Religious training and employment under WIA Title I

Signed letter (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2005/TEGL1-05.pdf):

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM
U.S. DEPARTMENT OF LABOR
Washington, D.C. 20210
CLASSIFICATION: WIA/Religious Activities
CORRESPONDENCE SYMBOL: OPDR
DATE: July 6, 2005

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 1-05

TO: ALL STATE WORKFORCE AGENCIES
ALL STATE WORKFORCE LIAISONS
JOB CORPS CONTRACTORS
JOB CORPS CENTER DIRECTORS
STATE WORKFORCE AGENCY EQUAL OPPORTUNITY OFFICERS

FROM: EMILY STOVER DeROCCO
Assistant Secretary for Employment and Training
ANNABELLE T. LOCKHART
Director, Civil Rights Center
Office of the Assistant Secretary for Administration and Management

SUBJECT: New Rules Allowing Use of WIA Title I Financial Assistance for Religious Training and Employment, and Making Other Changes to Religion-Related Regulations Governing Recipients of DOL Support Including the One-Stop Career Center Service Delivery System and the Job Corps

1. Purpose. To notify all State Workforce Agencies (SWA) and other stakeholders within the
One-Stop Career Center service delivery system that amendments to DOL regulations permit
the use, in defined circumstances, of Workforce Investment Act (WIA) Title I financial
assistance for training and employment of WIA participants in religious activities. The
amendments also clarify other religion-related requirements governing both the workforce
investment system and other recipients of Federal support from the Department of Labor

(DOL or the Department). This guidance explains and interprets the amendments and
requires various actions to implement them.

2. References. Executive Order 13279, see
http://www.whitehouse.gov/news/releases/2002/12/20021212-6.html;
Workforce Investment Act of 1998 (WIA), 29 U.S.C. 2801 et seq., see
http://www.doleta.gov/usworkforce/wia/act.cfm; 20 CFR parts 663, 667, and 670, WIA Final
Rules, see 69 FR 41882; 29 CFR part 37, Implementation of the Nondiscrimination and
Equal Opportunity Provisions of WIA, Interim Final Rule, see 69 FR 41882 and 41894; 29
CFR part 2, subpart D, Equal Treatment in Department of Labor Programs for Faith-Based

and Community Organizations; Protection of Religious Liberty of Department of Labor
Social Service Providers and Beneficiaries, see 69 FR 41882.

RESCISSIONS:
EXPIRATION DATE: Continuing

3. Background. Executive Order (E.O.) 13279 requires Federal agencies to review and
revise their policies in order to ensure that faith-based and community organizations are able to
apply and compete on equal footing with other eligible organizations for Federal financial
assistance. In response to this E.O., and to comply with certain constitutional requirements, the

Department has implemented several religion-related changes to its general regulations and to the
regulations implementing WIA.

A primary change relates to the regulations implementing Section 188 of WIA, 29 U.S.C. § 2938,
which contains the statute’s nondiscrimination and equal opportunity provisions. In November
1999, the Department of Labor’s Civil Rights Center (CRC) published an Interim Final Rule
(IFR) to implement that statutory section. The IFR, codified at 29 CFR part 37, generally carried
over the nondiscrimination and equal opportunity-related policies and procedures in place under
WIA’s predecessor statute, the Job Training Partnership Act (JTPA). Included among the
provisions carried over to the WIA nondiscrimination IFR from the JTPA nondiscrimination
regulations was a provision barring the use of all types of WIA Title I financial assistance to

employ or train participants in religious activities. See 29 CFR 37.6(f)(1); see also 20 CFR
667.266, 667.275.

However, the Department has now determined that this broad prohibition contained in the IFR is
not required by current law. Recent Supreme Court decisions permit the use of Federal financial
assistance to support employment and training in religious activities when the assistance is
“indirect” within the meaning of the Constitution. Assistance is considered indirect, for
example, when participants are given a genuine and independent private choice among training
providers or program options and can freely elect, from among such options, to receive training
in religious activities. Individual Training Accounts (ITAs), Personal Reemployment Accounts
(PRAs), and other types of support that provide participants with genuine choices generally meet
these criteria. Of course, any employment, training or services offered must otherwise satisfy the
requirements of the program (e.g., 20 CFR part 663, subparts C and D).

As a result, after publishing two Notices of Proposed Rule-Making (NPRM) in the Federal
Register (see 68 FR 56385, September 30, 2003; 69 FR 11234, March 9, 2004) to solicit public
comment, DOL has issued two final rules, which took effect on August 11, 2004. See 69 FR
41882 and 41894, July 12, 2004. The final rule at 69 FR 41894 relates to limitations on the
employment of WIA Title I participants in construction, operation and maintenance at locations

where certain religious activities occur. Separate guidance will be issued relating to this final
rule.

The final rule at 69 FR 41882, “Equal Treatment in Department of Labor Programs for Faith-
Based and Community Organizations; Protection of Religious Liberty of Department of Labor
Social Service Providers and Beneficiaries,” amends the WIA regulations to permit the use of
indirect financial assistance under WIA Title I to support employment and training in religious
activities, and amends both the WIA regulations and DOL’s general regulations to make other
religion-related changes. A copy of this final rule is attached to this guidance as Attachment I.
The preamble to the final rule describes in detail the reasons underlying the regulatory changes
the rule accomplishes. A brief summary of the changes that are most significant for recipients
and other stakeholders within the One-Stop Career Center system appears below; this summary is
based upon the preamble to the final rule. Addressees should refer to the final rule for further
information, e.g., definitions, which generally are not repeated in this guidance.

This guidance is intended to explain and interpret the new regulatory part, 29 CFR part 2, subpart
D, that was created by the final rule at 69 FR 41882. Administrators should be aware that, in
addition to these regulations, certain other Federal laws and regulations also relate to the
treatment of religious exercise. For example, the Religious Freedom Restoration Act (RFRA)
provides that the Federal Government must not impose legal or other requirements that
substantially burden a person’s exercise of religion unless doing so is the least restrictive means
of furthering a compelling government interest, 42 U.S.C. 2000bb-1(b). Because a valid RFRA
claim gives the claimant the right to be exempted from otherwise applicable legal requirements,
some faith-based organizations may request exemptions based upon RFRA from various
statutory or regulatory requirements otherwise applicable to the One-Stop system. Because
RFRA claims can be both legally complex and highly fact-dependent, administrators who are
faced with a RFRA-based claim for exemption are encouraged to contact ETA or CRC (see
contact information below) for further guidance. Administrators should also be aware, of course,
that in addition to the legal requirements discussed in this document, other Federal statutes and
regulations also relate to the operation of the One-Stop system (see, e.g., those listed on OMB
SF-424B). Each organization within the system must also comply with all such applicable
statutes and regulations.

Summary of Most Significant Changes

New Regulatory Subpart Created. A new subpart D has been created in 29 CFR part 2. This
subpart applies to all entities that receive or administer “DOL support,” defined in 29 CFR
2.31(g), including those affiliated with the One-Stop system and including State and local

governments administering DOL support. The remaining sections in this summary outline some
of the key provisions in the new subpart.

DOL Support for Job Training and Employment in Religious Activities Now Permitted When
Assistance is “Indirect.” 29 CFR 37.6(f)(1), as amended, permits WIA participants to be
employed or trained in religious activities when “indirect” WIA financial assistance is used, as
provided in new Subpart D in 29 CFR part 2. This change was accomplished by deleting the
original language of 29 CFR 37.6(f)(1), which was the paragraph in the WIA nondiscrimination
regulations that broadly prohibited participants from being “employed or trained in sectarian
activities,” and inserting language referring readers to the new Subpart D in 29 CFR part 2.

“Indirect Assistance.” Under 29 CFR 2.33(c) in the new subpart, assistance is “indirect” within
the meaning of the Establishment Clause of the First Amendment to the Constitution when
certain requirements are met. For example, assistance is considered “indirect” when a participant
is offered a genuine and independent choice among training providers or program options and
can freely elect, from among such options, a provider or option that incorporates religious
activities. (Any indirectly-assisted training or employment offered must also satisfy the legal and
other requirements of the program under which it is offered.) Such choice may be offered to
participants by means of a voucher, coupon, credit card, or certificate, or similar mechanism that
permits individuals to choose among providers or program options. Because the regulation
permits the use of any “similar mechanism” that provides genuine and independent private
choice, there is no need to incorporate an intermediate step by which the participant, having been
given a separate piece of paper, credit card, or voucher, then hands the voucher to the selected
provider. Rather, what is necessary is that the assistance program include some mechanism that
affords the participant the means by which to effectuate a genuine and independent private choice

of provider or program option. There is no difference, in other words, between giving the
participant a piece of paper or a credit card that directs the public agency to pay the service
provider, and the agency’s providing the participant with a genuine and independent opportunity

to choose a provider and then paying the provider whose services have been selected based on
the services provided.

To ensure genuine and independent private choice, each participant must be offered at least one
option to which the participant has no religious objection. Administrators are reminded,
however, that training services, whether under ITAs or under contract, must be provided in a
manner that maximizes informed consumer choice. See 20 CFR 663.440. In addition, an
organization must not be favored for, or denied recognition as, an eligible training provider
(ETP) or other provider solely on account of religion.

Individual Training Accounts (ITA) under WIA generally satisfy the requirements to qualify as
indirect assistance, as do the Personal Reemployment Accounts recently introduced by the
Department. Therefore, ITAs and PRAs generally are examples of indirect assistance, and WIA
financial assistance is generally permitted to be used to support employment and training of
participants in religious activities when such financial assistance is distributed through ITAs and
PRAs through a program that is neutral with regard to religion.

In addition to ITAs and PRAs, other WIA activities may also qualify as “indirect” assistance
(e.g., on-the-job training (OJT), incumbent worker training, customized training, core services,
intensive services, and supportive services) insofar as the programs offering such activities are
structured (or restructured) so that they operate in a manner designed to provide participants with
a genuine and independent choice among providers or program options. For example, although
under 20 CFR part 663 Local Workforce Investment Areas (LWIAs) must provide certain
services through the One-Stop operator or through contracts with service providers, LWIAs
could potentially provide such services indirectly by — assuming other requirements are satisfied
— first, developing a list of several service providers; second, allowing participants to make a
genuine and independent private choice of the provider from which to receive services, e.g., in a
manner similar to the way participants with ITAs choose training providers; and third, paying
providers selected by participants through a contract that provides payment based on actual
services used by participants. Questions as to whether a particular employment, training or
service provision’s structure (or proposed restructure) constitutes “indirect” assistance should be
addressed to the appropriate ETA regional office, or to CRC (see below for contact information).

