[Federal Register Volume 86, Number 10 (Friday, January 15, 2021)]
[Notices]
[Pages 4126-4128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00853]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

[Docket No. DOL-2021-0001]


Guidance Regarding Department of Labor Grants

AGENCY: Office of the Assistant Secretary for Administration & 
Management, Department of Labor.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Department of Labor publishes its ``Guidance Regarding 
Department of Labor Grants'' detailing the general rules regarding 
equal protection of faith-based organizations that govern the 
Department's grant and financial assistance programs. This guidance is 
issued pursuant to Executive Order 13798, titled ``Promoting Free 
Speech and Religious Liberty,'' signed by the President on May 4, 2017, 
and the related Office of Management and Budget guidance issued on 
January 16, 2020. This guidance also reflects changes to the 
Department's regulations recently made through the inter-agency 
rulemaking, ``Equal Participation of Faith-Based Organizations in the 
Federal Agencies' Programs and Activities,'' published on December 17, 
2020.

FOR FURTHER INFORMATION CONTACT: Carl Campbell, Office of the Senior 
Procurement Executive, Office of the Assistant Secretary for 
Administration and Management. Telephone: 1-202-693-7246. TTY/TDD 
callers may dial toll-free 1-800-877-8339 for further information.

SUPPLEMENTARY INFORMATION: The Department publishes this guidance to 
protect religious liberty in the administration of its grant and 
financial assistance programs, in compliance with Federal law. The 
guidance details the ways in which the Department's specific 
regulations protect the religious freedom of faith-based organizations 
that participate in these programs, and describes the process by which 
faith-based organizations can seek exemptions from religious non-
discrimination requirements in their employment practices. The guidance 
is provided in the Appendix of this notice.

Bryan Slater,
Assistant Secretary for Administration and Management, Department of 
Labor.

Appendix--Guidance Regarding Department of Labor Grants 1
---------------------------------------------------------------------------

    \1\ Other than the statutory and regulatory requirements 
included in the document, the contents of this guidance do not have 
the force and effect of law and are not meant to bind the public in 
any way. This document is intended only to provide clarity to the 
public regarding existing requirements under the law or agency 
policies.
---------------------------------------------------------------------------

I. Purpose and Background

    On May 4, 2017, the President signed Executive Order 13798, 
titled ``Promoting Free Speech and Religious Liberty.'' \2\ Among 
other things, Executive Order 13798 establishes a policy of 
promoting religious liberty and directed the Attorney General to 
provide guidance to Federal agencies on the requirements of Federal 
laws and policies protecting religious liberty. Accordingly, on 
October 6, 2017, the Attorney General issued a memorandum advising 
agencies on such laws and policies, including how they apply to the 
award of grants (Attorney General Memorandum).\3\ Subsequently, the 
Office of Management and Budget (OMB) issued its own guidance on 
January 16, 2020 (OMB Memorandum), directing all grant-administering 
agencies ``within 120 days of the date of this Memorandum . . . [to] 
publish policies detailing how they will administer Federal grants 
in compliance with E.O. 13798, the Attorney General memorandum, and 
this Memorandum.'' \4\
---------------------------------------------------------------------------

    \2\ Exec. Order No. 13798, 82 FR 21,675 (May 4, 2017).
    \3\ Office of Att'y Gen., Federal Law Protections for Religious 
Liberty, Memorandum for All Executive Departments and Agencies (Oct. 
6, 2017).
    \4\ Office of Mgmt. & Budget, Exec. Office of the President, M-
20-09, Guidance Regarding Federal Grants and Executive Order 13798 
(Jan. 16, 2020).
---------------------------------------------------------------------------

    The OMB and Attorney General Memoranda make clear that Federal 
law entitles religious organizations to compete on equal footing 
with secular organizations for Federal financial assistance.\5\ In 
line with these principles, the Department of Labor (DOL or 
Department) is committed to ensuring that DOL-supported social 
service programs are open to all qualified organizations, regardless 
of the organizations' religious character. In particular, any grant 
rule or policy that penalizes or disqualifies a religious 
organization from the right to compete for a grant or contract 
because of that organization's religious character could violate the 
Free Exercise Clause of the First Amendment to the Constitution, or 
governing DOL regulations. A rule or policy that imposes a 
substantial burden on an organization's exercise of religion may 
also, depending on the circumstances, violate the Religious Freedom 
Restoration Act (RFRA).
---------------------------------------------------------------------------

