Federal Contractors Must Prepare to Ban Sexual Orientation Bias

Presidential order means employers should review EEO and AA policies

By Bill Leonard July 28, 2014

Audio: Cornelia Gamlem, SPHR, founder and president of the GEMS Group Ltd. and co-author of "The Big Book of HR", talks about the impact of the executive order and what employers need to do.

President Barack Obama’s executive order protecting employees of federal contractors from discrimination based on sexual orientation and gender identity should create few, if any, changes for most human resource professionals and their companies, according to experts familiar with the issue.

However, companies that do business with the U.S. government should be aware of the pending change and review their equal employment opportunity (EEO) and affirmative action (AA) policies.

“Most federal contractors already include language in their EEO and affirmative action plans that their organizations do not discriminate against job applicants and employees based on sexual orientation,” said Cornelia Gamlem, president of the GEMS Group in Herndon, Va., a consulting group that specializes in developing EEO and AA plans for federal contractors. “So employers that already have sexual orientation provisions written into their EEO plan shouldn’t have problems complying with the executive order.”

Obama signed the order July 21, 2014.

The vast majority of federal contractors are accustomed to dealing with the complex rules and requirements for conducting business with the U.S. government, and most likely will be well prepared for dealing with the changes brought about by Obama’s order, said Gamlem and Jimmy Lin, vice president of product management and corporate development at The Network in Norcross, Ga.

“Companies that have done business with the federal government for several years and have gone through the contract certification process before should be well-acquainted with what it takes to qualify for and maintain a contract,” Lin said. “But that doesn’t mean they should sit back and do nothing. My advice to businesses with federal contracts is to be proactive and take this opportunity to review your employment policies and plans.”

The presidential order protects all employees of federal contractors from sexual orientation and/or gender identity discrimination. Statistics from the Office of Federal Contract Compliance Programs (OFCCP) show that private businesses holding contracts with the federal government employ approximately 28 million workers—or nearly one-fifth of the U.S. workforce.

Even though the executive action only affects federal contractors, the decision to extend the employment protections to lesbian, gay, bisexual and transgender (LGBT) workers signals a growing trend toward accepting LGBT workers, and could set the stage for eventual passage of federal anti-discrimination legislation, according to Lin.

“The trend is definitely happening, and policies and laws that prohibit sexual orientation and gender identity discrimination are becoming more commonplace,” Lin said.

Eighteen states and the District of Columbia have enacted laws that prohibit employment discrimination on the basis of sexual orientation and gender identity, while three additional states have laws that ban sexual orientation bias. The U.S. Senate passed the Employment Non-Discrimination Act (ENDA) in November 2013, but the bill, which would prohibit discrimination for sexual orientation and gender identity, stalled in the House of Representatives.

Nearly every major piece of nondiscrimination legislation enacted by Congress during the past 50 years can be linked to presidential orders that affected federal contractors.

President John F. Kennedy took the lead in 1961, when he signed executive order 10295 that required federal contractors to ensure job applicants and employees are treated equally “without regard to their race, creed, color or national origin.”

Three years after Kennedy’s order, Congress enacted the Civil Rights Act of 1964 with Title VII, which contained similar language. Presidential orders have subsequently expanded employment discrimination protections to pregnant women, military veterans and disabled workers.

“Executive orders do set a precedent, and often major legislation is enacted after an order goes into effect,” Lin said. “Legislation like ENDA definitely has some major hurdles to overcome, but you can definitely see a trend.”

In June 2014, the Society for Human Resource Management (SHRM) board of directors voiced support for policies that prohibit workplace discrimination based on sexual orientation or gender identity by adopting a public policy statement. The SHRM statement cautions that any public-policy action should be narrowly drafted to avoid unintended consequences for employers and employees. According to SHRM officials, members of the SHRM government affairs staff will review Obama’s executive order to determine how it will affect HR professionals and their employers.

“It’s really too early to tell what the impact will be until the Labor Department issues regulations on how the executive order will be enforced,” said Gamlem, who is also a co-author of The Big Book of HR (Career Press, 2012). “Until then, we are in a wait-and-see mode before we fully know the ramifications this executive order will have.”

Obama’s executive order requires the Secretary of Labor to prepare proposed regulations within 90 days.

“Right now, it’s just speculation what the real impact might be until the regulations are released,” said Lin. “But that doesn’t mean federal contractors should just sit around and wait for that to happen.”

Lin and Gamlem recommended that businesses with federal contracts go through their employment policies and handbooks and carefully examine references to preventing workplace discriminatory practices. By reviewing employee handbooks, hiring policies and recruitment materials, employers should have a good idea what needs to be updated or revised when the presidential order takes effect.

“It’s really best to do all this now and to be prepared once the regulations are issued,” Lin said.

In addition, he recommended that employers stay consistent and fair in all their hiring policies.

“Consistency is really the key here,” Lin said. “Businesses that treat job applicants and their employees in a consistent and fair manner and adhere to their EEO or affirmative action plans generally operate in fairly safe waters.”

Bill Leonard is a senior writer for SHRM.


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