Labor & Employment Blog

On December 7, 2020, the U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP) issued its Religious Exemption Final Rule, expanding the ability of federal contractors to seek religious exemptions from the nondiscrimination requirements imposed by Executive Order 11246 in federal government contracting.  Executive Order 11246 provides an exemption from its equal opportunity requirements for “a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.”  However, the terms used in the exemption were not defined.  The new final rule amends 41 C.F.R. Part 60-1 to broadly define key terms in the exemption. 

Under the new rule, a federal contractor may establish that it is “a religious corporation, association, educational institution, or society” within the scope of the exemption if it:

1. Is organized for a religious purpose;
2. Holds itself out to the public as carrying out a religious purpose;
3. Engages in activity consistent with, and in furtherance of, that religious purpose; and
4. Either (a) operates on a not-for-profit basis; or (b) presents other strong evidence that its purpose is substantially religious.

The contractor may be, but is not required to be, affiliated with a house of worship or other entity sharing the same religious tradition.  Further, whether the contractor meets these requirements is determined by reference to the contractor’s “own sincere understanding of its religious tenets.”  This emphasis is further underscored by the new definition of “particular religion” to include “acceptance of or adherence to sincere religious tenets as understood by the employer as a condition of employment, whether or not the particular religion of an individual employee or applicant is the same as the particular religion of his or her employer or prospective employer.”  The rule provides several examples of how the new definitions could be applied.  Finally, the rule provides that it is to be construed in favor of a broad protection of religious exercise. 

The rule goes into effect on January 8, 2021.The full text of the final rule can be found here: https://www.dol.gov/agencies/ofccp/religious-exemption

If you are a federal contractor or subcontractor, or are considering becoming one, Chamberlain Hrdlicka’s employment law group is ready to assist you with answering any questions in light of these new regulations.

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