    \5\ In addition, the Supreme Court recently reaffirmed that the 
Constitution guarantees the full participation of faith-based 
organizations in publicly funded programs. See Espinoza v. Montana 
Dep't of Revenue, 140 S.Ct. 2246 (2020).
---------------------------------------------------------------------------

    To ensure that all organizations are treated equally in the 
issuance of awards and sub-awards of Department grant funds, and 
that Federal law's protections for religious liberty are faithfully 
adhered to, the Department is issuing this guidance. The sections 
that follow detail the general rules regarding equal protection of 
faith-based organizations that govern DOL grant programs, and the 
process by which faith-based organizations can seek exemptions from 
religious non-discrimination requirements in their employment 
practices.

II. Equal Treatment in Department of Labor Programs for Faith-Based 
Organizations

a. Equal Participation of Faith-Based Organizations

    Faith-based organizations are eligible, on the same basis as any 
other organization, to seek DOL support or participate in DOL 
programs for which they are otherwise eligible. DOL and DOL social 
service intermediary providers, as well as State and local 
governments administering DOL support, must not discriminate for or 
against an organization on the basis of the organization's religious 
character, affiliation,

[[Page 4127]]

or exercise. DOL, DOL social service providers, and State and local 
governments administering DOL support are not precluded from 
accommodating religion in a constitutionally permissible manner.\6\
---------------------------------------------------------------------------

    \6\ See 29 CFR 2.32(a) (as amended January 19, 2021). On 
December 17, 2020, the Department published in the Federal Register 
amendments to its regulations at 29 CFR part 2 subpart D, 29 CFR 
2.30 to 2.39, with an effective date of January 19, 2021. See 85 FR 
82037, 82140-42 (Dec. 17, 2020). All citations to part 2 subpart D 
are to the newly amended version of the Code of Federal Regulations.
---------------------------------------------------------------------------

i. Grant Applications and Awards

    Faith-based organizations must be eligible to apply for or 
receive Federal financial assistance under and participate in any 
DOL social service program for which the organizations are otherwise 
eligible, on the same basis as any other organization. This means 
that an organization must not be discriminated for or against on the 
basis of the organization's religious character, affiliation, or 
exercise. At the same time, all applicable limitations on the use of 
Federal assistance must be met, including that direct financial 
support must not be used for explicitly religious activities.\7\
---------------------------------------------------------------------------

    \7\ See 29 CFR 2.32.
---------------------------------------------------------------------------

    For example, organizations that apply for and are qualified to 
become or remain eligible training providers (ETPs), or other types 
of service providers, must not be excluded from being recognized as 
an available provider on account of their religious character or 
affiliation, and must be included on program lists provided to 
participants. Approvals and denials of applications to become ETPs 
or other providers, and removals of providers from such lists, must 
be documented in accordance with the procedures established under 20 
CFR part 690, subpart D (e.g., 20 CFR 690.480) in order to 
facilitate the Department's monitoring efforts related to this 
provision.
    Decisions about awards of Federal financial assistance must be 
free from political interference, and the appearance of such 
interference. Award decisions must be made on the basis of merit, 
not on the basis of the religious affiliation of a recipient 
organization or lack thereof.\8\ DOL will ensure that decisions are 
made fairly based on the substance of the proposals.
---------------------------------------------------------------------------

