OFCCP Plans Three Proposed Rulemakings in 2019

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By: Connie N. Bertram and Jack Blum

On May 22, 2019, the Trump administration released its Spring 2019 Unified Agenda of Regulatory and Deregulatory Actions.  This agenda reports on the actions that administrative agencies plan to issue in both the near and long term.  Most notably for government contractors, OFCCP announced three regulatory priorities:

TRICARE and Other Healthcare Providers

 OFCCP’s first planned regulatory initiative is entitled “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE and Certain Other Healthcare Providers.”  The abstract states that this initiative “would include limiting and otherwise altering the obligations of TRICARE and other healthcare providers” that are subject to OFCCP’s jurisdiction.  Although the agenda states that OFCCP would issue a Notice of Proposed Rulemaking in May 2019, the agency appears to have missed that deadline.

OFCCP identifies this initiative as being “deregulatory” and a “major” regulation, i.e., one having an economic impact of $100 million or more.  Last year, in Directive 2018-02, OFCCP extended a moratorium on the enforcement of compliance obligations against TRICARE subcontractors to May 7, 2021.  It is possible that the contemplated regulation will extend make permanent some or all of Directive 2018-02’s moratorium.

Religious Exemptions

In its second item, OFCCP announced that it “plans to update its regulations to comply with current law regarding protections for religion-exercising organizations.”  This initiative is also listed as “deregulatory” and its priority to the agency is described as “significant.”  The agenda states that OFCCP will issue a Notice of Proposed Rulemaking in June 2019.

Again, this regulatory initiative follows on a 2018 directive concerning religious freedom.  In Directive 2018-03, OFCCP noted several prominent Supreme Court decisions that “addressed the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals” and instructed its staff “to take these legal developments into account in all their relevant activities.”  Now, it appears the agency may be planning to codify formal religious exemptions into its regulations. 

Resolving Potential Employment Discrimination

Finally, OFCCP announced that it would publish “Procedures to Resolve Potential Employment Discrimination.”  The goal of this initiative is to “increase clarity and certainty for OFCCP stakeholders, and enhance the agency’s efficiency in remedying employment discrimination.”  Although the description in the agenda is sparse, this initiative appears to follow OFCCP Director Craig Leen’s stated goal of increasing the agency’s transparency and cooperation with the contractor community.

OFCCP intends to issue a Notice of Proposed Rulemaking for this initiative in September 2019.  The initiative is described in the agenda as non-major and “nonsignificant.”

Polsinelli’s Government Contractor Update will continue to track these developments and alert the contractor community if and when OFCCP provides more detail about its proposals.