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How to Make Sure You’re EEO Compliant

Max Freedman
Max Freedman
Business News Daily Contributing Writer
Updated Aug 22, 2022

Federal law bars employers from discriminating against potential or current employees on factors such as gender, race and age.

  • Equal employment opportunity (EEO) compliance laws forbid discriminating against employees and job applicants based on protected characteristics.
  • The EEO laws businesses must follow depend on their size and number of employees.
  • To maintain your company’s EEO compliance, you must identify and correct your biases, provide accessibility accommodations, determine your business’s reporting requirements, and consider enacting an affirmative action plan.
  • This guide is for business owners who want to learn more about EEO and ensure their compliance.

Federal and state equal employment opportunity standards are in place to prevent job discrimination and inequitable hiring practices in the private sector. These guidelines offer your company a roadmap to ensure employees are treated fairly, from the moment they submit their application throughout their time with your company. To help you navigate these state and federal regulations, we created this guide to explain EEO laws and describe how you can make sure your business remains compliant with legal requirements.

What are equal employment opportunity (EEO) laws?

Equal employment opportunity laws are a government-mandated set of civil rights protections against job discrimination on the basis of race, color, gender, religion, national origin, disability, age, genetic information and other characteristics. Title VII of the Civil Rights Act of 1964 governs anti-discrimination measures for the first five of these protected classes. A federal agency called the Equal Employment Opportunity Commission (EEOC) ensures that employers comply with Title VII and all EEO laws. There are also state EEO laws that some employers must abide by, depending on where their businesses are located.

As an employer, you should note that certain EEO requirements have implications that may not be immediately obvious. For example, EEO laws explicitly ban discrimination based on sex, but do not specifically name sexual orientation or gender identity. However, a Supreme Court ruling has extended EEO laws to protect all sexual orientations and gender identities.

EEO protections apply across employment and workplace-related areas. According to the Society for Human Resource Management, these laws apply to recruiting, job interviews, background checks, hiring, compensation and benefits, working conditions, disciplinary actions (including terminations), promotions, and leave management.

Key TakeawayKey takeaway: EEO laws bar employers from discriminating against employees and job applicants based on aspects of their backgrounds, identities and life circumstances.

What does it mean to be EEO compliant?

At its most fundamental, EEO compliance means treating all people equally when it comes to hiring, promotions, compensation, layoffs, benefits, disciplinary actions and other employment practices. While all employers are required to provide equal pay for equal work, The EEOC requires different things for different businesses based on size:

  • For employers with 14 employees or fewer, EEO compliance requires paying employees of all gender identities equally for equal work.
  • For employers with 15 to 19 employees, EEO compliance prohibits discrimination against all protected classes except for age in all employment and hiring practices.
  • For employers with 20 or more employees, EEO requirements expand to ban age discrimination against people 40 years old or older.

EEO laws that apply to your company apply at all times. Your state may have additional rules depending on your company’s size.

When ensuring EEO compliance, you must consider not only your employees, but their families too. EEO laws ban discrimination against employees not only based on their own demographic traits, but also based on their partners’ or children’s race, color, sex, gender identity, sexual orientation, ethnicity, religion, disability, age or genetic information.

EEO compliance also extends to sexual harassment because, under Title VII, the federal government classifies sexual harassment as sex discrimination. Title VII also states that anyone who is hurt or offended by the perpetrator’s behavior is a victim of sexual harrassment, not just the person at whom the behavior was targeted.

Sex discrimination is arguably the most expansive civil rights protection that EEO laws cover. Title VII also bans discrimination against victims of domestic violence, sexual assault or stalking. This means if you find out that any of your employees or job applicants is a victim of these crimes, you cannot incorporate this knowledge into business and HR decisions. Victims of the same crime must also receive the same treatment in the workplace. 

How to maintain EEO compliance

If you apply common sense and standard fairness in your employment and business practices, you shouldn’t have trouble maintaining EEO compliance. That said, basic decency is only the start. You should also take the following steps.

1. Address your biases.

Some forms of discrimination that occur in the workplace are fairly well known, like the wage disparity between men and women and between white and nonwhite employees. Other biases and forms of workplace discrimination, however, are less widely known or understood. 

One common example of workplace discrimination is implementing a dress code or time-off policy that doesn’t fairly accommodate your employees’ religious traditions. Another could be failure to institute policies for responding to allegations of discrimination. This failure to respond indicates the bias of not believing that discrimination is a serious workplace issue.

2. Provide accessibility accommodations.

In 1990, the federal government enacted the Americans with Disabilities Act. While the ADA is distinct from EEO laws, it should still be a priority in your EEO compliance.

For example, you cannot reject someone’s job application because you believe their mobility impairment will prevent them from using the stairs at your workplace. You must treat these applicants exactly as you would treat other applicants. If you assume that all people with disabilities will not be able to use the stairs leading to your office, that’s disability discrimination. Furthermore, the ADA may require you to provide a ramp or another reasonable accommodation. Even if accommodations are not required of your workplace, providing them helps foster a more inclusive workspace. 

