Federal Contractor Update –Religious Exemption Developments, Certification Portal, Mega Construction Project Program.

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The US Department of Labor and its Office of Federal Contract Compliance Programs announced several matters of significance to federal contractors and subcontractors this month. These include the following:

  • Rescission of Religious Exemption Rule. The OFCCP has rescinded a controversial rule, “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption,” which went into effect in the waning days of the Trump administration. According to OFCCP Director Jenny Yang, the rule adopted new standards for applying the religious exemption under Executive Order 11246 (which established non-discrimination requirements based on race, color, religion, sex and national origin for federal contractors) that were at odds with existing legal authority and weakened protections for employees. With the rule’s rescission, the OFCCP returns to longstanding policy of determining the applicability of the religious exemption (for qualifying religious organizations to hire individual of a particular religion) under established caselaw as applied to the particular case.
  • Contractor Certification Portal. The OFCCP announced that the portal will be open from March 31-June 29, 2023. Through this portal, supply and service contractors and subcontractors must certify their current compliance with the OFCCP’s affirmative action and non-discrimination requirements, including the preparation of affirmative action plans (AAPs) or functional affirmative action plans (FAAPs). (New contractors have 120 days from the date of the contract to develop their AAPs and then 90 days to certify compliance through the portal). We discussed this annual certification requirement, which began in 2022, in our December 2021 E-Update. It is important to note that those who fail to certify are more likely to be selected for a compliance review.
  • Mega Construction Project Program. The OFCCP has launched a new initiative focused on construction The agency will designate certain Bipartisan Infrastructure Law-funded contracts, valued at $35 million or more and lasting at least one year, as Megaprojects. These projects will receive compliance assistance from the OFCCP with regard to recruitment, hiring, and employment practices and, of more concern, be subject to compliance reviews of the contractors’ anti-discrimination and EEO practices.