On March 1, 2023, the Office of Federal Contract Compliance Programs (OFCCP) published the "Rescission of Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption Rule" in the Federal Register. This rescission removes the regulations established by that rule, referred to in these FAQs as the “2020 religious exemption rule,” regarding the religious organization exemption under Executive Order 11246. The rescission does not remove the Executive Order 11246 religious exemption itself, which still appears in the regulations and is available to qualifying contractors.
Overview
- What is the Executive Order 11246 religious exemption and what types of contractors may qualify?
- What prompted OFCCP to rescind the 2020 religious exemption rule?
- What effect does rescinding the 2020 religious exemption rule have?
- Does rescinding the 2020 religious exemption rule affect OFCCP’s Guidelines on Discrimination Because of Religion or National Origin?
Application of the Religious Exemption
- How can a contractor request the religious exemption under 41 CFR 60–1.5(a)(5)?
- If OFCCP determines that a contractor is entitled to the religious exemption, is it completely exempt from following Executive Order 11246?
- How will OFCCP ensure that the EO 11246 religious exemption is applied consistently with principles and case law interpreting the Title VII religious exemption?
Technical Assistance and Public Education
- What steps has OFCCP taken to educate the public on the rescission of the 2020 religious exemption rule (e.g., workshops, webinars, and the issuance of other guidance materials)?
- How can I sign up to participate in these educational events and opportunities?
Other Religious Exemptions
- How does the “ministerial exception” interact with Executive Order 11246?
- How does the Religious Freedom Restoration Act (RFRA) interact with Executive Order 11246?
Overview
1. What is the Executive Order 11246 religious exemption and what types of contractors may qualify?
Executive Order 11246 prohibits federal contractors and subcontractors from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. The Executive Order 11246 religious exemption expressly imports the religious exemption found in Title VII of the Civil Rights Act of 1964, which, as amended in 1972, permits qualifying religious corporations, associations, educational institutions, and societies to prefer in employment individuals of a particular religion.
2. What prompted OFCCP to rescind the 2020 religious exemption rule?
The rule that OFCCP promulgated in December 2020 purported to clarify the scope and application of the religious exemption. However, the 2020 religious exemption rule did not provide clarity. Instead, it resulted in increased uncertainty about the religious exemption because of its divergence from the approach to the Title VII religious exemption taken by courts and the Equal Employment Opportunity Commission, as well as from OFCCP’s past practice.
There are two principal questions at issue: Which employers can qualify as religious organizations that may exercise the exemption? And what is the scope of the exemption for qualifying employers?
As to the first question, under established Title VII case law, an employer can qualify for the exemption if its purpose and character are primarily religious. In general, the courts have weighed the following factors in assessing whether this test is satisfied: (1) whether the entity operates for a profit; (2) whether it produces a secular product; (3) whether the entity’s articles of incorporation or other pertinent documents state a religious purpose; (4) whether it is owned, affiliated with, or financially supported by a formally religious entity such as a church or synagogue; (5) whether a formally religious entity participates in the management, for instance by having representatives on the board of trustees; (6) whether the entity holds itself out to the public as secular or sectarian; (7) whether the entity regularly includes prayer or other forms of worship in its activities; (8) whether it includes religious instruction in its curriculum, to the extent it is an educational institution; and (9) whether its membership is made up by coreligionists.
On the second question, the overwhelming weight of Title VII case law confirms—consistently with the views of the EEOC and DOJ—that qualifying religious employers generally may make decisions about whether to employ individuals based on acceptance of and adherence to religious tenets, but may not insist on compliance with such tenets to the extent it would result in violation of the other nondiscrimination provisions, e.g., the prohibitions on discrimination on the basis of race, sex, and sexual orientation, and the prohibition on retaliating against employees because they have asserted their legal rights.
By comparison, OFCCP’s 2020 religious exemption rule: (1) created a test for qualifying religious organizations that deviated from the Title VII case law that governs interpretation of the Executive Order 11246 religious exemption; (2) imposed a broad rule of construction that could exempt qualifying religious organizations from Executive Order 11246’s nondiscrimination requirements on protected grounds other than religion, which was inconsistent with the presidential intent that the Executive Order 11246 religious exemption should be construed consistent with the Title VII exemption on which it is based; and, in its preamble, (3) espoused an inappropriately categorical approach to how OFCCP would handle potential Religious Freedom Restoration Act (RFRA) claims, including an incorrect assertion that, in assessing such claims, OFCCP’s interests in prohibiting discrimination in government contracting are compelling only with respect to race discrimination.
