U.S. Department of Labor Publishes Final Rule to Implement Legal Requirements for Religious Exemption

WASHINGTON, DC – The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) today released its “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption” Final Rule, which will be published in an upcoming edition of the Federal Register. This rule will encourage the full and equal participation of religious organizations as federal contractors. Religious organizations, many of them small nonprofits, provide such essential services as feeding the hungry, supporting refugees, and educating our nation’s students.

Executive Order 11246, which OFCCP enforces, generally requires federal contractors to abide by nondiscrimination and affirmative action requirements. Yet the order also acknowledges that religious organizations may prefer in employment “individuals of a particular religion,” so that they can maintain their religious identity and integrity. This accommodation is patterned after a nearly identical provision that has been part of the Civil Rights Act for over a half-century. The rule provides clearer interpretation of the parameters of the religious exemption by adding definitions of key terms. It adds a rule of construction to provide the maximum legal protection of religious exercise permitted by the Constitution and law, including the Religious Freedom Restoration Act. The rule also adds several examples within the definition of “religious corporation, association, educational institution, or society” to better illustrate which organizations may qualify for the religious exemption.

“Religious organizations should not have to fear that acceptance of a federal contract or subcontract will require them to abandon their religious character or identity,” said U.S. Secretary of Labor Eugene Scalia. “This rule gives full effect to Executive Order 11246’s protection of religious organizations.”

“OFCCP is committed to protecting religious liberty, while ensuring vigorous enforcement of the anti-discrimination laws the agency administers,” said Office of Federal Contract Compliance Programs Director Craig E. Leen. “This rule will help ensure that religious organizations can fully participate in federal procurement consistent with the First Amendment and other applicable federal laws.”

The final rule is a deregulatory action under Executive Order 13771 as it reduces confusion regarding the Executive Order 11246 religious exemption. The Department estimates that the rule will yield unquantifiable net cost savings overall. The rule does not change the vast majority of federal contractors’ responsibilities to comply with their equal employment opportunity and affirmative action obligations under Executive Order 11246. The Department expects that the large majority of federal contractors do not and will not seek to qualify for the religious exemption. 

In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws, as amended, make it illegal for contractors and subcontractors doing business with the federal government to discriminate in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran. In addition, contractors and subcontractors are prohibited from discriminating against applicants or employees because they have inquired about, discussed, or disclosed their compensation or the compensation of others subject to certain limitations, and may not retaliate against applicants or employees for engaging in protected activities. These laws also require that federal contractors provide equal employment opportunity through affirmative action. For more information, please call OFCCP’s toll-free helpline at 800-397-6251 or visit https://www.dol.gov/ofccp/.

The mission of the Department of Labor is to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.