The benefits of diversity in staffing have long been recognized, from improved productivity and creativity to increased profits. With that said, there continues to be discrimination—overt or subtle—in some companies.
Clearly, it makes good business sense to embrace diversity, but at a minimum, understand what the law demands to avoid any legal problems from discrimination.
Federal nondiscrimination laws
Title VII of the Civil Rights Act of 1964 bars discrimination in hiring, firing, promoting, or other work-related decisions based on race, color, religion, sex and national origin. In the more than 50 years since enactment, this law has undergone considerable interpretation to protect the rights of individuals from discrimination. Recently, the U.S. Supreme Court made it clear that “sex” applies to gay and transgender individuals. Pregnancy discrimination (discrimination on the basis of pregnancy, childbirth, or similar condition) is also barred by Title VII.
There’s also the Age Discrimination in Employment Act (ADEA), which makes it illegal to discriminate in employment against individuals age 40 or older.
And the Americans with Disabilities Act (ADA) bars discrimination against individuals who have a disability and requires employers to make reasonable accommodations for them in the workplace.
State and local nondiscrimination laws
A number of states and localities have gone farther than the federal government in their nondiscrimination rules. For example, a number of locations—California, Colorado, New Jersey, New York, Virginia, and Washington—have expanded the term “race” to include hair, hairstyle, and hair textures. More than 20 other states are considering this nondiscrimination provision.
What to do
In light of current events, be sure to re-examine your company policies (including the employee handbook) and company culture to make sure that all people have the same opportunities to be hired, advance, and receive equal pay for equal work. Check both internal policies and attitudes as well as legal requirements.
Nonetheless, be sure you’re protected from claims by employees or former employees of discriminatory treatment. The basic business owners policy (BOP) doesn’t provide any coverage for discrimination claims by employees. For protection, you need employment practices liability insurance (EIPL). This policy will provide legal defense against discrimination claims, although you are free to obtain outside counsel if you want to. Discuss with an insurance agent the scope of the coverage so you have the protection you expect. Such policies are also designed for protection against sexual harassment and sexual abuse claims, but check to be sure whether these or other claims are excluded from coverage.