber Number of Annu a! Hecoipts ofEmployet'S Employet•s per per Firm Finn ~ N/A S7l $5.008,702Jl0t) $50.768 (l,l4% 25!,71)5 727585 2,S $7! $67,380.242.(){~) 7.(i95 O,O.'l.% 122.575 634.006 5.2 $71 $87.491. 736.()(){) $7!3.781 0.01°'(} 120.985 }.()!9.672 R4 $71 SEXJ,373,34UlOO $1.573,528 0Al0°"o 55)634 774,581 13.9 $71 $193,186,239.000 $3,472A49 (J.OO% !9.594 418.263 21.3 $7l Sll7.22.'t823.UOO $5,982.639 O.OO'?o 9.5S2 272, 28.5 $71 $80. 790,l4l.ll00 $8,431.449 o.oo•. 9,824 366, :17.3 $71 $115.236.3 B.OOO $1!. 73().[181 0.00 11 0 5.3!0 256. 48.4 $71 $86.999,536,(100 $16.384.093 (l.()(l"<> 3.498 ~ 57.5 $71 ~no&t6SuJoo $20,858,971 0Jl06·o 2.43& 167.5961 68.7 $71 LOOO S25A25.566 0.00°\ 1,835 !44.987 79.0 $71 $55.162.317.00{) $30.\161.208 0.00% 1.491 :.lg! 82,( $71 $50.711.404,000 $34,011.673 IJ.(lil"o nnt a-vailable, not Uisclo_,,eJ Table 9: Cost per small firm in the transportation and warehousing industry. Trans ortation and Warehousin Industry Small Business Size Standard: S7.5 million- $3R5 million Ave-rage Number of Total :>lumbc1· Numb~r of i\rmmdCost Annual Rt•reipts Finns pa· Firm $71 40.510 Annual Cost Rt>Ct.>iph pt.•r Firm $1,939.749.()( $47.883 of 67.987 181.924 $71 s16.284.066. 22.377 151.019 $7! $15.756,895. $704.156 P{'\rcent of Rccei ts tl15o $239.517 of pt>r Hrm ns tlOl~o ().()()" 91.408 123.966 85.367 621 68.836 110.8 429 51.989 12!.2 3ll 45.274 1·15.6 235 32~922 !40.1 $25,117396 0.00% not available~ not di14doscd VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 PO 00000 Frm 00026 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.003</GPH> asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 988 5271 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 10: Cost per small firm in the information industry. Information Industry Srnall Busin~ss Siz0 Standard; $7.5 minion $38.5 million AY<:"rage Total Number Number of f1'irms of Employee'S Number of Em ploy'"" per . Firm Fifmg \Vith i\lalcsitcoolpt;;/rcvenuc be1o\v Slllil,tXlO ;of Firms with SHXl,OOO to S499.'J99 ;of Firms \Vith S500,000 to $999.999 Firms with sales/receipts/revenue of $1.000.000 to $2,499.999 .,1...,\<~Hu.:of Firms with S2.500Jli.lll to $4.999,999 Finns \Yitb :of $5,0tll),OOO to $7.49'),999 F'inns with s-alcs;reccipts,'rc·venuc of $7,500,000-$9,999,999 Firms with sale~Jreccip~/n;venue -of $Hl,lli.lil,OOO to $14,999,999 IFirn'ls \vith sales/receipts/revenue of 7,67! ao,336 2.9 $71 $6.876,130.000 $243.433 ().()3'\ 10,3!1 67.954 6.6 S71 $7.260. 927Jl00 $704.192 (t01('{1 9JW8 !20,49$ n3 S7l $15248.992,000 1,75( ().(]()"(, 4.508 Hl0.331 22.3 $71 $15.4723BJl00 .19( O.OO~i 1.837 65,61)! 3U $71 $l0,856,89:i.ll(li.l $5.91!1.121 0.00°{) !Jll8 46,846 46.0 $71 $8,447,070,000 $8,297,711 OJI0°b 1,09; 68,()58 62,2 $71 $ 12.3ili.l,328J)(I(! $!1.264.037 O.tXl 0 < 61ll 49,Sl2 82.9 $71 $9,293,544.000 $15,463.468 0.00?' 389 37,522 %,5 $71 $7,616,666.0ili.l $19.580,118 o.oo• 270 3052"3 113.0 $71 $6.512265,000 $24.119.500 175 25.649 146.6 $71 $4,971.718.000 $28,409.817 1'16 21.553 15K5 $71 $4,082.897,{)()0 $30Jl2Uil1 sales/rcceipt'i/revenue of $25,000.000 tD $29,999.999 Firms with sah;:s/ret.:;e\pt'Frcvcnue uf to $34,999.999 Films with ~ales/n;.-ccipt~rrevt:nue of IN/A ~3<l llirm Annual Cost l''irm us of Rm•ipts };fi\ \~J'itb $.15,000.\XlO to Reeei pts pc1· 15.960 $15,000,000 to $19.999.999 $.10,\)(~l.OOO pt•r Firm Av~rag< Annual Rcc~ipts ,,,, Fimts '.Vith -salesin;~ro:-ipl•J:irevenut: of ''"'" """ tw> to ,.,., ""o ooo Finns Annual Cost <l9'l 900 $71 $767.642.000 S48Jl98 0.15°'() not available, not disclosed ~ . Table 11: Cost per small firm in the finance and insurance industry. Finance and Insurance Industi Annual \nsf Number of Firms Finns with srue~ireceipts/rcvc:nuc hek~VV' $100,1)00 61.54 222.8:22 185.783 ll&,HlO 90,442 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS $71 $25.663.651),000 87,611 $71 $2!.843,640.000 65.621 $71 $!7,478.694.000 515 58,481 $7! Sl5,619Jl23.000 41 Jkt 235001 106.8% 685 20:35 Jan 29, 2015 I. !, VerDate Sep<11>2014 $7! 5!,263 j;7[ Sl4.150.222,0UO PO 00000 Frm 00027 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.004</GPH> 14K252 Firms \\·.itll sales,'reccipts!revenue of $15.000,000 to $!9,999.999 5272 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 12: Cost per small firm in the real estate and rental and leasing industry. Real Estate and Rental and Leasing Industry Small Business Size Standard; $7.5 million $38.5 million Awrage Number of Annual Cost "umber of Total Number Annual Receipts }'inns of F:mployet'S Em p.lo~yt'i!S pc1· pt.•rFinn Firm l,'irms \Vlth salcstrcceipts/n:r•t-"Cnue bctmv SlOO,OOO Av'i::'ragc Receipts per Fkm Annual Cost Firm as of Re..'<'ints $10,000,000 290.0-ll 2A $71 ,166,()()() $2HJ46 ().()3~', !91.958 4.8 $71 $27.836.936.0()0 $'10().353 ll"< 269.366 9. S11 $45,164_417.000 $1,519,818 O.OO"o !8L600 18.! $7! $33.652."43,00" <;;; ().(){)<\ 95.418 29.C S71 $Ill. $5.714,21!4 0.00"• 6~4S:2 40.2 $71 $12, $7,869.442 (1.00?-o 1.518 81.675 53.8 $71 $16.329,83(),()()() $11!.757..164 1Hl0°o 771 48.442 62.8 $71 $li.037,708,0lXl $!4.3l6JJ9:l 0.00% 464 3!~318 78.3 $71 $1!,012.159,0()0 $17,267584 0,()0% 365 32555 h'9.2 $71 ,190,000 $20.879,97:1 0.00% 228 to~'" <>tlllOOQ 0.15% !.553 Firms vvlth salcs::'rcceipts"rt,''Vttme uf IS7,'>M O!X\-~1) <)()() <)()() Firms \Vith sales:reccipt::;.ire·v't.'1lU.;;: nf $48..<15 10,013 S2.500.0(X) to $4,999.999 $4,165.673.000 29,7!7 ,.,f' $71 3,288 Finns with N.·;\ 39.747 Firms: with salcs/rcccipts."rcvcnut:: of $5011.000 to $999.999 Fim1s ·with of SI.OOOJl\lll to $2.499,999 /;\ !24.9.1() Firms \vith sales/receipts/revenue of $100.000 to $499,999 86.219 25.638 112.4 17.743 110.2 m~"'"''·"' ~ Firms w_ith salcs/rccdpt;;/rcvc-nuc of S15Jl(){JJ100 to $19.999.999 Firms w-Ith salcs/rcc-eiptsirc\'cnue of $20lHl0,000 to $24.999,999 :Fim1s with salc~ireccipts/rcvenue of $25.000,()0() to ~~() OGO "'"' l::inns \Y:i1h salesirc.;_ciptslrcYcnue of 1 ;(,()()()'i $30~rnl.rnmu>S:;4.~1.999;;~~-J~------~J!----~~;j------~~~-------;~--:;~ l $71 [N/A, not avai1able~ not disdos(;{d Table 13: Cost per small firm in the professional, scientific, and technical services industry. Professional, Scientific and Technical Services Industry Small Business Size Standard: $7.5 2\\untbcr million-~ $38.5 million Avcr.agt:o or Total Number Nmuber of of l\mployec>s Emp~~yces per .Firms Annual Cost rmr Firm Annual Receipts Firm Firm below Finns with $IOO,Otl0 Finns with salesln:c~ipl~J,./t\:,•vcnuc of SlOIJJl()O to $499.999 Firms \Vith sales/recciptsJn,"Venue of $500,000 to $999.999 Firms \Yith salcs:/rcccipt~:'rcvcnuc: $!,000,00() to of 52,499,9'~) Finns \Vith sales/rec-eipt•(re·v'-'nue, of $2,5(~).000 t<J $4,999,9')9 FimJSwith $5.000,000 lo 57.499,999 Finns with salcs/receipt.;;/revenue of .... '"r $7,500.0()().$9.999,999 Firms \Yith saics-'rc-<::eipt>i/rev~nut:. of Firms ':vith sales,'receipt-<;.''revenuc of I~~" '""' non to $24.999,999 Finns \vith sal~s,'reveipts,'revenue of $25,000,000 to ~·Jo ooo ()()() Firms \Vith :salesiret.'Ciptsirevenuc of 207,%7 /A !A $71 $9,%8.674.000 $47,934 0.15~i :139,834 814,116 2.4 $71 $82.241 ,004JJOO $242.003 o.m~. 102,144 584,47:' $71 !,790,000 $700\,426 ll.tl1" 78,52() 870,369 lLl S7l $!20.44~007Jl00 $1.533,902 0.{)()% 28,337 63U82 22.3 $71 7.000 $3.435.064 >.00"<>, 9,714 355,2!0 36.6 $7! $57.721.674.000 $5,942.112 4,863 245.206 50.4 S7l :.7:!8.000 $8,347.263 4,658 H3.530 1.5 $7! S53.578Jl44.000 $11.502.37! 2,338 211.940 90.7 $71 '1>36. 728. 134,()\}(l $!.5,709.210 ~ !.381 +7.737 Hl7.0 $71 ~?7 1011ilill $19,875,59! 0.00°h 954 122.039 127.9 $71 :.723,()01) $23,713,546 603 91,258 151.3 S71 $15.961.4 !3.00() $26.470.(105 o.oo•, 51! 83.414 163.2 S7l $.15,94!,27~000 $31. 0.00% $30.000.000 to $34.999,999 Finns '\Nith salcsire-ceipt~ireYt:mue nf $35,000.000 to J\unual Cost per Firm a.~ Perc<mt nf Recoipts ~N QQQ Q'lll ld~ (!,()()"'' IN'i\_,, nnt available) not disdosed VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.005</GPH> asabaliauskas on DSK5VPTVN1PROD with PROPOSALS $10,000,000 lo $!4,99'1,999 Firms with sak~/reccipl~/n:.-•vcnue of Sl5.rnlo.ooo to ~1o ooo o<1<> Average Receipts per 5273 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 14: Cost per small firm in the management of companies and enterprises industry. Management of Companies and Enterprises Industry Small Busino" Siz<' Standard: $20.5 million Average Total Nt.unbt"'f ~mnber of Annual Cost of Employees Employees pt>r Firm Number of li'irms 4,529 5,082 rs.s29 $71 SL69K014,0\IO $71 26.723 St855, 703,0\Xl 28,312 16.5 22,469 17.9 $1.711,4M,(l(Kl 21.4 1>3, 120.558.11()0 Firms 1,1,:ith sale>&irccciptsirevcnue of $!5.()00,000 to $!9.999.999 24,1 Firms with sales/rcceiptsin::\'cnuc of 28.4 $20,000,0i~llo Table 15: Cost per small firm in the administrative and support and waste management and remediation services industry. Annu:\1 Cost per Firm Annual Ret<'ip!s Firms \Vith satcs:rcc.eiptsirevenue beto\v $Hl0Jl00 $71 $4500.981,000 Firms \vith sales/receipts, 'n;..-'\tcnuc of $7! ~31,66L&03,000 $l00,00(lto Firms \Vi1h sales.·rccx.:ipts/rcve,nuc Df $500,(1()0 to $999,999 OJJO•: asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Jkt 235001 2~1.0 $71 $17,408,483,000 $0,750, o.no• 208,9:19 288.6 $71 $12542,3 75,0lXl $17,323, (1.00? 528 PO 00000 ll.OO~ 174,359 173,953 267 20:35 Jan 29, 2015 $!0,572, 402 VerDate Sep<11>2014 $24,4 I2659Jl(l(l 724 Finns with sates.'reooipts ,revenue nf $71 292,501 $25,000,000 to S29,999,999 184. 122,013 Frm 00029 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.006</GPH> 424,912 5274 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 16: Cost per small firm in the educational services industry. Educational Services Industry Small Businc" Size Standard: $7.5 million S38.5 million Average Number of Tutal Number of Annual Cos! Annual Receipts Finus of FAltploy('es Emp!oyt'<'li pet· !l"f Firm Firm Fim1H \vitb t-Htle,~~ $HXUJOO Firms with sates,'recdpts $lOOJlCIO to $499,999 Finns \Villi sales:'rcccip-tsirevunuc of $50(),0(10 to $999.999 Finns with of $1,000,000 to $2.499,999 Finns \Yith salcsin:~cciptr.;/reYt.-'1me of $2,500,000 to $4,999,999 Firms \Vith salcs/re~-cipt<)/1\.,'Vcnuc of $5JJ!Xl,OOO to $7,490,99') }'irms vdth s.ales,t•ect.'.ipt·'i fCVcnue of $7,500,000·$9,999,999 Finns w·ith salcs.-·recciptsircvcmtc of $llHl00,()(Xl to $14.999,999 Films wit11 salcs/reccipts:rcvenut:: of $15.000.000 to $19,999.999 Finns with sales "rccc-ip"ffi/re.vt."'nu~: of $20,000,0(10 to $24,999.999 AYerage per Annual Cost Firm as of Receipts 2LS:ll 50.9% 2,? $7~$].(10:1,9 (lJ5 27,938 158,913 5.1 $71 ----~-----+------r----= $71 $5,984,604. $7tl3,740 () 3,504 112,142 13.2 8A65 2LU86 25.: 4,302 209,778 41!.8 $71 $14.792.101,000 $3,438.424 I.SSS 117.648 74.1 $71 $'9.314,307,000 $5,865,433 888 83.741 94.3 $71 $7,129. $8.029.244 1.(103 127,781 127.4 $71 $! 1,306, Sl 1.272,191 461 79Jl59 l7L5 $71 $6,98~.007,000 $!5. 147521 355 73JI45 205.8 $7! $6,992Jl60,01JO $19,695,944 0,()( 268 7tU9l 261.9 $71 $6,343.422.000 $2.',669.485 (),01 172 60,202 350.( $71 S5.ll\U82.000 S29, 762.686 (),()! 138 55.75.'\ 41:14.0 1 Firms with. sales ·rccciptsh·cvenuc of S30,iXJO,OOO to $:'14,999,999 Firms \Vith salcs/reccipts/tevl!nue- of $:l5JlOOJJOO to $39,999.999 (),()()" OJlt Table 17: Cost per small firm in the health care and social assistance industry. Health Care and Social Assistance Indust:ry_ Small f3tL,ineos Size Standard: $7.5 million Number of Firms Finns \Vith salcs/rcc.eipts/:t'evcnuc below· Total Number of F:mployces . Averag:r IEmployees per I , Flnn ~ $38.5 millioo Annual Cost per .Firm Avera~ pet· Annual Receipts Annual Cost per }'inn as Percent of" Receinls lswo.ooo ~~~~~O~~tl:0 s~:~;~qJ!sirmenue of 107.112 162265 L5 $71 $5,064,756.000 $47,285 tU5" ~560 1,027.234 4.; $71 $60, 168,5'\LOllO ~78< 0,03~·< sales/recciptsirevenue of 12.5.095 1,(154.'185 SA $71 $88.227.442.000 $7()5,284 0.0!% ~~~111:s \Vith sa1esJ~·e.ceiptt;.ireYenue of ,000.0011 to $2.499,99'1 84,361 1.466.391 17.4 $71 $!26,989.626.000 $!.505,312 O.OOQ,b Firms with .sotles 'rec:e1)Jts/revenue of 26,466 U07,445 4L8 $71 $91.034,690,000 'i:'\ A'\<>1;8, O.OO"·i 9,453 712,840 75.4 $71 $56,54!,818,000 $5,98!,362 QJlO?' 4,867 501.258 103.0 $71 S·l Ul63,9'66,000 $8.437,223 0Jl0°iJ i,198 760,60: 1463 $71 $6L !!6,459,000 l L757,681 o.oo•. 2,4<)8 497.184 20L5 $71 $40,851.963,000 $16,552,659 O.(J()oo l,'\74 3.47.358 252.8 $71 $29, 140.498,(!0() $2L208,5!4 o.oo• ~·~.-=~~·· 978 284,827 291.2 $7! $25Jl26, 728.0011 $25,589,701 O.tl!l% rcccipb;J"fC\'Cnuc of 34,999,999 665 23036C 34{),4 $71 &7,268,(l(K s:o.n6,7!9 ()JlO"\ 485 185.982 38J.5 $71 $16. 744.18UJ()(l $34.52.t,085 (),(){)•;, $999,999 $2.500Jl00 to $4,999.999 with '"f ie7 <f\11 I)<WU<Hl<>OOOQ Fitms \vith salcs/rccciptsircv-enuc of ~~'""'"'"' th sah;:s/r-ec~::ipl-.::/rev:.:;nuc of 000 to $19.990,999 th satcsi1'CCeij)f:sircvenue of lXJO to 0 ' """ """ asabaliauskas on DSK5VPTVN1PROD with PROPOSALS , <'JOOOOQOO rcccipt.<l/revcnuc -of , <><Hllioooo VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 PO 00000 Frm 00030 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.007</GPH> Firm~ I~<""" lllll)to $7,499,991) Finns ·with salcs.,'receipts/n.."\/CfiUC of 5275 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Table 18: Cost per small firm in the arts, entertainment, and recreation industry. Arts, Entertainment, and Recreation Industry Small Business Size Standard: $7.5 million· S3K5 million Average ;'\lumber of Total Number Ntunber of Annual Cost Annual Receipts Firm.s or Enlplnyees t:mployees j>et per Pirm Firm Fim1:s with salesireceiptsireve:nue below $Hl!l.OOO Finns \\-itll salcsirccciptsit·evenue of S!OO,OOO to $499,999 Firms vdth sa1esireceipts/r~venue of $50(),000 to $999,999 Firn:xs '\vilh sal-e-srrccdptR-it'e·vcnue of ISI,(l()(l,OOO to $2,499,999 Firms '"ith saks/receiptsit'eVt"1lUe nf S2500.000 to $4,999,999 Firms \'l:ith sales/receipts/revenue of 1~"1 ll<lCUlot) !o $7,499,999 FirnL~ v1ritl1 sal~sireceipts/rcvenue of Average Receipts per Firm Annual Cost pt>r Firm as Percent of Roeeltlts 33,186 5"'99+ L6 $71 SU69,733,000 $47,30! 0.!5"··· 46,210 199,647 43 $71 $1 L295.277,ll00 $244.43-1 0.03% 15,493 162.._642 !05 $71 $10,894,947,000 !7 (tO!% 12,148 259A80 2!.4 $71 $18.53Ll41,000 $LS25A48 OJJO"o 4,67~ 209.762 44.9 $71 $!6,040,448,000 S3A3U46 0.0~" 1,718 12ll,58(i 70.2 $71 S9,983,571,000 $5,8!1,159 O.O(l"<> 806 74.628 92.6 $71 $6.466,7 56.000 $8.(123.270 0,00"<. 660 77.131 !16.9 $71 S7,102,42J,OOtJ $ ](),761,247 O,O(Y'n 344 49.061 142.6 $71 $4,965,644,000 $14,435,012 0.00% 224 40,,:109 1&0.0 $71 t '(, 007 !)()~ $!8,464,295 o.oo~. 155 33,220 214.3 $71 $3,428,904,00() $22.12!,961 ().()0% ll5 281855 250.9 $71 $2,873,044,0()[) $24,982,991 tUlO% 84 25,163 29'1.6 $71 $2,569,574,000 $30,590,167 !1.00'% $7,500,0!)0-$9,999,999 Hrms \Vith saJ.cs:/re.;eipt~./rt:-v<:nuc of $!0,000,000to $J.!,999,999 Firms \Yith sales.1rcceipts/revenue of $!5,000,000 lo $19,999.999 ~24,999.99'1 Firms \Vith saks<"recdpts/rcvl;.';nuc of $25,000,000 to <~<> ''"" '""' Fittns \\lith sales/rcceipts/rcl.:enue of $30,000,000 to $34,~199,999 Finns with s:'ih:s/receipts_ireverme of $35,000,000 t<) $39,999,999 Table 19: Cost per small firm in the accommodation and food services industry. Accommodation and Food Services Industry Firms vvith sales/rccdptsircvcnuc bdow $100,000 Firms with saJ~s!r~ceipts"r~v~nue of SlOG.Ol)(l to 5499.999 Firms \Vith &.'lles./reccipts·reve:nue of $500,000 to $999,999 Firms 1vit!1 s.ales/re-e-t~ipts,'revenuc of SUJOO.lliJO to $2.499,999 Firms \\'iti:t salcsJroccipts/rcvcnuc of k1 '""' '""l to $4,999,999 Firms \'Vith sal~sJr¢eeipts/revcnuc of $5,\lO(l,OOO to $7,499.999 Firm~ \Vith salcs·'receipts/revenue of l$7, ~nn 000-~9 999 999 Finns \\ith sah."tS,'rcceiptsfrcvcnuc of $10,000,000 to $14,999,999 Firms vvith s.alcs/r~cipts/rcvenue of Sl5.000,000 to S19,999,999 Firms with "''V' •""' <>f SZO.OOOJl()(l !o $24,999,999 Firms \Yith salesireccipts_!t·cvenuc of $25.000,000 !o $29.999,999 Finns \\-iJh sa1es-'receipts/revenue of $30,\l!l!J,OO(J to $34,999,999 Finns with satt~sit\~t~eipts/revt:nue nf $35,\)(10,000 to~'""''" ooo VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 An~ rage Receipts per Firm Annual Cost per Firm as l"t>rcent or R.reints 99,592 207,093 2.1 $71 $4,845.922,000 $48,658 0,15% 216,446 1,349,187 6.2 $71 $55,536,558,00() $256,584 ().03% 79,875 !,260,097 15.8 $11 $55.913.962.000 56,476 1,777.649 3L5 $71 $84,117,236.000 14Jl95 896.373 63.6 $71 $46,231,:100,000 $3,279,979 O.OO~·o •.no 4tLl,866 108.6 $71 $21.249,810.000 $5,712,315 O,OO"i> 1,621 244,77:? 15LO $71 $12,&35,230,000 $7,91&,094 0.00°0 1,628 j,I(J,74l 209.3 $71 $17,98U34,000 $1!,047,195 (H)(l"·o 859 252,279 293.7 $71 SB.!l54,878,000 $l5,l\17,76.l (}J_)Q~~'o 446 !70,201 38L6 $71 $8.420,579,000 :!:18,880,222 0.\~l"'o 363 153,594 423.1 $71 $7,987,1!0,0()0 $2Ul03,ll58 0.00~·0 241 115.452 479.1 $7] $6,405,()41,000 $26. 0.00% 170 90,301 531.2 $71 $4,832,335,0()[) $28,425,5001 O.OO~·o PO 00000 Frm 00031 Fmt 4701 Sfmt 4725 E:\FR\FM\30JAP2.SGM ~ 30JAP2 (t.01'\} O.IJO~o EP30JA15.008</GPH> asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Small Business Size Standard: $7.5 million·~ $38.5 million Average Number nf Total.Numb<>r N11mberof Annual Cost Annual Hecelpls J•~irrns of Employees Employees per twr- finn "Firm 5276 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Paperwork Reduction Act The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that OFCCP consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement, unless it displays a currently valid OMB control number. OFCCP has determined that there is no new requirement for information collection associated with this proposed rule. This proposed rule clarifies and updates current part 60–20 and removes outdated provisions so that the requirements conform to current sex discrimination law. The information collection requirements contained in the existing Executive Order 11246 regulations are currently approved under OMB Control No. 1250–0001 (Construction Recordkeeping and Reporting Requirements) and OMB Control No. 1250–0003 (Recordkeeping and Reporting Requirements—Supply and Service). Consequently, this proposed rule does not require review by the Office of Management and Budget under the authority of the VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 Small Business Regulatory Enforcement Fairness Act of 1996 This rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of the United States-based companies to compete with foreignbased companies in domestic and export markets. Unfunded Mandates Reform Act of 1995 For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, this NPRM does not include any Federal mandate that may result in excess of $100 million in expenditures by state, local, and tribal governments in the aggregate or by the private sector. Executive Order 13132 (Federalism) OFCCP has reviewed this proposed rule in accordance with Executive Order 13132 regarding federalism, and has determined that it does not have ‘‘federalism implications.’’ This PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 proposed rule will not ‘‘have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.’’ Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments) This proposed rule does not have tribal implications under Executive Order 13175 that would require a tribal summary impact statement. The proposed rule would not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Effects on Families The undersigned hereby certifies that the NPRM would not adversely affect the well-being of families, as discussed under section 654 of the Treasury and General Government Appropriations Act, 1999. To the contrary, by better ensuring that working mothers do not suffer sex discrimination in compensation, benefits, or other terms and conditions of employment, and that working fathers do not suffer E:\FR\FM\30JAP2.SGM 30JAP2 EP30JA15.009</GPH> BILLING CODE 4510–CM–C Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules discrimination on the basis of sex-based stereotypes about caregiver responsibilities, the NPRM would have a positive effect on the economic wellbeing of families, especially of families headed by single mothers. Executive Order 13045 (Protection of Children) This NPRM would have no environmental health risk or safety risk that may disproportionately affect children. Environmental Impact Assessment A review of this NPRM in accordance with the requirements of the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq.; the regulations of the Council on Environmental Quality, 40 CFR 1500 et seq.; and DOL NEPA procedures, 41 CFR part 11, indicates the NPRM would not have a significant impact on the quality of the human environment. There is, thus, no corresponding environmental assessment or an environmental impact statement. Executive Order 13211 (Energy Supply) This NPRM is not subject to Executive Order 13211. It will not have a significant adverse effect on the supply, distribution, or use of energy. Executive Order 12630 (Constitutionally Protected Property Rights) This NPRM is not subject to Executive Order 12630 because it does not involve implementation of a policy that has takings implications or that could impose limitations on private property use. Executive Order 12988 (Civil Justice Reform Analysis) This NPRM was drafted and reviewed in accordance with Executive Order 12988 and will not unduly burden the Federal court system. The NPRM was: (1) Reviewed to eliminate drafting errors and ambiguities; (2) written to minimize litigation; and (3) written to provide a clear legal standard for affected conduct and to promote burden reduction. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS List of Subjects in 41 CFR Part 60–20 Civil rights, Discrimination in employment, Employment, Equal employment opportunity, Government procurement, Labor, Sex, Women. Patricia A. Shiu, Director, Office of Federal Contract Compliance Programs. For the reasons set forth in the preamble, OFCCP proposes to revise 41 CFR part 60–20 to read as follows: VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 PART 60–20—DISCRIMINATION ON THE BASIS OF SEX Sec. 60–20.1 Purpose. 60–20.2 General prohibitions. 60–20.3 Sex as a bona fide occupational qualification. 60–20.4 Discriminatory compensation. 60–20.5 Discrimination on the basis of pregnancy, childbirth, or related medical conditions. 60–20.6 Other fringe benefits. 60–20.7 Employment decisions made on the basis of sex-based stereotypes. 60–20.8 Harassment and hostile work environments. Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964–1965 Comp., p. 339 as amended by E.O. 11375, 32 FR 14303, 3 CFR 1966–1970 Comp., p. 684; E.O. 12086, 43 FR 46501, 3 CFR 1978 Comp., p. 230; E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13672, 79 FR 42971. § 60–20.1 Purpose. The purpose of this part is to set forth specific requirements that covered Federal Government contractors and subcontractors, including those performing work under federallyassisted construction contracts (‘‘contractors’’),1 must meet in fulfilling their obligations under Executive Order 11246, as amended, to ensure nondiscrimination on the basis of sex in employment. These regulations are to be read in conjunction with the other regulations implementing Executive Order 11246, as amended, set forth in parts 60–1, 60–2, 60–3, 60–4, and 60–30 of this chapter. § 60–20.2 General prohibitions. (a) In general. It is unlawful for a contractor to discriminate against any employee or applicant for employment because of sex. The term sex includes, but is not limited to pregnancy, childbirth, or related medical conditions; gender identity; and transgender status. (b) Disparate treatment. Unless sex is a bona fide occupational qualification reasonably necessary to the normal operation of a contractor’s particular business or enterprise, the contractor may not make any distinction based on sex in recruitment, hiring, firing, promotion, compensation, hours, job assignments, training, benefits, or other terms, conditions, or privileges of employment. Such unlawful sex-based discriminatory practices include, but are not limited to, the following: 1 This part also applies to entities that are ‘‘applicants’’ for Federal assistance involving a construction contract as defined in part 60–1 of this title. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 5277 (1) Making a distinction between married and unmarried persons that is not applied equally to both sexes; (2) Denying women with children an employment opportunity that is available to men with children; (3) Firing, or otherwise treating adversely, unmarried women, but not unmarried men, who become parents; (4) Imposing any differences in retirement age or other terms, conditions, or privileges of retirement on the basis of sex; (5) Restricting job classifications on the basis of sex; (6) Maintaining seniority lines and lists based upon sex; (7) Recruiting or advertising for individuals for certain jobs on the basis of sex, including through use of genderspecific terms for jobs (such as ‘‘lineman’’); (8) Distinguishing on the basis of sex in apprenticeship or other formal or informal training programs; in other opportunities such as networking, mentoring, sponsorship, individual development plans, rotational assignments, and succession planning programs; or in performance appraisals that may provide the basis of subsequent opportunities; (9) Making any facilities and employment-related activities available only to members of one sex, except that if the contractor provides restrooms or changing facilities, the contractor must provide separate or single-user restrooms or changing facilities to assure privacy between the sexes; (10) Denying transgender employees access to the bathrooms used by the gender with which they identify; and (11) Treating an employee or applicant for employment adversely because he or she has undergone, is undergoing, or is planning to undergo sex-reassignment surgery or other processes or procedures designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth. (c) Disparate impact. Employment policies or practices that have an adverse impact on the basis of sex, and are not job related and consistent with business necessity, violate Executive Order 11246, as amended, and this part. Examples of policies or practices that may violate Executive Order 11246 in terms of their disparate impact on the basis of sex include, but are not limited to: (1) Minimum height and/or weight qualifications that are not necessary to the performance of the job and that negatively impact women substantially more than men; E:\FR\FM\30JAP2.SGM 30JAP2 5278 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules (2) Strength requirements that exceed the strength necessary to perform the job in question and that negatively impact women substantially more than men; (3) A policy prohibiting large equipment operators from using a restroom while on the job, which adversely impacts women, who may require the use of restrooms more than men; and (4) Conditioning entry into an apprenticeship program on passing a scored written test that has an adverse impact on women where the contractor cannot establish the validity of the test consistent with the Uniform Guidelines on Employee Selection Procedures, 41 CFR part 60–3. § 60–20.3 Sex as a bona fide occupational qualification. Contractors may not hire and employ employees on the basis of sex unless sex is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the contractor’s particular business or enterprise. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS § 60–20.4 Discriminatory compensation. Compensation may not be based on sex. Contractors may not engage in any employment practice that denies equal wages, benefits, or any other forms of compensation, or equal access to earnings opportunities, on the basis of sex, on either an individual or systemic basis, including but not limited to the following: (a) Contractors may not pay different compensation to similarly situated employees on the basis of sex. For purposes of evaluating compensation differences, the determination of similarly situated employees is case specific. Relevant factors in determining similarity may include tasks performed, skills, effort, levels of responsibility, working conditions, job difficulty, minimum qualifications, and other objective factors. In some cases, employees are similarly situated where they are comparable on some of these factors, even if they are not similar on others. (b) Contractors may not grant or deny higher paying wage rates, salaries, positions, job classifications, work assignments, shifts, or development opportunities, or other opportunities on the basis of sex. Contractors may not grant or deny training, work assignments, or other opportunities that may lead to advancement in higher paying positions on the basis of sex. (c) Contractors may not provide or deny earnings opportunities because of sex, for example, by denying women equal opportunity to obtain regular and/ or overtime hours, commissions, pay VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 increases, incentive compensation, or any other additions to regular earnings. (d) Contractors may not implement compensation practices, including performance review systems, that have an adverse impact on the basis of sex and are not shown to be job related and consistent with business necessity. (e) A contractor will be in violation of Executive Order 11246 and this part any time it pays wages, benefits, or other compensation that is the result in whole or in part of the application of any discriminatory compensation decision or other practice described in this section. § 60–20.5 Discrimination on the basis of pregnancy, childbirth, or related medical conditions. (a) Discrimination on the basis of pregnancy, childbirth, or related medical condition, including childbearing capacity, is a form of unlawful sex discrimination. Contractors must treat people of childbearing capacity and those affected by pregnancy, childbirth, or related medical conditions the same for all employment-related purposes, including receipt of benefits under fringe-benefit programs, as other persons not so affected, but similar in their ability or inability to work. Related medical conditions include, but are not limited to, lactation; disorders directly related to pregnancy, such as preeclampsia (pregnancy-induced high blood pressure), placenta previa, and gestational diabetes; symptoms such as back pain; complications requiring bed rest; and the after-effects of a delivery. A contractor is not required to pay for health insurance benefits for abortion, except where the life of the mother would be endangered if the fetus were carried to term or except where medical complications have arisen from an abortion, provided that nothing herein precludes a contractor from providing abortion benefits or otherwise affects bargaining agreements in regard to abortion. (b) Examples of unlawful pregnancy discrimination include, but are not limited to: (1) Refusing to hire pregnant people or people of childbearing capacity, or otherwise subjecting such applicants or employees to adverse employment treatment, because of their pregnancy or childbearing capacity; (2) Firing a female employee or requiring her to go on leave because the employee becomes pregnant or has a child; (3) Limiting a pregnant employee’s job duties based solely on the fact that she is pregnant, or requiring a doctor’s note PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 in order for a pregnant woman to continue employment while pregnant when doctors’ notes are not required for employees who are similarly situated; (4) Providing employees with health insurance that does not cover hospitalization and other medical costs for pregnancy, childbirth, or related medical conditions, including contraceptive coverage, to the same extent that hospitalization and other medical costs are covered for other medical conditions; and (5) Denying an alternative job assignment, modified duties, or other accommodations to a pregnant employee who is temporarily unable to perform some of her job duties because of pregnancy, childbirth, or related medical conditions when such assignments, modifications, or other accommodations are provided, or are required to be provided by a contractor’s policy or by other relevant laws, to other employees whose abilities or inabilities to perform their job duties are similarly affected. (c) Leave—(1) In general. To the extent that a contractor provides family, medical, or other leave, such leave must not be denied or provided differently on the basis of sex. (2) Disparate treatment. (i) A contractor must provide job-guaranteed medical leave, including paid sick leave, for employees’ pregnancy, childbirth, or related medical conditions on the same terms that medical or sick leave is provided for medical conditions that are similar in their effect on employees’ ability to work. (ii) A contractor must provide jobguaranteed family leave, including any paid leave, for male employees on the same terms that family leave is provided for female employees. (3) Disparate impact. Contractors that have employment policies or practices under which insufficient or no medical or family leave is available must ensure that such policies or practices do not have an adverse impact on the basis of sex unless they are shown to be job related and consistent with business necessity. § 60–20.6 Other fringe benefits. (a) It shall be an unlawful employment practice for a contractor to discriminate on the basis of sex with regard to fringe benefits. (b) As used herein, ‘‘fringe benefits’’ includes, but is not limited to, medical, hospital, accident, life insurance and retirement benefits; profit-sharing and bonus plans; leave; dependent care assistance; educational assistance; employee discounts; stock options; lodging; meals; moving expense E:\FR\FM\30JAP2.SGM 30JAP2 Federal Register / Vol. 80, No. 20 / Friday, January 30, 2015 / Proposed Rules reimbursements; retirement planning services; and transportation benefits. (c) The greater cost of providing a fringe benefit to members of one sex is not a defense to a contractor’s failure to provide benefits equally to members of both sexes. § 60–20.7 Employment decisions made on the basis of sex-based stereotypes. asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Contractors must not make employment decisions on the basis of sex-based stereotypes, such as stereotypes about how males and/or females are expected to look, speak, or act. Such employment decisions are a form of sex discrimination prohibited by Executive Order 11246, as amended. Examples of discrimination based on sex-based stereotyping include, but are not limited to: (a) Adverse treatment of an employee or applicant for employment because of that individual’s failure to comply with gender norms and expectations for dress, appearance and/or behavior, such as: (1) Failure to promote a woman, or otherwise subjecting her to adverse employment treatment, based on sex stereotypes about dress, including wearing jewelry, make-up, or high heels; (2) Harassment of a man because he is considered insufficiently masculine, or effeminate; and (3) Adverse treatment of an employee because he or she does not conform to sex-role expectations by being in a relationship with a person of the same sex. (b) Adverse treatment of an employee or applicant for employment because of his or her actual or perceived gender identity or transgender status. VerDate Sep<11>2014 20:35 Jan 29, 2015 Jkt 235001 (c) Adverse treatment of an employee or applicant for employment based on sex-based stereotypes about caregiver responsibilities. For example, adverse treatment of a female employee because of a sex-based assumption that she has (or will have) family caretaking responsibilities, and that those responsibilities will interfere with her work performance, is discrimination based on sex. Other examples of such discriminatory treatment include, but are not limited to: (1) Adverse treatment of a male employee because he has taken or is planning to take leave to care for his newborn or recently adopted or foster child based on the sex-stereotyped belief that women and not men should care for children; (2) Denying opportunities to mothers of children based on the sex-stereotyped belief that women with children should not or will not work long hours, regardless of whether the contractor is acting out of hostility or belief that it is acting in the employee’s or her children’s best interest. (3) Evaluating the performance of female employees who have family caregiving responsibilities adversely, based on the sex-based stereotype that women are less capable or skilled than their male counterparts who do not have such responsibilities. § 60–20.8 Harassment and hostile work environments. (a) Harassment on the basis of sex is a violation of Executive Order 11246, as amended. Unwelcome sexual advances, requests for sexual favors, offensive remarks about a person’s sex, and other verbal or physical conduct of a sexual PO 00000 Frm 00035 Fmt 4701 Sfmt 9990 5279 nature constitute sexual harassment when: (1) Submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment; (2) Submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual; or (3) Such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment. (b) Harassment because of sex includes sexual harassment (including sexual harassment based on gender identity); harassment based on pregnancy, childbirth, or related medical conditions; and harassment that is not sexual in nature but that is because of sex (including harassment based on gender identity). (c) Though not required by this part, to ensure an environment in which all employees feel safe, welcome, and treated fairly, it is a best practice for a contractor to develop and implement procedures to ensure its employees are not harassed because of sex. Examples of such procedures include: (1) Communicating to all personnel that harassing conduct will not be tolerated; (2) Providing anti-harassment training to all personnel; (3) Establishing and implementing procedures for handling and resolving complaints about harassment and intimidation based on sex. [FR Doc. 2015–01422 Filed 1–28–15; 11:15 am] BILLING CODE 4510–CM–P E:\FR\FM\30JAP2.SGM 30JAP2

