The Ultimate Guide to Employee Discrimination Laws

By QuickBooks

5 min read

Many small businesses may not have a human resources department or specialized Equal Employment Opportunity staff; therefore, access to detailed information regarding these practices is a necessity.

This guide will walk you through everything you need to know concerning employment discrimination laws, including what practices are considered discriminatory, exceptions to discrimination and necessary documents for employers and employees.

Laws and Constitutional Basis

Employment discrimination law in the United States derives from a vast collection of state and federal laws, as well as county and municipality ordinances.

The Constitution protects against discrimination in the government, but federal law expands to a number of departments and private sectors. State laws often extend these protections.

The following is a breakdown of some of the various federal discrimination laws that have developed over time:

  • Title VII: Prohibits discrimination in more aspects of employment, such as color, religion, sex or national origin.

A full list and overview of these laws and others can be found at Cornell University’s Legal Information Institute’s page on Employment Discrimination.

Protection from Discriminatory Practices

Various types of discrimination are prohibited by the laws enforced by the United States Equal Employment Opportunity Commission (EEOC). TheEEOC protects employees from discrimination based on:

  • Age: The EEOC only regulates discrimination against people who are over age 40, although some states do have laws that protect younger workers.
  • Disability: Includes mental and physical disabilities, as well as current and past illnesses, as long as the employee would be able to adequately perform their job duties with reasonable accommodations.
  • Genetic Information: Includes family medical history and risk of potential diseases.
  • Pregnancy: Must be treated the same way as any other temporarily disabled employee.
  • Race/Color: Can also include discrimination against a person married to or connected with another person of a certain race or color or because of a person’s connection to a race-based organization or group.
  • National Origin: Can also include discrimination against a person married to or connected with another person of a certain nationality or because of a person’s connection to an ethnic organization or group.
  • Religion: Includes traditional organized religions as well as other sincerely held personal beliefs.
  • Sex: Includes gender identity, transgender status and sexual orientation.
  • Military service or affiliation.
  • Bankruptcy or debts.
  • Retaliation: All EEOC enforced laws make it illegal to fire, harass, demote or otherwise retaliate against people who have filed a discrimination suit or complained about discrimination on the job.

Discriminatory Practices

Under most federal and state laws, it is illegal to discriminate in any aspect of employment, including:

  • Hiring and firing
  • Compensation, assignment or classification of employees
  • Transfers, promotions, layoffs or recalls
  • Harassment based on any of the protected factors, such as religion, gender and disability.
  • Job advertisements
  • Recruitment
  • Testing
  • Use of company facilities
  • Training programs
  • Fringe benefits
  • Pay, retirement plans, medical leave


There are occasional certified exemptions regarding discrimination in the workplace if hiring choices are made in regulation with specific qualifications:

  • Bona fide occupational qualifications (BFOQ): Employers can consider characteristics that would otherwise be discriminatory if they are BFOQ, such as a religious school only hiring staff of that religious affiliation.
  • Religious organizations: Some religious organizations may be exempted entirely for certain categories, such as a church only hiring male clergy members because of sincerely held belief systems.
  • Military: The United States Army can exclude women from specialties, positions and units that routinely engage in direct combat.

Who Is Covered?

Organizations are covered by these laws and their enforcement if they have a qualifying number of employees. This also varies upon the type of the employer, such as whether the employer is a private company, a state or local government agency, a federal agency, an employment agency or a labor union.

General coverage for private companies typically requires fifteen or more employees who have worked for that employer for at least twenty weeks. More information regarding coverage can be found on the EEOC website.

Court Charges and Enforcement

Regarding enforcement and interpretations of these regulations, various federal and state entities are responsible for the process of handling claims and enforcing charges. The following are the related programs governing particular discrimination rulings:

  • Established under the Civil Rights Act of 1964, the EEOC interprets and enforces the majority of federal laws regarding employment discrimination.

Resolving and Remedying Charges

The EEOC offers employers the opportunity to resolve claims and charges brought against them. The voluntary methods of resolution include mediation, settlement and conciliation.

Whether or not the discrimination actually occurred, it is important to rectify the situation and ensure the employee is placed in the same position he or she would be in if the discrimination never occurred. These remedies may include compensatory, punitive and liquidated damages.

Requirements and Documents for Employers

It is wise for businesses to have a systematic procedure for recordkeeping, regardless of if a charge has been filed and additional recordkeeping when a charge has been filed. The EEOC often collects workforce data regardless of claims filed. It is also recommended to have this information on hand to document and prove valid terminations.

Employers are also required to post notices regarding Federal laws prohibiting job discrimination based on race, color, national origin, age, disability, genetic information, religion or sex. Posters can be requested through the EEOC here.

In order to prevent discrimination in the workplace, consider including a Non-Discrimination Policy in your Employee Handbook.

Other necessary documents are available through these links:

The best way for an employer to avoid employment discrimination suits is to stay educated about the laws surrounding employment obligations. Identifying a reputable employment law firm can assist in preventing and solving any issues that may arise in the process.

For additional information, visit the EEOC Employer website or contact the EEOC Small Business Liaisons for assistance.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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