3. What effect does rescinding the 2020 religious exemption rule have?
The EO 11246 religious exemption is preserved. The rescission returns to OFCCP’s longstanding practice of following the test from extensive Title VII case law for a “religious corporation, association, educational institution, or society” that qualifies for the religious exemption. Further, the rescission reestablishes OFCCP’s long-established view, consistent with the views of DOJ and the EEOC as well as the courts, that the exemption does not permit a qualifying employer to discriminate on the basis of race, color, sex, sexual orientation, gender identity, or national origin, even if such discrimination is religiously motivated.
4. Does rescinding the 2020 religious exemption rule affect OFCCP’s Guidelines on Discrimination Because of Religion or National Origin?
No. The rescission of the 2020 religious exemption rule effectively restores OFCCP’s longstanding policy and practice and, as such, does not affect implementation of the Guidelines.
Application of the Religious Exemption
1. How can a contractor request the religious exemption under 41 CFR 60–1.5(a)(5)?
There is no specific process to request an exemption from OFCCP. Whether the religious exemption applies is a highly fact-specific inquiry that depends on the particular employment scenario at issue. If the contractor is presently under review, the contractor may notify the OFCCP compliance officer (CO) that it requests a religious exemption. Outside the context of a compliance evaluation or complaint investigation, OFCCP is committed to providing compliance assistance to contractors with questions about their obligations and offers a variety of ways to contact the agency to seek that assistance.
2. If OFCCP determines that a contractor is entitled to the religious exemption, is it completely exempt from following Executive Order 11246?
No. Executive Order 11246 provides nondiscrimination protections for employees of federal contractors by clarifying that the religious exemption does not permit contractors to discriminate against applicants or employees based on race, color, sex, sexual orientation, gender identity, or national origin, even if due to a sincere religious belief.
3. How will OFCCP ensure that the EO 11246 religious exemption is applied consistently with principles and case law interpreting the Title VII religious exemption?
The rescission will ensure that OFCCP interprets and applies the religious exemption consistently with Title VII case law, which reflects that qualifying religious employers generally may make decisions about whether to employ individuals based on acceptance of and adherence to religious tenets, but only as long as those decisions do not violate the other nondiscrimination provisions, apart from the prohibition on religious discrimination.
Technical Assistance and Public Education
1. What steps has OFCCP taken to educate the public on the rescission of the 2020 religious exemption rule (e.g., workshops, webinars, and the issuance of other guidance materials)?
OFCCP has a webpage dedicated to educating contractors, stakeholders, and the general public about the rescission of the 2020 rule. We will continue to provide any needed compliance assistance on the religious exemption, including issuing frequently asked questions, conducting webinar(s), and providing other compliance assistance requested by stakeholders. OFCCP will also announce any additional materials or webinars in the near future through our OFCCP email alerts.
2. How can I sign up to participate in these educational events and opportunities?
You may sign up for OFCCP email alerts of upcoming events and you may also submit questions or call the Help Desk for information. See https://www.dol.gov/agencies/ofccp/contact.
Other Religious Exemptions
1. How does the “ministerial exception” interact with Executive Order 11246?
The Supreme Court has recognized that the First Amendment establishes a “ministerial exception” from employment discrimination laws. The ministerial exception prohibits the government from interfering with the ability of certain religious organizations to make employment decisions about its “ministers,” a category that includes, but is not limited to, clergy. In determining whether the ministerial exception applies to any employees of a qualifying religious organization, OFCCP, in consultation with the Solicitor of Labor, would take into account all relevant circumstances as guided by Supreme Court precedent.
2. How does the Religious Freedom Restoration Act (RFRA) interact with Executive Order 11246?
The RFRA applies to all federal laws, including Executive Order 11246. If a contractor seeks an exemption to Executive Order 11246 pursuant to RFRA, OFCCP will consider that request based on the facts of the particular case. OFCCP will do so in consultation with the Solicitor of Labor and the Department of Justice, as necessary. There is no formal process for invoking RFRA specifically as a basis for an exemption from Executive Order 11246. Insofar as the application of any requirement would violate RFRA, such application shall not be required.
Last updated on February 28, 2023