Agencies

[Federal Register Volume 80, Number 20 (Friday, January 30, 2015)]
[Proposed Rules]
[Pages 5245-5279]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-01422]

[[Page 5245]]

Vol. 80

Friday,

No. 20

January 30, 2015

Part III

Department of Labor

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Office of Federal Contract Compliance Programs

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41 CFR Part 60-20

Discrimination on the Basis of Sex; Proposed Rule

Federal Register / Vol. 80 , No. 20 / Friday, January 30, 2015 /
Proposed Rules

[[Page 5246]]

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DEPARTMENT OF LABOR

Office of Federal Contract Compliance Programs

41 CFR Part 60-20

[01 14 15 OFCCP]
RIN 1250-AA05

Discrimination on the Basis of Sex

AGENCY: Office of Federal Contract Compliance Programs, Labor.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Department of Labor's (``DOL'') Office of Federal
Contract Compliance Programs (``OFCCP'') is proposing regulations that
would set forth requirements that covered Federal Government
contractors and subcontractors and federally assisted construction
contractors and subcontractors must meet in fulfilling their
obligations under Executive Order 11246, as amended, to ensure
nondiscrimination in employment on the basis of sex and to take
affirmative action to ensure that applicants are employed, and that
employees are treated during employment, without regard to their sex.
This proposal would substantially revise the existing Sex
Discrimination Guidelines, which have not been substantively updated
since 1970, and replace them with regulations that align with current
law and legal principles and address their application to current
workplace practices and issues. Most of the proposed provisions in this
NPRM would clarify well-established case law or applicable requirements
from other Federal agencies and therefore would not change existing
requirements for entities affected by this rule. The NPRM's approach
with respect to pregnancy accommodation is consistent with the
interpretation of the Pregnancy Discrimination Act adopted by the Equal
Employment Opportunity Commission (EEOC) and by the Government in Young
v. United Parcel Serv., Inc., 707 F.3d 437 (4th Cir. 2013), cert.
granted (U.S. No. 12-1226, July 1, 2014).

DATES: To be assured of consideration, comments must be received on or
before March 31, 2015.

ADDRESSES: You may submit comments, identified by RIN number 1250-AA05,
by any of the following methods:
Federal eRulemaking Portal: www.regulations.gov. Follow
the instructions for submitting comments.
Fax: (202) 693-1304 (for comments of six pages or less).
Mail: Debra A. Carr, Director, Division of Policy,
Planning, and Program Development, Office of Federal Contract
Compliance Programs, Room C-3325, 200 Constitution Avenue NW.,
Washington, DC 20210.
Receipt of submissions will not be acknowledged; however, the
sender may request confirmation that a submission has been received by
telephoning OFCCP at (202) 693-0104 (voice) or (202) 693-1337 (TTY)
(these are not toll-free numbers).
All comments received, including any personal information provided,
will be available for public inspection during normal business hours at
Room C-3325, 200 Constitution Avenue NW., Washington, DC 20210, or via
the Internet at https://www.regulations.gov. Upon request, individuals
who require assistance to review comments will be provided with
appropriate aids such as readers or print magnifiers. Copies of this
Notice of Proposed Rulemaking (NPRM) will be made available in the
following formats: Large print, electronic file on computer disk, and
audiotape. To schedule an appointment to review the comments and/or to
obtain this NPRM in an alternate format, please contact OFCCP at the
telephone numbers or address listed above.

FOR FURTHER INFORMATION CONTACT: Debra A. Carr, Director, Division of
Policy, Planning and Program Development, Office of Federal Contract
Compliance Programs, 200 Constitution Avenue NW., Room C-3325,
Washington, DC 20210. Telephone: (202) 693-0104 (voice) or (202) 693-
1337 (TTY).

SUPPLEMENTARY INFORMATION:

Executive Summary

Purpose of the Regulatory Action

The U.S. Department of Labor's (``DOL'') Office of Federal Contract
Compliance Programs (``OFCCP'') is proposing regulations that would set
forth requirements that covered \1\ Federal Government contractors and
subcontractors and federally assisted construction contractors and
subcontractors must meet in fulfilling their obligations under
Executive Order 11246, as amended, to ensure nondiscrimination in
employment on the basis of sex and to take affirmative action to ensure
that applicants are employed, and that employees are treated during
employment, without regard to their sex. The OFCCP is charged with
enforcing Executive Order 11246, as amended (``Executive Order''),
which prohibits covered Federal Government contractors and
subcontractors and federally assisted construction contractors and
subcontractors (``contractors'') from discriminating in employment on
the basis of race, color, religion, sex, sexual orientation, gender
identity, or national origin.\2\ The Executive Order also requires
contractors to ensure equal employment opportunity for employees and
applicants for employment without regard to race, color, religion, sex,
sexual orientation, gender identity, or national origin and to take
affirmative action to ensure that applicants are employed, and that
employees are treated during employment, without regard to the
enumerated bases. OFCCP interprets the nondiscrimination provisions of
the Executive Order consistent with the principles of title VII of the
Civil Rights Act of 1964 (``title VII''),\3\ which is enforced, in
large part, by the Equal Employment Opportunity Commission (``EEOC''),
the agency responsible for coordinating the Federal government's
enforcement of all Federal statutes, Executive Orders, regulations, and
policies requiring equal employment opportunity.\4\
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\1\ 41 CFR 60-1.5 exempts certain Federal and federally assisted
contractors and subcontractors from coverage. That section exempts
contracts and subcontracts not exceeding $10,000 (Sec. 60-
1.5(a)(1)); certain contracts and subcontracts for indefinite
quantities (Sec. 60-1.5(a)(2)); work performed outside the United
States by employees who were not recruited within the United States
(Sec. 60-1.5(a)(3)); contracts with certain religious entities and
educational institutions (Sec. 60-1.5(a)(5) and (6)); specific
contracts and facilities exempted by the Director of the OFCCP when
required by ``special circumstances in the national interest''
(Sec. 60-1.5(b)(1)) or because they are ``separate and distinct
from activities . . . related to the performance of the contract or
subcontract'' (Sec. 60-1.5(b)(2); and contracts determined to be
essential to the national security (Sec. 60-1.5(c)).
\2\ Executive Order 13672, issued on July 21, 2014, added sexual
orientation and gender identity to Executive Order 11246 as
prohibited bases of discrimination. It applies to contracts entered
into on or after April 8, 2015, the effective date of the
implementing regulations promulgated thereunder.
\3\ Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-
2000e-17; U.S. Department of Labor, Office of Federal Contract
Compliance Programs, Federal Contract Compliance Manual, ch. 2,
Sec. 2H01(c), available at https://www.dol.gov/ofccp/regs/compliance/fccm/FCCM_FINAL_508c.pdf (last accessed June 6, 2014)
(hereinafter FCCM).
\4\ Executive Order 12067, 43 FR 28967, 3 CFR, 1978 Comp., p.
206. The U.S. Department of Justice also enforces portions of title
VII, as do state Fair Employment Practice Agencies (FEPA).
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The Sex Discrimination Guidelines at 41 CFR part 60-20
(``Guidelines'') set forth interpretations and guidelines for
implementing the Executive Order's nondiscrimination and affirmative
action requirements related to sex. These Guidelines have not been
substantively updated since they were

[[Page 5247]]

first promulgated in 1970,\5\ and fail to conform to or reflect current
title VII jurisprudence or to address the needs and realities of the
modern workplace. Since 1970, there have been historic changes to sex
discrimination law, in both statutory and case law, and to contractor
policies and practices as a result of the nature and extent of women's
participation in the labor force. Because the existing guidelines are
so outdated, they may cause some Federal contractors to incur
unnecessary legal and/or management expenses to resolve confusion about
possibly conflicting obligations; updating the regulations will reduce
the costs that such contractors may now incur.
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\5\ 35 FR 8888, June 9, 1970. The Guidelines were reissued in
1978 without substantive amendment. 43 FR 49258, October 20, 1978.
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It is long overdue for part 60-20 to be updated. Consequently,
OFCCP proposes in this NPRM to revise the Sex Discrimination Guidelines
to align the sex discrimination standards under Executive Order 11246
with developments and interpretations of existing title VII principles
and OFCCP's corresponding interpretation of the Executive Order.