Voluntary Religious Activities Must Be Permitted at Job Corps Centers. The recent amendments
also require Job Corps centers to permit residents to engage in voluntary religious activities,
including holding religious services, on center premises. See 29 CFR 2.33(b)(2). Services are
not required to be “nondenominational;” rather, services may contain the religious content
desired by residents. Job Corps may impose reasonable time, place, and manner restrictions,
however. In general, direct DOL support must not be used to support inherently religious
activities, such as worship, religious instruction, or proselytization, at Job Corps centers. At
facilities where there is such a degree of government control over the program environment that
religious exercise would be significantly burdened absent affirmative steps by Job Corps
operators (such as at isolated Job Corps Centers), program officials may take affirmative steps to
ensure that program beneficiaries may exercise their religious freedom, including the use of
direct Federal support to provide access to religious services and activities where necessary to
ensure the opportunity for exercise of religious rights. Of course, Job Corps Centers and

organizations offering religious activities must inform participants that participation in any such
religious activities is voluntary.

To implement these changes, the Department revised paragraphs (b) and (c) of 20 CFR 670.555,
the regulatory provisions governing the holding of religious services on the premises of Job
Corps centers. The original language of paragraph (b) prohibited religious services from being
held on the premises of a Job Corps center “unless the center is so isolated that transportation to
and from community religious facilities is impracticable.” Paragraph (c) provided that if
religious services are held on center, “no Federal funds may be paid to those who conduct such
services, services may not be confined to one denomination, and centers may not require students
to attend services.” The Department deleted the original language of these two paragraphs, re-designated previous paragraph (d) as paragraph (b), and inserted a new paragraph (c) that cross
references 29 CFR part 2, subpart D.

Job Corps Contractors, Center Directors, and other appropriate staff have received revisions to

the Job Corps Policy and Requirements Handbook that reflect these new requirements in more
detail.

Equal Protection of Faith-Based Organizations. 29 CFR part 2, new subpart D, outlines certain
constitutional requirements related to the participation of faith-based organizations in DOL social

service programs and ensures that DOL and its programs provide the required protections to
faith-based organizations:

• Faith-based organizations must be eligible, on the same basis as any other
organization, to apply for or receive Federal financial assistance under and
participate in any DOL social service program for which the organizations are
otherwise eligible. This means that organizations must not be discriminated
against simply because some of their employees are engaged in religious
activities. (Of course, all applicable limitations on use of Federal assistance must
be met, including that participants in directly-assisted programs must not be
required to perform any religious activities.) For example, organizations that
apply for and are qualified to become or remain ETPs, or other types of service
provider, must not, on account of religion, be excluded from being recognized as
such and included on 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 663, Subpart E (e.g., 663.565(b)(4)), in order to facilitate the
Department’s monitoring efforts related to this provision.

• Faith-based organizations, like all organizations receiving DOL financial
assistance, must not use direct DOL financial assistance to support any inherently

religious activities. Inherently religious activities include, for example, worship,
religious instruction, or proselytization.

• Faith-based organizations that receive DOL financial assistance retain their
independence from Federal, State and local government 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; the right to govern themselves and to
select board members on the basis of religion; and the right to express freely their
views, including religious views.

Religion-Related Responsibilities of DOL, DOL Social Service Providers and State and Local
Governments Administering DOL Support. 29 CFR part 2, subpart D, also outlines certain
religion-related responsibilities that faith-based organizations, as well as all other entities that
receive DOL support, have under current law:

• DOL, State and local governments administering DOL support, and non-Federal
entities (other than State or local governments) using direct DOL assistance must not
discriminate for or against a program participant or prospective participant on the
basis of religion or religious belief. Program providers must not impermissibly
restrict participants’ rights to exercise religious freedom.

• DOL, State and local governments administering DOL support, and non-Federal
entities (other than State or local governments) using direct DOL assistance must
ensure that no direct DOL financial assistance is used for inherently religious
activities. Organizations receiving DOL assistance are subject to audit and should
keep adequate records of funds expenditure and provision of other types of assistance
so that compliance with these requirements can be verified. The restriction against
using direct DOL financial assistance for inherently religious activities does not apply
when assistance is “indirect,” since that restriction, by definition, applies only to
“direct” assistance. (See description of “indirect” assistance earlier in this document.)

• If an organization conducts inherently religious activities and also offers social
service programs with direct DOL support, then that organization must offer the
inherently 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. Inherently
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 inherently religious activities is purely voluntary, and not compulsory, for
participants in these DOL-supported programs, and must inform participants that such
activities are voluntary. Participants may engage in any activities associated with the
social service program that are not inherently religious, if such activities are permitted
under other requirements relating to the training program.

• Employment, training and other service programs that receive only indirect DOL
support (and no direct support) may include required religious elements that occur at
the same time and in the same place as the rest of the training. Participants may
voluntarily choose to enroll in such programs.

Application to State and Local Funds. 29 CFR part 2, subpart D, clarifies that if a state or local
government voluntarily contributes its own funds to supplement funds provided by DOL to
support social service programs, the State or local government has the option to segregate the
Federal funds or commingle them. The section requires that all commingled funds be subject to

the same requirements as those applying to the DOL assistance. Required matching funds are
treated in the same manner as commingled funds, whether or not such funds are actually
commingled.

Effect of DOL Support on Exemption from Title VII Employment Discrimination Requirements
and on Requirements of Other Existing Statutes. 29 CFR part 2, subpart D, clarifies that a faith-based organization’s right, under Title VII of the Civil Rights Act of 1964, to make religion-related employment decisions will generally remain in effect when the organization receives
direct or indirect financial assistance from DOL. The ability of religious organizations to
consider faith in making employment decisions may be limited, however, where the statute
establishing the DOL program under which the assistance is provided contains independent
provisions requiring that recipients refrain from discriminating in employment on the basis of
religion. For example, Section 188(a)(2) of WIA (29 U.S.C. § 2938(a)(2)) prohibits
discrimination on the basis of religion in employment practices in the administration of, or in
connection with, any program or activity that is either financially assisted under WIA Title I, or
part of the One-Stop delivery system and operated by a One-Stop partner. Therefore, for
programs supported with WIA financial assistance, organizations still are barred by WIA from
basing employment decisions upon religion.

Status of Non-Profit Organizations. 29 CFR part 2, subpart D, clarifies that DOL generally does
not require that organizations, including faith-based organizations, obtain Federal tax-exempt
status to be eligible for Federal financial assistance. However, some DOL programs do require
that an organization must be a “non-profit organization” in order to be eligible for financial
assistance; the new subpart provides that solicitations for these programs must explicitly state
that non-profit status is required. Further, the subpart recognizes several alternate methods for
organizations to demonstrate their non-profit status (unless the program’s statute requires the use
of a particular method). When programs do not require recipient organizations to be non-profit,

then the equal treatment requirement prevents any such requirement from being imposed solely
upon faith-based organizations.

4. Action Required. This document, and the accompanying final rule, should be disseminated
to all staff that have responsibility for, or involvement with, the selection or approval of
participant training or employment or any of the other issues discussed in this guidance. States
and other recipients of WIA financial assistance must develop policies and procedures to
implement, monitor compliance with, and train staff on the provisions in subpart D. Any
additional information or guidance developed regarding these issues will be posted on ETA’s
Web site at http://www.doleta.gov and on CRC’s Web site at
http://www.dol.gov/oasam/programs/crc/crcwelcome.htm.

5. Inquiries. Questions or other concerns regarding this guidance should be addressed to the
appropriate ETA Regional Office or to CRC Senior Policy Advisor Denise Sudell at (202) 693-

6554 or [email protected]. The above voice telephone number can be reached through the

toll-free Federal Information Relay Service at (800) 877-8339 (TTY/TDD).

6. Attachments.

Attachment I, the cited 2004 final rule at 69 FR 41882 (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2005/TEGL1-05_Attach.pdf). The linked PDF begins a separate final rule after this article; only the complete rule cited by the letter appears below.

Monday,
July 12, 2004
Part II
Department of Labor
Employment and Training Administration
20 CFR Parts 667 and 670
29 CFR Parts 2 and 37
Workforce Investment Act—Equal
Treatment in Department of Labor
Programs for Faith-Based Community
Organizations; Protection of Religious
Liberty, and Limitation on Employment
of Participants; Final Rules

1 As in the proposed rule, the term ‘‘direct DOL
support’’ is used here to refer to DOL support
provided directly to a religious or other non-governmental organization within the meaning of
DEPARTMENT OF LABOR
Employment and Training
Administration
20 CFR Parts 667 and 670
Office of the Secretary
29 CFR Parts 2 and 37
RIN 1290–AA21
Equal Treatment in Department of
Labor Programs for Faith-Based and
Community Organizations; Protection
of Religious Liberty of Department of
Labor Social Service Providers and
Beneficiaries
AGENCY: Employment and Training
Administration and the Office of the
Secretary, Labor.
ACTION: Final rule.
SUMMARY: Consistent with constitutional
guidelines, this final rule clarifies that
faith-based and community
organizations may participate in the
United States Department of Labor (DOL
or the Department) social service
programs without regard to the
organizations’ religious character or
affiliation, and are able to apply for and
compete on an equal footing with other
eligible organizations to receive DOL
support. In addition, in order to
consolidate the Department’s
regulations on religious activities, this
final rule revises the Employment and
Training Administration’s (ETA)
regulation on religious services at Job
Corps centers and the Department’s
Workforce Investment Act of 1998
(WIA) regulations relating to the use of
WIA Title I financial assistance to
support employment and training in
religious activities, and employment at
specified locations defined with
reference to certain religious activities.
The U.S. Department of Labor supports
the participation of faith-based and
community organizations in its social
service programs.
DATES: Effective Date: August 11, 2004.
FOR FURTHER INFORMATION CONTACT: On
the Office of the Secretary’s general
regulations, 29 CFR part 2, contact:
Rhett Butler, Associate Director for
Policy Development, DOL Center for
Faith-Based and Community Initiatives
(CFBCI), (202) 693–6450. On 20 CFR
part 667, contact Maria K. Flynn, Acting
Administrator, Office of Policy
Development, Evaluation and Research,
Employment and Training
Administration, (202) 693–3700. On 20
CFR 670.555, contact: Grace Kilbane,
Administrator of the National Office of
Job Corps, (202) 693–3000. On 29 CFR
37.6, contact Annabelle T. Lockhart,
Director, Civil Rights Center (CRC),
(202) 693–6500. Please note these are
not toll-free numbers. Individuals with
hearing or speech impairments may
access these telephone numbers via TTY
by calling the toll-free Federal
Information Relay Service at 1–800–
877–8339.
SUPPLEMENTARY INFORMATION:
I. Background—The March 9, 2004
Proposed Rule
On March 9, 2004, the Department
published a proposed rule (69 FR
11234) to amend the Department’s
general regulations to make clear that
faith-based and community
organizations may participate in the
Department’s social service programs,
including as recipients of Federal
financial assistance. The proposed rule
also set forth conditions for seeking,
receiving, and using DOL support
related to DOL programs. The proposed
rule was part of the Department’s effort
to fulfill its responsibilities under two
Executive Orders issued by President
George W. Bush. The first of these
Orders, Executive Order 13198 (66 FR
8497), published in the Federal Register
on January 31, 2001, created Centers for
Faith-Based and Community Initiatives
in five cabinet departments—Education,
Health and Human Services, Housing
and Urban Development, Justice, and
Labor—and directed these Centers to
identify and eliminate regulatory,
contracting, and other programmatic
obstacles to the equal participation of
faith-based and community
organizations in the provision of social
services by these Departments. The
second of these Executive Orders,
Executive Order 13279, published in the
Federal Register on December 16, 2002
(67 FR 77141), charged executive branch
agencies to give equal treatment to faith-based and community groups that apply
for Federal financial assistance to meet
social needs in America’s communities.
In the Order, President Bush called for
an end to discrimination against faith-based organizations and ordered
implementation of these policies
throughout the executive branch in a
manner consistent with the First
Amendment to the United States
Constitution. He further directed that
faith-based organizations be allowed to
retain their religious autonomy over
their internal governance and
composition of boards, and over their
display of religious art, icons,
scriptures, or other religious symbols,
when participating in Federally-financed programs. The Administration
believes that there should be an equal
opportunity for all organizations—both
faith-based and otherwise—to
participate as partners in Federal
programs.
Consistent with the President’s
initiative, the Department’s proposed
rule of March 9, 2004, proposed to
amend the Department’s general
regulations as well as the specific
regulations governing Job Corps and
implementing the Workforce Investment
Act. The objective of the proposed rule
was to ensure that DOL-supported social
service programs were open to all
qualified organizations, regardless of
their religious character, and to
establish clearly the proper uses of DOL
support and the conditions for receipt of
such support. In addition, this proposed
rule was designed to ensure that the
implementation of the Department’s
social service programs would be
conducted in a manner consistent with
the requirements of the Constitution,
including the Religion Clauses of the
First Amendment. The proposed rule
had the following specific objectives:

