OFCCP Issues Final Rule on Religious Exemptions for Government Contractors

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The Office of Federal Contract Compliance Programs issued Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption final rule, which becomes effective on January 8, 2021. According to the OFCCP, this rule provides clarity on the religious exemption for government contractors and subcontractors in Executive Order 11246, and ensures that religious organizations can participate in federal procurement.

The final rule is intended to clarify the scope and application of the religious exemption in light of recent developments, including Supreme Court rulings and Executive Orders. Among other things, it clarifies that, in addition to churches, the exemption covers employers that: are organized for a religious purpose; hold themselves out to the public as carrying out a religious purpose; engage in exercise of religion consistent with and in furtherance of a religious purpose; and either operate on a not-for-profit basis or present other strong evidence that their purpose is substantially religious. Moreover, religious employers may condition employment on compliance with religious tenets, as long as they do not discriminate on other protected bases. This particular provision has caused concern, as some have interpreted it to permit discrimination against LGBTQ individuals.

The OFCCP identified the following as key provisions of the final rule:

  • The final rule amends 41 CFR 60-1.3 and clarifies the Executive Order 11246 religious exemption parameters by adding definitions of key terms: Exercise of religion; Particular religion; Religion; Religious corporation, association, educational institution, or society; and Sincere.
  • The final rule adds a rule of construction to provide the maximum legal protection of religious exercise permitted by the Constitution and laws, including the Religious Freedom Restoration Act.
  • The final rule also adds several illustrative examples within the definition of Religious Corporation, association, educational institution, or society to better illustrate which organizations may qualify for the religious exemption.
  • The final rule does not change the equal employment opportunity obligations under Executive Order 11246 for the vast majority of federal contractors.

The OFCCP also provided frequently asked questions along with the final rule.