Statement of Legal Authority

Issued in 1965, and amended several times in the intervening
years--including once in 1967, to add sex as a prohibited basis of
discrimination, and most recently in 2014, to add sexual orientation
and gender identity to the list of protected bases \6\--Executive Order
11246 has two purposes. First, it prohibits covered Federal contractors
and subcontractors from discriminating against employees and applicants
because of race, color, religion, sex, sexual orientation, gender
identity, or national origin. Second, it requires covered Federal
contractors and subcontractors to take affirmative action to ensure
that applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, sexual
orientation, gender identity, or national origin. The nondiscrimination
and affirmative action obligations of Federal contractors and
subcontractors cover all aspects of employment.
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\6\ Executive Order 13672, 79 FR 42971 (July 23, 2014).
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The requirements of the Executive Order promote the goals of
economy and efficiency in Government contracting, and the link between
them is well established. See, e.g, Executive Order 10925, 26 FR 1977
(March 8, 1961) (nondiscrimination and affirmative employment programs
ensure ``the most efficient and effective utilization of all available
manpower''). Executive Order 11246 regulations require government
contractors to conduct outreach to broaden the qualified applicant
pool; to identify and eliminate any discriminatory practices; to apply
merit principles; to choose applicants for employment without regard to
race, sex, or national origin; and to report their results. See, e.g.,
41 CFR 60-2.10, 60-2.11, 60-2.14, 60-2.16, 60-2.17, 60-20.6. The sex
discrimination regulations proposed herein outline the sex-
discriminatory practices that contractors must identify and eliminate,
and clarify how contractors must choose applicants for employment
without regard to sex. See, e.g., proposed Sec. 60-20.2 (clarifying
that sex discrimination includes discrimination on the bases of
pregnancy, childbirth, related medical conditions, gender identity, and
transgender status, and that disparate treatment and disparate impact
analyses apply to sex discrimination); Sec. 60-20.3 (clarifying
application of the bona fide occupational qualification (BFOQ) defense
to the rule against sex discrimination); Sec. 60-20.4, Sec. 60-20.5,
Sec. 60-20.6, and Sec. 60-20.8 (clarifying that discrimination in
compensation; discrimination based on pregnancy, childbirth, or related
medical conditions; discrimination in other fringe benefits; and sexual
harassment, respectively, can be unlawful sex-discriminatory
practices); and Sec. 60-20.7(c) (clarifying that contractors must not
choose applicants based on sex stereotypes such as ``a sex-based
assumption that [a female employee] . . . will have . . . family
caretaking responsibilities [that] will interfere with her work
performance'').
Each of these requirements ultimately reduces the government's
costs and increases the efficiency of its operations by ensuring that
all employees and applicants, including women, are fairly considered
and that, in its procurement, the government has access to, and
ultimately benefits from, the best qualified and most efficient
employees. Cf. Contractors Ass'n of E. Pa. v. Sec'y of Labor, 442 F.2d
159, 170 (3d Cir. 1971) (``[I]t is in the interest of the United States
in all procurement to see that its suppliers are not over the long run
increasing its costs and delaying its programs by excluding from the
labor pool available minority workmen.''). The proposed regulations'
requirements to eliminate discrimination and to choose applicants
without regard to sex also are consistent with the purposes of Title
VII to eliminate discrimination in employment.
The requirements in Executive Order 11246 generally apply to any
business or organization that (1) holds a single Federal contract,
subcontract, or federally assisted construction contract in excess of
$10,000; (2) has Federal contracts or subcontracts that, combined,
total in excess of $10,000 in any 12-month period; or (3) holds
Government bills of lading, serves as a depository of Federal funds, or
is an issuing and paying agency for U.S. savings bonds and notes in any
amount.
Pursuant to Executive Order 11246, receiving a Federal contract
comes with a number of responsibilities. Section 202 of this Executive
Order requires every covered contractor to agree to comply with all
provisions of the Executive Order and the rules, regulations, and
relevant orders of the Secretary of Labor. A contractor in violation of
Executive Order 11246 may be subject to suit for make-whole and
injunctive relief and to having its contracts canceled, terminated, or
suspended or to debarment after the opportunity for a hearing.\7\
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\7\ Executive Order 11246, Sec. 209(5); 41 CFR 60-1.27.
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Major Proposed Revisions

For the reasons stated above, OFCCP proposes to revise the
Guidelines at part 60-20 to create new sex discrimination regulations
that set forth Federal contractors' obligations under Executive Order
11246, in accordance with existing law and policy. This proposal
updates the Guidelines to address current issues in the workplace, and
clarifies existing title VII law as it relates to sex discrimination,
including developments and interpretations of existing law by the EEOC
and OFCCP's corresponding interpretation of the Executive Order. It is
intended to state clearly the existing principles applicable to a
contractor's obligation to refrain from discrimination in its
employment policies and practices because of sex and to ensure equal
employment opportunity on the basis of sex.
The proposal removes a number of outdated provisions in the current
Guidelines; restates, reorganizes, and clarifies others; and adds new
ones that address legal developments that have arisen since 1970. Where
current provisions of the Guidelines are uncontradicted by the proposed
part 60-20, but are omitted because they are, as a practical matter,
outdated, their omission does not mean that they are not still good
law. For example, paragraph 60-20.2(b) currently states that
``[a]dvertisement in newspapers

[[Page 5248]]

and other media for employment must not express a sex preference unless
sex is a bona fide occupational qualification for the job.'' This is a
correct statement of the law, but does not have much practical effect,
because few job advertisements today express a sex preference.\8\ OFCCP
seeks comments on whether any of the provisions proposed for deletion
continue to be useful.
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\8\ Recruitment for individuals of a certain sex for particular
jobs, including recruitment by advertisement, is covered in proposed
Sec. 60-20.2(g).
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The proposed amendments to part 60-20 offered herein do not in any
way alter a contractor's obligations under all other OFCCP regulations.
In particular, a contractor's obligations to ensure equal employment
opportunity and to take affirmative action, as set forth in parts 60-1,
60-2, 60-3, and 60-4 of this title, remain in effect. Similarly,
inclusion of a provision in part 60-20 does not in any way alter a
contractor's obligations to ensure nondiscrimination on the basis of
race, color, religion, national origin, sexual orientation, and gender
identity, under the Executive Order; on the basis of disability under
Section 503 of the Rehabilitation Act of 1973 (``Section 503''); \9\ or
on the basis of protected veteran status under 38 U.S.C. 4212 of the
Vietnam Era Veterans' Readjustment Assistance Act.\10\
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\9\ 29 U.S.C. 793.
\10\ 38 U.S.C. 4212.
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Benefits of the Proposed Rule

The proposed rule would benefit both Federal contractors and their
employees in several ways. First, by consolidating, updating, and
clearly and accurately stating the existing principles of applicable
law, including developments and interpretations of existing law by the
EEOC and OFCCP's corresponding interpretation of the Executive Order,
the proposed rule will facilitate contractor understanding and
compliance and thus reduce contractor costs. As discussed above, the
existing guidelines are extremely outdated and therefore do not provide
sufficient or even accurate guidance to contractors regarding their
nondiscrimination obligations. In fact, because OFCCP's interpretations
of a contractor's nondiscrimination mandate on the basis of sex follow
title VII principles, OFCCP no longer enforces part 60-20 to the extent
that it departs from existing law. Maintenance of these outdated and
inaccurate guidelines in the regulations may cause Federal contractors
to incur unnecessary legal and/or management expenses to resolve
confusion about possibly conflicting obligations. Thus, the NPRM will
directly reduce the costs that some contractors may now incur when
attempting to comply with part 60-20. OFCCP requests comment on the
amount of cost savings covered entities may realize because of this
rule.
The NPRM would also benefit the employees and job applicants of
Federal contractors and subcontractors. In general, by making it easier
for Federal contractors to comply with the law, this regulation would
increase equality of employment opportunity for the millions of women
working for Federal contractor establishments. Sixty-five million
employees work for the Federal contractors and other recipients of
Federal monies that are included in the General Service
Administration's System for Award Management (SAM) database.\11\ Based
on Bureau of Labor Statistics data showing that 47 percent of the
workforce is female,\12\ OFCCP estimates that 30.6 million of the
employees who work for the Federal contractors and other recipients of
Federal monies are women.
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\11\ U.S. General Services Administration, System for Award
Management, Legacy CCR Extracts Public (``FOIA'') Data Package, May
2014, available at https://www.sam.gov/portal/public/SAM/ (last
accessed June 14, 2014).
\12\ Women in the Labor Force: A Databook 2, BLS Reports,
available at https://www.bls.gov/cps/wlf-databook-2012.pdf (last
accessed Oct. 6, 2014) [hereinafter Women in the Labor Force].
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More specifically, the NPRM would advance the employment status of
female employees of Federal contractors in several ways. First, it
would address both quid pro quo and hostile-environment sexual
harassment. Second, it would clarify that adverse treatment of an
employee because of gender-stereotyped assumptions about family
caretaking responsibilities is discrimination. It would clarify that
childcare leave must be available to fathers on the same terms as they
are to mothers. It would also confirm the requirement that contractors
provide equal retirement benefits to male and female employees, even if
doing so costs more for one sex than the other.
In addition, by clarifying when pregnant workers are entitled to
workplace accommodations, this rulemaking will protect pregnant
employees who work for Federal contractors from losing their jobs,
wages, and health care coverage. OFCCP estimates that 2,046,850 women
in the Federal contractor workforce are likely to become pregnant each
year. Moreover, by clarifying that discrimination against an individual
because of her or his gender identity is unlawful sex discrimination,
the NPRM would ensure that contractors are aware of their
nondiscrimination obligations with respect to transgender employees and
would assure equality of opportunity for transgender employees, the
vast majority of whom report that they have experienced discrimination
in the workplace.\13\
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\13\ Jaime M. Grant, Lisa M. Mottet, & Justin Tanis, National
Center for Transgender Equality & National Gay and Lesbian Task
Force, Injustice at Every Turn: A Report of the National Transgender
Discrimination Survey, (2011), available at https://transequality.org/PDFs/Executive_Summary.pdf (last accessed Oct. 3,
2014) [hereinafter Injustice at Every Turn].
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Finally, the NPRM would benefit public understanding of the law.
Removing an ``outmoded'' and ``ineffective'' rule from the Code of
Federal Regulations is in the public interest. This public interest is
reflected in Section 6 of Executive Order 13563, which requires
agencies to engage in retrospective analyses of their rules ``and to
modify, streamline, expand, or repeal [such rules] in accordance with
what has been learned.''

Costs of the Proposed Rule

A detailed discussion of the costs of the proposed rule is included
in the section on Regulatory Procedures, infra. In sum, the proposed
rule should create relatively minimal administrative and other cost
burdens for contractors.
The only new administrative burden the proposed rule would create
for contractors would be the one-time cost of regulatory
familiarization--the estimated time it takes for contractors to review
and understand the instructions for compliance--calculated at just
under $26 million, or $52 per contractor company, the first year.
The only other new cost burden this rule would create for
contractors would be the cost of pregnancy accommodations, which OFCCP
calculates to be under $10 million annually, or $19 per contractor
company, per year.\14\
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\14\ OFCCP estimates approximately 2,046,850 women in the
Federal contractor workforce would be pregnant in a year, of whom 21
percent work in job categories likely to require accommodations that
might involve more than a de minimis cost. Because the incidence of
medical conditions during pregnancy that require accommodations
ranges from 0.5 percent (placenta previa) to 50 percent (back
issues), OFCCP estimates that of the women in positions that require
physical exertion or standing, half may require some type of an
accommodation or light duty. Based on a study finding that the
employers of 91 percent of pregnant women who needed and requested a
change in duties such as less lifting or more sitting attempted to
address their needs, the proposed rule would require covered
contractors to accommodate the nine percent of women whose needs
were not addressed or would not have been addressed had they
requested accommodation. According to the Job Accommodation Network,
the average cost of an accommodation is $500. Therefore, OFCCP
estimates that the cost would be $9,671,000 (2,046,850 x 21% x 50% x
9% x $500).

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[[Page 5249]]

Together, these costs amount to under $36 million, or $71 per
contractor company, the first year; and under $10 million, or $19 per
contractor company, each subsequent year.

Reasons for Amending the Current Sex Discrimination Guidelines, 41 CFR
60-20

The existing statement of the purpose of the current Guidelines
demonstrates their outdated nature. As the ``title and purpose''
section of current part 60-20 states, the Guidelines were first adopted
because sex discrimination was perceived as presenting ``special
problems [of] implementation'' that required ``a definitive treatment
beyond the terms of the [executive] order itself.'' 41 CFR 60-20.1.
Five sections, covering ``recruitment and advertisement,'' ``job
policies and practices,'' ``seniority system,'' ``discriminatory
wages,'' and ``affirmative actions,'' currently follow Sec. 60-20.1.
Since the Guidelines were promulgated in 1970, there have been
dramatic changes in women's participation in the workforce. Between
1970 and December 2013, women's participation in the labor force grew
from 43 percent to 57 percent.\15\ This included a marked increase in
employment of mothers: The labor force participation of women with
children under the age of 18 increased from 47 percent in 1975 to 70
percent in 2013.\16\ In 2013, both adults worked at least part time in
59 percent of married-couple families with children under 18, and 73
percent of mothers heading single-parent families with children under
18 worked at least part time.\17\
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\15\ U.S. Census Bureau, Civilian Population--Employment Status
by Sex, Race, and Ethnicity: 1970-2009, The 2012 Statistical
Abstract, available at https://www.census.gov/compendia/statab/2012/tables/12s0588.pdf (last accessed Oct. 31, 2014); Bureau of Labor
Statistics, U.S. Department of Labor Statistics, Data Retrieval:
Labor Force Statistics (Current Population Survey, Household Data,
Table A-1, Employment status of the civilian population by sex and
age, available at https://www.bls.gov/webapps/legacy/cpsatab1.htm
(last accessed Oct. 3, 2014).
\16\ Bureau of Labor Statistics, U.S. Department of Labor, TED:
The Economics Daily, Labor force participation rates among mothers,,
available at https://www.bls.gov/opub/ted/2010/ted_20100507_data.htm
(last accessed Oct. 3, 2014) [hereinafter Labor Force Participation:
Mothers--2010]; Press Release, Bureau of Labor Statistics, U.S.
Department of Labor, Employment Characteristics of Families--2013
(April 25, 2014), available at https://www.bls.gov/news.release/famee.nr0.htm (last accessed Nov. 5, 2014) [hereinafter Employment
Characteristics of Families--2013].
\17\ Employment Characteristics of Families--2013, supra note
16.
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Since 1970, there have also been extensive changes in the law
regarding sex-based employment discrimination and in contractors'
policies and practices governing workers. For example:
Title VII, which generally governs the law of sex-based
employment discrimination, has been significantly amended four times:
Once in 1972, by the Equal Employment Opportunity Act; \18\ once in
1978, by the Pregnancy Discrimination Act (``PDA''); \19\ once in 1991,
by the Civil Rights Act; \20\ and finally in 2009, by the Lilly
Ledbetter Act.\21\
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\18\ Equal Employment Opportunity Act of 1972, Public Law 92-
261, 86 Stat. 103 (1972).
\19\ Amendment to Title VII of the Civil Rights Act of 1964 to
Prohibit Sex Discrimination on the Basis of Pregnancy, Public Law
95-555, 995, 92 Stat. 2076 (1978).
\20\ Civil Rights Act of 1991, Public Law 102-166, 1745, 105
Stat. 1071 (1991).
\21\ Lilly Ledbetter Fair Pay Act of 2009, Public Law 111-2, 123
Stat. 5 (2009).
---------------------------------------------------------------------------

State ``protective laws'' that had explicitly barred women
from certain occupations or otherwise restricted their employment
conditions on the basis of sex have been repealed or are
unenforceable.\22\
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\22\ See, e.g., Conn. Gen. Stat. Sec. 31-18 (repealed 1973)
(prohibition of employment of women for more than nine hours a day
in specified establishments); Mass. Gen. Laws ch. 345 (1911)
(repealed 1974) (outright prohibition of employment of women before
and after childbirth); Ohio Rev. Code Ann. Sec. 4107.43 (repealed
1982) (prohibition of employment of women in specific occupations
that require the routine lifting of more than 25 pounds); see also
Nashville Gas Co. v. Satty, 434 U.S. 136, 142 (1977) (invalidating
public employer requirement that pregnant employees take a leave of
absence during which they did not receive sick pay and lost job
seniority); Cleveland Bd. of Educ. v. LaFleur, 414 U.S. 632 (1974)
(striking rules requiring leave from after the fifth month of
pregnancy until three months after birth); Somers v. Aldine Indep.
Sch. Dist., 464 F. Supp. 900 (S.D. Tex. 1979) (finding sex
discrimination where school district terminated teacher for not
complying with requirement that pregnant women take an unpaid leave
of absence in their third month or be terminated).
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In 1993, the Family and Medical Leave Act (``FMLA'') \23\
was enacted, requiring employers of 50 or more employees to provide a
minimum of 12 weeks of annual, unpaid, job-guaranteed leave to both
male and female employees to recover from their own serious health
conditions (including pregnancy, childbirth, or related medical
conditions), to care for a newborn or newly adopted or foster child, or
to care for a child, spouse, or parent with a serious health condition.
---------------------------------------------------------------------------

\23\ 29 U.S.C. 2601 et seq.
---------------------------------------------------------------------------

In 1970 it was not uncommon for employers to require
female employees to retire at earlier ages than their male
counterparts. However, the Age Discrimination in Employment Act was
amended in 1986 to abolish mandatory retirement for all employees with
a few exceptions.\24\
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\24\ 29 U.S.C. 621-634.
---------------------------------------------------------------------------

Moreover, since 1970 the Supreme Court has determined that numerous
practices which were not then widely recognized as discriminatory
constitute unlawful sex discrimination under title VII. See e.g., City
of Los Angeles v. Manhart, 435 U.S. 702 (1978) (requiring equal
retirement benefits for women and men, despite statistical differences
in longevity); County of Washington v. Gunther, 452 U.S. 161 (1981)
(holding that compensation discrimination is not limited to unequal pay
for equal work within the meaning of the Equal Pay Act); Newport News
Shipping & Dry Dock Co. v. EEOC, 462 U.S. 669 (1983) (holding that
employer discriminated on the basis of sex by excluding pregnancy-
related hospitalization coverage for the spouses of male employees
while providing complete hospitalization coverage for the spouses of
female employees); Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986)
(recognizing cause of action for sexually hostile work environment);
California Federal S. & L. Assn. v. Guerra, 479 U.S. 272 (1987)
(upholding California law requiring up to four months leave and
reinstatement to pregnant employees and finding law not inconsistent
with title VII); Price Waterhouse v. Hopkins, 490 U.S. 228, 250 (1989)
(finding sex discrimination on basis of sex stereotyping); Oncale v.
Sundowner Offshore Servs., 523 U.S. 75, 78 (1998) (recognizing cause of
action for ``same sex'' harassment); Int'l Union, United Auto.,
Aerospace and Agr. Implement. Workers of Am. v. Johnson Controls, Inc.,
499 U.S. 187 (1991) (holding that possible reproductive health hazards
to women of childbearing age did not justify sex-based exclusions from
certain jobs); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742
(1998), and Faragher v. City of Boca Raton, 524 U.S. 775 (1998)
(holding employers vicariously liable under title VII for the harassing
activity of supervisors who create hostile working conditions for those
over whom they have authority); and Burlington N. & Santa Fe Railway
Co. v. White, 548 U.S. 53 (2006) (clarifying broad scope of prohibition
of retaliation for filing of charge of sex discrimination).
In response to these legal and economic changes, employment
policies and practices have also changed. Contractors rarely adopt or
implement explicit rules that prohibit hiring of women for certain
jobs; and jobs are no longer advertised in sex-segregated newspaper
columns. Women have made major inroads into professions and

[[Page 5250]]

occupations traditionally dominated by men. For example, women's
representation among doctors tripled, from nearly 12 percent in 1980
\25\ to 36 percent in 2013.\26\ Executive suites are no longer
predominantly segregated by sex, with the executive positions all being
occupied by men and women functioning as secretaries. Indeed, in many
companies, it is hardly surprising for women to be in positions of
considerable power and status. Moreover, the female-to-male earnings
ratio for women and men working full-time, year-round in all
occupations increased from 59 percent in 1970 to 78 percent in
2013.\27\
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\25\ American Medical Association, Women in Medicine: An AMA
Timeline 4, available at https://download.ama-assn.org/resources/doc/wps/x-pub/wimtimeline.pdf (last accessed May 13, 2014).
\26\ Bureau of Labor Statistics, U.S. Department of Labor, Labor
Force Statistics from the Current Population Survey, Table 11,
Employed persons by detailed occupation, sex, race, and Hispanic or
Latino ethnicity, Household Data Annual Averages, available at
https://www.bls.gov/cps/cpsaat11.htm (last accessed June 5, 2014)
[hereinafter BLS Labor Force Statistics 2013].
\27\ U.S. Census Bureau, Income and Poverty in the United
States: 2013, Current Population Reports 10 (2014), Table A-4,
Number and real median earnings of total workers and full-time,
year-round workers by sex and female-to-male earnings ratio: 1960-
2013, available at https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf (last accessed Nov. 2, 2014).
---------------------------------------------------------------------------

In addition, employer-provided insurance policies that explicitly
provide lower-value or otherwise less comprehensive hospitalization or
disability benefits for childbirth than for other medical conditions
are unlawful for employers of 15 or more employees.\28\ Generous leave
and other family-friendly policies are increasingly common. As early as
2000, even employers that were not covered by the FMLA routinely
extended leave to their employees for FMLA-covered reasons: Two-thirds
of such employers provided leave for an employee's own serious health
condition and for pregnancy-related disabilities, and half extended
leave to care for a newborn child.\29\ Eleven percent of employees have
access to paid family leave, and most employees receive some pay during
family and medical leave due to paid vacation, sick, or personal leave
or temporary disability insurance.\30\
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\28\ These practices, common before the PDA, were prohibited
when that law became effective as to fringe benefits in 1979. As the
EEOC explained in guidance on the PDA issued in 1979--
A woman unable to work for pregnancy-related reasons is entitled
to disability benefits or sick leave on the same basis as employees
unable to work for other medical reasons. Also, any health insurance
provided must cover expenses for pregnancy-related conditions on the
same basis as expenses for other medical conditions.
Appendix to Part 1604--Questions and Answers on the Pregnancy
Discrimination Act, 44 FR 23805 (Apr. 20, 1979), 29 CFR part 1604.
EEOC's recently issued guidance echoes this earlier interpretation
and discusses recent developments on benefits issues affecting PDA
compliance. U.S. Equal Opportunity Commission, Enforcement Guidance:
Pregnancy Discrimination and Related Issues I.C.2-4 (July 14, 2014),
available at https://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm (last accessed Oct. 3, 2014). OFCCP welcomes
comments on the extent to which contractor-provided health insurance
plans comply with the PDA.
\29\ U.S. Department of Labor, Wage and Hour Division, The 2000
Survey Report ch. 5, Table 5-1. Family and Medical Leave Policies by
FMLA Coverage Status, 2000 Survey Report available at https://www.dol.gov/whd/fmla/chapter5.htm#5.1.1 (last accessed May 13,
2014).
\30\ Robert Van Giezen, Paid Leave in Private Industry over the
Past 20 Years, Bureau of Labor Statistics, U.S. Department of Labor,
Beyond the Numbers: Pay & Benefits Aug. 2013, available at https://www.bls.gov/opub/btn/volume-2/paid-leave-in-private-industry-over-the-past-20-years.htm (last accessed Oct. 3, 2014). In addition,
most employees taking family or medical leave had some access to
paid leave: ``48% report[ed] receiving full pay and another 17%
receive[d] partial pay, usually but not exclusively through regular
paid vacation leave, sick leave, or other `paid time off' hours.''
Jacob Klerman, Kelly Daley, & Alyssa Pozniak, Family and Medical
Leave in 2012: Executive Summary ii, https://www.dol.gov/asp/evaluation/fmla/FMLA-2012-Executive-Summary.pdf (last accessed Oct.
3, 2014).
---------------------------------------------------------------------------

While these changes in policies and practices show a measure of
progress, there is no doubt that sex discrimination remains a
significant and pervasive problem. Indeed, the percentage of total
annual EEOC charges that allege sex discrimination has remained nearly
constant at around 30 percent since at least 1997.\31\
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\31\ This rate has varied from a low of 28.5 percent in FY 2011
to a high of 31.5 percent in FY 2000. U.S. Equal Employment
Opportunity Commission, Enforcement and Litigation Statistics,
Charge Statistics: FY 1997 Through FY 2013, available at https://eeoc.gov/eeoc/statistics/enforcement/charges.cfm (last accessed Nov.
2, 2014). In FY 2013, the EEOC received 27,687 charges alleging sex
discrimination.
---------------------------------------------------------------------------

Additionally, occupational sex segregation remains widespread:

In 2012, nontraditional occupations for women employed only six
percent of all women, but 44 percent of all men. The same imbalance
holds for occupations that are nontraditional for men; these employ
only 5 percent of men, but 40 percent of women. Gender segregation
is also substantial in terms of the broad sectors where men and
women work: Three in four workers in education and health services
are women, nine in ten workers in the construction industry and
seven in ten workers in manufacturing are men.\32\
---------------------------------------------------------------------------

\32\ Ariane Hegewisch & Heidi Hartmann, Institute for Women's
Policy Research, Occupational Segregation and the Gender Wage Gap: A
Job Half Done (2014), available at https://www.iwpr.org/publications/pubs/occupational-segregation-and-the-gender-wage-gap-a-job-half-done (last accessed Oct. 3, 2014) (citations omitted); see also
Ariane Hegewisch et al., The Gender Wage Gap by Occupation, Fact
Sheet #C350a, The Institute for Women's Policy Research, available
at https://www.iwpr.org/publications/pubs/the-gender-wage-gap-by-occupation-2/at_download/file/ (last accessed Oct. 3, 2014)
[hereinafter IWPR Wage Gap By Occupation].

Likewise, women continue to be underrepresented in higher level or
more senior jobs within occupations. For example, in 2013, women were
represented in only 38 percent of all manager positions.\33\ Women also
accounted for only 27 percent of chief executive officer positions.\34\
---------------------------------------------------------------------------

\33\ BLS Labor Force Statistics 2013, supra note 26.
\34\ Id.
---------------------------------------------------------------------------

As mentioned above, in 2013, women working full time earned 78
cents on the dollar compared with men, measured on the basis of median
annual earnings.\35\ While this represents real progress, and
discrimination may not be the cause of the entire gap, more than fifty
years after passage of the Equal Pay Act, the size of the gap is still
unacceptable. At the current rate of progress, researchers estimate it
will take until 2057 to close the gender pay gap.\36\
---------------------------------------------------------------------------

\35\ U.S. Census Bureau, Income and Poverty in the United
States: 2013, Current Population Reports 10 (2014), available at
https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf (last accessed Nov. 2, 2014).
\36\ Institute for Women's Policy Research, At Current Pace of
Progress, Wage Gap for Women Expected to Close in 2057 (April 2013),
available at https://www.iwpr.org/publications/pubs/at-currentpace-of-progress-wage-gap-for-women-expected-toclose-in-2057.
---------------------------------------------------------------------------

The wage gap is also greater for women of color and women with
disabilities. When measured by median full-time weekly earnings, in
2013 African-American women made approximately 69 cents and Latinas
made approximately 61 cents for every dollar earned by a non-Hispanic,
white man.\37\ In 2013, median annual earnings for women with
disabilities were only 47 percent of median annual earnings for men
without disabilities.\38\ Moreover, it appears that the narrowing of
the pay gap has slowed since the 1990's.\39\
---------------------------------------------------------------------------

\37\ Bureau of Labor Statistics, U.S. Department of Labor,
Household Data, Annual Averages, Table 37. ``Median Weekly Earnings
of Full-Time Wage and Salary Workers By Selected Characteristics''
available at https://www.bls.gov/cps/cpsaat37.pdf (last accessed Oct.
6, 2014).
\38\ Calculation from U.S. Census Bureau, American Fact Finder,
``Median earnings in the past 12 months (in 2013 inflation-adjusted
dollars) by disability status by sex for the civilian
noninstitutionalized population 16 years and over with earnings,''
available at https://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_1YR_B18140&prodType=table (last
accessed Nov. 6, 2014).
\39\ From 1980 to 1989, the percentage of women's earnings
relative to men's increased from 60.2% to 66.0%; from 1990 to 1999,
the percentage increased from 71.6% to just 72.2%. U.S. Census
Bureau, Historical Income Tables: People, Table P-40: Women's
Earnings as a Percentage of Men's Earnings by Race and Hispanic
Origin, available at https://www.census.gov/hhes/www/income/data/historical/people/ (last accessed Nov. 2, 2014). See also Youngjoo
Cha & Kim A Weeden, Overwork and the Slow Convergence in the Gender
Gap in Wages, Am. Soc. Rev. 1-28 (2014), available at https://www.asanet.org/journals/ASR/ChaWeedenJune14ASR.pdf (last accessed
Nov. 2, 2014); Francine D. Blau & Lawrence M. Kahn, The U.S. Gender
Pay Gap in the 1990s: Slowing Convergence, 60 Indus. & Lab. Rel.
Rev. 45 (2006) [hereinafter Slowing Convergence].