1. Participation by faith-based
organizations in the Department of
Labor’s programs. The proposed rule
clarified that organizations are eligible
to participate in DOL social service
programs without regard to their
religious character or affiliation, and
that organizations must not be excluded
from competing for DOL support simply
because they are faith-based.
Specifically, the proposed rule included
regulatory provisions specifying that
faith-based organizations would be
eligible to compete for DOL support on
the same basis, and under the same
eligibility requirements, as all other
organizations. The proposed rule also
included provisions designed to ensure
that DOL, DOL social service providers,
and State and local governments
administering DOL support would be
prohibited from discriminating for or
against organizations on the basis of
religion, religious belief, or religious
character in the administration or
distribution of DOL support, including
grants, contracts, and cooperative
agreements.
2. Inherently religious activities. The
proposed rule included requirements
related to inherently religious activities
in DOL-supported social service
programs. Specifically, under the
proposed regulatory provisions, an
organization could not use direct DOL
support 1 for inherently religious

the Establishment Clause of the First Amendment.
For example, direct DOL support may occur where
the Federal Government, a State or local
government administering DOL support, or a DOL
intermediary social service provider selects an
organization and obtains the needed services
straight from the organization (e.g., via a grant or
cooperative agreement).
activities, such as worship, religious
instruction, or proselytization. If the
organization engaged in such activities,
the proposed provisions required the
organization to offer those activities
separately in time or location from the
social service programs receiving direct
DOL support, and participation by
program beneficiaries in any such
inherently religious activities would
have to be voluntary. The proposed
requirements ensured that direct DOL
support would not be used to support
inherently religious activities. Such
support could not be used, for example,
to conduct prayer meetings, worship
services, or any other activity that is
inherently religious.
The proposed rule clarified that this
restriction would not mean that DOL
social service providers could not
engage in inherently religious activities,
but only that such providers could not
use direct DOL support for these
activities. Under the proposed rule,
such providers would have to take steps
to separate in time or location their
inherently religious activities from the
services they offer with direct DOL
support. The proposed rule further
provided that these restrictions on
inherently religious activities would not
apply where DOL support was
indirectly provided. The proposed rule
clarified that indirect DOL support
referred to DOL support that is indirect
within the meaning of the Establishment
Clause of the First Amendment to the
Constitution. An organization receives
indirect support if, for example, a
program beneficiary redeems a voucher,
coupon, certificate, or similar
mechanism that was provided to that
individual using DOL financial
assistance under a program that was
designed to give that individual a
genuine and independent private choice
among providers or program options.
In addition, the proposed rule
clarified that the legal restrictions
applied to inherently religious activities
in DOL social service programs within
correctional facilities would sometimes
be different from the legal restrictions
that are applied to other DOL-supported
social service programs, because the
degree of government control over
correctional environments sometimes
warrants affirmative steps by prison
officials, in the form of chaplaincies and
similar programs, to ensure that
prisoners have opportunities to exercise
their religion.
The proposed rule also recognized
that the legal restrictions applied to
inherently religious activities in other
DOL-supported social service programs
under extensive government control, for
example isolated residential Job Corps
facilities, would sometimes be different
from the legal restrictions applied to
other DOL-supported social service
programs. These restrictions would
differ because the extensive government
control over the environment of these
DOL social service programs sometimes
would require that affirmative steps be
taken by program officials to ensure that
the beneficiaries of these programs have
the opportunity to exercise their
religion. The proposed rule emphasized
that any participation in such inherently
religious activities would have to be
voluntary and that nothing in the
proposed rule was intended to restrict
the exercise of rights or duties
guaranteed by the Constitution. For
example, the proposed rule specified
that program officials, although
permitted to impose reasonable time,
place, and manner restrictions, would
not be allowed to restrict program
beneficiaries’ ability to freely express
their views and to exercise their right to
religious freedom. In addition, the
proposed rule specified that residential
facilities receiving DOL support would
be required to permit residents to
engage in voluntary religious activities,
including holding religious services, at
such facilities (although reasonable
time, place, and manner restrictions
would be permitted).

3. Independence of faith-based
organizations. The proposed rule also
clarified that a faith-based organization
that is a DOL social service provider or
that participates in DOL social service
programs would retain its independence
and could continue to carry out its
mission, including the definition,
development, practice, and expressions
of its religious beliefs, although no
organization, faith-based or otherwise,
could use direct DOL support for any
inherently religious activities, such as
worship, religious instruction, or
proselytization. Among other things, the
proposed rule included provisions that
explicitly stated that a faith-based
organization could use space in its
facilities to provide DOL-supported
social services without removing
religious art, icons, scriptures, or other
religious symbols. In addition, under
the proposed rule, a DOL-supported
faith-based organization could retain its
name (even if the name made a religious
reference), select its board members and
otherwise govern itself on a religious
basis, and include religious references
in its mission statements and other
governing documents.
4. Nondiscrimination in providing
assistance. The proposed rule provided
that DOL, DOL social service
intermediary providers, DOL social
service providers in their use of direct
DOL support, and State and local
governments could not, in providing
social services (including outreach for
such services), discriminate for or
against a current or prospective program
beneficiary on the basis of religion,
religious belief, or absence thereof. The
proposed rule clarified that
organizations receiving DOL support
indirectly (for example, as a result of the
genuine and independent private choice
of a beneficiary of a program offering
choice among providers or program
options) would not be prohibited from
offering assistance that integrates faith
and social services and requires
participation in all aspects of the
organizations’ programs and activities,
including the religious aspects.
5. Assurance requirements. The
proposed rule also prohibited, and
directed the removal of, provisions in
the Department’s grant documents,
agreements, covenants, memoranda of
understanding, policies, or regulations
that require only faith-based
organizations applying for or receiving
DOL support to provide assurances that
they would not use such support for
inherently religious activities. Under the
proposed rule, all DOL social service
providers, as well as State and local
governments administering DOL
support, would be required to carry out
all DOL-supported activities in
accordance with all program
requirements and other applicable
requirements governing the conduct of
DOL-supported activities, including
those requirements prohibiting the use
of direct DOL support for inherently
religious activities. In addition, to the
extent that provisions in grant
documents, agreements, covenants,
memoranda of understanding, policies,
or regulations used by DOL, or by a DOL
social service intermediary provider or
a State or local government
administering DOL support, disqualify
organizations from participating in
DOL’s programs because such
organizations are motivated or
influenced by religious faith to provide
social services, or because of the
organizations’ religious character or
affiliation, the proposed rule removed
such restrictions, which are inconsistent
with governing law.

