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(CNN) —  

The Trump administration has proposed allowing religious organizations that do work for the federal government to base hiring and employment decisions on the “acceptance of or adherence to religious tenets,” a move critics say will allow for discrimination, including against LGBTQ individuals.

The Labor Department proposal would apply to self-identified religious groups and companies with a “religious purpose” that receive federal government contracts. Organizations would still be required to “not discriminate based on other protected bases.”

Critics of the proposal, however, say the Trump administration is working to undercut protections instituted by former President Barack Obama, who in 2014 prohibited workplace discrimination by federal contractors based on sexual orientation or identity in states that did not already have such protections.

The American Civil Liberties Union said the administration is “shamefully working to license taxpayer-funded discrimination in the name of religion.”

“Nearly one-quarter of the employees in the US work for an employer that has a contract with the federal government,” said Ian Thompson of the ACLU. “We will work to stop this rule that seeks to undermine our civil rights protections and encourages discrimination in the workplace.”

The Labor Department said the rule is consistent with recent Supreme Court decisions from recent years, including the Hobby Lobby decision on contraception and the ruling in favor of a Colorado baker.

The proposed rule follows interim guidance the Labor Department issued last summer that federal employees should “to take these [and other] legal developments into account” when handling complaints against federal contractors.

The department suggested the ruling could lead to new companies and groups that were previously “reluctant to participate” applying for federal contracts.

The proposal will be open for public comments for 30 days.

Trump has announced he will nominate Eugene Scalia as his next Labor secretary.