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[[Page 5251]]

These disparities can be explained to some extent by differences in
experience, occupation, and industry.\40\ However, decades of research
show these wage gaps remain even after accounting for factors like the
type of work people do and qualifications such as education and
experience.\41\ Moreover, while some women may work fewer hours or take
time out of the workforce because of family responsibilities, there is
research suggesting that discrimination and not just choices can lead
to women with children earning less; \42\ to the extent that the
potential explanations such as type of job or amount of continuous
labor market experience are also influenced by discrimination, the
``unexplained'' difference may understate the true effect of sex
discrimination.\43\
---------------------------------------------------------------------------

\40\ Equal Pay for Equal Work? New Evidence on the Persistence
of the Gender Pay Gap: Hearing Before United States Joint Economic
Comm., Majority Staff of the Joint Econ. Comm., 111th Cong., Invest
in Women, Invest in America: A Comprehensive Review of Women in the
U.S. Economy 80 (Comm. Print 2010), 80, available at https://jec.senate.gov/public/?a=Files.Serve&File_id=9118a9ef-0771-4777-9c1f-8232fe70a45c (last accessed Oct. 3, 2014) (statement of Randy
Albelda, Professor of Economics and Senior Research Associate,
University of Massachusetts-Boston Center for Social Policy).
\41\ A March 2011 White House report entitled Women in America:
Indicators of Social and Economic Well-Being, found that while
earnings for women and men typically increase with higher levels of
education, male-female pay gap persists at all levels of education
for full-time workers (35 or more hours per week), according to 2009
BLS wage data. Potentially nondiscriminatory factors can explain
some of the gender wage differences. See, e.g., June Elliot O'Neill,
The Gender Gap in Wages, Circa 2000, Am. Econ. Rev. (May 2003). Even
so, after controlling for differences in skills and job
characteristics, women still earn less than men. Explaining Trends
in the Gender Wage Gap, A Report by the Council of Economic Advisers
(June 1998). Ultimately, the research literature still finds an
unexplained gap exists even after accounting for potential
explanations, and finds that the narrowing of the pay gap for women
has slowed since the 1980s. Joyce P. Jacobsen, The Economics of
Gender 44 (2007); Slowing Convergence, supra note 39.
\42\ Shelley J. Correll, Stephen Benard, & In Paik, ``Getting a
Job: Is There a Motherhood Penalty?'' 112 American Journal of
Sociology 1297 (2007).
\43\ Strengthening the Middle Class: Ensuring Equal Pay for
Women: Hearing Before H. Comm. on Educ. and Labor, 110th Cong.
(2007), available at https://www.cepr.net/index.php/strengthening-the-middle-class-ensuring-equal-pay-for-women-testimony/ (last
accessed Oct. 3, 2014) (statement of Heather Boushey, Senior
Economist, Center for Economic and Policy Research).
---------------------------------------------------------------------------

Male-dominated occupations generally pay more than female-dominated
occupations at similar skill levels. But even within the same
occupation, women earn less than men on average. For example, in 2012,
full-time women auditors' and accountants' earnings were less than 74
percent of the earnings of their male counterparts.\44\ Retail
salespersons faced the largest wage gap, among whom women made only 64
percent of what men made.\45\ Likewise, in the medical profession,
women earn less than their male counterparts. On average, male
physicians earn 13 percent more than female physicians at the outset of
their careers and as much as 28 percent more eight years later.\46\
This gap could not be explained by practice type, work hours, or other
characteristics of employees' work situations.\47\
---------------------------------------------------------------------------

\44\ IWPR Wage Gap by Occupation, supra note 32.
\45\ Id.
\46\ Constanca Esteves-Sorenson & Jason Snyder, The Gender
Earnings Gap for Physicians and its Increase Over Time 1 (2011),
available at https://faculty.som.yale.edu/ConstancaEstevesSorenson/documents/Physician_000.pdf (last accessed October 3, 2014).
\47\ Id. A 2008 study on physicians leaving residency programs
in New York State also found a $16,819 pay gap between male and
female physicians. Anthony T. LoSasso, Michael R. Richards, Chiu-
Fang Chou & Susan E. Gerber, The $16,819 Pay Gap For Newly Trained
Physicians: The Unexplained Trend Of Men Earning More Than Women, 30
Health Affairs 193 (2011), available at https://content.healthaffairs.org/content/30/2/193.full.pdf+html (last
accessed May 13, 2014).
---------------------------------------------------------------------------

Despite enactment of the PDA, women continue to report that they
have experienced discrimination on account of pregnancy. Between FY
1997 and FY 2011, the number of charges of pregnancy discrimination
filed with the EEOC and state and local agencies was significant,
ranging from a low of 3,977 in 1997 to a high of 6,285 in 2008.\48\ A
2011 review of reported ``family responsibility discrimination'' cases
(brought by men as well as women) found that low-income workers face
``extreme hostility to pregnancy.'' \49\
---------------------------------------------------------------------------

\48\ U.S. Equal Employment Opportunity Commission, Pregnancy
Discrimination Charges, EEOC & FEPAs Combined: FY 1997-FY 2011,
available at https://www.eeoc.gov/eeoc/statistics/enforcement/pregnancy.cfm (last accessed Nov. 2, 2014); U.S Equal Employment
Opportunity Commission, Charge Statistics: FY 1997 Through FY 2013,
available at https://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm (last accessed Nov. 2, 2014) (hereinafter ``EEOC Charge
Statistics: FY 1997-2013''). FY 2011 is the last year for which
comparable data are available. For FY 2012 and FY 2013, four percent
of the charges filed with the EEOC alleged pregnancy discrimination.
OFCCP calculations made from data from U.S Equal Employment
Opportunity Commission, Pregnancy Discrimination Charges, FY 2010-FY
2013, available at https://www.eeoc.gov/eeoc/statistics/enforcement/pregnancy_new.cfm (last accessed Nov. 2, 2014) and EEOC Charge
Statistics: FY 1997-2013.
\49\ Stephanie Bornstein, Center for WorkLife Law, UC Hastings
College of the Law, Poor, Pregnant and Fired: Caregiver
Discrimination Against Low-Wage Workers 2 (2011), available at
https://worklifelaw.org/pubs/PoorPregnantAndFired.pdf (last accessed
Oct. 3, 2014).
---------------------------------------------------------------------------

In addition, some pregnant workers face a serious and unmet need
for workplace accommodations, which are vital to their uninterrupted,
seamless, and continued employment and, ultimately, to their health and
that of their children. OFCCP is aware of a number of situations in
which women have been denied accommodations with deleterious health
consequences. For example:

In one instance, a pregnant cashier in New York who was not
allowed to drink water during her shift, in contravention of her
doctor's recommendation to stay well-hydrated, was rushed to the
emergency room after collapsing at work. As the emergency room
doctor who treated her explained, because ``pregnant women are
already at increased risk of fainting (due to high progesterone
levels causing blood vessel dilation), dehydration puts them at even
further risk of collapse and injury from falling.'' Another pregnant
worker was prohibited from carrying a water bottle while stocking
grocery shelves despite her doctor's instructions that she drink
water throughout the day to prevent dehydration. She experienced
preterm contractions, requiring multiple hospital visits and
hydration with IV fluids. . . . [Another] woman, a pregnant retail
worker in the Midwest who had developed a painful urinary tract
infection, supplied a letter from her doctor to her employer
explaining that she needed a short bathroom break more frequently
than the store's standard policy. The store refused. She later
suffered another urinary tract infection that required her to miss
multiple days of work and receive medical treatment.\50\
---------------------------------------------------------------------------

\50\ Brief of Health Care Providers, the National Partnership
for Women & Families, and Other Organizations Concerned with
Maternal and Infant Health as Amici Curiae in Support of Petitioner
in Young v. United Parcel Service, supra, available at https://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/BriefsV4/12-1226_pet_amcu_hcp-etal.authcheckdam.pdf, at 9-10, 11 [citations omitted]. See also
Wiseman v. Wal-Mart Stores, Inc., No. 08-1244-EFM, 2009 WL 1617669
(D. Kan. June 9, 2009) (pregnant retail employee with recurring
urinary and bladder infections caused by dehydration alleged she was
denied permission to carry a water bottle despite doctor's note),
available at https://www.gpo.gov/fdsys/pkg/USCOURTS-ksd-6_08-cv-01244/pdf/USCOURTS-ksd-6_08-cv-01244-0.pdf.

``Pregnant workers in physically demanding, inflexible, or
hazardous jobs are particularly likely to need accommodations at some
point during their pregnancies to continue working safely.'' \51\
Meanwhile, more women

[[Page 5252]]

today continue to work throughout their pregnancies and therefore are
more likely to need accommodations of some sort. Of women who had their
first child between 1966 and 1970, 49 percent worked during pregnancy;
of those, 39 percent worked into their last month. For the period from
2006 to 2008, the proportion working increased to 66 percent, and the
proportion of those working into the last month increased to 82
percent.\52\
---------------------------------------------------------------------------

\51\ National Women's Law Center & A Better Balance, It
Shouldn't Be a Heavy Lift: Fair Treatment for Pregnant Workers 5
(2013), available at https://www.nwlc.org/sites/default/files/pdfs/pregnant_workers.pdf (last accessed Dec. 30, 2014) [hereinafter
Heavy Lift].
\52\ U.S. Census Bureau, Maternity Leave and Employment Patterns
of First-Time Mothers: 1961-2008 4, 7 (2011), available at https://www.census.gov/prod/2011pubs/p70-128.pdf (last accessed Nov. 2,
2014) (tables 1 and 3).
---------------------------------------------------------------------------

In some ways, the nature of sex discrimination has also changed
since OFCCP promulgated the Sex Discrimination Guidelines. Explicit sex
segregation, such as the facial ``male only'' hiring policies that part
60-20 specifically addresses, has been replaced in many workforces by
less overt mechanisms that nevertheless present real equal opportunity
barriers.
One of the most significant barriers is the role of sex-based
stereotyping. Decades of social science research have documented the
extent to which sex-based stereotypes about the roles of women and men
and their respective capabilities in the workplace can influence
decisions about hiring, training, promotions, pay raises, and other
conditions of employment.\53\ As the Supreme Court recognized in 1989,
an employer engages in sex discrimination if its female employees'
chances of promotion depend on whether they fit their managers'
preconceived notions of how women should dress and act.\54\ Research
clearly demonstrates that widely held social attitudes and biases can
lead to discriminatory decisions, even where there is no formal sex-
based (or race-based) policy or practice in place.\55\ Sex-based
stereotyping may have even more severe consequences for transgender,
lesbian, gay, and bisexual applicants and employees, many of whom
report that they have experienced discrimination in the workplace.\56\
---------------------------------------------------------------------------

\53\ See, e.g., Susan Fiske et al., Controlling Other People:
The Impact of Power on Stereotyping, 48 a.m. Psychol. 621 (1993);
Marzarin Banaji, Implicit Social Cognition: Attitudes, Self-Esteem
and Stereotypes, 102 Psychol. Rev. 4 (1995); Brian Welle & Madeline
Heilman, Formal and Informal Discrimination Against Women at Work in
Managing Social and Ethical Issues in Organizations 23 (Stephen
Gilliland, Dirk Douglas Steiner & Daniel Skarlicki eds., 2007);
Susan Bruckm[uuml]ller et al., Beyond the Glass Ceiling: The Glass
Cliff and Its Lessons for Organizational Policy, 8 Soc. Issues &
Pol. Rev. 202 (2014) (describing the role of sex-based stereotypes
in the workplace).
\54\ Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). Men, too,
can experience adverse effects from sex-based stereotyping.
\55\ See, e.g., Kevin Lang & Jee-Yeon K. Lehmann, Racial
Discrimination in the Labor Market: Theory and Empirics (NBER
Working Paper No. 17450, 2010), available at https://128.197.153.21/jee/Lang_Lehmann_jel_disc.pdf (last accessed Oct. 3, 2014); Marianne
Bertrand & Sendhil Mullainathan, Are Emily and Brendan More
Employable Than Lakisha and Jamal? A Field Experiment on Labor
Market Discrimination, 94(4) American Econ. Rev. (2004); Ian Ayres &
Peter Siegelman, Race and Gender Discrimination in Bargaining for a
New Car, 85(3) Am. Econ. Rev. (1995); Marc Bendick, Charles Jackson
& Victor Reinoso, Measuring Employment Discrimination Through
Controlled Experiments, 23 Rev. of Black Pol. Econ. 25 (1994).
\56\ Injustice at Every Turn, supra note 13; Brad Sears &
Christy Mallory, The Williams Institute, Documented Evidence of
Employment Discrimination & Its Effects on LGBT People (2011),
available at https://williamsinstitute.law.ucla.edu/wp-content/uploads/Sears-Mallory-Discrimination-July-20111.pdf (last accessed
Nov. 5, 2014). Further discussion of discrimination on the basis of
sexual orientation and gender identity can be found infra in the
passages on Sec. 60-20.2(a) and Sec. 60-20.7.
---------------------------------------------------------------------------

With the marked increase of women in the labor force, the changes
in employment practices, and numerous key legal developments since
1970, the ``special problems . . . [of] implementation'' of the
Executive Order's prohibition of sex discrimination referred to in
current Sec. 60-20.1 have changed significantly as well. As a result,
many of the provisions in the Guidelines are outdated, inaccurate, or
both. At the same time, there are important and current areas of law
that the Guidelines fail to address at all. For example, while the
existing regulations touch upon leave for childbearing, they are
completely silent about refusals to hire pregnant women or women of
childbearing age, restricted duty during pregnancy, health insurance or
other benefits, and other applications of the law prohibiting pregnancy
discrimination.

Section-by-Section Analysis

The NPRM recommends a quite different organization of the topics
covered in current part 60-20. For example, discussion of the BFOQ
defense is repeated in several different sections of the current
guidelines; the proposal consolidates this discussion into one section
covering BFOQs. In addition, the proposal does not address some topics
that are addressed in current part 60-20 but are outdated; includes
some topics that are covered by the current guidelines but in revised
form to align them with current law; and adds some provisions not
contained in the current guidelines to address contemporary problems
with implementation.
This Section-by-Section Analysis identifies and discusses all
proposed changes in each section. OFCCP welcomes comments on each of
the provisions discussed below.

Title of the Regulations

The current title of part 60-20 is ``Sex Discrimination
Guidelines.'' OFCCP proposes to change this title to ``Discrimination
on the Basis of Sex,'' to make clear that the provisions in part 60-20
are regulations implementing Executive Order 11246 with the full force
and effect of law.

Section 60-20.1 Purpose

The NPRM proposes a few minor changes to this section. First, it
deletes the words ``Title and'' from the heading of current Sec. 60-
20.1, because the proposed section does not set out a title. Second, it
deletes the second sentence of current Sec. 60-20.1, which explains
the reason that this part was promulgated in 1970, because the reasons
for amending this part are contained in the preamble of the NPRM.
Finally, the proposal modifies the last sentence of current Sec. 60-
20.1, which notifies the public that part 60-20 is ``to be read in
connection with existing regulations, set forth in part 60-1 of this
chapter.'' For completeness and to prevent any confusion, this change
clarifies that contractors are subject to all the relevant parts
related to the implementation of Executive Order 11246, by listing them
specifically. Therefore, the proposed rule states that part 60-20 is to
be read in conjunction with parts 60-1, 60-2, 60-3, 60-4, and 60-30 of
this title.

Section 60-20.2 General Prohibitions

OFCCP proposes removing current Sec. 60-20.2 entitled
``Recruitment and advertisement,'' which addresses both the
nondiscrimination requirements related to recruiting and advertising
and the BFOQ defense. Unlawful practices related to recruitment and
advertising contained in current Sec. 60-20.2 are subsumed in a new
subparagraph of this section. See proposed paragraph 60-20.2(b)(7). The
BFOQ defense is now addressed in proposed Sec. 60-20.3.
In place of current Sec. 60-20.2, OFCCP proposes a new section
entitled ``General prohibitions.'' Paragraph (a) of this new section
articulates the general prohibition against sex discrimination in
employment. Paragraph (b) expressly prohibits disparate treatment
discrimination; subparagraphs (b)(1) through (b)(10) apply the general
prohibition of disparate treatment discrimination to specific
practices. Paragraph (c) prohibits discrimination under disparate
impact analysis.
The general statement prohibiting sex discrimination in paragraph
(a) clarifies that discrimination based on pregnancy,

[[Page 5253]]

childbirth, or related medical conditions is a form of sex
discrimination. This principle has been the law since Congress enacted
the Pregnancy Discrimination Act amendments to title VII in 1978. This
form of discrimination is also treated separately in proposed Sec. 60-
20.5.
In addition, paragraph (a) clarifies that discrimination based on
gender identity or transgender status is also a form of sex
discrimination. See OFCCP Directive 2014-02, ``Gender Identity and Sex
Discrimination'' (August 19, 2014). As Directive 2014-02 explains,
``Under current Title VII case law principles, discrimination based on
gender identity or transgender status . . . is discrimination based on
sex.'' The Directive relied on the EEOC's decision in Macy v. Holder,
2012 WL 1435995 (EEOC April 20, 2012), in which the EEOC commissioners
unanimously concluded that discrimination because a person is
transgender is sex discrimination in violation of title VII, by
definition, because the discriminatory act is ``related to the sex of
the victim.'' \57\ The EEOC cited both the text of title VII and the
reasoning in Schroer v. Billington, 577 F. Supp. 2d 293 (D.D.C. 2008),
for its conclusion.\58\ See also Memorandum from Attorney General Eric
Holder to United States Attorneys and Heads of Department Components
(Dec. 15, 2014) (citing EEOC's decision in Macy v. Holder as support
for DOJ's positon that ``[t]he most straightforward reading of Title
VII is that discrimination `because of . . . sex' includes
discrimination because an employee's gender identification is as a
member of a particular sex, or because the employee is transitioning,
or has transitioned, to another sex''). Note that discrimination on the
basis of gender identity or transgender status can arise regardless of
whether a transgender individual has undergone, is undergoing, or plans
to undergo sex-reassignment surgery or other processes or procedures
designed to facilitate the adoption of a sex or gender other than the
individual's designated sex at birth.
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\57\ Macy at *7. Macy also held that discrimination on the basis
of transgender status could be unlawful under title VII as sex
stereotyping. That form of sex stereotyping is separately addressed
in proposed Sec. 20.7.
\58\ Consistent with Macy, this NPRM defines discrimination on
the basis of gender identity as a form of sex discrimination. Gender
identity is also a stand-alone protected category (along with sexual
orientation) under Executive Order 13672. Executive Order 13672
amends Executive Order 11246 to add sexual orientation and gender
identity as protected bases, and applies to contracts entered into
or modified on or after April 8, 2015, the effective date of the
implementing regulations promulgated thereunder.
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Many of the examples included in this proposed section are
presently listed in Sec. 60-20.3, ``Job policies and practices,'' of
the current part 60-20. For instance, proposed paragraph 60-20.2(b)(1)
identifies making a distinction between married and unmarried persons
that is not applied equally to both sexes as an example of a sex-based
discriminatory practice, and proposed paragraph 60-20.2(b)(2) provides
that denying women with children an employment opportunity that is
available to men with children is an unlawful sex-based discriminatory
practice. These proposed provisions can be found in current paragraph
60-20.3(d).
Other examples of practices listed in this proposed rule that,
absent a BFOQ, would constitute sex-based discriminatory treatment
include: Treating unmarried female parents differently than unmarried
male parents (proposed paragraph 60-20.2(b)(3)); imposing differences
in retirement age or other terms, conditions, or privileges of
retirement based on sex (proposed paragraph 60-20.2(b)(4)); restricting
job classifications on the basis of sex (proposed paragraph 60-
20.2(b)(5)); maintaining seniority lines and lists based on sex
(proposed paragraph 60-20.2(b)(6)); recruiting or advertising for
members of one sex for a certain job, including through use of gender-
specific terms for jobs (proposed paragraph 60-20.2(b)(7)); and
distinguishing on the basis of sex in apprenticeship or other formal or
informal training programs; in other opportunities such as networking,
mentoring, sponsorship, individual development plans, rotational
assignments, and succession planning programs; and in performance
appraisals that may provide the basis of subsequent opportunities
(proposed paragraph 60-20.2(b)(8)). Specific enumeration of these types
of programs ensures that the forms of career development and
advancement opportunities that contractors currently use are included.
Proposed paragraph 60-20.2(b)(9) states that making any facilities
or employment-related activities available only to members of one sex
is an example of an unlawful sex-based discriminatory practice, with
the condition that if a contractor provides restrooms or changing
facilities, the contractor must provide separate or single-user
restrooms or changing facilities to assure privacy between the
sexes.\59\
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\59\ This provision aligns with an existing affirmative action
requirement applicable to Federal and federally-assisted
construction contractors at 41 CFR 60-4.3(a) 7n (``Ensure that all
facilities and company activities are nonsegregated except that
separate or single-user toilet and necessary changing facilities
shall be provided to assure privacy between the sexes.'').
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This proposed paragraph replaces current Sec. 60-20.3(e), which
requires contractors to provide ``appropriate physical facilities'' to
both men and women ``unless the employer is able to show that the
construction of the facilities would be unreasonable for such reasons
as excessive expense or lack of space.'' Under existing law,
unreasonable cost is not acceptable as a defense to sex discrimination
in employment.\60\ Moreover, current Sec. 60-20.3(e) is inconsistent
with other OFCCP regulations, which require contractors to provide
separate or single-user restrooms and changing facilities to assure
privacy between the sexes without exception for cost or lack of space.
See 41 CFR 60-1.8 (supply and service contractors); 41 CFR 60-4.3(a) 7n
(construction contractors).\61\
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\60\ See Int'l Union, United Auto., Aerospace and Agric.
Implement Workers of Am. v. Johnson Controls, Inc., 499 U.S. 187,
210-11 (1991), in which the plaintiff challenged defendant's policy
prohibiting women of childbearing age from working in jobs involving
exposure to lead because of potential health dangers to fetuses that
they may be carrying. The Supreme Court held that the cost of
eliminating the health dangers cannot be a BFOQ that justifies the
exclusion of women workers.
\61\ In addition, OSHA regulations require employers to provide
employees with toilets, except for ``mobile crews, which must have]
``transportation readily available to nearby toilet facilities.'' 29
CFR 1926.51(c) (OSHA construction sanitation standard); OSHA
Standard Interpretation regarding 29 CFR 1926.51(c) (June 7, 2002),
https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=24369
(interpreting the provision pertaining to mobile crews as requiring
prompt access to toilets that are less than 10 minutes away and
recognizing that women may need bathroom facilities more often than
men).
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Proposed paragraph 60-20.2(b)(10) describes another example of sex-
based discriminatory practices: Denying transgender employees access to
the bathrooms used by the gender with which they identify.
Proposed paragraph 60-20.2(b)(11) addresses discrimination against
transgender individuals who have undergone, are undergoing, or plan to
undergo sex-reassignment surgery or other processes or procedures
designed to facilitate the adoption of a sex or gender other than the
individual's designated sex at birth. Disparate treatment for this
reason has been classified as both discrimination on the basis of sex-
based stereotypes and as discrimination on the basis of sex. Schroer v.
Billington, supra, at 304-08 (D.D.C. 2008) (concluding that an
employer's decision to withdraw a job offer from a transgender
applicant

[[Page 5254]]

constituted both sex-stereotyping discrimination and sex discrimination
in violation of title VII). The EEOC has recognized this principle as
well. Macy v. Holder, supra.
Finally, proposed paragraph 60-20.2(c) provides that employment
policies or practices that state a claim of disparate impact
discrimination violate Executive Order 11246 and the regulations at 41
CFR part 60-20. Proposed paragraph 60-20.2(c) identifies several
examples of employment practices that may have an adverse impact on
women. Traditionally, disparate impact claims have involved selection
criteria that are not necessary to the performance of the job, but
which instead reflect stereotypical notions about the skills required
for the position in question. See, e.g., Blake v. City of Los Angeles,
595 F.2d 1367 (9th Cir. 1979) (striking down height requirements by the
Los Angeles police department because they were not job related and had
a disparate impact on women, who in general are shorter than men); EEOC
v. Dial Corp., 469 F.3d 735 (8th Cir. 2006) (striking down a strength
test used in a sausage factory because the test was more physically
demanding than the job in question and had a significant disparate
impact on women). This sex discrimination analysis may also apply to
policies or practices that are unrelated to selection procedures. For
instance, an employer policy requiring crane operators to urinate off
the back of the crane instead of using a restroom was held to be a
neutral employment policy that was not justified by business necessity
and that produced an adverse effect on women, who, the court found,
have ``obvious anatomical and biological differences'' that require the
use of bathrooms. Johnson v. AK Steel Corp., 2008 WL 2184230, *8 (S.D.
Oh. May 23, 2008).