II. Discussion of Comments Received on
the Proposed Rule
The Department received comments
on the proposed rule from 7
commenters—two individuals, four civil
or religious liberties organizations, and
one State agency receiving financial
assistance under the Workforce
Investment Act (WIA). Some comments
were generally supportive of the
proposed rule; others were critical. The
following is a summary of the
comments, and the Department’s
responses.
Participation by Faith-Based
Organizations in Department of Labor
Social Service Programs
Several commenters expressed
appreciation and support for the
Department’s efforts to clarify the rules
governing participation of religious
organizations in its programs. Two
commenters commended DOL, in
particular, for explicitly stating that
DOL, DOL social service providers, and
State and local governments
administering DOL-supported social
service programs may not discriminate
either for or against religious providers.
Other commenters disagreed with the
proposed rule, arguing that it would
allow Federal financial assistance to be
given to ‘‘pervasively sectarian’’
organizations in violation of what the
commenters described as a
constitutional principle that government
may not fund programs that are so
permeated by religion that their secular
side cannot be separated from the
sectarian. These commenters
maintained that the rule places no
limitations on the kinds of religious
organizations that can receive financial
assistance, and they requested that
‘‘pervasively sectarian’’ organizations be
barred from receiving such assistance
from the Department.
We do not agree that the Constitution
requires the Department to assess the
overall religiousness of an organization
and deny financial assistance to
organizations that are ‘‘pervasively
sectarian.’’ Rather, faith-based (and
other) organizations that receive direct
DOL support must not use such support
for inherently religious activities, and
they must ensure that such religious
activities are separate in time or location
from services directly supported by the
Department and that participation in
such activities by program beneficiaries
is voluntary. Furthermore, under the
proposed rule, such religious
organizations are prohibited from
discriminating for or against program
beneficiaries on the basis of religion or
religious belief, and participating
organizations that violate these
requirements are subject to applicable
sanctions and penalties. The regulations
would thus ensure that direct DOL
support is not used for inherently
religious activities, as required by
current case law.
Moreover, the Supreme Court’s
‘‘pervasively sectarian’’ doctrine—
which held that there are certain
religious institutions in which religion
is so pervasive that no government aid
may be provided to them, because their
performance of even ‘‘secular’’ tasks
will be infused with religious purpose—
no longer enjoys the support of a
majority of the Court. Four Justices
expressly abandoned it in Mitchell v.
Helms, 530 U.S. 793, 825–29 (2000)
(plurality opinion), and Justice
O’Connor’s opinion in that case, joined
by Justice Breyer, set forth reasoning
that is inconsistent with its underlying
premises, see id. at 857–58 (O’Connor,
J., concurring in judgment) (requiring
proof of ‘‘actual diversion of public
support to religious uses’’). Thus, six
members of the Court have rejected the
view that aid provided to religious
institutions will invariably advance the
institutions’ religious purposes. That
view is the foundation of the
‘‘pervasively sectarian’’ doctrine. The
Department therefore believes that
under current precedent, the
Department may provide DOL support
to all social service providers, without
regard to religion and without criteria
that would require providers to abandon
their religious expression or character.
As a result, the Department declines to
make the requested change.
Another commenter expressed
concern that section 2.32(a) of the
proposed rule failed to circumscribe
how and when religion could be
accommodated. Section 2.32(a) states in
pertinent part: ‘‘DOL, DOL social service
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 or
affiliation, although this requirement
does not preclude DOL, DOL social
service providers, or State and local
governments administering DOL
support from accommodating religion in
a manner consistent with the
Establishment Clause.’’ The commenter
suggested that the Department revise the
rule to set limits on permissible
accommodation, for instance, by stating
that accommodation must be handled in
an even-handed manner and not favor
some faiths over others; by stating that
accommodation is permissible only if it
removes a substantial burden on
religious exercise; and by ‘‘prohibiting
accommodations to religion that would
vitiate the essence of the program, or
which would work a hardship on
participants.’’
The Department does not agree that
the requested change is necessary. The
purpose of the rule is to clarify that all
organizations, both faith-based and
otherwise, are eligible to participate in
DOL social service programs without
regard to their religious character or
affiliation and to establish clearly the
proper uses to which DOL support
could be put and the conditions for
receipt of such support. The rule is
designed to ensure that the
implementation of the Department’s
social service programs will be
conducted in a manner consistent with
the requirements of the Constitution,
including the Religion Clauses of the
First Amendment. All accommodations
provided to religious individuals or
organizations must be done within the
confines of law. Such law includes
statutory program requirements as well
as the conditions set forth in this rule.
The statement in the rule concerning
accommodation simply clarifies that
otherwise valid religious
accommodations do not violate the
religious nondiscrimination
requirement of the rule.
One commenter requested that the
Department revise § 2.32(c) to clarify
that an organization may not be
discriminated against because it lacks a
faith-based component. This section as
proposed stated in pertinent part: ‘‘A
grant document, agreement, covenant,
memorandum of understanding, policy,
or regulation that is used by DOL, a
State or local government, or a DOL
social service intermediary provider in
administering a DOL social service
program must not disqualify religious
organizations from receiving DOL
support or participating in DOL
programs on the grounds that such
organizations are motivated or
influenced by religious faith to provide
social services, or on the grounds that
such organizations have a religious
character or affiliation.’’
We believe the commenter’s concerns
are already addressed by § 2.32(a),
which provides, inter alia, that ‘‘DOL,
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 or
affiliation’’ (emphasis added). However,
we have modified the language of the
final rule to further address this concern
and to make even more clear that it is
impermissible to disqualify an
organization from receiving DOL

support based on the organization’s
religious faith, character, or affiliation,
or because such organization lacks a
religious component. Section 2.32(c) of
the final rule reads: ‘‘A grant document,
agreement, covenant, memorandum of
understanding, policy, or regulation that
is used by DOL, a State or local
government, or a DOL social service
intermediary provider in administering
a DOL social service program must not
disqualify organizations from receiving
DOL support or from participating in
DOL programs on the grounds that such
organizations are motivated or
influenced by religious faith to provide
social services, have a religious
character or affiliation, or lack a
religious component.’’
Inherently Religious Activities
Some commenters suggested that the
proposed rule does not sufficiently
detail the scope of religious content that
must be omitted from programs
receiving DOL support. For example,
two commenters suggested that the
explanation given of ‘‘inherently
religious activities’’ as ‘‘worship,
religious instruction, or proselytization’’
is unclear or incomplete. Relatedly, one
commenter suggested that the proposed
rule would authorize conduct that
would impermissibly convey the
message that government endorses
religious content. Another commenter
suggested that the Department modify
the proposed rule to make clear that the
government may not disburse public
funds to organizations that convey
religious messages or in any way
advance religion. Another commenter
suggested that the rule define
‘‘participation’’ to provide guidance as
to whether ‘‘compelled but passive
presence at religious activities * * *
constitute[s] coerced participation.’’
Finally, one commenter requested
clarification whether it would be
permissible for a DOL social services
provider to engage in inherently
religious activity at a beneficiary’s
request before or following the
provision of social services that receive
direct financial assistance.
The Department disagrees with these
comments and declines to make the
requested changes. Concerning the
rule’s definition of ‘‘inherently religious
activities,’’ it would be difficult, if not
impossible, to establish a complete list
of all inherently religious activities.
Inevitably, a regulatory definition would
exclude some inherently religious
activities while including activities that
arguably may not be inherently
religious. Rather than attempt to
establish an exhaustive regulatory
definition, the Department has decided
to retain the language of the proposed
rule, which provides examples of
prohibited activities. This approach is
consistent with Supreme Court
precedent, which likewise has not
comprehensively defined inherently
religious activities. In response to the
suggestion that the rule will indicate or
create the appearance that the
Department endorses religious content,
it again merits emphasis that the rule
forbids the use of direct government
assistance for inherently religious
activities and states that any such
activities must be voluntary for
participants and separated in time or
location from activities directly
supported by the Department. As to the
suggestion that the government must
exclude from its programs those
organizations that convey religious
messages or advance religion with their
own funds, the Department finds no
constitutional support for this view. As
noted above, the Supreme Court has
held that the Constitution forbids the
use of direct Federal financial assistance
for inherently religious activities, but
the Court has rejected the presumption
that religious organizations will
inevitably divert such assistance for
their own religious activities. The
Department likewise rejects the view
that faith-based organizations cannot be
trusted to fulfill their written promises
to adhere to grant or contract
requirements.
Moreover, for reasons similar to those
articulated above regarding ‘‘inherently
religious activities,’’ the Department
does not believe that it would be
appropriate to provide a more detailed
definition of ‘‘participation.’’
Nonetheless, we reaffirm that a
beneficiary’s participation in any
religious activities offered by a recipient
of DOL support must be entirely
voluntary and further, that such
activities must be offered separately in
time or location from social service
programs receiving direct DOL support.
We recommend that DOL social service
providers, including State and local
governments administering DOL-supported programs, help to ensure that
beneficiaries and prospective
beneficiaries of their programs
understand their rights by having
literature available for the beneficiaries
explaining their rights.
Finally, in response to commenter’s
request for further clarification of the
‘‘separate, in time or location’’
requirement, the Department declines to
revise this portion of the rule, because
the Department does not believe that it
is ambiguous or necessitates additional
regulation for proper adherence.
Regarding the example posed by the
commenter, the Department believes it
would be permissible under the rule for
staff of a DOL-supported social services
provider to engage in inherently
religious activity with a beneficiary at a
beneficiary’s request before or after the
provision of social service activities
directly supported by DOL. Such
activity would be permitted because it
would be voluntary (because it was at
the beneficiary’s request) and separate
in time from any social service activity
receiving direct DOL support (because it
took place before or after, but not
during, the social service activities
directly supported by DOL). Under the
rule, an organization receiving direct
DOL support is responsible for
maintaining a distinction between the
social service activities directly
supported by DOL and any privately-supported inherently religious
activities. Of course, no direct DOL
support can be used for inherently
religious activities.
Voucher-Style Programs Under the Rule
Two commenters claimed that the
proposed rule would authorize the use
of voucher programs to provide
assistance to faith-based organizations
without instituting adequate
‘‘constitutional safeguards,’’ and
requested that the rule be revised to
comply with the framework instituted
by Zelman v. Simmons-Harris, 536 U.S.
639 (2002). These commenters
emphasized the need for program
beneficiaries to have a ‘‘real choice’’ of
their social service provider and
suggested there was ‘‘no * * * social
service structure in place to ensure a
real choice.’’ One commenter requested
clarification whether inherently
religious activities conducted by a
service provider receiving both direct
and indirect support must be separate in
time and location from DOL program
services. This commenter also requested
reconciliation between, as the
commenter described it, the rule’s
requirement that service providers
receiving vouchers must satisfy ‘‘all
legal and programmatic requirements’’
(see 2.32(c) and 2.33(c), both referring to
‘‘all applicable legal and programmatic
requirements’’) and the rule’s
implication that the Department may
‘‘dispense with programmatic
requirements where doing so relieves a
substantial burden on religious
practice.’’ Last, one commenter
requested a rule change that would
make the nondiscrimination provision
of § 2.33(a) applicable to service
providers receiving indirect support.
The Department respectfully declines
to adopt the recommendations of the
commenters requesting incorporation of

