Frustrated with Congress’s failure to pass the Employment Non-Discrimination Act (ENDA) and consistent with his recent Executive Order to raise the minimum wage to $10.10 per hour for employees of federal contractors, President Obama once again signed an Executive Order on Monday amending Executive Order 11246 to include "sexual orientation" and "gender identity" in the list of protected classes federal contractors may not discriminate against.
In light of the President’s action, Executive Order 11246, originally issued by President Lyndon Johnson, will now prohibit federal contractors from discriminating "against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin.” The Executive Order is not as broad as the proposed Employment Non-Discrimination Act, a law that would prohibit discrimination in employment based on sexual orientation or gender identity for all employers with 15 or more employees. There is no indication that Congress will act anytime soon to enact nationwide legislation prohibiting private employers from discriminating in hiring and employment on the basis of sexual orientation or gender identity.
Notably, the Executive Order does not contain any type of "religious exemption" meaning that religiously affiliated federal contractors and subcontractors must abide by the Executive Order. Under an Amendment to the Order issued by President George W. Bush, religiously affiliated contractors may favor individuals of a particular religion when making employment decisions. However, President Obama’s Order does not allow religious organizations with federal contracts or subcontracts to consider sexual orientation or gender identity when making employment decisions. Federal law already prohibits discrimination against federal employees based on sexual orientation and President Obama’s Order extends that protection to discrimination on the basis of gender identity.
What does this mean for many Pennsylvania employers? Frankly, not much. The Executive Order only applies to federal contractors and subcontractors. Unlike 18 other states and the District of Columbia, Pennsylvania does not have a law prohibiting employment discrimination based on sexual orientation or gender identity—however many of the Commonwealth’s largest cities including Pittsburgh, Harrisburg, and Philadelphia do. While Pennsylvania employers are free to include sexual orientation and gender identity in the list of protected classes guarded by their discriminatory harassment policies, they are under no legal obligation to do so unless they are a federal contractor or subcontractor or covered by a local ordinance. Furthermore, according to the White House, 91% of Fortune 500 companies already prohibit discrimination based on sexual orientation; and 61% already prohibit discrimination based on gender identity.
The President’s Executive Order requires the Department of Labor to prepare regulations to implement the requirements of his Order within 90 days. We will update you again when proposed regulations are released in mid-October.