Section 60-20.3 Sex as a Bona Fide Occupational Qualification

OFCCP proposes removing current Sec. 60-20.3 entitled ``Job
policies and practices,'' which addresses a variety of topics,
including a contractor's general obligations to ensure equal
opportunity in employment on the basis of sex (paragraphs 60-20.3(a),
60-20.3(b), and 60-20.3(c)); provides examples of discriminatory
treatment (paragraph 60-20.3(d)); and sets forth contractor obligations
with respect to the provision of physical facilities, including
bathrooms (paragraph 60-20.3(e)), the impact of state protective laws
(paragraph 60-20.3(f)), leave for childbearing (paragraph 60-20.3(g)),
and specification of retirement age (paragraph 60-20.3(h)). Current
paragraph 60-20.3(i) clarifies that differences in capabilities for job
assignments among individuals may be recognized by the employer in
making specific assignments.
As explained earlier in the preamble, OFCCP proposes moving the
general obligation to ensure equal employment opportunity and the
examples of discriminatory treatment to proposed Sec. 60-20.2. To
improve coherence and clarity, OFCCP proposes to move (and revise in
some instances) the remaining obligations set forth in paragraphs (e)
through (i) to their own separate sections or to incorporate them as
illustrations of discriminatory treatment in proposed Sec. 60-20.2.
Specifically, current paragraph 60-20.3(e) regarding provision of
physical facilities is now addressed in proposed Sec. 60-20.2. See the
discussion earlier in this preamble for information regarding this
proposed provision.
Current paragraph 60-20.3(f), which addressed state protective
laws, has been removed entirely because it is unnecessary and
anachronistic. While in 1970 there may have been some legal question
whether state protective laws provided a defense to discriminatory
employment policies, in 2014 it is beyond dispute that they do not. See
Int'l Union, United Auto., Aerospace and Agr. Implement. Workers of Am.
v. Johnson Controls, Inc., supra (holding that possible reproductive
health hazards to women of childbearing age did not justify sex-based
exclusions from certain jobs). Proposed paragraph 60-20.2(b)(5),
prohibiting sex-based job classifications, clearly states the
underlying principle that no job, absent a job-specific BFOQ, is the
separate domain of any sex. OFCCP invites comment from stakeholders as
to the current scope of state protective laws, whether those that exist
are enforced, and what practical effect, if any, they have on
contractors.
Current paragraph 60-20.3(g) regarding leave for childbearing is
now addressed in its own section: discrimination on the basis of
pregnancy, childbirth, or related medical conditions. See the
discussion of proposed Sec. 60-20.5 later in this preamble.
Current paragraph 60-20.3(h) prohibits differential treatment
between men and women with regard to retirement age. It is restated and
broadened, prohibiting the imposition not only of sex-based differences
in retirement age but also in ``other terms, conditions, or privileges
of retirement,'' in proposed paragraph 60-20.2(b)(4). OFCCP invites
comments on whether such differential treatment continues today.
Current paragraph 60-20.3(i) states, in its first sentence, that
the Sex Discrimination Guidelines allow contractors to recognize
differences in capabilities for job assignments in making specific
assignments. The second sentence reiterates that the purpose of the
guidelines ``is to insure that such distinctions are not based upon
sex.'' This paragraph is omitted from the proposal because it is
unnecessary and because its second sentence is repetitive of proposed
Sec. 60-20.1. Implicit in the provisions prohibiting discrimination on
the basis of sex is the principle that distinctions for other reasons,
such as differences in capabilities, are not prohibited.\62\ Making
distinctions among employees based on their relevant job skills, for
example, does not constitute unlawful discrimination.
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\62\ Of course, discrimination based on other reasons that are
independently prohibited by law--such as race, religion, color,
national origin, disability, sexual orientation, gender identity,
and protected veteran status--is prohibited.
---------------------------------------------------------------------------

Proposed Sec. 60-20.3 entitled ``Sex as a bona fide occupational
qualification'' is new and consolidates in one provision the current
references to the BFOQ defense available to employers in paragraphs 60-
20.3(b) and 60-20.3(f)(2), and adopts the BFOQ language set forth in
title VII, 42 U.S.C. 2000e-2(e).
OFCCP expects that this proposed reorganization will make the
regulations more user-friendly and will help facilitate a better
understanding of the Executive Order requirements with respect to sex
discrimination.

Section 60-20.4 Discriminatory compensation

Current Sec. 60-20.4 relating to seniority systems would be
removed because its subject matter--the interaction of seniority
systems and sex discrimination--is addressed in proposed Sec. 60-20.2
at paragraph (b)(6).
Proposed Sec. 60-20.4 would replace the current requirements
related to discriminatory wages in current Sec. 60-20.5. In general,
the existing text focuses on particular kinds of jobs and fact patterns
that may have posed significant limitations on equal opportunity in
compensation at the time the Guidelines were adopted. However, the
continued increase of women into the workforce, their robust
participation in a wide variety of occupations and positions, ranging
from entry-level to senior management, and the significant
representation of women in both the hourly and salaried workforce
require a more comprehensive statement

[[Page 5255]]

addressing sex discrimination in wages and other terms of compensation.
For example, paragraph (a) of current Sec. 60-20.5 provides only a
cursory description of sex discrimination in wages and other forms of
compensation and fails to give useful guidance to contractors in
evaluating their compensation programs for potential sex
discrimination. The one clarifying example provided in the Note in
current Sec. 60-20.5(a) tracks the Equal Pay Act rather than title
VII. OFCCP enforces the Executive Order's nondiscrimination provisions,
including the ban on compensation discrimination, consistent with title
VII. Courts have concluded that title VII uses a broader and more
flexible approach to comparing jobs and defining similarly situated
workers than the Equal Pay Act, see, e.g., Cnty. of Washington v.
Gunther, 452 U.S. 161 (1981); Miranda v. B & B Cash Grocery, 975 F.2d
1518 (11th Cir. 1992). For that reason, the Note has the potential to
create unnecessary confusion, and the proposed rule omits it entirely.
Similarly, current paragraph (b) appears to contemplate only
workplaces that are completely or explicitly segregated by gender.
However, title VII also bars other, more subtle forms of discriminatory
compensation that can result from de facto job segregation or
classification on the basis of sex. For example, a retail chain might
disproportionately steer women into lower paying cashier jobs--even
though the women are qualified and available for higher paying
positions--based on the outdated, stereotypical notion that men, and
not women, are the primary wage earners. These forms of discriminatory
compensation remain a potential concern that should be, and are,
addressed by the proposed regulation.
Current paragraph (c) has been superseded by the transfer of Equal
Pay Act jurisdiction to the EEOC and is therefore removed.
The proposed new text in Sec. 60-20.4 provides a clearer general
statement of the contractor's obligation to provide equal opportunity
with respect to wages and other forms of compensation. The Executive
Order and the implementing regulations specifically require contractors
to ensure pay equity. Thus, Federal contractors have affirmative duties
to maintain data, conduct internal reviews, and monitor pay practices
for potential discrimination, as well as comply with the Executive
Order's ban on discrimination in the payment of wages, salaries, and
other forms of compensation.\63\ The section generally restates the
agency's case-specific approach to evaluating contractor pay systems
and practices for sex discrimination, where the agency tailors the
investigative and analytic methods to the facts of the case.\64\ This
may include conducting multiple regression analyses and applying other
formal statistical tests as well as using comparative and
circumstantial evidence. As this approach is grounded in well-
established principles of title VII law,\65\ it also would apply when
evaluating contractor pay systems and practices for discrimination
based on other protected categories.
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\63\ Section 202 of Executive Order 11246, as amended; 41 CFR
60-1.12; 60-1.4; 60-2.17(b)-(d).
\64\ OFCCP's case-by-case investigation procedures implement the
title VII principles applicable to enforcing discrimination in any
employment practice under Executive Order 11246. The agency provides
this very general description of its approach for purposes of
clarification and consistency with its other statements of policy in
this area.
\65\ Interpreting Nondiscrimination Requirements of Executive
Order 11246 with Respect to Systemic Compensation Discrimination and
Voluntary Guidelines for Self-Evaluation of Compensation Practices
for Compliance with Nondiscrimination Requirements of Executive
Order 11246 with Respect to Systemic Compensation Discrimination:
Notice of Final Rescission, 78 FR 13508, Feb. 28, 2013 (hereinafter
Notice of Rescission).
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Furthermore, OFCCP does not require anecdotal evidence to support a
pay violation. Identifying individuals harmed by pay discrimination is
particularly difficult.\66\ Many workers do not know that they are
underpaid.\67\ If OFCCP finds evidence of pay discrimination by Federal
contractors through its review of data, the agency should not permit
that discrimination to continue simply because the contractor had
successfully hidden it from its employees. Federal contractors have
special obligations to avoid discrimination, monitor their pay
practices and submit to reviews to make certain they are in compliance,
regardless of whether any individual applicant or employee actually has
knowledge of discrimination.
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\66\ Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 645
(2007) (Ginsburg, J., dissenting).
\67\ On April 8, 2014, President Obama issued Executive Order
13655, which provides that a Federal contractor may not discharge or
otherwise discriminate against any employee or applicant because
such person has inquired about, discussed, or disclosed the
compensation of the person or another employee or applicant. OFCCP
published an NPRM on Sept. 17, 2014 to implement this executive
order. 79 FR 55712. The comment period closed on Dec. 16, 2014.
---------------------------------------------------------------------------

Section 60-20.4 substitutes the general and more modern term
``compensation'' for the outdated term ``wage schedules'' and clarifies
that both systemic and individual forms of such discrimination are
barred by the Executive Order. Proposed amendments to Section 60-1.3 to
implement Executive Order 13655 would define compensation as follows:

Compensation means any payments made to, or on behalf of, an
employee or offered to an applicant as remuneration for employment,
including but not limited to salary, wages, overtime pay, shift
differentials, bonuses, commissions, vacation and holiday pay,
allowances, insurance and other benefits, stock options and awards,
profit sharing, and contributions to retirement.

That same definition would apply to any assessment of compensation
discrimination under EO 11246, including when evaluating sex
discrimination in compensation under this section.
To provide more guidance to contractors about the kinds of
practices they should review and analyses they should undertake to
assess their compliance, new paragraphs (a), (b), and (c) specify a
variety of ways pay discrimination may occur. For example, proposed
paragraph (a) states that contractors may not pay different
compensation to similarly situated employees on the basis of sex.
Proposed paragraph (b) prohibits contractors from, among other things,
granting or denying training, work assignments, or other opportunities
that may lead to advancement on the basis of sex, and proposed
paragraph (c) states that contractors may not provide or deny earnings
opportunities because of sex, for example by denying women equal
opportunity to obtain regular and/or overtime hours, commissions, pay
increases, incentive compensation, or any other additions to regular
earnings.
The revised text in proposed paragraph (a) also addresses the
question of determining ``similarly situated'' employees for purposes
of analyzing compensation differences. The determination of similarly
situated employees is case specific. Relevant factors in determining
similarity may include tasks performed, skills, effort, levels of
responsibility, working conditions, job difficulty, minimum
qualifications, and other objective factors. In some cases, employees
are similarly situated where they are comparable on some of these
factors, even if they are not similar in other

[[Page 5256]]

factors.\68\ For example, when evaluating a job assignment issue,
workers are similarly situated when their qualifications are
comparable, but they are assigned to jobs at different levels.\69\
Employees are similarly situated when they are comparable on factors
relevant to the compensation issues presented. Identification of
similarly situated employees for purposes of an individual analysis or
review of a single specific employment decision may be determined based
on different criteria than when conducting a systemic discrimination
analysis. In analyzing compensation, title VII permits comparing
workers within the same or similar jobs or within specific units or
locations, and also permits consideration of pay differences more
broadly--for example, across jobs or locations or units--as long as the
workers are comparable under the employer's wage or salary system.\70\
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\68\ In employment discrimination cases, courts generally
consider whether the workers being compared are similar in aspects
relevant to the case. See, e.g., McGuinness v. Lincoln Hall, 263
F.3d 49, 53-54 (2d Cir. 2001); Ercegovich v. Goodyear Tire and
Rubber Co., 154 F.3d 344 (6th Cir. 1998); McNabola v. Chicago
Transit Authority, 10 F.3d 501 (7th Cir. 1993).
\69\ See, e.g., Beckman v. CBS, 192 FRD. 608 (D. Minn. 2000);
Stender v. Lucky Stores, 803 F.Supp. 259 (N.D. Cal. 1992); OFCCP v.
St. Regis Corp. 78-OFC-1, ALJ's Recommended Decision (Dep't. of
Labor Dec. 28, 1984).
\70\ Notice of Rescission, supra note 65, 78 FR at 13511-13513.
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New paragraph (d) prohibits contractors from implementing
compensation practices, including performance review systems, that
discriminate on the basis of sex under the disparate impact analysis of
discrimination.\71\ New paragraph (e) restates longstanding OFCCP
principles regarding the circumstances under which pay discrimination
is a continuing violation under the Executive Order.
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\71\ Lewis v. City of Chicago, 560 U.S. 205, 212 (2010) (finding
title VII places no limit on the types of employment practices that
may be challenged under disparate impact analysis).
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Section 60-20.5 Discrimination on the Basis of Pregnancy, Childbirth,
or Related Medical Conditions

Current Sec. 60-20.5 entitled ``Discriminatory wages'' has been
revised and moved to Sec. 60-20.4 as discussed earlier in the
preamble.
This proposed section is new; however, it incorporates certain
obligations already set forth in the current part 60-20 at paragraph
60-20.3(g) regarding the provision of leave to employees who require
time away from work on account of childbearing.
Proposed paragraph (a) of this section incorporates the principle
set forth in the Pregnancy Discrimination Act that discrimination on
the basis of sex includes ``because of or on the basis of pregnancy,
childbirth, or related medical conditions.'' It requires that
contractors treat employees and job applicants of childbearing capacity
and those affected by pregnancy, childbirth, or related medical
conditions the same for all employment-related purposes as other
persons not so affected but similar in their ability or inability to
work and defines the term ``related medical conditions.'' Further, it
incorporates the provision in the PDA, codified in 42 U.S.C. 2000e(k),
that exempts employers from having to pay for health insurance benefits
for abortion ``except where the life of the mother would be endangered
if the fetus were carried to term, or except where medical
complications have arisen from an abortion,'' and the further proviso
that nothing in that exemption ``preclude[s] a contractor from
providing abortion benefits or otherwise affect[s] bargaining
agreements in regard to abortion.''
Proposed paragraph (b) sets forth some of the most common
applications of the general principle of nondiscrimination on the basis
of pregnancy, childbirth, or related medical conditions. These examples
include refusing to hire applicants because of pregnancy or
childbearing capacity (paragraph (b)(1)); firing employees or requiring
them to go on leave because they become pregnant or have a child
(paragraph (b)(2)); limiting a pregnant employee's job duties based on
pregnancy or requiring a doctor's note in order for the employee to
continue employment while pregnant (paragraph (b)(3)); and providing
employees with health insurance that does not cover hospitalization and
other medical costs for pregnancy, childbirth, or related medical
conditions, including contraception coverage, to the same extent that
such costs are covered for other medical conditions (paragraph (b)(4)).
Paragraph (b)(5) includes, as another common example of
discrimination based on pregnancy, childbirth, or related medical
conditions, failure to provide reasonable workplace accommodations to
employees affected by such conditions when such accommodations are
provided to other workers similar in their ability or inability to
work.\72\ Without such workplace accommodations, many pregnant workers
are forced to go on leave. Unfortunately, insufficient job-protected
leave, time-limited temporary disability insurance, and minimal sick
leave often fail to cover the entire period of pregnancy-related work
limitations. Consequently, some pregnant workers who need reasonable
accommodations lose their jobs, wages, and health care coverage.\73\
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\72\ This is true even though ``pregnancy itself is not an
impairment within the meaning of the [Americans with Disabilities
Act of 1990, 42 U.S.C. 12101 et seq., as amended], and thus is never
on its own a disability.'' EEOC, Enforcement Guidance: Pregnancy
Discrimination and Related Issues, sec. II.A (July 14, 2014)
(footnote omitted), available at https://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm (last accessed December 12, 2014).
\73\ Heavy Lift, supra note 51, at 1, 4, 6, 8, 9-10, 11, 15, 18.
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The range of accommodations to address the temporary limitations of
a pregnant worker may include simple things that involve little or no
cost, such as permitting more frequent bathroom breaks and allowing the
pregnant worker to sit down during a shift.\74\ Other temporary
limitations, however, may require a temporary light-duty assignment to
accommodate lifting or bending restrictions that a pregnant worker may
have.
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\74\ In addition, the Fair Labor Standards Act, 29 U.S.C.
207(r), requires employers of 50 or more employees (and smaller
employers if complying does not impose an undue hardship) to provide
reasonable break time for an employee to express breast milk for a
nursing child for one year after the child's birth, each time such
employee has need to express the milk. Employers are also required
to provide a place, other than a bathroom, that is shielded from
view and free from intrusion from coworkers and the public, which
may be used by an employee to express breast milk.
---------------------------------------------------------------------------

Denying an alternative job assignment, modified duties, or other
accommodations to a pregnant employee who is temporarily unable to
perform some job duties because of pregnancy, childbirth, or a related
medical condition is sex discrimination when such assignments,
modifications, or other accommodations are provided, or are required to
be provided, by a contractor's policy or other relevant laws, to other
employees whose abilities to perform some of their job duties are
similarly affected (paragraph (b)(5)). Thus, for example, a contractor
that permits light-duty assignments for employees who are unable to
work their regular assignments due to on-the-job injuries or
disabilities must also permit light-duty assignments for employees who
are unable to work their regular assignments due to pregnancy. The
approach set forth here with respect to pregnancy accommodation is
intended to align OFCCP's regulations implementing Executive Order
11246 with EEOC guidance in this area and with the position taken by
the Federal government in Young v. United Parcel Serv., Inc., 707 F.3d
437 (4th Cir. 2013), cert. granted (U.S. No. 12-1226, July 1, 2014), a
case currently before the Supreme Court. Should the Supreme Court rule
contrary to our interpretation, OFCCP's final rule will be revised
consistent with the ruling.
The EEOC has long interpreted the PDA in this way, stating as early
as 1979

[[Page 5257]]

that ``[a]n employer is required to treat an employee temporarily
unable to perform the functions of her job because of her pregnancy-
related condition in the same manner as it treats other temporarily
disabled employees.'' 29 CFR pt. 1604, App. ] 5 (emphasis added). It
reaffirmed this position in its 2014 PDA enforcement guidance. EEOC,
Enforcement Guidance: Pregnancy Discrimination and Related Issues
I.C.1.b (July 14, 2014), https://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm; see also 9 CFR pt. 1604, App. ] 5 (``[a]n
employer is required to treat an employee temporarily unable to perform
the functions of her job because of her pregnancy-related condition in
the same manner as it treats other temporarily disabled employees.'')
(emphasis added); id. (``If other employees temporarily unable to lift
are relieved of these functions, pregnant employees also unable to lift
must be temporarily relieved of the function.'').
As the Government has argued in its brief before the Supreme Court
in Young, nothing in the plain language of the PDA or any EEOC guidance
suggests that the underlying reason for the inability to work is
relevant; as long as the employees are ``similar in their inability to
work,'' those affected by pregnancy, childbirth, or related medical
conditions must be provided the same accommodation as those not so
affected, regardless of the reasons for the inability to work. See
Brief for the United States as Amicus Curiae Supporting Petitioner in
Young v. United Parcel Service, Inc., No. 12-1226 (U.S.), 2014 WL
4536939, at *16 (``Nothing in the PDA indicates that a pregnant
employee faces discrimination . . . only when she receives less
favorable treatment than every other employee who is similar in his or
her ability or inability to work. The plain text of the statute
prohibits treating pregnant employees less favorably (for any
`employment-related purpose[ ]') than `other persons not so affected
but similar in their ability or inability to work.''') (citation
omitted); id. at *26 (``Recognizing that petitioner has established a
violation of the PDA is consistent with the longstanding position of
the EEOC.'').\75\ See also International Union v. Johnson Controls,
Inc., 499 U.S. 187, 204-05 (1991) (``[u]nless pregnant employees differ
from others in their ability or inability to work, they must be treated
the same as other employees for all employment-related purposes''
(citation and internal quotation marks omitted; emphases added));
Ensley-Gaines v. Runyon, 100 F.3d 1220 (6th Cir. 1996); Raciti-Hur v.
Homan, No. 98-1218, 1999 U.S. App. LEXIS 9551, 1999 WL 331650 (6th Cir.
May 13, 1999) (unpublished); Latowski v. Northwoods Nursing Center, No.
12-2408, 2013 U.S. App. LEXIS 25738, at *10-*11 (6th Cir. December 23,
2013) (unpublished).\76\
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\75\ The EEOC further explained its position in EEOC v. Horizon/
CMS Healthcare Corp., 220 F.3d 1184 (10th Cir. 2000) (decided on
other grounds). The EEOC argued in Horizon that ``the Charging
Parties are most appropriately compared to all temporarily-disabled,
non-pregnant employees whether they sustained their injuries on or
off the job.'' Id. at 1194-1195 (emphasis added).
\76\ Other Sixth Circuit opinions appear to suggest a different
interpretation of the PDA. Reeves v. Swift Transp. Co., 446 F.3d 637
(6th Cir. 2006); Tysinger v. Police Dept., 463 F.3d 569 (2006). In
addition, other circuits have held that the reason for employees'
inability to work does make a difference to the determination
whether employees affected by pregnancy, childbirth, or related
medical conditions are similarly situated to those not so affected
for purposes of receiving accommodations for their inability to
work. Young v. United Parcel Serv., Inc., 707 F.3d 437 (4th Cir.
2013), cert. granted (U.S. No. 12-1226, July 1, 2014); Serednyj v.
Beverly Healthcare, LLC, 656 F.3d 540, 548-549 (7th Cir. 2011);
Spivey v. Beverly Enters., Inc., 196 F.3d 1309, 1312-1313 (11th Cir.
1999); Urbano v. Continental Airlines, Inc., 138 F.3d 204, 207-208
(5th Cir.), cert. denied, 525 U.S. 1000 (1998); Troupe v. May Dep't
Stores Co., 20 F.3d 734, 738 (7th Cir. 1994).
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The phrase ``or are required to be provided by a contractor's
policy or other relevant laws'' is included to cover the situation
where a contractor's policy or a relevant law (such as the Americans
with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended
(ADA), and section 503) would require an alternative job assignment or
job modification to be provided to an employee not affected by
pregnancy, childbirth, or related medical condition but who is
similarly restricted in his or her ability to perform the job. In such
a situation, the existence of the policy or law (e.g., the ADA and
Section 503) requiring reasonable accommodation or job modifications
for the one class of employees--employees with disabilities who are not
affected by pregnancy, childbirth, or related medical conditions--
requires that the contractor similarly provide such accommodations to
pregnant employees who are similar in their ability or inability to
work. Failure to do so is disparate treatment in violation of Executive
Order 11246. The list in Sec. 60-20.5(b) is by no means exhaustive,
but rather, contains a few illustrative examples. The relevant
provisions of the EEOC's 2014 enforcement guidance on pregnancy
discrimination as well as its Guidelines on Discrimination Because of
Sex (29 CFR 1604.10) and Questions and Answers on the Pregnancy
Discrimination Act (Appendix to part 1604 of 29 CFR) provide additional
instruction.
Proposed paragraph (c) addresses the provision of leave related to
pregnancy, childbirth, or related medical conditions. Paragraph (c)(1)
sets forth the general title VII principle that neither family nor
medical leave, including family or medical leave related to pregnancy,
childbirth, or related medical conditions, may be denied or provided
differently on the basis of sex. Paragraph (c)(2) elaborates on this
general principle. Paragraph (c)(2)(a) requires that employees affected
by pregnancy, childbirth, or related medical conditions be granted
medical leave, including paid sick leave, on the same basis that such
leave is granted to other employees unable to work for other medical
reasons. An employer may not impose requirements on pregnancy leave not
imposed on other employees similar in their ability or inability to
work. For example, employers may not impose a shorter maximum amount of
pregnancy leave as compared to the maximum time off allowed for other
types of medical or short-term disability leave. Paragraph (c)(2)(b)
requires that family leave be provided to men on the same terms that it
is provided to women.
Consistent with the EEOC's Guidelines on Discrimination Because of
Sex, 29 CFR 1604.10(c), and Section I.B.2 of its recent enforcement
guidance on pregnancy discrimination, proposed paragraph (c)(3) applies
disparate impact analysis to contractor leave policies that are
inadequate such that they have a disparate impact on members of one
sex. Thus, a contractor that provides workers who are temporarily
unable to work due to pregnancy, childbirth, or related medical
conditions with no parental or medical leave at all, or with
insufficient leave, may be held liable for discrimination based on sex,
if such a practice is found to have an adverse impact on such workers,
unless the contractor can demonstrate that the failure to provide leave
or sufficient leave is job related and consistent with business
necessity.
It should be noted that this provision is different from current
Sec. 60-20.3(g), which requires contractors to provide maternity leave
whether or not their failure to do so has a disparate impact on women.
However, OFCCP has not enforced this requirement in Sec. 60-20.3(g)
for some time. Instead, as was stated in its previous Federal
Contractor Compliance Manual (FCCM), issued in 1988, OFCCP has:

[[Page 5258]]

consistent with the PDA, [current] 41 CFR 60-1.4(a), and the EEOC
Guidelines on Discrimination Because of Sex, . . . implement[ed] the
following policies:

i. . . .
ii. If the contractor's leave policy, or lack thereof, has an
adverse impact on employees of one sex and is not justified by
business necessity, it violates the Executive Order.\77\
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\77\ U.S. Department of Labor, Office of Federal Contract
Compliance Programs Federal Contract Compliance Manual (1988), ch.
3, Sec. 3G01(h)(2) (on file with OFCCP) (hereinafter Previous
FCCM). A version of this Manual (dated 1993, but containing the same
language) is available at https://www.docstoc.com/docs/8387063/Federal-Contract (last accessed Oct. 7, 2014).

