This week, DOL’s Office of Federal Contract Compliance Programs (OFCCP), published in the Federal Register the rescission of a Trump-era rule that provided religious exemptions for federal contractors, reducing their liability from discrimination charges. Under Title VII of the 1964 Civil Rights Act, “religion-exercising organizations” may take religious beliefs into consideration when making employment decisions. Effective January 2021, a final rule published by OFCCP extended the same exemptions to “closely held” federal contractors and subcontractors. Shortly thereafter, litigation against the legality of the Final Rule ensued.
DOL announced in November 2021 a proposal to rescind the rule, pausing litigation efforts. The regulation to rescind the expanded religious exemption for federal contractors, published on March 1, 2023, returns OFFCP to its prior “policy and practice of considering the facts of each case and applying Title VII principles and case law and other applicable law,” according to OFCCP Director Jenny Yang.