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Office of Federal Contract Compliance Programs (OFCCP) Publishes Proposal to Rescind the Religious Exemption Rule

Published on November 9, 2021, the Proposal To Rescind Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption aims to provide clarification to the extent and application of the religious exemption contained in Executive Order 11246 (EO), that is applicable to federal contractors and subcontractors.

Executive Order 11246

The EO prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in government business in one year from discriminating in employment decisions based on race, color, religion, sex, sexual orientation, gender identity or national origin. The EO also requires government contractors to take affirmative action to ensure that equal opportunity is provided in all aspects of their employment. Additionally, EO 11246 prohibits federal contractors and subcontractors from, under certain circumstances, taking adverse employment actions against applicants and employees for asking about, discussing, or sharing information about their pay or the pay of their co‐workers.

Need for Repeal

The reason behind the need for clarification is due to the OFCCP’s previous implementation of the final rule (85 FR 79324 (2020 Rule)). The 2020 Rule intended to simplify the scope and application of the EO’s religious exemption. However, the OFCCP believes “that the 2020 rule creates a lack of clarity regarding the scope and application of the exemption because, as explained in more detail below, it misstates the law in key respects.” 

The Proposal

Through proposing the rescindment of the 2020 Rule, the Office will return to its policy and practice of interpreting and applying the religious exemption in Section 204(c) of Executive Order 11246, in accordance with Title VII principles and case law. As such, the OFCCP will abide by relevant religious liberty authorities, including the ministerial exception mandated by the religion clauses of the First Amendment. Additionally, the OFCCP will go about returning to its policy of considering any Religious Freedom Restoration Act (RFRA) claims raised by contractors on a case-by-case basis and refraining from applying any regulatory requirement to a case in which it would violate RFRA.

OFCCP encouraged any interested parties to comment on the proposal to rescind the 2020 Rule by December 9, 2021.   

HR Works will continue to monitor this topic and provide updates as more information becomes available.

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.