Similarly, the current FCCM requires Compliance Officers to
``examine whether the contractor's leave policy, or lack thereof, has
an adverse impact on employees of one sex and is not justified by
business necessity.'' Section 2H01(b). Thus, proposed paragraph (c)(3)
is consistent both with OFCCP's current and long-standing practice.
OFCCP welcomes comments from stakeholders about current practices
and policies regarding workplace accommodations and leave for
pregnancy, childbirth, or related medical conditions; for care for
newborn or newly adopted or foster children; and for an employee's
serious health conditions (other than those related to pregnancy and
childbirth).

Section 60-20.6 Other Fringe Benefits

Current Sec. 60-20.6 entitled ``Affirmative action'' has been
removed because the requirements related to affirmative action programs
are set forth in parts 60-2 and 60-4 of this title.
This proposed section is new and is divided into three paragraphs.
Proposed paragraph (a) states the general principle that contractors
may not discriminate on the basis of sex in the provision of fringe
benefits. Proposed paragraph (b) defines ``fringe benefits'' broadly to
encompass a variety of such benefits that are now provided by
contractors. In proposed paragraph (c), OFCCP replaces the inaccurate
statement found at current Sec. 60-20.3(c) that a contractor will not
be considered to have violated the Executive Order if its contributions
for fringe benefits are the same for men and women or if the resulting
benefits are equal. In 1978, the Supreme Court held that under title
VII, an employer must provide equal benefits to men and women, even if
doing so costs more for one sex than the other. City of Los Angeles v.
Manhart, 435 U.S. 702 (1978); see also Ariz. Governing Comm. v. Norris,
463 U.S. 1073 (1983).\78\
---------------------------------------------------------------------------

\78\ Indeed, the FCCM follows current law, providing that ``if
the contractor is not providing equal fringe benefits and/or not
making equal contributions to insurance plans or pensions for men
and women, this may constitute discrimination.'' FCCM, ch. 2, Sec.
2L03. The Previous FCCM also noted the discrepancy between OFCCP's
regulations and title VII law, providing (in chapter 3, Sec.
3G01(h)(3)) that because--
OFCCP's policy is to interpret the nondiscrimination provisions
of the Executive Order consistent with Title VII principles. . . ,
if [an OFCCP compliance officer] becomes aware of a situation where
a contractor is either not paying equal fringe benefits and/or not
making equal contributions to fringe benefits for men and women, the
matter should be brought to the attention of RSOL [the Regional
Solicitor of Labor].
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Section 60-20.7 Employment Decisions Made on the Basis of Sex-Based
Stereotypes

This proposed section is new. It states the well-recognized
principle that employment decisions made on the basis of stereotypes
about how males and/or females are expected to look, speak, or act are
a form of sex-based employment discrimination. As the Supreme Court
stated in Price Waterhouse v. Hopkins, 490 U.S. at 251, ``we are beyond
the day when an employer can evaluate employees by assuming or
insisting that they match the stereotype associated with their . . .
[sex].'' In Price Waterhouse, the Court held that an employer's failure
to promote a female senior manager to partner because of the sex-
stereotyped perceptions that she was too aggressive and did not ``walk
more femininely, talk more femininely, dress more femininely, wear
make-up, have her hair styled, and wear jewelry'' was unlawful sex-
based employment discrimination.\79\ The principle that sex-based
stereotyping is a form of sex discrimination has been applied
consistently in Supreme Court and lower-court decisions. See, e.g.,
Nevada Dep't of Human Res. v. Hibbs, 538 U.S. 721 (2003) (stereotype-
based beliefs about the allocation of family duties on which state
employers relied in establishing discriminatory leave policies held to
be sex discrimination under the Constitution); Chadwick v. Wellpoint,
Inc., 561 F.3d 38 (1st Cir. 2009) (making employment decision based on
the belief that women with young children neglect their job
responsibilities is unlawful sex discrimination); Prowel v. Wise Bus.
Forms, Inc., 579 F.3d 285 (3d Cir. 2009) (harassment based on a man's
effeminacy); Terveer v. Billington, 2014 WL 1280301 (D. DC March 31,
2014) (hostile work environment based on stereotyped beliefs about the
appropriateness of same-sex relationships).\80\ Cf. U.S. v. Virginia,
518 U.S. 515, 533 (1996) (in making classifications based on sex, state
governments ``must not rely on overbroad generalizations about the
different talents, capacities, or preferences of males and
females'').\81\ Specific examples of such stereotyping follow in
proposed paragraphs (a) through (c).
---------------------------------------------------------------------------

\79\ Price Waterhouse, 490 U.S. at 235.
\80\ See also Centola v. Potter, 183 F. Supp. 2d 403 (D. Mass.
2002) (``Sexual orientation harassment is often, if not always,
motivated by a desire to enforce heterosexually defined gender
norms. In fact, stereotypes about homosexuality are directly related
to our stereotype about the proper roles of men and women.'');
Heller v. Columbia Edgewater Country Club, 195 F. Supp. 2d 1212 (D.
Or. 2002) (``[A] jury could find that Cagle repeatedly harassed (and
ultimately discharged) Heller because Heller did not conform to
Cagle's stereotype of how a woman ought to behave. Heller is
attracted to and dates other women, whereas Cagle believes that a
woman should be attracted to and date only men.''). The EEOC has
recognized in a long line of federal sector decisions that adverse
actions taken on the basis of sex stereotypes related to sexual
orientation violate Title VII. Castello v. U.S. Postal Service, EEOC
Request No. 0520110649, 2011 WL 6960810 (Dec. 20, 2011) (sex-
stereotyping evidence entailed offensive comment by manager about
female subordinate's relationships with women); Veretto v. U.S.
Postal Service, EEOC Appeal No. 0120110873, 2011 WL 2663401 (July 1,
2011) (complainant stated plausible sex-stereotyping claim alleging
harassment because he married a man); Culp v. Dep't of Homeland
Security, EEOC Appeal 0720130012, 2013 WL 2146756 (May 7, 2013)
(Title VII covers discrimination based on associating with lesbian
colleague); Couch v. Dep't of Energy, EEOC Appeal No. 0120131136,
2013 WL 4499198, at *8 (Aug. 13, 2013) (complainant's claim of
harassment based on his ``perceived sexual orientation'');
Complainant v. Department of Homeland Security, EEOC Appeal No.
0120110576, 2014 WL 4407422 (Aug. 20, 2014) (``While Title VII's
prohibition of discrimination does not explicitly include sexual
orientation as a basis, Title VII prohibits sex discrimination,
including sex-stereotyping discrimination and gender
discrimination'' and ``sex discrimination claims may intersect with
claims of sexual orientation discrimination.'').
\81\ The U.S. Court of Appeals for the Seventh Circuit
articulated this principle as early as 1971. Sprogis v. United Air
Lines, Inc., 444 F.2d 1194, 1198 (7th Cir. 1971) (``In forbidding
employers to discriminate against individuals because of their sex,
Congress intended to strike at the entire spectrum of disparate
treatment of men and women resulting from sex stereotypes.'')
(emphasis added).

---------------------------------------------------------------------------

Proposed paragraphs 60-20.7(a), (b), and (c) address stereotyping
based on an employee's nonconformity with norms about how people with
the employee's assigned sex at birth should look, speak, and act.
Paragraph (a) sets forth three examples of such stereotyping: in
proposed paragraph 60-20.7(a)(1), failure to promote female employee
because she did not wear jewelry, make-up, or high heels (see Price
Waterhouse, supra); in proposed paragraph 60-20.7(a)(2), harassment of
a man because he is too effeminate, (see Prowel v. Wise Bus. Forms,
Inc., supra); and in proposed paragraph 60-20.7(a)(3), adverse
treatment of an employee because he or she does not conform to sex-role
expectations by being in a

[[Page 5259]]

relationship with a person of the same sex (see Veretto v. U.S. Postal
Service and Castello v. U.S. Postal Service, supra note 80).
Paragraph (b) addresses disparate treatment based on gender
identity. As noted above, disparate treatment of a transgender employee
may constitute discrimination because of the individual's non-
conformity to sex-based stereotypes. Barnes v. City of Cincinnati, 401
F.3d 729 (6th Cir. 2005) (holding that transgender woman was a member
of a protected class based on her failure to conform to sex-based
stereotypes and thus her title VII claim was actionable); Smith v. City
of Salem, 378 F.3d 566, 574 (6th Cir. 2004) (``discrimination against a
plaintiff who is a transsexual [sic]--and therefore fails to act and/or
identify with his or her gender--is no different from the
discrimination directed against [the plaintiff] in Price Waterhouse
who, in sex-stereotypical terms, did not act like a woman''); Schroer
v. Billington, supra, at 305-06 (D.D.C. 2008) (withdrawal of a job
offer from a transgender applicant constituted sex-stereotyping
discrimination in violation of title VII). In addition to these
appellate cases, ``[t]here has likewise been a steady stream of
district court decisions recognizing that discrimination against
transsexuals [sic] on the basis of sex-based stereotyping constitutes
discrimination because of sex.'' Macy v. Holder, supra. See also Glenn
v. Brumby, 663 F.3d 1312 (11th Cir. 2011) (termination of a transgender
employee constituted discrimination on the basis of gender non-
conformity and sex-stereotyping discrimination under Equal Protection
Clause). Cf. Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 78
(1998) (same-sex harassment may be sex discrimination); Prowel v. Wise
Bus. Forms, 579 F.3d 285 (3d Cir. 2009) (harassment of an
``effeminate'' man may be sex discrimination).\82\ This principle--that
discrimination against a transgender individual is discrimination based
on non-conformity to sex-based stereotypes, and thus sex
discrimination--has also been adopted under the Gender-Motivated
Violence Act,\83\ Schwenk v. Hartford, 204 F.3d 1187, 1201-02 (9th Cir.
2000), and the Equal Credit Opportunity Act,\84\ Rosa v. Park W. Bank &
Trust Co., 214 F.3d 213, 215-16 (1st Cir. 2000).
---------------------------------------------------------------------------

\82\ See also Statement of Interest of the United States at 4,
Apr. 4, 2014, in Burnett v. City of Philadelphia, No. 09-4348 (E.D.
Pa.) (``Since Price Waterhouse, in cases where the defendant's
action had been motivated by the plaintiff's failure to conform with
sex-based stereotypes, every Federal circuit court of appeals that
has addressed the question has recognized that disparate treatment
against a transgender plaintiff can be discrimination `because . . .
of sex.' '').
\83\ 42 U.S.C. 13981.
\84\ 15 U.S.C. 1691.
---------------------------------------------------------------------------

Paragraph 60-20.7(c) addresses stereotyping based on specific
expectations about the proper roles of women and men regarding
caregiving. As noted above, the EEOC recognizes that adverse treatment
of women stemming from sex-based assumptions about ``childcare
responsibilities that will make female employees less dependable than
male employees'' violates title VII.\85\ Even an employer's perceptions
of a caregiver's work performance can, consciously or unconsciously, be
affected by sex-based stereotypes that female caregivers are ``less
capable and skilled than their childless female counterparts or their
male counterparts'' (Caregiving Guidance, II.A.4). Moreover--
---------------------------------------------------------------------------

\85\ EEOC, Enforcement Guidance: Unlawful Disparate Treatment of
Workers with Caregiving Responsibilities II.A.3 (last modified Feb.
8, 2011), https://www.eeoc.gov/policy/docs/caregiving.html (last
accessed Oct. 2, 2014).

Gender-based stereotypes may also influence how male workers are
perceived: ``Stereotypes about women's domestic roles are reinforced
by parallel stereotypes presuming a lack of domestic
responsibilities for men. These mutually reinforcing stereotypes
created a self-fulfilling cycle of discrimination.'' Stereotypes of
men as ``bread winners'' can further lead to the perception that a
man who works part time is not a good father, even if he does so to
care for his children. Thus, while working women have generally
borne the brunt of gender-based stereotyping, unlawful assumptions
about working fathers and other male caregivers have sometimes led
employers to deny male employees opportunities that have been
provided to working women or to subject men who are primary
caregivers to harassment or other disparate treatment. For example,
some employers have denied male employees' requests for leave for
---------------------------------------------------------------------------
childcare purposes even while granting female employees' requests.

Caregiving Guidance II.C [footnotes omitted].
In its introduction, the Caregiving Guidance also notes that
discrimination against caregivers may also fall under the ADA, which
prohibits discrimination based on an employee's association with an
individual with a disability. The same is true of section 503.

Section 60-20.8 Harassment and Hostile Work Environments

This proposed section is new. It has been well-recognized for many
years that harassment on the basis of sex, including the existence of a
work environment that is hostile to members of one sex, may give rise
to a violation of title VII.\86\ Moreover, sexual harassment continues
to be a serious problem for women in the workplace \87\ and a
significant barrier to women's entry into and advancement in many
nontraditional occupations, including the construction trades and the
computer and information technology industries. Yet, current part 60-20
does not include any references to sexual harassment or hostile work
environments. Proposed Sec. 20.8 remedies this omission.\88\
---------------------------------------------------------------------------

\86\ U.S. Equal Employment Opportunity Commission Guidelines on
Discrimination Because of Sex, 41 CFR 1604.11 (1980) (provision on
harassment); Harris v. Forklift Sys., 510 U.S. 17 (1993); Meritor
Savings Bank v. Vinson, 477 U.S. 57 (1986); Barnes v. Costle, 561
F.2d 983 (D.C. Cir. 1977).
\87\ In FY 2013, the EEOC received 7,256 sexual harassment
charges (out of 93,727). U.S. Equal Employment Opportunity
Commission, Enforcement & Litigation Statistics, Sexual Harassment
Charges FY 2010--2013, available at https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment_new.cfm (last accessed Nov.
2, 2014); U.S. Equal Employment Opportunity Commission, Enforcement
and Litigation Statistics, Charge Statistics: FY 1997 Through FY
2013, available at https://eeoc.gov/eeoc/statistics/enforcement/charges.cfm (last accessed Nov. 2, 2014). In FY 2011 (the last year
for which combined data is available), the EEOC and state and local
fair employment practices agencies together received just over
11,300 charges of sexual harassment. The average number of such
claims filed per year from FY 2000 through FY 2011 was 13,446. OFCCP
calculations from data in U.S. Equal Employment Opportunity
Commission, Enforcement & Litigation Statistics, Sexual Harassment
Charges: EEOC & FEPAs Combined: FY 1997--FY 2011, available at
https://www.eeoc.gov/eeoc/statistics/enforcement/sexual_harassment.cfm (last accessed Nov. 2, 2014).
\88\ The one reference to harassment in OFCCP's current body of
regulations implementing Executive Order 11246 is that construction
contractors are required to ``[e]nsure and maintain a working
environment free of harassment, intimidation, and coercion at all
sites.'' 41 CFR 60-4.3(a) (subsections 7(a) and (n) of the required
Equal Opportunity Clause for construction contracts).
In addition, in chapter 3, Sec. 2H01(d), the FCCM recognizes
that ``[a]lthough not specifically mentioned in the Guidelines,
sexual harassment (as well as harassment on the basis of race,
national origin or religion) is a violation of the nondiscrimination
provisions of the Executive Order'' and directs OFCCP compliance
officers to ``be alert for any indications of such harassment.'' It
goes on to state that ``OFCCP follows Title VII principles when
determining whether sexual harassment has occurred.''
---------------------------------------------------------------------------

Proposed paragraph 60-20.8(a) incorporates the provision of EEOC's
Guidelines relating to sexual harassment virtually verbatim. See 29 CFR
1604.11(a). Inclusion of the EEOC language is intended to align the
prohibitions of sexually harassing conduct under the Executive Order
with the prohibitions under title VII.
Proposed paragraph 60-20.8(b) defines harassment because of sex
under the Executive Order broadly to include sexual harassment
(including sexual

[[Page 5260]]

harassment based on gender identity), harassment based on pregnancy,
childbirth, or related medical conditions, and harassment that is not
sexual in nature but is because of sex (including harassment based on
gender identity). This aligns the meaning of ``because of sex'' for
purposes of sexual harassment with its meaning under current title VII
and Executive Order law. See proposed Sec. 60-20.2, which includes
discrimination on the bases of pregnancy, childbirth, or related
medical conditions and gender identity discrimination as types of sex
discrimination.
Proposed paragraph 60-20.8(c) suggests as best practices procedures
that contractors may develop and implement ``to ensure an environment
in which all employees feel safe, welcomed, and treated fairly . . .
[and] are not harassed because of sex.'' The suggested procedures are:
Broad dissemination of the message ``that harassing conduct will not be
tolerated'' (paragraph 60-20.8(c)(1)); anti-harassment training
(paragraph 60-20.8(c)(2)); and procedures for handling and resolving
complaints ``about harassment and intimidation based on sex''
(paragraph 60-20.8(c)(3)). Contractors are not required to use such
procedures and will not be found in violation of this part for not
using such procedures. We note, however, that using such procedures may
assist contractors in meeting their obligations with respect to
harassment and hostile work environments. Procedures such as these are
key to preventing harassment before it occurs.
In addition, a contractor can avoid or reduce liability for certain
sexually harassing acts committed by its supervisors if it can show
that it has taken reasonable care to prevent and correct
harassment.\89\ The activities listed in paragraph 60-20.8(c) are the
kinds of activities that would help a contractor in making that
showing. For example, taking reasonable care ``generally requires
establish[ing], disseminat[ing], and enforcing an anti-harassment
policy and complaint procedure.'' \90\ The law does not require such
activities, but it does encourage employers to engage in them.
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\89\ The Supreme Court established this affirmative defense in
Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998), and
Faragher v. City of Boca Raton, 524 U.S. 775 (1998). See also U.S.
Equal Employment Opportunity Commission, Enforcement Guidance on
Vicarious Employer Liability for Unlawful Harassment by Supervisors
(July 18, 1999), available at https://www.eeoc.gov/policy/docs/harassment.html (last accessed Oct. 7, 2014) [hereinafter EEOC
Guidance on Vicarious Liability for Unlawful Harassment].
\90\ EEOC Guidance on Vicarious Liability for Unlawful
Harassment, supra note 89, Sec. V(C).
---------------------------------------------------------------------------

Regulatory Procedures

Executive Order 12866 (Regulatory Planning and Review) and Executive
Order 13563 (Improving Regulation and Regulatory Review)

Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives, and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health, and safety effects, distributive impacts, and equity).
Executive Order 13563 directs agencies to propose or adopt a
regulation only upon a reasoned determination that its benefits justify
its costs; tailor the regulation to impose the least burden on society,
consistent with obtaining the regulatory objectives; and in choosing
among alternative regulatory approaches, select those approaches that
maximize net benefits. Executive Order 13563 recognizes that some
benefits are difficult to quantify and provides that, where appropriate
and permitted by law, agencies may consider and discuss qualitatively
values that are difficult or impossible to quantify, including equity,
human dignity, fairness, and distributive impacts.
This proposed rule has been designated a ``significant regulatory
action'' although not economically significant, under Sec. 3(f) of
Executive Order 12866. The NPRM is not economically significant, as it
will not have an annual effect on the economy of $100 million or more.
The Office of Management and Budget has reviewed the NPRM.
The Need for the Regulation
OFCCP's longstanding policy is to follow title VII principles when
conducting analyses of potential sex discrimination under Executive
Order 11246. See Notice of Final Rescission, 78 FR 13508, February 28,
2013. However, the existing Sex Discrimination Guidelines, unchanged
since their initial promulgation in 1970 and re-issuance in 1978, are
no longer an accurate depiction of current title VII principles. Title
VII has been significantly amended four times since that time, and the
Supreme Court has issued several decisions clarifying that practices
such as sexual harassment can be unlawful discrimination. In light of
these changes, this proposed rule revises the current Guidelines, and
replaces them with new sex discrimination regulations that accurately
set forth a contractor's obligation not to discriminate on the basis of
sex in accordance with current title VII principles. (A more detailed
discussion of the need for the regulation is contained in Reasons for
Amending the Current Sex Discrimination Guidelines, supra.)
Discussion of Impacts
In this section, OFCCP presents a summary of the costs associated
with the new requirements in part 60-20. Comments are welcome on every
aspect of the cost and burden calculations including but not limited to
the amount of time contractors would spend on complying with the
proposals in this NPRM, including those related to accommodations for
light duty. The estimated labor cost to contractors and subcontractors
is based on U.S. Department of Labor, Bureau of Labor Statistics (BLS)
data in the publication ``Employer Costs for Employee Compensation''
issued in December 2013, which lists total compensation for Management,
Professionals, and Related Occupations as $51.58 per hour.\91\
---------------------------------------------------------------------------

\91\ Press Release, Bureau of Labor Statistics, U.S. Department
of Labor, Employer Costs for Employee Compensation--December 2013,
at 4, available at https://www.bls.gov/news.release/pdf/ecec.pdf
(last accessed Oct. 6, 2014).
---------------------------------------------------------------------------

There are approximately 500,000 contractor firms, employing
approximately 65 million employees, registered in the SAM. Therefore,
OFCCP estimates that 500,000 contractor companies or firms may be
affected by the proposed new provisions.\92\ The SAM number results in
an overestimation for several reasons: the system captures firms that
do not meet the $10,000 jurisdictional dollar threshold for this
proposed rule; it captures inactive contracts, although OFCCP's
jurisdiction covers only active contracts; and it captures thousands of
recipients of Federal grants and Federal financial assistance, which
are not contractors.\93\
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\92\ U.S. General Services Administration, System for Award
Management, Legacy CCR Extracts Public (``FOIA'') Data Package, May
2014, available at https://www.sam.gov/portal/public/SAM/(last
accessed June 14, 2014).
\93\ In addition to these reasons to believe that the SAM data
yield an overestimate of the number of entities affected by this
rule, there is at least one reason to believe the data yield an
underestimate: SAM does not necessarily include all subcontractors.
But this data limitation is offset somewhat because of the overlap
among contractors and subcontractors; a firm may be a subcontractor
on some activities but have a contract on others and thus in fact be
included in the SAM data.