additional requirements by regulation.
The proposed rule clearly states that any
organization receiving indirect DOL
support, whether through a voucher-style program or other qualifying
program offered by the Department,
must comply with Federal law. Such
law includes constitutional
requirements. The Department thus
believes that the proposed rule
adequately addresses these commenters’
constitutional concerns.
Regarding the inquiry whether
inherently religious activities conducted
by a social service provider receiving
both direct and indirect support must be
separate in time and location from DOL
program services, § 2.33(b)(1) of the rule
plainly prohibits service providers from
using direct DOL support to conduct
inherently religious activities. Using any
direct support to conduct such activities
would violate this prohibition, even if
the organization also received indirect
support. Religious activity need not be
restricted, however, when related to
services (or part of programs) that
receive only indirect DOL support.
The Department also disagrees with
the suggestion that the rule is
inconsistent in requiring faith-based
organizations to meet applicable legal
and programmatic requirements but also
permitting constitutional
accommodations for certain religious
practices. One fundamental purpose of
this rule is to allow organizations to be
eligible for Department programs
without regard to their religious
character or affiliation and to prevent
the exclusion of organizations from
competing for DOL support simply
because of their religious character.
Thus, faith-based organizations are
eligible to compete for DOL support on
the same basis, and under the same
eligibility requirements, as all other
organizations. The statement in the
proposed rule that indicated
accommodations to religion may be
permitted, ‘‘in a manner consistent with
the Establishment Clause,’’ does not
signify that discrimination against or
preferential treatment for religion is
permissible, but rather acknowledges
the special circumstances involved
when DOL provides support to religious
organizations. Necessarily included
within these special circumstances are
any accommodations for religious
practices that are consistent with the
Free Exercise and Establishment Clauses
of the Constitution.
The Department also disagrees with
the commenter’s request to extend the
proposed rule’s nondiscrimination
provision (§ 2.33(a)) to religious
organizations receiving indirect DOL
support. As an initial matter, this final
rule does not alter any
nondiscrimination provisions of
existing statutes, including statutes
governing programs providing DOL
support. See section of preamble
entitled Applicability and Notice of
Nondiscrimination Requirements. Thus,
to the extent that such statutes restrict
the activities of indirectly funded
organizations, those restrictions remain
in effect under this rule. Questions
regarding the applicability of these other
statutes may be addressed to the
appropriate DOL program official or the
DOL’s Civil Rights Center. See § 2.35 of
this final rule. Additionally, the
religious freedom of beneficiaries in a
program receiving indirect support is
protected by the guarantee of genuine
and independent private choice.
Officials administering public support
under a program providing indirect
assistance have an obligation to ensure
that every eligible applicant receives
services from some provider, and no
beneficiary may be required to receive
services from a provider to which the
beneficiary has a religious objection. In
other words, DOL-supported vouchers
and other mechanisms for providing
indirect support must be available to all
participants regardless of their religious
belief, and those who object to a
religious provider have a right to
services from some alternative provider.
Exceptions for Chaplains and Certain
DOL-Supported Social Service Programs
From the Restriction on Direct Funding
of ‘‘Inherently Religious’’ Activities
Some commenters objected to the
exception from the ‘‘inherently religious
activities’’ restrictions for religious or
other organizations assisting chaplains
in carrying out their duties in prisons,
detention facilities, or community
correction centers. Others criticized the
rule for excepting certain DOL-supported social service programs—i.e.,
those that involve a high degree of
government control over the program
environment—from the restriction on
direct financial assistance of inherently
religious activities, asserting that there
is no legal basis for such an exception.
One commenter suggested modifying
the proposed rule to clarify that
religious accommodation at remote Job
Corps centers must be available to all
participants and not limited to
participants of dominant religions. Still
another commenter criticized the rule
for lacking clarity, and expressed
concern that too much discretion was
being given to the government in
determining which programs have a
high degree of government control.
The Department respectfully disagrees
with these comments. As noted in the
proposed rule, the legal restrictions that
apply to religious programs within
correctional facilities will sometimes be
different from legal restrictions that
govern other Department programs. That
is because correctional institutions are
heavily regulated, and this extensive
government control over the prison
environment means that prison officials
must sometimes take affirmative steps,
in the form of chaplaincies and similar
programs, to provide an opportunity for
prisoners to exercise their religion.
Without such efforts, religious freedom
would not exist for Federal prisoners.
See Cruz v. Beto, 450 U.S. 319, 322 n.2
(1972) (explaining that ‘‘reasonable
opportunities must be afforded to all
prisoners to exercise the religious
freedom guaranteed by the First and
Fourteenth Amendments without fear of
penalty’’); Abington School District v.
Schempp, 374 U.S. 203, 299 (1963)
(Brennan, J., concurring) (observing that
‘‘hostility, not neutrality, would
characterize the refusal to provide
chaplains and places of worship for
prisoners . . . cut off by the State from
all civilian opportunities for public
communion’’). Of course, religious
activities must be voluntary for the
inmates.
Sometimes the activities of chaplains
and those assisting them will be
inherently religious. For example, a
chaplain might conduct a voluntary
worship service or administer
sacraments. The rule does not effect any
change in the professional or legal
responsibilities of chaplains or those
persons or organizations assisting them.
Nor does it diminish the fact that
chaplains’ duties often include the
provision of secular counseling. Rather,
the rule is intended simply to make
clear that the rule’s otherwise-applicable restrictions on the use of
direct DOL support for inherently
religious activities do not apply to
chaplains in correctional facilities or
those functioning in similar roles.
Accordingly, the rule as stated reflects
the law and requires no change.
For similar reasons, the legal
restrictions that apply to religious
activities within some DOL-supported
social service programs, such as isolated
residential Job Corps facilities, may
sometimes be different from the legal
restrictions that govern other DOL
programs. This is because where there is
extensive government control over the
environment of a DOL-supported social
service program, like an isolated
residential Job Corps facility, program
officials must sometimes take
affirmative steps, in the form of access
to ministers and similar programs, to
ensure that program beneficiaries may

exercise their religious freedom. Cf.
Katcoff v. Marsh, 755 F.2d 223, 234 (2d
Cir. 1985) (finding it ‘‘readily apparent’’
that government is obligated by the First
Amendment to make religion available
to members of the Army who otherwise
would not have access to their religion
because they are often in isolated areas
without access to religious
opportunities). Without such efforts,
religious freedom would not exist for
these DOL program beneficiaries. Of
course, participation in such activities
must be voluntary. In response to the
suggestion that the rule be modified to
clarify that any religious
accommodation at Job Corps centers
must not be limited to participants from
dominant faiths, the Department rejects
the suggestion as unnecessary. Of
course, religious activities on Job Corps
Centers must be permitted for all
beneficiaries of such DOL programs
regardless of faith. The rule already
provides that there can be no
‘‘discriminat[ion] for or against a current
or prospective program beneficiary on
the basis of religious or religious belief.’’
The Department believes that the
proposed rule requires no change in this
regard.
Applicability and Notice of
Nondiscrimination Requirements
Three commenters suggested that the
rule should explain the scope of
applicable independent statutory
provisions requiring grantees not to
discriminate on the basis of religion,
rather than simply referring grantees to
appropriate Department program offices.
One commenter further suggested that
the proposed rule be amended to
provide specific directions on which
programs statutorily bar religious
discrimination.
The Department understands that
organizations participating in DOL
programs need to be aware of such
provisions, but declines to adopt the
suggested recommendation because the
Department believes such information is
most easily obtained and best explained
by the appropriate Department offices.
The purpose of this rulemaking is to
eliminate undue administrative barriers
that the Department has imposed to the
participation of religious organizations
in Department programs; it is not to
alter existing statutory requirements,
which apply to Department programs to
the same extent that they applied under
the prior rule.
State and Local Diversity Requirements
and Preemption
Two commenters expressed concern
that the proposed rule will exempt
religious organizations from State and
local diversity and nondiscrimination
requirements. Both commenters
suggested that the proposed rule be
modified to provide that State and local
laws will not be preempted by the rule.
Conversely, one commenter indicated
that the rule should clearly state that it
preempts all such State and local
requirements.
The requirements that govern
financial assistance under the
Department programs at issue in these
regulations do not address preemption
of State or local diversity or
nondiscrimination laws. Federal
financial assistance, however, carries
Federal obligations. The Federal
obligations continue to be applicable
even when Federal financial assistance
is first given to the States or localities
through block grants and the latter are
then responsible for disbursing the
Federal financial assistance. No
organization is required to apply for
assistance under these programs, but
organizations that apply and are
selected for assistance must comply
with the applicable legal and
programmatic requirements. As
discussed below, these Federal
requirements apply not only to Federal
financial assistance but also to State
matching funds and to State funds that
are commingled with the Federal
assistance.
Applicability of Rule to State, Local,
and ‘‘Commingled’’ Funds
One commenter stated that the
proposed rule was unclear on whether
it applied to funds supplied by the
States. Two commenters stated that the
Department lacked the statutory or
constitutional authority to require States
to waive, for their own funds, State law
that is inconsistent with the rule. A
third commenter requested a rule
change that would make State matching
funds that are not commingled subject
to the rule’s requirements.
The Department disagrees with these
objections, but has modified the
regulatory text slightly for clarification.
The rule makes clear that when States
and local governments voluntarily
choose to contribute their own funds to
supplement program activities, they
have the option of commingling their
funds with Federal funds or to separate
out their funds from Federal funds. The
rule applies to State funds in the former
instance, but not the latter. To the extent
a Department program may explicitly
require that Federal rules apply to State
matching funds (or other grantee
contributions) or may require State
matching funds to be part of the
program grant budget, these State
matching funds are considered to be
commingled and thus subject to the
requirements of this rule. The
Department also disagrees that it lacks
statutory or constitutional authority to
require States to comply with this rule
for commingled State funds when State
law is inconsistent with the rule.
Neither States nor localities are
obligated to participate in Department
programs, but should they choose to do
so, they must comply with Federal
requirements. Valid Federal
requirements may be imposed through,
among other means, statute or agency
rulemaking, as was done here. And, of
course, where no statute requires
commingling of funds, States remain
free to separate their funds from Federal
funds, and Federal requirements do not
apply to segregated State funds.
Organizations’ Display of Religious Art
or Symbols
Three commenters objected to the
provisions allowing faith-based
organizations conducting DOL-supported social service programs in
their facilities to retain religious art,
icons, scriptures, or other religious
symbols in their facilities.
The Department disagrees with these
comments. A number of Federal statutes
affirm the principle embodied in this
rule. See, e.g., 42 U.S.C. 290kk–
1(d)(2)(B). Moreover, for no other
service providers do Department
regulations prescribe the types of
artwork or symbols that may be placed
within the structures or room in which
DOL-supported social services are
provided. In addition, a prohibition on
the use of religious icons would make
it more difficult for many religious
organizations to participate in
Department programs than other
organizations by forcing them to procure
additional space. It would thus be an
inappropriate and excessive restriction,
typical of the types of regulatory barriers
that this final rule seeks to eliminate.
Consistent with constitutional church-state guidelines, a religious organization
that participates in Department
programs retains its independence and
may continue to carry out its mission,
although it must not use direct DOL
support to support any inherently
religious activities. Accordingly, this
final rule continues to provide that
religious organizations may use space in
their facilities to provide DOL-supported services, without removing
religious art, icons, scriptures, or other
religious symbols.
Religious Freedom Restoration Act
One commenter requested that the
Department include language in the
regulation stating that the Religious

