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Business Protection Bulletin


By November 1, 2009No Comments

During the past several decades, Congress and state legislatures have enacted numerous laws protecting workers from unfair discrimination by their employers. These laws affect all but the very smallest employers and cover a wide variety of employee characteristics. Failure to abide by them can cause a great deal of trouble for employers. Under Title VII of the Civil Rights Act of 1964, employers may not discriminate against employees on the basis of race, national origin, religion, or sex. The prohibition applies to aspects of employment such as:

  • Hiring and firing
  • Compensation, assignment, or classification of employees
  • Transfer, promotion, layoff, or recall
  • Job advertisements
  • Recruitment
  • Testing
  • Use of company facilities
  • Training and apprenticeship programs
  • Fringe benefits
  • Pay, retirement plans, and disability leave
  • Other terms and conditions of employment.

Employers are also prohibited from taking actions that would have a disparate impact on a protected class of employees. For example, firing all employees who cannot work on Sundays might have a disparate impact on individuals whose religions forbid them to work. Title VII also bars discrimination based on pregnancy. Finally, the law prohibits “reverse discrimination,” which occurs when an employer goes so far to protect members of a minority or protected group that it harms members of other groups.

Other types of restricted discrimination include:

  • Pay discrimination based on gender. The federal Equal Pay Act of 1963 requires employers to provide equal pay to men and women for equal work on jobs where the performance requires equal skill, effort, and responsibility, and which are performed under similar working conditions. However, employers can make allowances for seniority, merit, quality or quantity of production, or differentials based on factors other than sex.
  • Age discrimination. The Age Discrimination in Employment Act bars deliberate discrimination against workers over 40. However, it does not prohibit actions that have a disparate impact against older workers as a group.
  • Disability discrimination. The Americans with Disabilities Act forbids employers from discriminating against workers who are disabled, have a history of disability, or whom the employer considered to be disabled. The law requires the employer to provide reasonable accommodations for the disabled employee, such as modified work duties or schedules, special tools, and unpaid time off, if needed.
  • National origin. Under the Immigration Reform and Control Act, employers may not discriminate against U.S. citizens or non-citizens who are in the country legally on the basis of their national origin.

Some of these laws also prohibit harassment against protected employees; retaliation against those who make complaints; and discrimination based on employee’s marriage to or association with a member of a protected group or participation in schools or places of worship associated with these groups. Although federal law does not prohibit discrimination based on a person’s sexual orientation, some state and municipal laws do. Other local laws may forbid discrimination against employees with children, welfare recipients, and on the basis of marital status. Employers should familiarize themselves with the laws in their states.

Even the most well-intentioned employers might find themselves the target of an employment discrimination action. For this reason, every employer should consult a professional insurance agent about purchasing Employment Practices Liability insurance. This coverage protects the employer from the cost of suits and damages alleging most types of discrimination. They do not, however, cover fines or penalties assessed by regulators. One of our agents can help you obtain appropriate coverage at a reasonable cost.

Workers who used to endure unfair discrimination now have the law on their side. Employers must avoid discriminatory practices, for the good of their workers and their businesses.