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What Business Owners Should Know About Discrimination Laws


There’s a surprising number of policies and procedures all business owners must follow if they want to succeed in the business landscape. If you’re starting your own business, you’ve likely been assaulted with dozens of must-dos to keep your business running. Anti-discrimination laws are among the most important.

“Employers need to take the time to know what the laws are on the books and what categories could lead to a discrimination claim,” says Karen Harned, Executive Director of the NFIB Small Business Legal Center.

Discrimination laws have been instituted to prevent those with prejudice against any member of society from failing to hire an individual based on a certain feature like race, gender, or disability rather than on their merits, as explained by this article from the Law Offices of Snider & Associates, who deal with civil discrimination claims daily.

“These federal statutes protect minority groups such as women, the disabled, the young, the elderly, and those with genetic diseases. The Civil Rights Act of 1964 also makes it illegal to discriminate against anyone in the workplace based on their race, color, religion, sex, or national origin.”

Failing to abide by these policies could not only cost you a fortune, but it could also cause you to lose your business and never earn your business license back. To help you stay on the straight and narrow, here are a few things business owners should understand about discrimination in the workplace: 

When the Laws Apply.

The laws set forth by the U.S. Equal Employment Opportunity Commission (EEOC) apply to most businesses in the world. More specifically, any business that has 15 or more employees must abide by these laws. 

Most of the time, the laws come into play during hiring and firing. A business owner or hiring manager who fails to hire or chooses to fire a candidate based solely on their disability, for example, would be breaking the law. 

Additionally, the laws may apply when an employee is treated unfairly in the workplace. For example, a woman who is most capable of doing the job may be passed over for a promotion based on her gender. 

As a business owner, be sure to review the laws and policies for anti-discrimination before taking any negative action against an employee. It’s important to be just and fair in your processes to ensure that all employees are treated equally. Otherwise, your employees can rightfully sue you and win their cases. 

When the EEOC Gets Involved.

The EEOC is the government agency designated to monitor and regulate the fair employment of U.S. residents. They determine policies and investigate claims of misconduct in the workplace. In the best-case scenario, the EEOC will find no case of discrimination, and you’ll resume business as usual.

If there’s evidence of misconduct, the EEOC will launch a full-scale investigation. “At the end of their investigatory process, they can issue what’s called a right to sue letter,” attorney Todd Wulffson told SmallBizTrends.com. This means that the employee can hire an attorney and sue with a good chance of winning. The employee might choose not to, however. 

In the worst-case scenario, the EEOC will file a lawsuit on behalf of a victimized employee. With the full force of this legal agency behind them, there’s very little chance of you winning. 

Be Prepared to Prevent Discrimination.

Educating yourself is only the first step in preventing the long arm of the EEOC from coming down on you. You also must help your employees in leadership positions to understand anti-discrimination policies. 

First, create policies and procedures in place that, when followed, make it very difficult to make a discriminatory decision. The EEOC has many recommendations on how to handle employee involvement in the workplace to minimize the chances of discrimination. 

You’ll want a clear structure for spotting discrimination before it occurs. For example, performance reviews can have a multi-tiered system so that a single person isn’t responsible for reviewing an employee’s performance. You can also set clear boundaries for promotion criteria, hiring requirements, and conduct that won’t be tolerated. 

After setting up directions for preventing discrimination, prepare for the possibility that you could be sued. “You need to make sure you’re applying the policies in an anti-retaliatory way,” Wulffson suggests, recommending clear verbiage stating that retaliation will not be tolerated when there are no grounds for discrimination.