    \8\ See 29 CFR 2.39.
---------------------------------------------------------------------------

ii. Ongoing Operations

    Faith-based organizations that receive DOL financial assistance 
retain their programmatic independence from Federal, State, and 
local governments and may continue to carry out their missions and 
maintain their religious character. This autonomy includes, among 
other things, the right to use the organizations' facilities to 
provide DOL-supported social services without removing or altering 
religious art, icons, scriptures or other religious symbols, and the 
right to govern themselves and to select board members and employees 
on the basis of their acceptance of or adherence to the religious 
requirements or standards of the organization. Faith-based 
organizations, like all organizations receiving DOL financial 
assistance, must not use direct DOL financial assistance to support 
any explicitly religious activities and must further comply with 
appropriate costs rules related to grants. Explicitly religious 
activities include, for example, worship, religious instruction, and 
proselytization.\9\
---------------------------------------------------------------------------

    \9\ See 29 CFR 2.32.
---------------------------------------------------------------------------

b. Responsibilities of DOL, DOL Social Service Providers, and State 
and Local Governments Administering DOL Support

    DOL, DOL social service providers, and State and local 
governments administering DOL support must not discriminate against 
a program beneficiary or prospective program beneficiary on the 
basis of religion, religious belief, a refusal to hold a religious 
belief, or a refusal to attend or participate in a religious 
practice. Program providers must not impermissibly restrict program 
beneficiaries' rights to exercise religious freedom. DOL, DOL social 
service providers, and State and local governments administering DOL 
support are not precluded from accommodating religion in a 
constitutionally permissible manner.\10\
---------------------------------------------------------------------------

    \10\ See 29 CFR 2.33.
---------------------------------------------------------------------------

    DOL, DOL social service providers, and State and local 
governments administering DOL support must ensure that no direct DOL 
financial assistance is used for explicitly religious activities. 
The restriction against using financial assistance for explicitly 
religious activities does not apply when the assistance is indirect, 
meaning that the beneficiary chooses the service provider and the 
cost of the service is paid through a voucher, certificate, or other 
similar means of government-funded payment.\11\
---------------------------------------------------------------------------

    \11\ See 29 CFR 2.33(b).
---------------------------------------------------------------------------

    If an organization conducts explicitly religious activities 
using non-DOL funds and also offers social service programs using 
direct DOL support, then that organization must offer the explicitly 
religious activities at a time or in a place that is separate from 
the programs receiving direct DOL support. For example, if directly-
supported training activities are offered in a certain room in an 
organization's facility, inherently religious activities must not 
occur in that room at the same time as the training. Explicitly 
religious activities may occur in another room at the facility at 
the same time as directly-supported training, or in the same room if 
offered at a different time from the directly-supported training. 
The organization must also ensure that participation in any 
explicitly religious activities is purely voluntary, and not 
compulsory, for beneficiaries of these DOL-supported programs.\12\
---------------------------------------------------------------------------

    \12\ See id.
---------------------------------------------------------------------------

    Organizations whose programs are funded only by indirect DOL 
financial support need not modify their program activities to 
accommodate a beneficiary of DOL support who chooses to enroll in 
the organization's program and may require attendance at all 
activities that are fundamental to the program.\13\
---------------------------------------------------------------------------

    \13\ See 29 CFR 2.33(a).
---------------------------------------------------------------------------

c. Application to State and Local Funds

    State or local governments that voluntarily contribute their own 
funds to supplement funds provided by DOL to support social service 
programs may either segregate the Federal funds or commingle them. 
All commingled funds are subject to the same requirements as those 
applying to the DOL assistance. Required matching funds and program 
income are treated in the same manner as commingled funds, whether 
or not such funds are actually commingled.\14\
---------------------------------------------------------------------------

    \14\ See 29 CFR 2.36.
---------------------------------------------------------------------------

d. Effect of DOL Support on Title VII Employment Non-Discrimination 
Requirements and on Other Existing Statutes

    A faith-based organization does not forfeit its exemption from 
the Federal prohibition on employment discrimination on the basis of 
religion when the organization receives direct or indirect DOL 
support.\15\ Some DOL programs, however, were established through 
Federal statutes containing independent statutory provisions that 
require that recipients refrain from discriminating in employment on 
the basis of religion. Further information on exemptions from non-
discrimination requirements is provided in the next section of this 
guidance.
---------------------------------------------------------------------------

    \15\ Civil Rights Act of 1964 Sec.  702(a), 42 U.S.C. 2000e-1; 
see 29 CFR 2.37.
---------------------------------------------------------------------------