Freedom Restoration Act (‘‘RFRA’’), 42
U.S.C. 2000bb et seq., may provide relief
from otherwise applicable statutory
provisions prohibiting employment
discrimination on the basis of religion.
The commenter noted that, for example,
the Department of Health and Human
Services has recognized RFRA’s ability
to provide relief from certain
employment nondiscrimination
requirements in the final regulations it
promulgated governing its substance
abuse and mental health programs (e.g.,
42 CFR 54.6).
The Department notes that RFRA,
which applies to all Federal law and its
implementation, 42 U.S.C. 4000bb–3,
4000bb–2(1), is applicable regardless of
whether it is specifically mentioned in
this rule. Whether a party is entitled to
an exemption or other relief under
RFRA simply depends upon whether
the party satisfies the RFRA’s statutory
requirements. The Department therefore
declines to adopt this recommendation
at this time.
Recognition of Religious Organizations’
Title VII Exemption
The Department received three
comments expressing views on the
rule’s provision that, absent statutory
authority to the contrary, religious
organizations do not forfeit their Title
VII exemption by receiving financial
assistance from the Department. One
commenter approved of the retention of
the Title VII exemption, but urged
renaming the section with a more
expansive title, such as ‘‘Preserving the
Freedom of Faith-Based Organizations
in Employment Decisions.’’ Two
commenters stated that the rule
‘‘improperly extends [the] Title VII’’
exemption because ‘‘Congress has never
authorized [the] exemption’’ for DOL
programs. These commenters further
assert that providing Federal financial
assistance for the provision of social
services to an organization that
considers religion in its employment
decisions is unconstitutional.
The Department disagrees with the
objections to the rule’s recognition that
a religious organization does not forfeit
its Title VII exemption when
administering DOL-supported social
services. As an initial matter, applicable
statutory nondiscrimination
requirements are not altered by this
rule. Congress establishes the conditions
under which religious organizations are
exempt from Title VII. This rule simply
recognizes that the Title VII exemption,
including its limitations, is fully
applicable to Federally-assisted
organizations unless Congress says
otherwise.
As to the suggestion that the
Constitution restricts the government
from providing support for social
services to religious organizations that
consider faith in hiring, that view does
not accurately represent the law. As
noted below, the employment decisions
of organizations that receive extensive
public financial assistance are not
attributable to the State, see Rendell-
Baker v. Kohn, 457 U.S. 830 (1982), and
it has been settled for more than 100
years that the Establishment Clause does
not bar the provision of direct Federal
grants to organizations that are
controlled and operated exclusively by
members of a single faith. See Bradfield
v. Roberts, 175 U.S. 291 (1899); see also
Bowen v. Kendrick, 487 U.S. 589, 609
(1988). Finally, the Department notes
that allowing religious organizations to
consider faith in hiring when they
receive government support is much
like allowing a Federally-supported
environmental organization to hire
those who share its views on protecting
the environment—both types of
organization are allowed to consider
ideology and missions, which improves
the organizations’ effectiveness and
preserves their integrity. Thus, the
Department declines to amend the final
rule to require religious organizations to
forfeit their Title VII rights.
The Department also rejects the
request to give this section a more
expansive title. The section relates most
directly to the retention of the Title VII
exemption, and the proposed title
accurately reflects the section’s scope
and purpose.
Nondiscrimination in Providing
Assistance
Commenters have requested a number
of rule changes that would provide
express protections for beneficiaries
who object to the religious character of
an assigned service provider. One
commenter requested a revision to make
clear that the right to religious freedom
includes the right to be free from
religion. Other commenters have
requested provisions that would require
notice to beneficiaries that they may
object to a religious service provider and
obtain a secular alternative; that
participation in religious activity is
voluntary, and pressure or coercion,
even subtly applied, is prohibited; and
that the failure to participate in religious
activities will not impact the receipt of
social services. These commenters
additionally requested the creation of a
grievance process and remedies for
violations of these rights.
The Department declines to adopt
these recommendations, because it
believes that the rule’s existing language
prohibiting organizations from
discriminating for or against program
beneficiaries on the basis of religion or
religious belief encompasses
beneficiaries who hold no religious
belief or who desire to be free of
religion. Such a prohibition is
straightforward and requires no further
elaboration. In addition, the rule
provides that organizations may not use
direct DOL support for inherently
religious activities and that any such
activities must be offered separately in
time or location and must be voluntary
for program beneficiaries. These
requirements further protect the rights
of program beneficiaries. The
Department also declines to adopt the
recommendation that the rule create a
grievance process that is specific to the
requirements contained in this rule,
because traditional channels of airing
grievances or filing complaints are
already generally available.
Assurance Requirements
One commenter, in order to mitigate
constitutional concerns raised by the
proposed rule, opposed the removal of
any existing requirements that faith-based organizations provide assurances
that direct DOL support will not be used
for inherently religious activities. This
commenter, and one other, stated that
the proposed rule should include
additional assurances and safeguards to
‘‘prevent religious use of [Department]
funds.’’ Still another commenter
requested that the rule require State and
local governments to provide assurances
that they will follow the equal treatment
principles of this rule.
The Department disagrees with the
commenters and declines to adopt their
recommendations. Once this rule comes
into effect, each prospective DOL social
service provider, including State and
local governments, must certify in its
application for assistance that it will
comply with various laws applicable to
recipients of Federal financial
assistance, including this final rule and
its prohibitions on the use of direct DOL
support for inherently religious
activities and on discrimination either
for or against religious organizations.
Additional assurances, such as those
that are being removed and prohibited
by this rule, only perpetuate an unfair
presumption that program requirements
applicable to all DOL providers are
insufficient to bind faith-based
organizations and that additional
requirements and assurances must be
imposed on these organizations.
The Department believes that no
additional requirements above and
beyond those imposed on all
participating organizations are needed.

In issuing this rule, the Department’s
general approach is that faith-based
organizations are not a category of
applicants or service providers that
require additional requirements or
oversight in order to ensure compliance
with program regulations. Rather, the
Department presumes that faith-based
organizations, like other recipients of
DOL support, fully understand the
restrictions on the support they receive,
including the restriction that inherently
religious activities cannot be undertaken
with direct DOL support and must
remain separate from the Federally-supported activities. The requirements
for use of DOL support under a
Department program apply to, and are
binding on, all Department social
service providers.
One commenter requested that the
proposed rule require monthly reports
and periodic site visits of all
Department grantees to ensure
compliance with the Establishment
Clause.
The Department respectfully declines
to adopt this recommendation. Ordinary
enforcement and monitoring procedures
are sufficient to ensure that faith-based
organizations, like other participating
organizations, do not violate program
restrictions, including those concerning
unauthorized uses of financial
assistance. The need for enforcement of
Department regulations does not
increase simply because some service
providers are faith-based organizations.
The Department has a responsibility to
ensure that all DOL support is used in
accordance with program-specific
regulations and any government-wide
requirements. Compliance with the
Establishment Clause is just one aspect
of compliance with legal and
programmatic requirements. We believe
the monitoring mechanisms currently in
place are sufficient to address whatever
compliance issues may arise.
Another commenter suggested that
the Department amend the proposed
rule regarding assurances to clarify that
§ 2.32(c) is not limited to grant
documents and applies equally to
contracts. The commenter noted that
State and local governments frequently
administer federally-financed social
service programs by issuing contracts
with service providers rather than
grants.
The Department believes that no
change is required. Section 2.32(c)
applies to ‘‘a grant document,
agreement, covenant, memorandum of
understanding, policy, or regulation.’’
The language is broadly sweeping and
the use of the term ‘‘agreement’’
includes by definition ‘‘contracts.’’
However, in an effort to further clarify
the regulation, the Department has made
the requested change.
Employment or Training Activities That
Involve the Maintenance of a Building
Used for Religious Activities
One commenter objected that the
proposed rule purportedly
‘‘incorporates by reference an earlier
proposed rule’’ proposing revisions to
29 CFR 37.6(f)(2). The commenter stated
that the proposed revision to 37.6(f)(2)
would lead to confusion and possible
unconstitutional use of Federal funds
for capital improvements to religious
buildings. The Department notes that,
contrary to the commenter’s assertions,
the rule proposed on March 9 did not
include proposed changes to 29 CFR
37.6(f)(2). As a result, the Department
has responded in detail to this and
similar objections in its notice of final
rulemaking for 29 CFR part 37,
published elsewhere in the Federal
Register today.
Definitions
The Department received several
comments relating to definitions for
terms used in the proposed rule. Two
comments focused on the definition of
‘‘social service program,’’ which the
Department defined as including, inter
alia, childcare services and literacy and
mentoring programs. One commenter
expressed concern that the proposed
rule subsequently failed to address how
a religious childcare service provider
would be able to ensure that children as
young as three or four, or perhaps even
younger, would have a choice as to
whether to participate in inherently
religious activities of the childcare
center. Likewise, the commenter was
concerned that such children would be
unable to separate out the religious
childcare center’s views from the
instruction provided.
The Department disagrees that
changes to the rule are necessary in
response to this comment. As with the
definition of ‘‘inherently religious
activities’’ discussed earlier in this
preamble, it would be difficult, if not
impossible, to craft regulatory language
that would address the specific
circumstances of every activity covered
by the rule. In the Department’s view,
the language of the rule is sufficiently
broad to cover the circumstances
suggested by the commenter. That
language requires recipients to operate
their DOL-supported programs in a
manner consistent with applicable
Federal law. Such law, of course,
includes the Constitution.
The same commenter questioned
whether a ban on using direct DOL
support for inherently religious
activities would apply to volunteer
mentors who were not paid with
government money. The commenter
wondered whether such mentors could
engage in religious activities with the
children they mentored in an activity
receiving direct DOL support.
DOL social service providers may not
use direct DOL support for inherently
religious activities. As is discussed
below, DOL support includes more than
money. Thus, in a program receiving
any form of direct DOL support, a DOL
social service provider—including one
staffed by volunteer mentors—must
comply with this rule’s restrictions on
inherently religious activities. Of
course, where volunteer mentors are
acting outside the scope of a DOL-supported program, they are not subject
to such restrictions on their religious
activities.
One commenter suggested that the
Department provide a definition for
‘‘religious organization’’ or ‘‘faith-based
organization,’’ reasoning that a common
definition across Federal programs
would maximize opportunities for these
organizations. The Department declines
to adopt this suggestion. One of the
objectives of this rule is to move away
from unnecessary Federal inquiry into
the religious nature, or absence of
religious nature, of an organization
seeking DOL support or participation in
a DOL social service program. The
Department believes the focus should
always be on (1) whether the
organization is eligible as defined by the
program in question; and (2) whether
the organization commits to abide, and
does abide, by all legal and
programmatic requirements that govern
that support.
Finally, a commenter suggested that
‘‘Federal financial assistance’’ should be
defined to include non-financial
assistance that might be provided by
DOL or by State or local governments
using DOL funds. The Department
declines to amend the definition.
Historically, Federal regulations have
used similar, if not identical, language
to define Federal financial assistance.
Through the course of time, it has been
clearly established that such assistance
includes more than money. See U.S.
Dep’t of Transp. v. Paralyzed Veterans,
477 U.S. 597, 607 n.11 (1986) (noting
that Federal financial assistance may
take non-monetary form). Federal
financial assistance may include, for
example, the use or rent of Federal land
or property at below market value,
Federal training, a loan of Federal
personnel, subsidies, or other
arrangements with the intention of
providing assistance. See Delmonte v.
Department of Bus. & Prof’l Regulation,

