With the stroke of a pen, President Obama expanded the workplace protections of LGBT workers during an executive order signing ceremony on Monday at the White House.

The order forbids discrimination against lesbian, gay, bisexual, and transgender people working for federal contractors. It also does not allow companies to exempt themselves based on religious exceptions, and for the first time adds transgender identity to the list of protected workers in a federal context.

In addition to prohibiting discriminatory hiring, the executive order should make it more difficult for employers to fire or harass workers based on their sexual orientation and gender expression.

The executive order comes at a critical time for workers and small business owners. In recent months, a Supreme Court ruling in the Hobby Lobby case and numerous new state laws have expanded the ability of closely-held companies to claim religious exemptions from things like federally mandated healthcare that includes contraception, and potentially the kinds of workers they hire. 

"No current federal law adequately protects lesbian, gay, bisexual, and transgender (LGBT) workers from employment discrimination," the White House said in a statement today. "This is completely contrary to our values as Americans--and it’s also bad for business."

There are, reportedly, 24,000 federal contractors in the U.S., which collectively employ about 28 million workers, or nearly one-fifth of the nation's workers.

Religious groups had lobbied heavily for an exemption from the order. In a letter to President Obama from July 1, signed by more than dozen religious groups and individuals such as Catholic Charities USA and former presidential faith advisor Michael Wear, conservatives expressed concern that the executive order would cause social and economic damage. The letter reads:

Without a robust religious exemption, like the provisions in the Senate-passed ENDA, this expansion of hiring rights will come at an unreasonable cost to the common good, national unity and religious unity.

Plenty of religious groups supported the executive order, however, including the Presbyterian Church (U.S.A.), United Methodist Church, General Board of Church and Society, the Episcopal Church, the United Church of Christ, and the Union of Reform Judaism.

Gay business groups cheered the order today. 

“This is the ultimate ‘pro-business’ decision the President can make," Justin Nelson, president of the National Gay & Lesbian Chamber of Commerce said in a statement. "Access to work and economic advancement is a basic and fundamental principle of what makes the U.S. economy strong and resilient." 

For close to two decades, a bill called the Employee Non-discrimination Act (ENDA) has attempted to add LGBT workers to the roster of employees currently protected under Title VII of the Civil Rights Act of 1964, which forbids discrimination based on gender, race, national origin, and religion. Other classes of workers have received workplace protections through congressional action, such as the Americans with Disabilities Act, signed by George H. Bush in 1990.

ENDA passed the Senate late last year only after a controversial religious exemption was added to it. In protest this month, prominent gay rights groups including the National Gay and Lesbian Task Force, Lambda Legal, and the American Civil Liberties Union dropped their support of the bill.

According to the White House:

  • Workplace Inequality Still Impacts Millions of LGBT Workers. Today, only 18 states and the District of Columbia have laws explicitly protecting LGBT workers from being fired because of their sexual orientation or gender identity, and no federal law adequately protects LGBT workers from being fired because of who they are or who they love. According to surveys and studies, more than four in ten lesbian, gay, and bisexual people have experienced some form of employment discrimination based on their sexual orientation at some point in their lives, and 90 percent of transgender employees have experienced harassment, mistreatment or discrimination on the job.
  • Small Businesses Support LGBT Workplace Equality. According to research conducted by Small Business Majority, six in ten small business owners believe that employment nondiscrimination laws improve their bottom line by helping employers attract the best and brightest employees. And of small business owners who have adopted nondiscrimination policies to protect LGBT workers, 86 percent report that nondiscrimination policies cost them “nothing or next to nothing,” 2 percent said such policies had a small but significant cost, and none said they had a substantial cost.

About 75 percent of LGBT people say they have experienced discrimination at work, with an equivalent percentage saying they have been harassed at work, according to the Williams Institute, a gender identity law and public policy institute. Sixteen percent say they have lost a job due to their sexual orientation. Williams estimates there are about 8.2 million lesbian and gay workers in the U.S. 

A prior executive order issued by President Bill Clintion prohibits discrimination based on sexual orientation for federal workers. And an executive order signed by President George W. Bush allows religiously affiliated contractors to make preferential hiring decisions based on religion. The executive order signed today does not interfere with that religious exemption, the White House said.