III. The Effect of the Religious Freedom Restoration Act on Recipients 
of DOL Financial Assistance

a. Background

    One of the many important provisions of the Department's 
regulations on equal treatment of faith-based organizations provides 
that, absent statutory authority to the contrary, ``[a] religious 
organization's exemption from the Federal prohibition on employment 
discrimination on the basis of religion, set forth in Sec.  702(a) 
of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is not forfeited 
when the organization receives direct or indirect DOL support.'' 
\16\ An organization qualifying for such exemption may make its 
employment decisions on the basis of an applicant's or employee's 
acceptance of or adherence to the religious requirements or 
standards of the organization, but not on the basis of any other 
protected characteristic. As noted above, however, some DOL programs 
were established through Federal statutes containing independent 
statutory provisions requiring that recipients refrain from 
discriminating in employment on the basis of religion. Recipients 
and potential recipients of DOL support are therefore instructed to 
consult with DOL program officials, or the Civil Rights Center, to 
determine the scope of any such requirements, including in light of 
any additional constitutional or statutory protections for 
employment decisions that may apply.\17\
---------------------------------------------------------------------------

    \16\ 29 CFR 2.37.
    \17\ Civil Rights Center, U.S. Department of Labor, 200 
Constitution Ave NW, Room N-4123, Washington, DC 20210, 202-693-
6500. Individuals with hearing or speech impairments may access this 
telephone number via TTY by calling the toll-free Federal 
Information Relay Service at 1-800-877-8339.

---------------------------------------------------------------------------

[[Page 4128]]

    Following the adoption of the Department's regulations on equal 
treatment of faith-based organizations, questions from the public 
arose regarding whether the Religious Freedom Restoration Act (RFRA) 
exempts recipients of Federal financial assistance from provisions 
of authorizing statutes and implementing regulations of programs 
that require all recipients of Federal financial assistance under 
those statutes or programs to agree not to consider religion when 
making employment decisions for positions connected with the 
Federally-financed program or activity. The Department of Labor has 
developed the exemption process described below to effectuate a 
controlling opinion and guidance of the U.S. Department of Justice 
concerning how RFRA applies to laws restricting recipients of 
Federal financial assistance from making employment decisions based 
on religion.\18\
---------------------------------------------------------------------------

    \18\ See Attorney General Memorandum at 5a; Memorandum Opinion 
for the General Counsel, Office of Justice Programs, Re: Application 
of the Religious Freedom Restoration Act to the Award of a Grant 
Pursuant to the Juvenile Justice and Delinquency Prevention Act 
(June 26, 2007) available at www.justice.gov/olc/opinions.htm.
---------------------------------------------------------------------------

b. RFRA Exemption Process

    In 1993, Congress enacted RFRA in response to the Supreme 
Court's decision in Employment Division, Department of Human 
Resources of Oregon v. Smith, which held that a law that is 
religion-neutral and generally applicable need not be justified by a 
compelling governmental interest, even if such law incidentally 
affects religious practice.\19\ By enacting RFRA, Congress sought to 
ensure that the government justify substantial burdens on religious 
exercise. Under RFRA, ``[g]overnment shall not substantially burden 
[an organization's] exercise of religion even if the burden results 
from a rule of general applicability,'' \20\ unless the Government 
``demonstrates that application of the burden to the 
[organization]--(1) is in furtherance of a compelling governmental 
interest; and (2) is the least restrictive means of furthering that 
compelling governmental interest.'' \21\ RFRA thus mandates strict 
scrutiny of any federal law that substantially burdens the exercise 
of religion, even if the burden is incidental to the application of 
a religion-neutral rule. Congress expressly applied RFRA to all 
Federal law whether adopted before or after the enactment of RFRA; 
it therefore applies to all laws governing DOL programs.\22\
---------------------------------------------------------------------------

    \19\ 494 U.S. 872, 878-79 (1990).
    \20\ 42 U.S.C. 2000bb-1(a).
    \21\ Id. Sec.  2000bb-1(b).
    \22\ See id. Sec.  2000bb-3.
---------------------------------------------------------------------------