877 F. Supp. 1563 (S.D. Fla. 1995)
(training of city police officers by
Federal personnel considered to be
Federal financial assistance).
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded
Mandates Reform Act of 1995 requires
that a covered agency prepare a
budgetary impact statement before
promulgating a rule that includes any
Federal mandate that may result in the
expenditure by State, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year.
One commenter suggested that the
rule met the unfunded mandate
requirement only because the rule failed
to mandate that alternative secular
providers must be made available for
beneficiaries who object to the religious
character of an organization. Contrary to
the commenter’s suggestion, the
Department has determined that this
rule would not impose a mandate that
will result in the expenditure by State,
local, and tribal governments, in the
aggregate, or by the private sector, of
more than $100 million in any one year.
This is largely because these regulations
impact only Federal financial
assistance. Although State or local
governments may commingle their
funds with Federal funds, the rule does
not require them to do so.
Amendments to Job Corps and WIA
Regulations
Except to the extent discussed above,
the Department did not receive
comments concerning the portions of
the proposed rule that proposed to
amend the Job Corps and WIA
regulations. The Department has revised
the language of these portions of the
proposed rule to improve their clarity
and consistency with the part of the
proposed rule that is now the new
subpart D of DOL’s final general
regulation at 29 CFR part 2. The
Department has also revised the
language of the proposed WIA
regulations in order to ensure greater
conformity with the language of WIA
section 188(a)(3).
II. Findings and Certifications
Executive Order 12866
The Office of Management and Budget
(OMB) determined that this rule is a
‘‘significant regulatory action’’ as
defined in section 3(f) of the Order
(although not an economically
significant regulatory action under the
Order). OMB reviewed this final rule
under Executive Order 12866,
Regulatory Planning and Review. Any
changes made to the rule as a result of
that review are identified in the docket
file, which is available for public
inspection in the office of the Center for
Faith-Based and Community Initiatives,
U.S. Department of Labor, 200
Constitution Avenue, NW., Room S–
2235, Washington, DC 20210.
Regulatory Flexibility Act
The Secretary of Labor, in accordance
with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed and
approved this final rule and in so doing
certifies that the rule will not have a
significant economic impact on a
substantial number of small entities.
The final rule will not impose any new
costs, or modify existing costs,
applicable to recipients of DOL support.
Rather, the purpose of the rule is to
clarify that DOL’s social service
programs are open to all qualified
organizations, regardless of their
religious character, and to establish
clearly the permissible uses to which
DOL support may be put.
Notwithstanding the Secretary’s
determination that this rule will not
have a significant economic effect on a
substantial number of small entities, the
Department specifically invited
comments regarding any less
burdensome alternatives to this rule that
will meet the Department’s objectives as
described in this preamble. No such
comments were received.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1531–
1538) establishes requirements for
Federal agencies to assess the effects of
their regulatory actions on State, local,
and tribal governments, and on the
private sector. This final rule does not
impose any Federal mandates on any
State, local, or tribal governments, or the
private sector, within the meaning of the
Unfunded Mandates Reform Act of
1995.
Paperwork Reduction Act
The Paperwork Reduction Act does
not apply because this rule does not
contain any information collection
requirements that require the approval
of the Office of Management and
Budget.
Executive Order 13132, Federalism
Executive Order 13132, Federalism,
prohibits an agency from publishing any
rule that has federalism implications if
the rule either imposes substantial
direct compliance costs on State and
local governments and is not required
by statute, or the rule preempts State
law, unless the agency meets the
consultation and funding requirements
of section 6 of the Executive Order.
Consistent with Executive Order 13132,
the Department specifically solicited
comments from State and local
government officials on this proposed
rule, and no comments from these
entities were submitted that raised
federalism concerns.
List of Subjects
20 CFR Part 667
Employment; Grant programs—labor;
Reporting and recordkeeping
requirements.
20 CFR Part 670
Employment; Grant programs—labor;
Job Corps; Religious discrimination.
29 CFR Part 2
Administrative practice and
procedure; Claims; Courts; Government
employees; Religious discrimination.
29 CFR Part 37
Administrative practice and
procedure; Aged; Aliens; Civil rights;
Discrimination; Equal educational
opportunity; Equal employment
opportunity; Grant programs-labor;
Individuals with disabilities;
Investigations; Manpower training
programs; Political affiliation
discrimination; Religious
discrimination; Reporting and
recordkeeping requirements; Sex
discrimination.
Signed at Washington, DC, this 7th day of
July, 2004.
Elaine L. Chao,
Secretary of Labor.
Emily S. DeRocco,
Assistant Secretary for Employment and
Training.
■ For the reasons set forth in the
preamble, the Department of Labor
amends 20 CFR Part 667; 20 CFR Part
670; 29 CFR Part 2; and 29 CFR Part 37
as set forth below.
Title 20—Employees’ Benefits
Chapter V—Employment and Training
Administration, Department of Labor
PART 667—ADMINISTRATIVE
PROVISIONS UNDER TITLE I OF THE
WORKFORCE INVESTMENT ACT
■ 1. The authority citation for part 667 is
revised to read as follows:
Authority: Subtitle C of Title I, Sec. 506(c),
Pub. L. 105–220, 112 Stat. 936 (20 U.S.C.
9276(c)); Executive Order 13198, 66 FR 8497,
3 CFR 2001 Comp., p. 750; Executive Order
13279, 67 FR 77141, 3 CFR 2002 Comp., p.
258.

■ 2. In § 667.266, paragraph (b) and the
section heading are revised to read as
follows:
§ 667.266 What are the limitations related
to religious activities?

* * * * *
(b)(1) 29 CFR part 2, subpart D
governs the circumstances under which
DOL support, including WIA Title I
financial assistance, may be used to
employ or train participants in religious
activities. Under that subpart, such
assistance may be used for such
employment or training only when the
assistance is provided indirectly within
the meaning of the Establishment Clause
of the U.S. Constitution, and not when
the assistance is provided directly. As
explained in that subpart, assistance
provided through an Individual
Training Account is generally
considered indirect, and other
mechanisms may also be considered
indirect. See also 20 CFR 667.275 and
29 CFR 37.6(f)(1). 29 CFR part 2, subpart
D also contains requirements related to
equal treatment in Department of Labor
programs for religious organizations,
and to protecting the religious liberty of
Department of Labor social service
providers and beneficiaries.
(2) Limitations on the employment of
participants under WIA Title I to carry
out the construction, operation, or
maintenance of any part of any facility
used or to be used for religious
instruction or as a place for religious
worship are described at 29 CFR
37.6(f)(2).
■ 3. In § 667.275, paragraph (b) and the
section heading are revised to read as
follows:
§ 667.275 What are a recipient’s
obligations to ensure nondiscrimination
and equal opportunity, and what are a
recipient’s obligations with respect to
religious activities?
* * * * *
(b) 29 CFR part 2, subpart D governs
the circumstances under which
recipients may use DOL support,
including WIA Title I financial
assistance, to employ or train
participants in religious activities.
Under that subpart, such assistance may
be used for such employment or training
only when the assistance is provided
indirectly within the meaning of the
Establishment Clause of the U.S.
Constitution, and not when the
assistance is provided directly. As
explained in that subpart, assistance
provided through an Individual
Training Account is generally
considered indirect, and other
mechanisms may also be considered
indirect. See also 20 CFR 667.266 and
29 CFR 37.6(f)(1). 29 CFR part 2, subpart
D also contains requirements related to
equal treatment of religious
organizations in Department of Labor
programs, and to protection of religious
liberty of Department of Labor social
service providers and beneficiaries.
Limitations on the employment of
participants under WIA Title I to carry
out the construction, operation, or
maintenance of any part of any facility
used or to be used for religious
instruction or as a place of religious
worship are described at 29 CFR
37.6(f)(2). See section 188(a)(3) of the
Workforce Investment Act of 1998, 29
U.S.C. 2938(a)(3).
PART 670—THE JOB CORPS UNDER
TITLE I OF THE WORKFORCE
INVESTMENT ACT
■ 4. The authority citation for part 670 is
revised to read as follows:
Authority: Subtitle C of title I, sec. 506(c),
Pub. L. 105–220, 112 Stat. 936 (20 U.S.C.
2881 et seq. and 9276(c)); 5 U.S.C. 301;
Executive Order 13198, 66 FR 8497, 3 CFR
2001 Comp., p. 750); Executive Order 13279,
67 FR 77141, 3 CFR 2002 Comp., p. 258.
■ 5. Section 670.555 is amended by
removing paragraph (b), redesignating
paragraph (d) as paragraph (b), and
revising paragraph (c) to read as follows:
§ 670.555 What are the center’s
responsibilities in ensuring that students’
religious rights are respected?
* * * * *
(c) Requirements related to equal
treatment of religious organizations in
Department of Labor programs, and to
protection of religious liberty of
Department of Labor social service
providers and beneficiaries, are found at
subpart D of 29 CFR part 2. See also
§§ 667.266 and 667.275 of 20 CFR; 29
CFR part 37.
Title 29—Labor
Chapter I—Office of the Secretary of
Labor
PART 2—GENERAL REGULATIONS
■ 7. The authority citation for part 2 is
revised to read as follows:
Authority: 5 U.S.C. 301; Executive Order
13198, 66 FR 8497, 3 CFR 2001 Comp., p.
750; Executive Order 13279, 67 FR 77141, 3
CFR 2002 Comp., p. 258.
■ 8. Part 2 is amended by adding a new
subpart D to read as follows:
PART 2—GENERAL REGULATIONS
* * * * *
Subpart D—Equal Treatment in
Department of Labor Programs for
Religious Organizations; Protection of
Religious Liberty of Department of
Labor Social Service Providers and
Beneficiaries
Sec.
2.30 Purpose.
2.31 Definitions.
2.32 Equal participation of religious
organizations.
2.33 Responsibilities of DOL, DOL social
service providers and State and local
governments administering DOL
support.
2.34 Application to State and local funds.
2.35 Effect of DOL support on Title VII
employment nondiscrimination
requirements and on other existing
statutes.
2.36 Status of nonprofit organizations.
§ 2.30 Purpose.
The purpose of the regulations in this
subpart is to ensure that DOL-supported
social service programs are open to all
qualified organizations, regardless of the
organizations’ religious character, and to
establish clearly the permissible uses to
which DOL support for social service
programs may be put, and the
conditions for receipt of such support.
In addition, this proposed rule is
designed to ensure that the
Department’s social service programs
are implemented in a manner consistent
with the requirements of the
Constitution, including the Religion
Clauses of the First Amendment.
§ 2.31 Definitions.
As used in the regulations in this
subpart:
(a) The term Federal financial
assistance means assistance that non-
Federal entities (including State and
local governments) receive or
administer in the form of grants,
contracts, loans, loan guarantees,
property, cooperative agreements, direct
appropriations, or other direct or
indirect assistance, but does not include
a tax credit, deduction or exemption.
(b) The term social service program
means a program that is administered or
supported by the Federal Government,
or by a State or local government using
Federal financial assistance, and that
provides services directed at reducing
poverty, improving opportunities for
low-income children, revitalizing low-income communities, empowering low-income families and low-income
individuals to become self-sufficient, or
otherwise helping people in need. Such
programs include, but are not limited to,
the following:
(1) Child care services and services to
meet the special needs of children, older
individuals, and individuals with