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[[Page 5261]]

Cost of Regulatory Familiarization
Agencies are required to include in the burden analysis the
estimated time it takes for contractors to review and understand the
instructions for compliance. See 5 CFR 1320.3(b)(1)(i). In order to
minimize this burden, OFCCP will publish compliance assistance
materials including, but not limited to, fact sheets and ``Frequently
Asked Questions.'' OFCCP will also host webinars for the contractor
community that will describe the new requirements and conduct listening
sessions to identify any specific challenges contractors believe they
face, or may face, when complying with the requirements.
Based on its experience with Federal contractors' compliance with
the laws OFCCP enforces, OFCCP believes that human resources or
personnel managers at each contractor establishment or firm will become
responsible for understanding or becoming familiar with the new
requirements. Therefore, OFCCP estimates that it will take 60 minutes
or 1 hour for a management professional at each contractor
establishment to either read the compliance assistance materials
provided by OFCCP or participate in an OFCCP webinar to learn more
about the new requirements. Consequently, the estimated burden for rule
familiarization is 500,000 hours (500,000 contractor companies x 1 hour
= 500,000 hours). Based on data from the Bureau of Labor Statistics,
which lists total compensation for the Management, Professional, and
Related Occupations group at $51.58,\94\ we calculate the total
estimated cost as $25,790,000 (500,000 hours x $51.58/hour =
$25,790,000) or $52 per contractor company.
---------------------------------------------------------------------------

\94\ See supra note 91 and accompanying text.
---------------------------------------------------------------------------

Cost of Proposed Provisions
The NPRM proposes revising the current Sex Discrimination
Guidelines to replace them with regulations that set forth requirements
that Federal contractors and subcontractors and federally assisted
construction contractors and subcontractors must meet in fulfilling
their obligations under Executive Order 11246, as amended, to ensure
nondiscrimination in employment on the basis of sex. In order to reduce
the burden and increase understanding, the NPRM includes examples of
prohibited employment practices with each of the provisions.
The NPRM proposes changing the title of the regulation to provide
clarity that the provisions in part 60-20 are regulations implementing
Executive Order 11246. The title change does not incur burden.
The NPRM proposes minor edits to Sec. 60-20.1, including deleting
a sentence explaining the reason for promulgating this part of the
regulation, and modifying the sentence notifying the public that part
60-20 is to be read in connection with existing regulations. These
minor edits update the regulations and provide clarity. Because the
edits do not cause additional action on the part of contractors, no
additional burden is associated with this section.
Section 60-20.2, General Prohibitions, of the NPRM proposes
removing the current section ``Recruitment and advertisement'' section
and replacing it with a section that articulates the general
prohibition against sex discrimination in employment. The general
prohibition against sex discrimination in employment is not a new
provision and as such does not require any additional action on the
part of Federal contractors, subcontractors, or federally assisted
construction contractors or subcontractors. Thus no burden is assessed
for this provision.
The NPRM proposes replacing the current Sec. 60-20.3 (Job policies
and practices) with ``Sex as a bona fide occupational qualification.''
In this section, the NPRM proposes to consolidate in one provision the
current references to the BFOQ defense available to employers and
update the language set forth in title VII. This reorganization is
intended to make it easier for Federal contractors, subcontractors, and
federally assisted construction contractors and subcontractors to
locate and understand the BFOQ defense. This section reorganizes
existing information and does not incur additional burden. Thus no
burden is assessed for this provision.
Section 60-20.4 proposes to replace the current provision
addressing seniority systems with a section addressing discrimination
in compensation practices. The proposed section provides clear guidance
to covered contractors on their obligation to provide equal opportunity
with respect to compensation. It provides guidance on determining
similarly situated employees and confirms that OFCCP follows title VII
principles in investigating compensation discrimination. The provisions
do not create new requirements; rather, they clarify existing
provisions regarding compensation discrimination, thus reducing
confusion that may have resulted in the analysis of compensation
discrimination.\95\ Therefore no new burden or new benefit (beyond
confusion reduction) is created by this provision.
---------------------------------------------------------------------------

\95\ The existing Sec. 60-20.5 addressed discriminatory wages.
The proposed Sec. 60-20.4 incorporates that existing requirement
and updates it to be consistent with current title VII law.
---------------------------------------------------------------------------

The NPRM proposes to address discrimination on the basis of
pregnancy, childbirth, or related medical conditions in Section 60-
20.5.
Subsection 60-20.5(a) prohibits discrimination on the basis of
pregnancy, childbirth, or related medical conditions, including
childbearing capacity. This clarifies current law that discrimination
based on any of these factors is prohibited under Executive Order 11246
and as such does not generate new burden or new benefits (with the
exception of reduced confusion).
Subsection 60-20.5(b) provides a non-exhaustive list of examples of
unlawful pregnancy discrimination, including refusing to hire pregnant
applicants; firing an employee or requiring an employee to go on leave
because the employee becomes pregnant; limiting a pregnant employee's
job duties based on pregnancy or requiring a doctor's note in order for
a pregnant employee to continue employment; providing employees with
health insurance that does not cover hospitalization and other medical
costs related to pregnancy, childbirth, or related medical conditions
when hospitalization is provided for other medical conditions; and
denying an alternative job assignment, modified duties or other
accommodations to a pregnant employee when such accommodations are
provided or are required to be provided by a contractor's policy or by
other relevant laws to other employees whose abilities or inabilities
to work are similar. The clarification, including the examples provided
in subsection 60-20.5(b), reduces contractors' confusion by harmonizing
OFCCP's outdated regulations with current title VII jurisprudence.
Although OFCCP believes that Federal contractors are already required
to provide accommodations and light duty under title VII, because some
courts disagree with this interpretation, see supra note 76 and
accompanying text, it estimates that there will be some burden
associated with this provision for contractors that did not provide
accommodations or light duty in the past.
To determine the burden of this accommodations provision, OFCCP
first estimated the number of workers who may need an accommodation or
light

[[Page 5262]]

duty during pregnancy. No specific data sets detail the characteristics
of Federal contractor and subcontractor workers relating to pregnancy.
Thus OFCCP relied on the data sets available for the general population
and general labor force. OFCCP believes that the characteristics of the
general labor force are similar to the Federal contractor workforce.
In estimating the burden associated with the accommodations
provision, OFCCP determined that there are approximately 65 million
employees who work for the Federal contractors and other recipients of
Federal monies that are included in the SAM database. Because the data
does not indicate gender demographics, OFCCP used data from the Bureau
of Labor Statistics that indicates that 47 percent of the workforce is
female.\96\ According to National Center for Health Statistics (NCHS)
data, there were 6,127,000 pregnancies among women ages 18 to 44 in the
United States in 2009 among the general population.\97\ When compared
to data from the U.S. Census for the same time period, that number of
pregnancies reflects a pregnancy rate of approximately 10.9
percent.\98\
---------------------------------------------------------------------------

\96\ Women in the Labor Force, supra note 12, at 2.
\97\ Centers for Disease Control and Prevention, National Center
for Health Statistics, NCHS Data Brief No. 136: Pregnancy Rates for
U.S. Women Continue to Drop 2 (2013) available at https://www.cdc.gov/nchs/data/databriefs/db136.pdf (last accessed Oct. 6,
2014).
\98\ This may be an overestimation of the number of pregnant
workers because there is limited data available regarding the age of
employees of federal contractors.
---------------------------------------------------------------------------

OFCCP further refined this rate to reflect pregnancies of working
women. NCHS's pregnancy rate did not distinguish between working and
non-working women. Thus OFCCP turned to data from the U.S. Census. U.S.
Census American Fact Finder does not report on pregnancy, but does
report on births. Census data also shows whether the mother was in the
labor force. As this is the best data available, OFCCP used the ratio
of births among working and non-working mothers to determine the
pregnancy rate of women in the workforce. Thus, OFCCP determined that
the pregnancy rate for women in the workforce is approximately 61
percent of the rate for women in the general population, translating to
a pregnancy rate of 6.7 percent of women in the Federal contractor
workforce.\99\ Based on the above, OFCCP estimates approximately
2,046,850 women (four women per SAM contractor firm) in the Federal
contractor workforce would be pregnant in a year.\100\
---------------------------------------------------------------------------

\99\ U.S. Census Bureau, American Fact Finder, Women 16 to 50
Years Who Had a Birth in the Past 12 Months by Marital Status and
Labor Force Status, 2009 to 2011 American Community Survey 3-Year
Estimates, available at https://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_11_3YR_B13012&prodType=table (last
accessed Aug. 1, 2014). The data table reports birth rates for women
in labor force at 5.1 percent, compared to women not in the labor
force at 8.4 percent. Comparing the two rates (5.1 percent to 8.1
percent), the birth rate of women in the labor force was 61 percent
that of women not in the labor force. Therefore, multiplying the
pregnancy rate among women of working age, 10.9 percent, by 61
percent results in a 6.7 percent pregnancy rate.
\100\ Id.
---------------------------------------------------------------------------

Not every pregnant employee in the Federal contractor workforce
will require an accommodation that might involve more than a de minimis
cost. Many will have no medical condition associated with their
pregnancies that require such accommodation. Even for those who do have
such conditions, the positions that require such accommodation
generally involve physical exertion or standing; such positions are
likely to be found in the job categories of craft workers, operatives,
laborers, and service workers. Based on data from the Employer
Information Report EEO-1, OFCCP estimates that 21 percent of women in
the Federal contractor workforce are in such job categories. Thus, of
the 2,046,850 women who may be pregnant, 429,839 are in positions in
the job categories likely to require accommodations that might involve
more than a de minimis cost.
Reports from NIH show that the incidence of medical conditions
during pregnancy that require accommodations ranges from 0.5 percent
(placenta previa) to 50 percent (back issues).\101\ Thus, OFCCP
estimates that of the approximately 429,839 women in positions that
require physical exertion or standing, half or 214,920 may require some
type of an accommodation or light duty.
---------------------------------------------------------------------------

\101\ S. Malmqvist et.al., Prevalence of low back and pelvic
pain during pregnancy (Abstract), J. Manipulative Physiological
Therapy, National Center for Biotechnology Information (2012),
available at https://www.ncbi.nlm.nih.gov/pubmed/22632586, (last
accessed Oct. 6, 2014).
---------------------------------------------------------------------------

The types of accommodations needed during pregnancy also vary. They
range from time off for medical appointments and more frequent breaks
to stools for sitting and assistance with heavy lifting.\102\ Reports
from the W.K. Kellogg Foundation on women's child bearing experiences
and the National Women's Law Center on accommodating pregnant workers
show that the costs associated with accommodating pregnant workers are
minimal and generally involve schedule adjustments or modified work
duties.\103\ One study found that when faced with a pregnancy-related
need for accommodation, between 62 percent and 74 percent of pregnant
women asked their employer to address their needs. The study further
found that between 87 percent and 95 percent of the pregnant women who
requested an adjustment to their work schedule or job duties worked for
employers that attempted to address those requests. The study
specifically found that 63 percent of pregnant women who needed a
change in duties such as less lifting or more sitting asked their
employers to address that need, and 91 percent of those women worked
for employers that attempted to address their needs.\104\ Based on this
study, OFCCP believes that most employers do provide some form of
accommodation when requested.
---------------------------------------------------------------------------

\102\ Unlawful Discrimination Against Pregnant Workers and
Workers with Caregiving Responsibilities: Meeting of the U.S. Equal
Emp. Opportunity Comm'n 8 (Feb. 15, 2012) (statement of Dr. Stephen
Benard, Professor of Sociology, Indiana University), available at
https://www.eeoc.gov/eeoc/meetings/2-15-12/transcript.cfm (last
accessed Oct. 6, 2014).
\103\ Heavy Lift, supra note 51, at 12.
\104\ Eugene Declerq et al., W.K. Kellogg Foundation, Listening
to Mothers III: New Mothers Speak Out, 36, (2013).
---------------------------------------------------------------------------

To determine the cost of accommodation or light duty imposed by the
proposed rule, OFCCP considered the types of light duty or
accommodations needed. Generally, providing light duty or accommodation
for pregnancy involves adjusting work schedules or allowing more
frequent breaks. OFCCP believes that these accommodations would incur
little to no additional cost.
Additional accommodations may involve either modifications to work
environments (providing a stool for sitting rather than standing) or to
job duties--for example, lifting restrictions. In making such an
accommodation, Federal contractors have discretion regarding how they
would make such modifications. For example, a contractor may provide an
employee with an existing stool, or a contractor may have other
employees assist when heavy lifting is required. To determine the cost
of such accommodations, OFCCP referred to the Job Accommodation Network
(JAN). JAN reports that the average cost of accommodation is $500.\105\
---------------------------------------------------------------------------

\105\ Beth Loy, Job Accommodation Network, Workplace
Accommodations: Low Cost, High Impact, available at https://askjan.org/media/lowcosthighimpact.html (last updated Sept. 1, 2014)
(last accessed Oct. 6, 2014).
---------------------------------------------------------------------------

As stated above, 63 percent of pregnant women who needed a change
in duties related to less lifting or more

[[Page 5263]]

sitting requested such an accommodation from their employers. Thus,
OFCCP estimates that 135,400 women (214,920 x 0.63) would have made
such a request, and 91 percent, or 123,214 of those requests (135,400 x
0.91) would have been addressed. In addition, OFCCP assumes that of the
37 percent (79,520 women) who did not make such a request, had they
made the request, the needs of 91 percent of them (72,364 women) would
also have been addressed.\106\ Thus, this proposed rule would require
covered contractors to accommodate the nine percent of women whose
needs were not addressed. Therefore, OFCCP estimates that the cost,
accounting for those pregnant women who made requests and those
additional women who could make requests, would be $9,671,000 ((135,400
- 123,214) + (79,520 - 72,364) x $500). Accounting for women's requests
that could be made but may not be made is likely an overestimation of
the cost of this accommodation. In addition, OFCCP believes that this
cost estimate may also be an overestimate because contractors with 15
or more employees are covered by a similar requirement found in title
VII and 36 states have requirements that apply to employers with fewer
than 15 employees.\107\ Although OFCCP seeks comments on all aspects of
its calculation of burden and costs, the agency specifically seeks
comments on the burden associated with providing accommodations to
pregnant workers.
---------------------------------------------------------------------------

\106\ OFCCP arrived at 79,250 by multiplying the 214,920 women
by 37 percent.
\107\ State laws covering employers with one employee: Alaska,
Colorado, Hawaii, Maine, Michigan, Minnesota, Montana, New Jersey,
North Dakota, Oklahoma, Oregon, South Dakota, Vermont, and
Wisconsin; state laws covering employers with two employees:
Wyoming; state laws covering employers with three employees:
Connecticut; state laws covering employers with four employees:
Delaware, Iowa, Kansas, New Mexico, New York, Ohio, Pennsylvania,
and Rhode Island; state laws covering employers with five employees:
California and Idaho; state laws covering employers with six
employees: Indiana, Massachusetts, Missouri, New Hampshire, and
Virginia; state laws covering employers with eight or more
employees: Kentucky, Tennessee, and Washington; state laws covering
employers with nine or more employees: Arkansas; state laws covering
employers with 12 or more employees: West Virginia. In addition, the
District of Columbia and Puerto Rico's laws cover employers with one
employee.
---------------------------------------------------------------------------

The NPRM proposes replacing the current Sec. 60-20.6 (Affirmative
action) with a new section titled ``Other fringe benefits.'' The
current section on affirmative action is unnecessary because the
requirements related to affirmative action programs are set forth in
parts 60-2 and 60-4. In the new Sec. 60-20.6, the NPRM proposes to
clarify the existing requirement of nondiscrimination in fringe
benefits, specifically with regard to application of that principle to
contributions to and distributions from pension and retirement funds.
The proposed section reflects the current state of title VII law with
regard to pension funds, imposing no additional burden on contractors
covered both by Executive Order 11246, as amended, and by title VII
(which, generally, covers employers of 15 or more employees) or by
state or local laws that similarly prohibit sex discrimination (many of
which have lower coverage thresholds \108\). As to the remaining
contractors--those that have fewer than 15 employees as defined by
title VII, are not covered by state or local laws, and have at least
$10,000 in Federal contracts or subcontracts--as noted in the
discussion of this requirement elsewhere in the preamble, OFCCP's
publicly available FCCM has put them on notice that OFCCP follows
current law with regard to providing equal benefits and making equal
contributions to pensions funds for men and women. Thus, as an existing
requirement, this does not generate any new benefits (beyond reduced
confusion) or additional burden.
---------------------------------------------------------------------------

\108\ See note 99, supra.
---------------------------------------------------------------------------

The NPRM proposes a new section, Sec. 60-20.7, titled ``Employment
decisions made on the basis of sex-based stereotypes.'' This section
explains the prohibition against making employment decisions on the
basis of sex-based stereotypes, which the Supreme Court recognized in
1989 as a form of sex discrimination under title VII. This section
clarifies that such discrimination includes disparate treatment based
on nonconformity to stereotypical expectations about gender identity,
gender expression, and sexual orientation and stereotyping based on
specific expectations about the proper roles of women and men regarding
caregiving. The proposed section reflects the current state of title
VII law with regard to sex-based stereotyping, imposing no additional
burden on contractors covered both by Executive Order 11246, as
amended, and by title VII or by state or local laws that similarly
prohibit sex discrimination, many of which have lower coverage
thresholds.\109\ As to the remaining contractors--those that have fewer
than 15 employees as defined by title VII, are not covered by state or
local laws, and have at least $10,000 in Federal contracts or
subcontracts--as noted in the discussion of this requirement elsewhere
in the preamble, OFCCP's publicly available FCCM has put them on notice
that OFCCP follows current law with regard to sex-based stereotyping.
The FCCM provides that:
---------------------------------------------------------------------------

\109\ See note 99, supra.

COs must examine whether contractor policies make prohibited
distinctions in conditions of employment based on sex, including the
basis of pregnancy, childbirth or related medical conditions, or on
the basis of sex-based stereotypes, including those related to
actual or perceived caregiver responsibilities. Contractors must not
make employment decisions based on stereotypes about how males and
females are ``supposed'' to look or act. Such employment decisions
are a form of sex discrimination prohibited by Executive Order
---------------------------------------------------------------------------
11246, as amended.

FCCM, ch. 2, section 2H00(a).\110\ Thus, for these contractors as
well, the proposed section imposes no additional burden and generates
no new benefits for their employees.
---------------------------------------------------------------------------

\110\ Another section of the FCCM also covers sex-based
stereotyping:
Sex-Based Stereotyping and Caregiver Discrimination.
Differential treatment for an employment-related purpose based on
sex-based stereotypes, including those related to actual or
perceived caregiving responsibilities, is a violation of Title VII
of the Civil Rights Act of 1964. For example, it is prohibited to
deny advancement opportunities to similarly situated mothers that
are provided to fathers or women without children, based on
stereotypes about mothers in the workplace; it is also prohibited to
deny to fathers access to family-friendly policies like workplace
flexibility that employers provide to mothers, based on stereotypes
about fathers' roles in care giving.
FCCM, ch. 2, section 2H01(e).
---------------------------------------------------------------------------

The NPRM proposes a new section, Sec. 60-20.8, titled ``Harassment
and hostile work environments.'' This section explains the
circumstances under which sex-based harassment and hostile work
environments violate the Executive Order, reflecting principles
established in Supreme Court title VII decisions beginning in 1986.
This section clarifies that such discrimination includes ``sexual
harassment (including harassment based on gender identity or
expression), harassment based on pregnancy, childbirth, or related
medical conditions,'' and sex-based harassment that is not sexual in
nature but that is because of sex or where one sex is targeted for the
harassment. The proposed section describes best practices that
contractors may follow to reduce and eliminate harassment and hostile
work environments but explicitly states that such practices are ``not
required by this part.''
The proposed section reflects the current state of title VII law
with regard to sex-based harassment and hostile work environments,
imposing no additional burden on contractors covered both by Executive
Order 11246, as amended, and by title VII or by state or local laws
that similarly prohibit sex

[[Page 5264]]

discrimination (many of which have lower coverage thresholds \111\). As
to the remaining contractors--those that have fewer than 15 employees
as defined by title VII, are not covered by state or local laws, and
have at least $10,000 in Federal contracts or subcontracts--as noted in
the discussion of this requirement elsewhere in the preamble, OFCCP's
publicly available FCCM has put them on notice that OFCCP follows
current law with regard to sex-based harassment and hostile work
environments. The FCCM provides that:
---------------------------------------------------------------------------

\111\ See note 99, supra.

Although not specifically mentioned in the Guidelines, sexual
harassment, as well as harassment based on race, color, national
origin or religion is a violation of the nondiscrimination
provisions of EO 11246. During the onsite review, COs must be alert
for any indications of such harassment. OFCCP follows Title VII
principles when determining whether sexual harassment has occurred.
FCCM, Chapter 2, Section 2H01(d). Thus, for these contractors as well,
the proposed section imposes no additional burden and generates no new
benefits for their employees.
The total first year cost of the regulation is estimated at
$35,461,000 or $71 per contractor company. Below, in Table 1, is a
summary of the hours and costs:

Table 1--Contractor Proposed New Requirements
------------------------------------------------------------------------
Section Burden hours Costs
------------------------------------------------------------------------
Estimated One-Time Burden:
Regulatory Familiarization.......... 500,000 $25,790,000
Total One-Time Burden............... 500,000 25,790,000
Estimated Recurring Burden:
41 CFR 60-20.5: Light duty or 0 9,671,000
accommodation......................
Total Annual Recurring Burden....... 0 9,671,000
-------------------------------
Total Burden.................... 500,000 35,461,000
------------------------------------------------------------------------

Summary of Transfer and Benefits
If the proposed rule decreases sex-based compensation
discrimination, that effect may generate a transfer of value to
employees from employers (if additional wages are paid out of profits)
or taxpayers (if contractor fees increase to pay higher wages to
employees). Contractors may also transfer any costs of providing
pregnancy accommodations to employees, by not increasing wages or
reducing other benefits (to the extent not prohibited by the Davis-
Bacon and Service Contract Acts). However, OFCCP does not currently
have sufficient information to reliably estimate the potential transfer
payments resulting from this proposed rule, and it requests public
comment on data and methods to do so.

Analysis of Rulemaking Alternatives

OFCCP considered a range of regulatory alternatives that would
enable the agency to encourage voluntary compliance and effectively
enforce the prohibition against sex discrimination. In addition to the
approach proposed in the NPRM, OFCCP considered two alternative
approaches. First, OFCCP considered maintaining the current guidelines
with no changes. Second, OFCCP considered rescinding the existing
guidelines without proposing new regulations. Each of these
alternatives is discussed in further detail below. OFCCP seeks comments
from stakeholders on the proposal in the NPRM, as well as each
alternative, including OFCCP's assessment of the costs and benefits.
Alternative 1: Maintaining the Current Guidelines
OFCCP considered maintaining the Sex Discrimination Guidelines with
no changes. This alternative would impose no new costs and achieve no
new benefits. However, as discussed above, the existing guidelines are
extremely outdated and therefore do not provide sufficient or even
accurate guidance to contractors regarding their nondiscrimination
obligations. Thus, retaining the existing guidelines would have the
negative effect of continuing to impose compliance costs on compliant
contractors. It is true that, as discussed elsewhere in this preamble,
the FCCM provides updated guidance in the areas of maternity leave,
sex-based stereotyping, sexual harassment, and pensions. But even in
these areas, the provisions of the Guidelines conflict with the FCCM
and thus potentially sow confusion among the contractor community.
As mentioned above, current Sec. 60-20.3(c) provides that a
contractor will not be considered to have violated the Executive Order
if its contributions for fringe benefits are the same for men and women
or if the resulting benefits are equal. But in 1978, the Supreme Court
held that under title VII, an employer must provide equal retirement
benefits to men and women even if the contributions necessary to do so
cost more for one sex than the other. While the FCCM recognizes this
Supreme Court development, it is possible that contractors, especially
new contractors confronted for the first time with the conflict between
the outdated provisions in the Guidelines, on the one hand, and current
title VII principles and the FCCM, on the other, may still be incurring
legal fees or the cost of human resource professionals' time to
reconcile this conflict. Moreover, maintaining the Sex Discrimination
Guidelines with no changes would be inconsistent with Section 6 of
Executive Order 13563, which requires agencies to engage in
retrospective analyses of ``rules that may be outmoded, ineffective,
insufficient, or excessively burdensome, and to modify, streamline,
expand, or repeal them in accordance with what has been learned.''
Alternative 2: Rescinding but Not Replacing the Current Guidelines
OFCCP considered rescinding the Sex Discrimination Guidelines but
not proposing regulations to replace them. This alternative would have
the benefit of removing from the Code of Federal Regulations provisions
that are inconsistent with current title VII principles, such as the
fringe benefit provision discussed above. Contractors would no longer
need to expend resources to reconcile conflicts between the Sex
Discrimination Guidelines and the current requirements of title VII
law. However, this alternative would create a vacuum of guidance for
contractors, requiring them to expend resources for a different
reason--for example, to pay for lawyers' or human resource

[[Page 5265]]

professionals' time to provide guidance regarding their
nondiscrimination obligations. That ad hoc approach would reduce
consistency across contractors' practices and could increase the
incidence of unintended noncompliance, potentially harming job
applicants and employees.