    Under RFRA, the term ``exercise of religion'' does not require 
that a burdened religious practice be compelled by, or central to, 
an organization's system of religious belief to be protected.\23\ 
Relatedly, RFRA does not permit the government to assess the 
reasonableness of a religious belief, including the adherent's 
assessment of the religious connection between a belief asserted and 
what the government forbids, requires, or prevents.\24\ However, 
where a law enforced by DOL infringes on a religious practice that 
an organization itself regards as unimportant or inconsequential, no 
substantial burden has been imposed for purposes of RFRA.\25\
---------------------------------------------------------------------------

    \23\ See 42 U.S.C. 2000bb-2(4).
    \24\ Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 724 
(2014).
    \25\ Attorney General Memorandum at 5a.
---------------------------------------------------------------------------

    Where a law enforced by DOL prohibits religious discrimination 
in employment by recipients of DOL financial assistance, such 
prohibition will be displaced by RFRA and thus will not apply to a 
recipient with respect to employing individuals of a particular 
religious belief to perform work connected with carrying on the 
recipient's activities, provided that (i) such recipient can 
demonstrate that its religious exercise would be substantially 
burdened by applying the religious non-discrimination requirement to 
its employment practices in the program or activity at issue, and 
(ii) DOL is unable to demonstrate that applying the non-
discrimination provision to this recipient both would further a 
compelling government interest and would be the least restrictive 
means of furthering that interest.
    Under RFRA, a law substantially burdens religious exercise if it 
``bans an aspect of the adherent's religious observance or practice, 
compels an act inconsistent with that observance or practice, or 
substantially pressures the adherent to modify such observance or 
practice.'' \26\ And in identifying a compelling government 
interest, ``broadly formulated interests justifying the general 
applicability of government mandates'' are insufficient.\27\
---------------------------------------------------------------------------

    \26\ Id. at 5a.
    \27\ Gonzales v. O Centro Esp[iacute]rita Beneficente 
Uni[atilde]o do Vegetal, 546 U.S. 418, 431 (2006).
---------------------------------------------------------------------------

    Once selected as a grantee, a recipient that seeks an exemption 
from the application of a religious non-discrimination provision 
must submit a certification of its eligibility for an exemption to 
the Assistant Secretary or relevant Agency Head charged with issuing 
or administering the grant or his/her designee attesting that: (1) 
Receiving the grant is important to the recipient; (2) employing 
individuals of a particular religion is important to the religious 
identity, autonomy, or communal religious exercise of the recipient; 
and (3) conditioning receipt of the grant on compliance with the 
non-discrimination provision substantially burdens its religious 
exercise. The Assistant Secretary or relevant Agency Head will 
approve exemptions, in consultation with the Office of the 
Solicitor, on a case-by-case basis, and no later than 14 calendar 
days from the date the certification was submitted, for recipients 
that make the above attestations, unless there is good reason to 
question the certification. If the Assistant Secretary or relevant 
Agency Head takes no action by the close of the 14 calendar day 
period, the certification will be deemed approved.
    Recipients exempted from the religious non-discrimination 
requirements at issue will not be exempted or excused, by virtue of 
that particular exemption, from complying with other requirements 
contained in the law or regulation at issue. In addition, any 
exemption may be voided at any time by the Assistant Secretary or 
relevant Agency Head charged with issuing or administering the grant 
or his/her designee, in consultation with the Office of the 
Solicitor of the U.S. Department of Labor, upon a determination that 
the certification was untruthful or a material change in 
circumstances indicates that reassessment of the exemption is in 
order. Following such determination, the Assistant Secretary or 
relevant Agency Head, or his/her designee will notify the recipient 
of the invalidation, the reasons for the invalidation, and the name, 
title, telephone number and/or email address of the person to 
contact for further information.

    Signed at Washington, DC, this 12th day of January, 2021.
Bryan Slater,
Assistant Secretary for Administration and Management.

[FR Doc. 2021-00853 Filed 1-14-21; 8:45 am]
BILLING CODE 4510-FN-P