Want to bulletproof your business from employment discrimination lawsuits?
Claims of workplace discrimination are becoming more common. The EEOC reported 88,531 new discrimination charges in 2024, a 9.2% increase from the prior year.
Here’s the problem:
Employers rarely know they are violating discrimination laws until it’s too late. By then you are facing expensive lawsuits, lost reputation, and even criminal penalties.
The good news is that compliance with employment discrimination law doesn’t need to be complicated or confusing. With the right systems in place, you can protect your business and create a fairer and more productive workplace for all your employees.
Your complete compliance roadmap:
- Know Your Legal Requirements
- Build a Discrimination-Free Culture
- Develop and Enforce Anti-Discrimination Policies
- Train Your Employees and Managers Effectively
- Respond to Complaints Properly
1. Know Your Legal Requirements
Before you can comply with discrimination laws, you need to know what they are.
Employment discrimination laws cover various types of employee mistreatment or unfair treatment based on protected characteristics such as race, color, religion, sex, national origin, age, disability, and genetic information.
If you are unfamiliar with these laws, now is the time to become educated. Discrimination Lawyers can help you understand your specific legal obligations and how to comply with both federal and state laws.
The most important federal discrimination laws:
- Title VII of the Civil Rights Act
- Age Discrimination in Employment Act (ADEA)
- Americans with Disabilities Act (ADA)
- Equal Pay Act
- Pregnant Workers Fairness Act (PWFA)
Keep in mind though…
Federal laws are the floor, not the ceiling, when it comes to discrimination compliance. State laws are just as important (if not more so) and provide additional protections against workplace discrimination.
Comply with both. Violating even one law can cost your business hundreds of thousands of dollars in lawsuits and settlements. The EEOC awarded $694 million to victims of discrimination in 2024, the highest recovery in the last few years.
2. Build a Discrimination-Free Culture
There’s a secret to discrimination compliance most employers miss…
It’s not just about following the rules. It’s about creating a culture where discrimination and harassment never happen to begin with.
It starts with strong leadership setting the tone and example for the entire company. This means leaders:
- Speak up and act when they see unfair treatment
- Value diversity and inclusion in all its forms
- Encourage open dialogue and reporting of concerns
- Make sure that promotions and opportunities are available and distributed fairly.
This type of company culture doesn’t happen overnight. But when you commit to it and work towards it, compliance becomes much easier.
3. Develop and Enforce Anti-Discrimination Policies
Your business needs clear, written policies stating that discrimination is prohibited and how your company prevents it.
You anti-discrimination policy should be in writing, easy to understand, accessible to all employees, reviewed annually, and applied fairly and equally to all employees at all levels.
Make sure your policies cover:
- Hiring and recruitment
- Compensation and benefits
- Promotions and transfers
- Discipline and termination
- Leave and accommodations.
And here’s the key…
Your policies need to be more than a paper document. They need to actually inform decisions and actions every day. Your policy needs teeth.
4. Train Your Employees and Managers Effectively
Here’s where most employers get it wrong:
They think one annual training session is enough to check the compliance box. It’s not.
Anti-discrimination training needs to be ongoing, interactive, and connected to your specific workplace. Automatic online modules that employees click through with their eyes half closed? That won’t cut it.
Here’s what real training looks like:
- Training on discrimination and harassment during onboarding and then annually or biannually after that.
- Training that uses real world workplace examples.
- Training that focuses on both blatant and subtle forms of discrimination.
- Training that explains the complaint process to all employees.
- Training that teaches managers how to investigate and handle complaints appropriately.
And here’s another thing…
Managers and supervisors need even more training than non-managerial employees. They are the ones making hiring, pay, promotion, and discipline decisions. If they do it wrong, your company is on the hook.
Document all training with a list of who attended what training and when it occurred.
5. Respond to Complaints Properly
Employee complaints of discrimination and harassment are the biggest thing that can go wrong and end up in lawsuits.
The good news is that how you respond to complaints makes the difference between fixing a problem and getting sued. Here’s how to handle complaints properly.
Take every complaint seriously and investigate it fully and promptly.
A proper investigation:
- Begins immediately after receiving a complaint
- Is conducted by a neutral party
- Interviews all relevant witnesses
- Is documented in writing
- Protects the complainant from retaliation
Never retaliate against an employee for filing a complaint or participating in an investigation. Retaliation claims are the most common type of discrimination charge, making up more than half of EEOC complaints.
If the investigation shows that discrimination did occur, take immediate corrective action, which may include disciplining the perpetrator, retraining, or updating policies.
Additional Best Practices
Regular compliance audits: Think of compliance audits as annual physicals for your business. Just like a physical catches problems before they turn into illnesses, a compliance audit can catch discrimination problems before an employee files a complaint. Schedule regular audits of your hiring, pay equity, promotion decisions, and discipline actions. Look for patterns that might indicate discrimination even if no one has complained yet. Audit these areas at least annually:
1. Demographics in hiring and promotions,
2. Pay differences across protected categories,
3. Discipline action patterns,
4. Accommodation request handling,
5. Complaint and investigation records.
When you find pay disparities, hiring/promotion disparities, or discipline disparities, investigate them. You need a legitimate, non-discriminatory explanation for any such pattern or disparity. If you don’t have one, change things before someone files a charge.
Documentation: Documentation is your friend. When you have to defend against a discrimination claim, a single comment on a piece of documentation can win or lose a case. Good documentation demonstrates that you followed proper procedures, made decisions for legitimate business reasons, and took complaints seriously. Document all of the following and keep the documentation in personnel files:
1. Performance reviews and feedback,
2. Disciplinary actions and warnings,
3. Reasonable accommodation requests and your responses,
4. Complaint investigations and outcomes,
5. Training attendance and completion.
Remember though that bad documentation can harm you too. Do not put discriminatory comments in documentation or show a pattern of treating some employees differently in your documentation.
Wrapping It Up
Compliance with employment discrimination law can protect both your business and your employees. It’s not just about avoiding lawsuits. It’s about creating a better workplace for everyone where success is based on ability and contribution, not irrelevant personal characteristics.
The 5 key strategies covered in this article to implement for discrimination law compliance:
- Know your legal requirements for federal and state discrimination law
- Build a discrimination-free company culture from the top down
- Develop and enforce anti-discrimination policies
- Provide employees and managers with ongoing and effective training
- Handle complaints properly
- Conduct regular compliance audits and checkups
- Document, document, document everything.
Discrimination charges are increasing every year. Don’t wait for a lawsuit to force your hand. Start today to protect your business and create a discrimination-free workplace where all employees can succeed.
