OFCCP Publishes New Proposed Rule for Religious Exemptions

The Office of Federal Contract Compliance Programs (OFCCP) has published a new rule “clarifying” religious exemptions a contractor can be granted under the Executive Order 11246 contractual obligations. OFCCP cites the need for a proposed rule for current contractors to better understand their obligations, but also to clear up ambiguity previously voiced from potential contractors, who have been reluctant in the past to accept federal contract monies due to the uncertainty surrounding current religious exemption language.

“Some religious organizations have previously provided feedback to OFCCP that they were reluctant to participate as federal contractors because of uncertainty regarding the scope of the religious exemption contained in section 204(c) of Executive Order 11246 and codified in OFCCP’s regulations.” pg. 41679

As currently written, the proposed rule would seek to clarify the following under Executive Order 11246:

• direction that regulations were not designed to address just churches; more so, religious organizations can also be applied to “employers that are organized for a religious purpose” and engage in religious exercises that further “a religious purpose”;
• guidance that contractors can “condition employment on acceptance of or adherence to religious tenets without sanction” as long as they do not “discriminate based on other protected bases";
  
• understanding for both contractors and future contractors that the proposed language will allow for the “broadest protection of religious exercise permitted by the Constitution and other laws”;
• provide definitions to key terms, such as: “religion”, “exercise of religion”, and “particular religion”, “education institute”, and “religious corporations”.

OFCCP seeks to provide direction and understanding for contractors that identify as religious corporations and religious educational organizations. Thus, documenting corporations and educational institutions could qualify for exemption, but may not depending on previous circuit court decisions –  citing “confusing” tests for determination of exemption coverage. The agency references that Spencer v. World Vision, Inc's "test" (pg. 41681) will serve as their internal foundation to determine which factors will become essential for a contractor to meet in order to qualify for religious exemption status. The 3 factors OFCCP will consider when determining if a contractor has met religious exemptions are as follows:

1. Contractor must be organized for religious purpose, and
2. Contractor must hold itself out to the public as carrying out a religious purpose, and
3. Contractor must exercise religion consistent with, and in furtherance of, a religious purpose.

“While OFCCP generally follows Title VII case law, the agency is an enforcement body, not a court, and it has authority over federal contractors specifically, rather than employers generally. Those differences counsel in favor of OFCCP’s proposed revision to this aspect of the World Vision test.” pg. 41683

The proposed rule takes the stance that religion is beyond religious belief and includes “all aspects of religious observance and practices”. OFCCP then furthers the definition of “Particular religion,” allowing for religious contractors to not only prefer employment, but also condition employment, based on the potential employee’s acceptance or adherence to an employer’s religious beliefs. OFCCP’s belief here is that contractors will now have guidance on the exemptions, as they were not designed for religious contractors to only permit the preference of potential employees that were members of the employer’s own faith. According to the agency, the new clarifications will in fact decrease contractor burden, as the risk of non-compliance is lower when the religious exemption is defined broadly.

“ […] OFCCP proposes to define Particular religion to clarify that the religious exemption allows religious contractors not only to prefer in employment individuals who share their religion, but also to condition employment on acceptance of or adherence to religious tenets as understood by the employing contractor.” pg. 41679

Finally, OFCCP provides clarification that any religious exemption itself does not exempt a religious contractor from complying with other contractor requirements under Executive Order 11246.

“Thus, an employer may not, under Title VII or Executive Order 11246, invoke religion to discriminate on other bases protected by law.” pg. 41680

OFCCP’s formal proposed rule covering religious exemptions has been published a year after Directive 2018-03, issued August 2018, and under the same OFCPP leadership. The Directive reminds OFCCP staff of the permissibility of religious exemptions and they, thereby, should poise themselves in a position to protect religious exercises versus obstructing or hindering the practices. 

The proposed rule has been published in the Federal Register. Dated August 15th, this allows for OFCCP to receive public comment until September 16, 2019.

By Marcelle Clavette, M.S., Consultant, and Lily Kerr, M.S., HR Analyst at DCI Consulting Group