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What is Equal Employment and How Can Small Businesses Ensure Compliance?

written by: N. Plowman • edited by: Michele McDonough • updated: 5/18/2011

The concept of equal employment seems simple, but it can be extremely difficult to implement sound business practices that comply. This article identifies what EEO is, the importance of EEO, and how to ensure compliance in employment practices.

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    Defining Equal Employment Opportunity

    The concept of equal employment emerged during the civil rights era to make minorities and women equal to their white-male counterparts. Although Title VII of the Civil Rights Act aims to protect employees from discrimination on the basis of skin color, religion, race, sex, and national origin, many felt additional legislation needed to be implemented to further protect individuals. Therefore, the Equal Employment Opportunity Commission (EEOC) was developed specifically to address issues of discrimination and unequal employment practices.

    In addition to the protected classes addressed in Title VII, the Equal Employment Opportunity law protects discrimination based on sexual orientation, age, individuals with disabilities, marital status, parental/pregnancy status, and military/veteran status.

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    The Importance of Equal Employment

    Equal employment practices are important for both individuals and organizations. On an individual basis, EEO laws accomplish many things. First, EEO helps establish a baseline for acceptable behavior, which is important considering the vast array of lifestyles, values, and attitudes individuals have. Secondly, EEO practices help individuals feel they are being treated fairly and equally, which can increase an individual’s level of commitment, satisfaction, and loyalty to their employer. A third reason involves a person’s mental mindset and sense of personal worth and well-being. An individual that feels confident in all situations, even ones where he or she is a minority, will help the individual’s sense of overall worth and ability to comfortably contribute.

    diversity When considering the important of equal employment practices for organizations, it is easy to see the benefits of EEO laws. First, an organization that can confidently state that they practice equal employment has a greater advantage to attracting qualified and dedicated candidates. Secondly, an organization that is EEO compliant decreases the chances of facing a discrimination or wrongful discharge lawsuit. Finally, an organization that ensures equal employment for all increases the chances that it will have a diverse workforce, which has many positive implications for teams, departments, and overall organizational productivity and creativity.

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    Legal Ramifications of Unequal Employment Practices

    There are many legal consequences associated with violating an antidiscrimination law. Companies can experience financial impacts resulting from settlements and court fees. Businesses may also see a decrease in customer and employee loyalty. Furthermore, other companies may tend to avoid doing business with employers who intentionally discriminate against employees.

    If an employee feels he or she has been treated unfairly, the individual can file a complaint with the EEOC. The EEOC will then investigate and determine whether a pattern of discrimination is evident. The EEOC protects employees against both types of discrimination, but the consequences of committing disparate treatment (intentional discrimination) are more sever because it involved motive.

    If an employment procedure or practice unintentionally discriminates against employees, disparate impact is said to have occurred. When the EEOC investigates claims of disparate impact, the employer is held legally responsible to provide substantial evidence to support the continued use of the employment practice. Such evidence may include the existence of bona fide occupational qualifications (BFOQs), which are discriminatory qualifications that are legally justified on the basis of business necessity, social appropriateness or propriety, and safe and efficient job performance.

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    Steps to Ensure Compliance with EEOC Laws

    Businesses that evaluate their employment practices according to the following guidelines can ensure they develop and implement legal, ethical, fair, and justified employment standards. This list is not meant to be inclusive, but rather a guideline of areas to evaluate to ensure compliance with EEO laws.

    1. job ads When recruiting applicants for a position, submit advertisements in a variety of sources (web, newspaper, job board, flyers, etc.). The greater number and variety of sources utilized ensures that a broader range of candidates are notified and have the opportunity to apply. If a business focuses on a single method of advertisement, the company is missing a population that might not have access to that particular communication channel.

    2. When selecting qualified candidates from a large applicant pool, it is critical to standardize selection processes. The more subjectivity involved in the selection process, the more likely a hiring manager will allow (albeit intentionally or unintentionally) his or her biases to sway selection decisions. Furthermore, a more objective and standardized process helps ensure accuracy of screening results and increases retention.

    3. When a position opens up and an employer wants to promote from within, formal steps need to be taken to ensure all qualified candidates have an equal opportunity to be notified and apply for the position. These steps include posting the position for a specified period of time, placing the notice of vacancy in a highly-populated area or in a popular mode of communication, developing standardized screening tests and techniques to promote the most qualified employee, and thoroughly debriefing unselected candidates as to the reasoning and rationale.

    4. When implementing a formal grievance process, a company must enforce a strict confidentiality clause. Without trust in anonymity, employees can be intimidated by the thought of retaliation, especially those of protected classes. Furthermore, utilizing a third-party mediator significantly increases the likelihood of positive and fair dispute outcomes.

    5. When making compensation decisions, a company must ensure that the compensation strategy is well-documented and there is ample evidence to support the fact that the company is abiding by the written policy. Furthermore, provide employees a copy of the strategy to enable all employees to make the most of opportunities that will yield higher compensation.

    6. Implement a formal documentation process for unsatisfactory behavior and formal warnings. Furthermore, businesses should identify standards of behavior and performance expectations that can be used as evidence for temporary suspensions, loss of bonuses, and potential terminations.