disabilities (including physical, mental,
or emotional disabilities);
(2) Job training and related services,
and employment services;
(3) Information, referral, and
counseling services;
(4) Literacy and mentoring programs;
and
(5) Services for the prevention and
treatment of juvenile delinquency and
substance abuse, services for the
prevention of crime and the provision of
assistance to the victims and the
families of criminal offenders, and
services related to intervention in, and
prevention of domestic violence.
(c) The term DOL means the U.S.
Department of Labor.
(d) The term DOL-supported social
service program, DOL social service
program, or DOL program means a
social service program, as defined in
paragraph (b) of this section, that is
administered by or for DOL with DOL
support. Such programs include, but are
not limited to, the One Stop Career
Center System, the Job Corps, and other
programs supported through the
Workforce Investment Act.
(e) The term DOL social service
provider means any non-Federal
organization, other than a State or local
government, that seeks or receives DOL
support as defined in paragraph (g) of
this section, or participates in DOL
programs other than as the ultimate
beneficiary of such programs.
(f) The term DOL social service
intermediary provider means any DOL
social service provider that, as part of its
duties, selects subgrantees to receive
DOL support or subcontractors to
provide DOL-supported services, or has
the same duties under this part as a
governmental entity.
(g) The term DOL support means
Federal financial assistance, as well as
procurement funding provided to a non-
Federal organization, including a State
or local government, to support the
organization’s administration of or
participation in a DOL social service
program as defined in paragraph (d) of
this section.
§ 2.32 Equal participation of religious
organizations.
(a) Religious organizations must be
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, 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 or
affiliation, although this requirement
does not preclude DOL, DOL social
service providers, or State and local
governments administering DOL
support from accommodating religion in
a manner consistent with the
Establishment Clause. In addition,
because this rule does not affect existing
constitutional requirements, DOL, DOL
social service providers (insofar as they
may otherwise be subject to any
constitutional requirements), and State
and local governments administering
DOL support must continue to comply
with otherwise applicable constitutional
principles, including, among others,
those articulated in the Establishment,
Free Speech, and Free Exercise Clauses
of the First Amendment to the
Constitution.
(b) A religious organization that is a
DOL social service provider retains its
independence from Federal, State, and
local governments and must be
permitted to continue to carry out its
mission, including the definition,
practice, and expression of its religious
beliefs, subject to the provisions of
§ 2.33 of this subpart. Among other
things, such a religious organization
must be permitted to:
(1) Use its facilities to provide DOL-supported social services without
removing or altering religious art, icons,
scriptures, or other religious symbols
from those facilities; and
(2) Retain its authority over its
internal governance, including retaining
religious terms in its name, selecting its
board members on a religious basis, and
including religious references in its
mission statements and other governing
documents.
(c) A grant document, contract or
other agreement, covenant,
memorandum of understanding, policy,
or regulation that is used by DOL, a
State or local government administering
DOL support, or a DOL social service
intermediary provider must not require
only religious organizations to provide
assurances that they will not use direct
DOL support for inherently religious
activities. Any such requirements must
apply equally to both religious and
other organizations. All organizations,
including religious ones, that are DOL
social service providers must carry out
DOL-supported activities in accordance
with all applicable legal and
programmatic requirements, including
those prohibiting the use of direct DOL
support for inherently religious
activities. A grant document, contract or
other agreement, covenant,
memorandum of understanding, policy,
or regulation that is used by DOL, a
State or local government, or a DOL
social service intermediary provider in
administering a DOL social service
program must not disqualify
organizations from receiving DOL
support or participating in DOL
programs on the grounds that such
organizations are motivated or
influenced by religious faith to provide
social services, have a religious
character or affiliation, or lack a
religious component.
§ 2.33 Responsibilities of DOL, DOL social
service providers and State and local
governments administering DOL support.
(a) DOL, DOL social service
intermediary providers, DOL social
service providers in their use of direct
DOL support, and State and local
governments administering DOL
support must not, when providing
social services, discriminate for or
against a current or prospective program
beneficiary on the basis of religion or
religious belief. This requirement does
not preclude DOL, DOL social service
intermediary providers, or State or local
governments administering DOL
support from accommodating religion in
a manner consistent with the
Establishment Clause of the First
Amendment to the Constitution.
(b)(1) DOL, DOL social service
providers, and State and local
governments administering DOL
support must ensure that they do not
use direct DOL support for inherently
religious activities such as worship,
religious instruction, or proselytization.
DOL social service providers must be
permitted to offer inherently religious
activities so long as they offer those
activities separately in time or location
from social services receiving direct
DOL support, and participation in the
inherently religious activities is
voluntary for the beneficiaries of social
service programs receiving direct DOL
support. For example, participation in
an inherently religious activity must not
be a condition for participating in a
directly-supported social service
program.
(2) This regulation is not intended to
and does not restrict the exercise of
rights or duties guaranteed by the
Constitution. For example, program
officials must not impermissibly restrict
the ability of program beneficiaries or
DOL social service providers to freely
express their views and to exercise their
right to religious freedom. Additionally,
subject to reasonable and permissible
time, place and manner restrictions,
residential facilities that receive DOL
support must permit residents to engage
in voluntary religious activities,
including holding religious services, at
these facilities.
(3) Notwithstanding the requirements
of paragraph (b)(1), and to the extent

otherwise permitted by Federal law
(including constitutional requirements),
direct DOL support may be used to
support inherently religious activities,
and such activities need not be provided
separately in time or location from other
DOL-supported activities, under the
following circumstances:
(i) Where DOL support is provided to
chaplains to work with inmates in
prisons, detention facilities, or
community correction centers through
social service programs;
(ii) Where DOL support is provided to
social service programs in prisons,
detention facilities, or community
correction centers, in which social
service organizations assist chaplains in
carrying out their duties; or
(iii) Where DOL-supported social
service programs involve such a degree
of government control over the program
environment that religious exercise
would be significantly burdened absent
affirmative steps by DOL or its social
service providers.
(c) To the extent otherwise permitted
by Federal law, the restrictions set forth
in this section regarding the use of
direct DOL support do not apply to
social service programs where DOL
support is provided to a religious or
other non-governmental organization
indirectly within the meaning of the
Establishment Clause of the First
Amendment to the Constitution.
Religious or other non-governmental
organizations will be considered to have
received support indirectly, for
example, if as a result of a program
beneficiary’s genuine and independent
choice the beneficiary redeems a
voucher, coupon, or certificate that
allows the beneficiary to choose the
service provider, or some other
mechanism is provided to ensure that
beneficiaries have a genuine and
independent choice among providers or
program options. All organizations
must, however, satisfy all applicable
legal and programmatic requirements.
§ 2.34 Application to State and local funds.
If a State or local government
voluntarily contributes its own funds to
supplement activities carried out under
the applicable programs, the State or
local government has the option to
separate out the Federal funds or
commingle them. If the funds are
commingled, then the provisions of this
subpart apply to all of the commingled
funds in the same manner, and to the
same extent, as the provisions apply to
the Federal assistance. State funds that
are contributed pursuant to the
requirements of a matching or grant
agreement are considered to be
commingled funds.
§ 2.35 Effect of DOL support on Title VII
employment nondiscrimination
requirements and on other existing
statutes.
A religious organization’s exemption
from the Federal prohibition on
employment discrimination on the basis
of religion, set forth in § 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. Some DOL programs,
however, were established through
Federal statutes containing independent
statutory provisions requiring that
recipients refrain from discriminating
on the basis of religion. Accordingly, to
determine the scope of any applicable
requirements, recipients and potential
recipients should consult with the
appropriate DOL program official or
with the Civil Rights Center, U.S.
Department of Labor, 200 Constitution
Avenue, NW., Room N4123,
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.
§ 2.36 Status of nonprofit organizations.
(a) In general, DOL does not require
that an organization, including a
religious organization, obtain tax-exempt status under section 501(c)(3) of
the Internal Revenue Code in order to be
eligible for Federal financial assistance
under DOL social service programs.
Many such programs, however, do
require an organization to be a
‘‘nonprofit organization’’ in order to be
eligible for such support. Individual
solicitations that require organizations
to have nonprofit status must
specifically so indicate in the eligibility
section of the solicitation. In addition,
any solicitation for a program that
requires an organization to maintain tax-exempt status must expressly state the
statutory authority for requiring such
status. For assistance with questions
about a particular solicitation,
applicants should contact the DOL
program office that issued the
solicitation.
(b) Unless otherwise provided by
statute, in DOL programs in which an
applicant must show that it is a
nonprofit organization, the applicant
must be permitted to do so by any of the
following means:
(1) Proof that the Internal Revenue
Service currently recognizes the
applicant as tax exempt under section
501(c)(3) of the Internal Revenue Code;
(2) A statement from a State taxing
body or the State Secretary of State
certifying that:
(i) the organization is a nonprofit
organization operating within the State;
and
(ii) no part of its net earnings may
lawfully benefit any private shareholder
or individual;
(3) A certified copy of the applicant’s
certificate of incorporation or similar
document that clearly establishes the
nonprofit status of the applicant; or
(4) Any item described in paragraphs
(b)(1) through (b)(3) of this section, if
that item applies to a State or national
parent organization, together with a
statement by the State or national parent
organization that the applicant is a local
nonprofit affiliate of the organization.
PART 37—IMPLEMENTATION OF THE
NONDISCRIMINATION AND EQUAL
OPPORTUNITY PROVISIONS OF THE
WORKFORCE INVESTMENT ACT OF
1998 (WIA)
■ 9. The authority citation for part 37 is
revised to read as follows:
Authority: Sections 134(b), 136(d)(2)(F),
136(e), 172(a), 183(c), 185(d)(1)(E), 186, 187
and 188 of the Workforce Investment Act of
1998, 29 U.S.C. 2801, et seq.; Title VI of the
Civil Rights Act of 1964, as amended, 42
U.S.C. 2000d, et seq.; Section 504 of the
Rehabilitation Act of 1973, as amended, 29
U.S.C. 794; the Age Discrimination Act of
1975, as amended, 42 U.S.C. 6101; Title IX
of the Education Amendments of 1972, as
amended, 29 U.S.C. 1681; Executive Order
13198, 66 FR 8497, 3 CFR 2001 Comp., p.
750; and Executive Order 13279, 67 FR
77141, 3 CFR 2002 Comp., p. 258.
■ 10. In § 37.6, paragraph (f)(1) and the
section heading are revised to read as
follows:
§ 37.6 What specific discriminatory
actions, based on prohibited grounds other
than disability, are prohibited by this part,
and what limitations are there related to
religious activities?

* * * * *
(f)(1) 29 CFR part 2, subpart D governs
the circumstances under which DOL
support, including WIA Title I financial
assistance, may be used to employ or
train participants in religious activities.
Under that subpart, such assistance may
be used for such employment or training
only when the assistance is provided
indirectly within the meaning of the
Establishment Clause of the U.S.
Constitution, and not when the
assistance is provided directly. As
explained in that subpart, assistance
provided through an Individual
Training Account is generally
considered indirect, and other
mechanisms may also be considered
indirect. See also §§ 667.266 and
667.275 of 20 CFR. 29 CFR part 2,
subpart D also contains requirements

related to equal treatment of religious
organizations in Department of Labor
programs, and to protection of religious
liberty for Department of Labor social
service providers and beneficiaries.

* * * * *
[FR Doc. 04–15707 Filed 7–8–04; 8:45 am]
BILLING CODE 4510–23–P