Regulatory Flexibility Act and Executive Order 13272 (Consideration of
Small Entities)

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and applicable
statutes, to fit regulatory and informational requirements to the scale
of the business organizations and governmental jurisdictions subject to
regulation.'' Public Law 96-354. To achieve that principle, the Act
requires agencies promulgating proposed rules to prepare an initial
regulatory flexibility analysis (IRFA) and to develop alternatives
whenever possible, when drafting regulations that will have a
significant impact on a substantial number of small entities. The Act
requires the consideration for the impact of a proposed regulation on a
wide-range of small entities including small businesses, not-for-profit
organizations, and small governmental jurisdictions.
Agencies must perform a review to determine whether a proposal or
final rule would have a significant economic impact on a substantial
number of small entities.\112\ If the determination is that it would,
then the agency must prepare a regulatory flexibility analysis as
described in the RFA.\113\
---------------------------------------------------------------------------

\112\ See 5 U.S.C. 603.
\113\ Id.
---------------------------------------------------------------------------

However, if an agency determines that a proposed or final rule is
not expected to have a significant economic impact on a substantial
number of small entities, section 605(b) of the RFA provides that the
head of the agency may so certify and a regulatory flexibility analysis
is not required. See 5 U.S.C. 605. The certification must include a
statement providing the factual basis for this determination and the
reasoning should be clear.
OFCCP is publishing this initial regulatory flexibility analysis to
aid stakeholders in understanding the small entity impacts of the
proposed rule and to obtain additional information on the small entity
impacts. OFCCP invites interested persons to submit comments on the
following estimates, including the number of small entities affected by
the NPRM, the compliance cost estimates, and whether alternatives exist
that will reduce burden on small entities while still remaining
consistent with the objective of the proposed rule.
Why OFCCP is Considering Action: OFCCP is publishing this proposed
rule in order to align its existing regulations related to sex
discrimination with current law and address their application to
current workplace practices and issues.
Objectives of and Legal Basis for Rule: This proposed rule will
provide guidance on how to comply with the nondiscrimination
requirements of Executive Order 11246, as amended.
Compliance Requirements of the Proposed Rule, Including Reporting
and Recordkeeping: As explained in this proposed rule, the Sex
Discrimination Guidelines at 41 CFR part 60-20 set forth
interpretations and guidelines for implementing Executive Order 11246's
nondiscrimination and affirmative action requirements related to sex.
The guidelines have not been updated in more than 40 years. This NPRM
is intended to update the requirements to reflect current statutory and
case law. The requirements in Executive Order 11246 generally apply to
any business or organization that (1) holds a single Federal contract,
subcontract, or federally assisted construction contract in excess of
$10,000; (2) has Federal contracts or subcontracts that, combined,
total in excess of $10,000 in any 12-month period; or (3) holds
Government bills of lading, serves as a depository of Federal funds, or
is an issuing and paying agency for U.S. savings bonds and notes in any
amount.
This NPRM contains several provisions that could be considered to
impose compliance requirements on contractors. Generally, contractors
are prohibited from making employment decisions based upon gender,
including decisions regarding compensation and fringe benefits. The
NPRM updates the existing regulations to address, inter alia,
discrimination on the basis of pregnancy, harassment, and employment
decisions made on the basis of sex-based stereotypes. These revisions
and updates are intended to bring OFCCP's regulations at part 60-20 in
line with the current standards of title VII and thus reduce potential
confusion among contractors, applicants and employees regarding which
requirement applies to a particular situation.
All small entities subject to Executive Order 11246 would be
required to comply with all of the provisions of the NPRM. Such
compliance requirements are more fully described above in other
portions of this preamble. The following section analyzes the cost of
complying with proposed requirements in the NPRM.
Calculating Impact of the Proposed Rule on Small Business Firms:
OFCCP must determine the compliance cost of this proposed rule on small
contractor firms, and whether these costs will be significant for a
substantial number of small contractor firms (i.e., small business
firms that enter into contracts with the Federal Government). If the
estimated compliance costs for affected small contractor firms are less
than three percent of small contractor firms' revenues, OFCCP considers
it appropriate to conclude that this proposed rule will not have a
significant economic impact on the small contractor firms covered by
Executive Order 11246. While OFCCP has chosen three percent as our
significance criterion, using this benchmark as an indicator of
significant impact may overstate the significance of such an impact,
since the costs associated with prohibiting sex discrimination against
employees and job applicants are expected to be mitigated to some
degree by the benefits of the proposed rule. The benefits are discussed
more fully in the preamble of this NPRM.
The data sources used in the analysis of small business impact are
the Small Business Administration's (SBA) Table of Small Business Size
Standards,\114\ the Current Population Survey (CPS), and the U.S.
Census Bureau's Statistics of U.S. Businesses (SUSB).\115\ Since
Federal contractors are not limited to specific industries, OFCCP
assessed the impact of this NPRM across the 19 industrial
classifications.\116\ Because data limitations do not allow OFCCP to
determine which of the small firms within these industries are Federal
contractors, OFCCP assumes that these

[[Page 5266]]

small firms are not significantly different from the small Federal
contractors that will be directly affected by the proposed rule.
---------------------------------------------------------------------------

\114\ U.S. Small Business Administration, Firm Size Data,
Statistics of U.S. Businesses, available at https://www.sba.gov/advocacy/849/12162#susb (last visited June 9, 2014).
\115\ U.S. Census Bureau, Statistics of U.S. Businesses: Latest
SUSB Annual Data, available at https://www.census.gov/econ/susb/
(last accessed June 9, 2014).
\116\ Agriculture, Forestry, Fishing, and Hunting Industry
(North American Industry Classification System (NAICS) 11, Mining
NAICS 21, Utilities NAICS 22, Construction NAICS 23, Manufacturing,
NAICS 31-33, Wholesale Trade NAICS 42, Retail Trade NAICS 44-45,
Transportation and Warehousing NAICS 48-49, Information NAICS 51,
Finance and Insurance NAICS 52, Real Estate and Rental and Leasing
NAICS 53, Professional, Scientific, and Technical Services NAICS 54,
Management of Companies and Enterprises NAICS 55, Administrative and
Support and Waste Management and Remediation Services NAICS 56,
Educational Services NAICS 61, Healthcare and Social Assistance
NAICS 62, Arts, Entertainment, and Recreation NAICS 71,
Accommodation and Food Services NAICS 72, Other Services NAICS 81.
---------------------------------------------------------------------------

OFCCP used the following steps to estimate the cost of the proposed
rule per small contractor firm as measured by a percentage of the total
annual receipts. First, OFCCP used Census SUSB data that disaggregates
industry information by firm size in order to perform a robust analysis
of the impact on small contractor firms. OFCCP applied the SBA small
business size standards to the SUSB data to determine the number of
small firms in the affected industries. Then OFCCP used receipts data
from the SUSB to calculate the cost per firm as a percent of total
receipts by dividing the estimated annual cost per firm by the average
annual receipts per firm. This methodology was applied to each of the
industries, and the results by industry are presented in the summary
tables below (see Tables 2-20).
In sum, the increased cost of compliance resulting from the
proposed rule is de minimis relative to revenue at small contractor
firms, no matter their size. All of the industries had an annual cost
per firm as a percent of receipts of far less than three percent. For
instance, the manufacturing industry cost is estimated to range from
0.00 percent for firms that have average annual receipts of
approximately $985 million to 0.02 percent for firms that have average
annual receipts of under $500,000. Management of companies and
enterprises is the industry with the highest relative costs, with a
range of 0.00 percent for firms that have average annual receipts of
approximately $2 million to 0.30 percent for firms that have average
annual receipts of under $24,000. Therefore, in no instance is the
effect of the NPRM greater than three percent of total receipts, and in
fact does not exceed 0.3 percent.
Although OFCCP estimates the compliance costs are less than three
percent of the average revenue per small contractor firm for each of
the 19 industries, OFCCP seeks data and feedback from small firms on
the factors and assumptions used in this analysis, such as the data
sources, small business industries, NAICS codes and size standards, and
the annual costs per firm as a percent of receipts. OFCCP seeks
information about which data sources should be used to estimate the
number of Federal small subcontractors. OFCCP also seeks information
about the potential compliance cost estimates, such as any differences
in compliance costs for small businesses as compared to larger
businesses and any compliance costs that may not have been included in
this analysis.
Estimating the Number of Small Businesses Affected by the
Rulemaking: OFCCP now sets forth its estimate of the number of small
contractor firms actually affected by the proposed rule. This
information is not readily available. The best source for the number of
small contractor firms that are affected by this proposed rule is GSA's
SAM. OFCCP used SAM data to estimate the number of affected small
contractor firms since SAM data allow us to directly estimate the
number of small contractor firms. Federal contractor status cannot be
discerned from the SBA firm size data. It can only be used to estimate
the number of small firms, not the number of small contractor firms.
OFCCP used the SBA data to estimate the impact of the proposed
regulation on a ``typical'' or ``average'' small firm in each of the 19
industries. OFCCP then assumed that a typical small firm is similar to
a small contractor firm. OFCCP believes that this NPRM will not have a
significant economic effect on a substantial number of small
businesses.
Based on the most current SAM data available, if OFCCP defined
``small'' as fewer than 500 employees, then there are 328,552 small
contractor firms. If OFCCP defined ``small'' as firms with less than
$35.5 million in revenues, then there are 315,902 small contractor
firms. Thus, OFCCP established a range of 315,902 to 328,552 as the
total number of small contractor firms. Of course, not all of these
contractor firms will be impacted by the proposed rule; only those
contractor firms that have active contracts of more than $10,000 and
are not otherwise covered by title VII or similar state or local anti-
discrimination laws will be impacted. Thus this range is an
overestimate of the number of firms affected by the proposed rule. As
the proposed regulation applies to contractors covered by Executive
Order 11246, OFCCP estimates that the range of small firms impacted is
from 315,902 to 328,552.
Relevant Federal Rules Duplicating, Overlapping, or Conflicting
with the Rule: As discussed in the preamble above, OFCCP recognizes
that title VII, like the Executive Order, prohibits employers from
discriminating against employees and job applicants on the basis of
sex. Thus some overlap exists between the two laws.\117\ In fact, OFCCP
is proposing in this NPRM to eliminate conflict with title VII and
current case law.
---------------------------------------------------------------------------

\117\ Unlike title VII, Executive Order 11246 contains the
additional requirement that Federal contractors engage in
affirmative action to ensure that applicants are employed, and that
employees are treated during employment, without regard to their
sex, as well as their race, color, religion, sexual orientation,
gender identity, or national origin.
---------------------------------------------------------------------------

Alternatives to the Proposed Rule: As described above, OFCCP
considered two alternatives. These alternatives would not be an
effective or efficient way to enforce Executive Order 11246, as
amended.
Differing Compliance and Reporting Requirements for Small Entities:
This NPRM provides for no differing compliance requirements for small
entities. In its implementation of Executive Order 11246, as amended,
OFCCP does provide different reporting requirements for small
entities--for example, contractor companies with fewer than 50
employees are not required to submit an EEO-1 Report or develop
affirmative action programs. See 41 CFR 1.7, 1.40, and 2.1. In
addition, the record retention period for smaller contractors is
reduced. See 41 CFR 60-1.12.
Clarification, Consolidation, and Simplification of Compliance and
Reporting Requirements for Small Entities: This NPRM was drafted to
state clearly the compliance requirements for all contractors subject
to Executive Order 11246, as amended. The proposed rule does not
contain any new reporting or recordkeeping requirements. The compliance
provisions apply generally to all businesses covered by Executive Order
11246, as amended; no rational basis exists for creating an exemption
from compliance requirements for small businesses. OFCCP makes
available a variety of resources to employers for understanding their
obligations and achieving compliance.
Use of Performance Rather Than Design Standards: This NPRM was
written to provide clear guidelines to ensure compliance with the
Executive Order requirements. Under the proposed rule, contractors may
achieve compliance through a variety of means. OFCCP makes available a
variety of resources to contractors for understanding their obligations
and achieving compliance.
Exemption from Coverage of the Rule for Small Entities: Executive
Order 11246, as amended, establishes its own exemption requirements;
therefore, OFCCP has no authority to exempt small businesses from the
requirements of the Executive Order.

[[Page 5267]]

Regulatory Flexibility Act and Executive Order 13272 (Consideration of
Small Entities)

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Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that OFCCP consider the impact of paperwork and other information
collection burdens imposed on the public. According to the 1995
amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi), an
agency may not collect or sponsor the collection of information, nor
may it impose an information collection requirement, unless it displays
a currently valid OMB control number.
OFCCP has determined that there is no new requirement for
information collection associated with this proposed rule. This
proposed rule clarifies and updates current part 60-20 and removes
outdated provisions so that the requirements conform to current sex
discrimination law. The information collection requirements contained
in the existing Executive Order 11246 regulations are currently
approved under OMB Control No. 1250-0001 (Construction Recordkeeping
and Reporting Requirements) and OMB Control No. 1250-0003
(Recordkeeping and Reporting Requirements--Supply and Service).
Consequently, this proposed rule does not require review by the Office
of Management and Budget under the authority of the Paperwork Reduction
Act of 1995, 44 U.S.C. 3501 et seq.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by Section 804 of the
Small Business Regulatory Enforcement Fairness Act of 1996. This rule
will not result in an annual effect on the economy of $100 million or
more; a major increase in costs or prices; or significant adverse
effects on competition, employment, investment, productivity,
innovation, or on the ability of the United States-based companies to
compete with foreign-based companies in domestic and export markets.

Unfunded Mandates Reform Act of 1995

For purposes of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532, this NPRM does not include any Federal mandate that may result in
excess of $100 million in expenditures by state, local, and tribal
governments in the aggregate or by the private sector.

Executive Order 13132 (Federalism)

OFCCP has reviewed this proposed rule in accordance with Executive
Order 13132 regarding federalism, and has determined that it does not
have ``federalism implications.'' This proposed rule will not ``have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.''

Executive Order 13175 (Consultation and Coordination With Indian Tribal
Governments)

This proposed rule does not have tribal implications under
Executive Order 13175 that would require a tribal summary impact
statement. The proposed rule would not have substantial direct effects
on one or more Indian tribes, on the relationship between the Federal
government and Indian tribes, or on the distribution of power and
responsibilities between the Federal government and Indian tribes.

Effects on Families

The undersigned hereby certifies that the NPRM would not adversely
affect the well-being of families, as discussed under section 654 of
the Treasury and General Government Appropriations Act, 1999. To the
contrary, by better ensuring that working mothers do not suffer sex
discrimination in compensation, benefits, or other terms and conditions
of employment, and that working fathers do not suffer

[[Page 5277]]

discrimination on the basis of sex-based stereotypes about caregiver
responsibilities, the NPRM would have a positive effect on the economic
well-being of families, especially of families headed by single
mothers.

Executive Order 13045 (Protection of Children)

This NPRM would have no environmental health risk or safety risk
that may disproportionately affect children.

Environmental Impact Assessment

A review of this NPRM in accordance with the requirements of the
National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et
seq.; the regulations of the Council on Environmental Quality, 40 CFR
1500 et seq.; and DOL NEPA procedures, 41 CFR part 11, indicates the
NPRM would not have a significant impact on the quality of the human
environment. There is, thus, no corresponding environmental assessment
or an environmental impact statement.

Executive Order 13211 (Energy Supply)

This NPRM is not subject to Executive Order 13211. It will not have
a significant adverse effect on the supply, distribution, or use of
energy.

Executive Order 12630 (Constitutionally Protected Property Rights)

This NPRM is not subject to Executive Order 12630 because it does
not involve implementation of a policy that has takings implications or
that could impose limitations on private property use.

Executive Order 12988 (Civil Justice Reform Analysis)

This NPRM was drafted and reviewed in accordance with Executive
Order 12988 and will not unduly burden the Federal court system. The
NPRM was: (1) Reviewed to eliminate drafting errors and ambiguities;
(2) written to minimize litigation; and (3) written to provide a clear
legal standard for affected conduct and to promote burden reduction.

List of Subjects in 41 CFR Part 60-20

Civil rights, Discrimination in employment, Employment, Equal
employment opportunity, Government procurement, Labor, Sex, Women.

Patricia A. Shiu,
Director, Office of Federal Contract Compliance Programs.

For the reasons set forth in the preamble, OFCCP proposes to revise
41 CFR part 60-20 to read as follows:

PART 60-20--DISCRIMINATION ON THE BASIS OF SEX

Sec.
60-20.1 Purpose.
60-20.2 General prohibitions.
60-20.3 Sex as a bona fide occupational qualification.
60-20.4 Discriminatory compensation.
60-20.5 Discrimination on the basis of pregnancy, childbirth, or
related medical conditions.
60-20.6 Other fringe benefits.
60-20.7 Employment decisions made on the basis of sex-based
stereotypes.
60-20.8 Harassment and hostile work environments.

Authority: Sec. 201, E.O. 11246, 30 FR 12319, 3 CFR, 1964-1965
Comp., p. 339 as amended by E.O. 11375, 32 FR 14303, 3 CFR 1966-1970
Comp., p. 684; E.O. 12086, 43 FR 46501, 3 CFR 1978 Comp., p. 230;
E.O. 13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 258; and E.O. 13672,
79 FR 42971.

Sec. 60-20.1 Purpose.

The purpose of this part is to set forth specific requirements that
covered Federal Government contractors and subcontractors, including
those performing work under federally-assisted construction contracts
(``contractors''),\1\ must meet in fulfilling their obligations under
Executive Order 11246, as amended, to ensure nondiscrimination on the
basis of sex in employment. These regulations are to be read in
conjunction with the other regulations implementing Executive Order
11246, as amended, set forth in parts 60-1, 60-2, 60-3, 60-4, and 60-30
of this chapter.
---------------------------------------------------------------------------

\1\ This part also applies to entities that are ``applicants''
for Federal assistance involving a construction contract as defined
in part 60-1 of this title.
---------------------------------------------------------------------------

Sec. 60-20.2 General prohibitions.

(a) In general. It is unlawful for a contractor to discriminate
against any employee or applicant for employment because of sex. The
term sex includes, but is not limited to pregnancy, childbirth, or
related medical conditions; gender identity; and transgender status.
(b) Disparate treatment. Unless sex is a bona fide occupational
qualification reasonably necessary to the normal operation of a
contractor's particular business or enterprise, the contractor may not
make any distinction based on sex in recruitment, hiring, firing,
promotion, compensation, hours, job assignments, training, benefits, or
other terms, conditions, or privileges of employment. Such unlawful
sex-based discriminatory practices include, but are not limited to, the
following:
(1) Making a distinction between married and unmarried persons that
is not applied equally to both sexes;
(2) Denying women with children an employment opportunity that is
available to men with children;
(3) Firing, or otherwise treating adversely, unmarried women, but
not unmarried men, who become parents;
(4) Imposing any differences in retirement age or other terms,
conditions, or privileges of retirement on the basis of sex;
(5) Restricting job classifications on the basis of sex;
(6) Maintaining seniority lines and lists based upon sex;
(7) Recruiting or advertising for individuals for certain jobs on
the basis of sex, including through use of gender-specific terms for
jobs (such as ``lineman'');
(8) Distinguishing on the basis of sex in apprenticeship or other
formal or informal training programs; in other opportunities such as
networking, mentoring, sponsorship, individual development plans,
rotational assignments, and succession planning programs; or in
performance appraisals that may provide the basis of subsequent
opportunities;
(9) Making any facilities and employment-related activities
available only to members of one sex, except that if the contractor
provides restrooms or changing facilities, the contractor must provide
separate or single-user restrooms or changing facilities to assure
privacy between the sexes;
(10) Denying transgender employees access to the bathrooms used by
the gender with which they identify; and
(11) Treating an employee or applicant for employment adversely
because he or she has undergone, is undergoing, or is planning to
undergo sex-reassignment surgery or other processes or procedures
designed to facilitate the adoption of a sex or gender other than the
individual's designated sex at birth.
(c) Disparate impact. Employment policies or practices that have an
adverse impact on the basis of sex, and are not job related and
consistent with business necessity, violate Executive Order 11246, as
amended, and this part. Examples of policies or practices that may
violate Executive Order 11246 in terms of their disparate impact on the
basis of sex include, but are not limited to:
(1) Minimum height and/or weight qualifications that are not
necessary to the performance of the job and that negatively impact
women substantially more than men;

[[Page 5278]]

(2) Strength requirements that exceed the strength necessary to
perform the job in question and that negatively impact women
substantially more than men;
(3) A policy prohibiting large equipment operators from using a
restroom while on the job, which adversely impacts women, who may
require the use of restrooms more than men; and
(4) Conditioning entry into an apprenticeship program on passing a
scored written test that has an adverse impact on women where the
contractor cannot establish the validity of the test consistent with
the Uniform Guidelines on Employee Selection Procedures, 41 CFR part
60-3.

Sec. 60-20.3 Sex as a bona fide occupational qualification.

Contractors may not hire and employ employees on the basis of sex
unless sex is a bona fide occupational qualification (BFOQ) reasonably
necessary to the normal operation of the contractor's particular
business or enterprise.

Sec. 60-20.4 Discriminatory compensation.

Compensation may not be based on sex. Contractors may not engage in
any employment practice that denies equal wages, benefits, or any other
forms of compensation, or equal access to earnings opportunities, on
the basis of sex, on either an individual or systemic basis, including
but not limited to the following:
(a) Contractors may not pay different compensation to similarly
situated employees on the basis of sex. For purposes of evaluating
compensation differences, the determination of similarly situated
employees is case specific. Relevant factors in determining similarity
may include tasks performed, skills, effort, levels of responsibility,
working conditions, job difficulty, minimum qualifications, and other
objective factors. In some cases, employees are similarly situated
where they are comparable on some of these factors, even if they are
not similar on others.
(b) Contractors may not grant or deny higher paying wage rates,
salaries, positions, job classifications, work assignments, shifts, or
development opportunities, or other opportunities on the basis of sex.
Contractors may not grant or deny training, work assignments, or other
opportunities that may lead to advancement in higher paying positions
on the basis of sex.
(c) Contractors may not provide or deny earnings opportunities
because of sex, for example, by denying women equal opportunity to
obtain regular and/or overtime hours, commissions, pay increases,
incentive compensation, or any other additions to regular earnings.
(d) Contractors may not implement compensation practices, including
performance review systems, that have an adverse impact on the basis of
sex and are not shown to be job related and consistent with business
necessity.
(e) A contractor will be in violation of Executive Order 11246 and
this part any time it pays wages, benefits, or other compensation that
is the result in whole or in part of the application of any
discriminatory compensation decision or other practice described in
this section.

Sec. 60-20.5 Discrimination on the basis of pregnancy, childbirth, or
related medical conditions.

(a) Discrimination on the basis of pregnancy, childbirth, or
related medical condition, including childbearing capacity, is a form
of unlawful sex discrimination. Contractors must treat people of
childbearing capacity and those affected by pregnancy, childbirth, or
related medical conditions the same for all employment-related
purposes, including receipt of benefits under fringe-benefit programs,
as other persons not so affected, but similar in their ability or
inability to work. Related medical conditions include, but are not
limited to, lactation; disorders directly related to pregnancy, such as
preeclampsia (pregnancy-induced high blood pressure), placenta previa,
and gestational diabetes; symptoms such as back pain; complications
requiring bed rest; and the after-effects of a delivery. A contractor
is not required to pay for health insurance benefits for abortion,
except where the life of the mother would be endangered if the fetus
were carried to term or except where medical complications have arisen
from an abortion, provided that nothing herein precludes a contractor
from providing abortion benefits or otherwise affects bargaining
agreements in regard to abortion.
(b) Examples of unlawful pregnancy discrimination include, but are
not limited to:
(1) Refusing to hire pregnant people or people of childbearing
capacity, or otherwise subjecting such applicants or employees to
adverse employment treatment, because of their pregnancy or
childbearing capacity;
(2) Firing a female employee or requiring her to go on leave
because the employee becomes pregnant or has a child;
(3) Limiting a pregnant employee's job duties based solely on the
fact that she is pregnant, or requiring a doctor's note in order for a
pregnant woman to continue employment while pregnant when doctors'
notes are not required for employees who are similarly situated;
(4) Providing employees with health insurance that does not cover
hospitalization and other medical costs for pregnancy, childbirth, or
related medical conditions, including contraceptive coverage, to the
same extent that hospitalization and other medical costs are covered
for other medical conditions; and
(5) Denying an alternative job assignment, modified duties, or
other accommodations to a pregnant employee who is temporarily unable
to perform some of her job duties because of pregnancy, childbirth, or
related medical conditions when such assignments, modifications, or
other accommodations are provided, or are required to be provided by a
contractor's policy or by other relevant laws, to other employees whose
abilities or inabilities to perform their job duties are similarly
affected.
(c) Leave--(1) In general. To the extent that a contractor provides
family, medical, or other leave, such leave must not be denied or
provided differently on the basis of sex.
(2) Disparate treatment. (i) A contractor must provide job-
guaranteed medical leave, including paid sick leave, for employees'
pregnancy, childbirth, or related medical conditions on the same terms
that medical or sick leave is provided for medical conditions that are
similar in their effect on employees' ability to work.
(ii) A contractor must provide job-guaranteed family leave,
including any paid leave, for male employees on the same terms that
family leave is provided for female employees.
(3) Disparate impact. Contractors that have employment policies or
practices under which insufficient or no medical or family leave is
available must ensure that such policies or practices do not have an
adverse impact on the basis of sex unless they are shown to be job
related and consistent with business necessity.

Sec. 60-20.6 Other fringe benefits.

(a) It shall be an unlawful employment practice for a contractor to
discriminate on the basis of sex with regard to fringe benefits.
(b) As used herein, ``fringe benefits'' includes, but is not
limited to, medical, hospital, accident, life insurance and retirement
benefits; profit-sharing and bonus plans; leave; dependent care
assistance; educational assistance; employee discounts; stock options;
lodging; meals; moving expense

[[Page 5279]]

reimbursements; retirement planning services; and transportation
benefits.
(c) The greater cost of providing a fringe benefit to members of
one sex is not a defense to a contractor's failure to provide benefits
equally to members of both sexes.

Sec. 60-20.7 Employment decisions made on the basis of sex-based
stereotypes.

Contractors must not make employment decisions on the basis of sex-
based stereotypes, such as stereotypes about how males and/or females
are expected to look, speak, or act. Such employment decisions are a
form of sex discrimination prohibited by Executive Order 11246, as
amended. Examples of discrimination based on sex-based stereotyping
include, but are not limited to:
(a) Adverse treatment of an employee or applicant for employment
because of that individual's failure to comply with gender norms and
expectations for dress, appearance and/or behavior, such as:
(1) Failure to promote a woman, or otherwise subjecting her to
adverse employment treatment, based on sex stereotypes about dress,
including wearing jewelry, make-up, or high heels;
(2) Harassment of a man because he is considered insufficiently
masculine, or effeminate; and
(3) Adverse treatment of an employee because he or she does not
conform to sex-role expectations by being in a relationship with a
person of the same sex.
(b) Adverse treatment of an employee or applicant for employment
because of his or her actual or perceived gender identity or
transgender status.
(c) Adverse treatment of an employee or applicant for employment
based on sex-based stereotypes about caregiver responsibilities. For
example, adverse treatment of a female employee because of a sex-based
assumption that she has (or will have) family caretaking
responsibilities, and that those responsibilities will interfere with
her work performance, is discrimination based on sex. Other examples of
such discriminatory treatment include, but are not limited to:
(1) Adverse treatment of a male employee because he has taken or is
planning to take leave to care for his newborn or recently adopted or
foster child based on the sex-stereotyped belief that women and not men
should care for children;
(2) Denying opportunities to mothers of children based on the sex-
stereotyped belief that women with children should not or will not work
long hours, regardless of whether the contractor is acting out of
hostility or belief that it is acting in the employee's or her
children's best interest.
(3) Evaluating the performance of female employees who have family
caregiving responsibilities adversely, based on the sex-based
stereotype that women are less capable or skilled than their male
counterparts who do not have such responsibilities.

Sec. 60-20.8 Harassment and hostile work environments.

(a) Harassment on the basis of sex is a violation of Executive
Order 11246, as amended. Unwelcome sexual advances, requests for sexual
favors, offensive remarks about a person's sex, and other verbal or
physical conduct of a sexual nature constitute sexual harassment when:
(1) Submission to such conduct is made either explicitly or
implicitly a term or condition of an individual's employment;
(2) Submission to or rejection of such conduct by an individual is
used as the basis for employment decisions affecting such individual;
or
(3) Such conduct has the purpose or effect of unreasonably
interfering with an individual's work performance or creating an
intimidating, hostile, or offensive working environment.
(b) Harassment because of sex includes sexual harassment (including
sexual harassment based on gender identity); harassment based on
pregnancy, childbirth, or related medical conditions; and harassment
that is not sexual in nature but that is because of sex (including
harassment based on gender identity).
(c) Though not required by this part, to ensure an environment in
which all employees feel safe, welcome, and treated fairly, it is a
best practice for a contractor to develop and implement procedures to
ensure its employees are not harassed because of sex. Examples of such
procedures include:
(1) Communicating to all personnel that harassing conduct will not
be tolerated;
(2) Providing anti-harassment training to all personnel;
(3) Establishing and implementing procedures for handling and
resolving complaints about harassment and intimidation based on sex.

[FR Doc. 2015-01422 Filed 1-28-15; 11:15 am]
BILLING CODE 4510-CM-P

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