Update Applicable to:
All employers of contractors and subcontractors

What happened?
On February 28, 2023, the U.S Department of Labor announced the rescission of the rule “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption,” which has been in effect since January 8, 2021.

What are the details?
The rescission ensures a return to the department’s prior policy and practice during the presidencies of George W. Bush and Barack Obama – of interpreting and applying the religious exemption in Executive Order 11246 consistent with Title VII principles and case law.

Enforced by the department’s Office of Federal Contract Compliance Programs, EO 11246 prohibits federal contractors and subcontractors from discriminating in employment decisions based on race, color, religion, sex, sexual orientation, gender identity, or national origin. The order contains a religious exemption for religious corporations, associations, educational institutions, and societies concerning the employment of individuals of a particular religion. The rescission preserves the order’s religious exemption, which is available to qualified contractors.

“The U.S. Department of Labor remains committed to protecting workers from discrimination and safeguarding principles of religious freedom. This rescission restores the department’s prior approach of aligning Executive Order 11246’s religious exemption with Title VII case law as applied to the facts and circumstances of each contractor when it invokes the exemption,” said Office of Federal Contract Compliance Programs Director Jenny R. Yang.

In addition to EO 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws, as amended, prohibit federal contractors and subcontractors from discrimination in employment because of disability or status as a protected veteran.

The rescission of the rule was published in the Federal Register on March 1, 2023.

For more information, please see the links below:

Department of Labor Announcement

Executive Order 11246

Federal Register Article

What do employers need to do?
Employers should review the links provided above, review their policies, and train their managers to ensure that their employees are not discriminated against, no matter their religion, culture, race, or appearance.

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