You should also keep in mind that disabilities include far more than mobility issues. The exact ADA definition of a disability is a “physical or mental impairment that substantially limits one or more major life activities.” Under this definition, mental illnesses, cognitive impairments and many more conditions qualify as disabilities.

3. Create an affirmative action program.

While most employers are not required to create affirmative action programs, you may want to draft one anyway. An affirmative action plan outlines the steps your company is committed to taking to both recruit and support employees from underrepresented groups – namely, employees who aren’t cisgender, heterosexual, caucasian and/or male.

If you enact an affirmative action program, you should include measurable goals. For example, you may decide that a certain percentage of your workforce should include employees from nondominant groups. Any thresholds you set that don’t violate the discrimination protections of Title VII are legally sound.

While most employers aren’t legally required to create affirmative action plans, certain federal contractors must do so. If your company has federal contracts, this government guide spells out your legal obligations. Additionally, employers and contractors with at least $10,000 in federal contracts may need to comply with EEO laws even if they aren’t required to institute affirmative action programs.

4. Post required notices.

Title VII, the ADA and the Genetic Information Nondiscrimination Act all require employers to post workplace notices explaining the rights these laws give employees. You should post these notices in high-traffic areas of your workplace to avoid EEO violation penalties. If an employee brings a complaint to the EEOC and you haven’t posted notices in appropriate areas, you could be fined even if the EEOC finds no other wrongdoing on your part.

5. File EEO reports.

If your company has 100 or more employees, you must file an EEO-1 form every year. So must federal contractors with at least 50 employees and $50,000 in contracts.

The EEO-1 form details the racial, gender and ethnic makeup of each sector of an employer’s workforce. In other words, it provides data on your company’s nondiscrimination efforts. Even if you’re not required to file an EEO-1 form, completing one may help you assess your EEO compliance.

Let’s say you discover that, at your 22-person company, 18 employees are white men. Chances are you already knew this, but maybe you never thought critically about it until now. That’s exactly the point of EEO law – it forces employers to step outside of their implicit employment biases.

Key TakeawayKey takeaway: To maintain your company’s EEO compliance, address your biases, provide accessibility accommodations, create an affirmative action plan, and acquaint yourself with the EEO-1 form.

What are the penalties for violating EEO laws?

If your company fails to comply with EEO laws, the EEOC may require you to pay a penalty. The fines for these penalties have risen sharply over the past two decades: In 1997, the EEOC increased the penalty for each EEO violation from $100 to $110. As of February 2022, that fine is now $612 per EEO violation.

Failure to post notices of EEO laws accounts for a large number of EEO violations. If you post these notices in prominent, accessible locations in your workplace while making sure not to discriminate in your hiring and employment practices, you’re well on your way to consistent, continuous EEO compliance.

TipTip: Workplace retaliation is the most common violation of EEO standards, and discrimination on the basis of disability is the second most common. Intentional conversations with HR and among your leadership team about recognizing and preventing these violations can help you maintain EEO compliance.

What happens when companies ignore EEOC laws? 

Unfortunately, EEOC violations are common, even among major companies. In recent years, some high-profile cases have included discrimination based on disability and gender. 

Walmart 

Marlo Spaeth, who was born with Down Syndrome, began working as a sales associate for Walmart in 1999. Because of her disability, Spaeth was unable to drive and relied on the city bus for transportation. Furthermore, she had significant difficulty navigating changes in her daily routine. Her specific shift, 12 p.m. to 4 p.m., was chosen to accommodate these needs. However, changes to Walmart’s scheduling guidelines and systems in the mid-2010s left her with a new schedule that made it impossible for her to take the bus home for dinner. Walmart fired Spaeth in 2015 for absenteeism because she had to regularly leave her shifts early to make it home. After Walmart refused to rehire Spaeth, the EEOC filed a lawsuit on her behalf. The jury quickly determined that Walmart violated the ADA and awarded Spaeth $150,000 in compensatory damages and $125 million in punitive damages, though the latter was reduced to $300,000 due to statutory caps. 

Dell 

Kea Golden had 24 years of experience working in IT when Dell acquired her company and hired her alongside her three male coworkers in 2017. While working for Dell, Golden and one male coworker performed the same tasks and worked on the same assignments, all within the same department. However, Dell paid Golden $17,510 less each year. The EEOC filed a lawsuit against Dell on Golden’s behalf, asserting that they had violated the Equal Pay Act and Title II by discriminating against Golden for being a woman. In 2021, both parties voluntarily agreed to settle the case. Dell paid Golden $75,000 in monetary relief and agreed to post a notice of employee rights including the EPA and Title VII, to conduct a specialized training on the EPA, Title VII and EEO compliance, and report in employee allegations of discrimination to the EEOC for two years. 

Lowe’s 

A man with a spinal cord injury began working at Lowe’s in 2006, and was promoted to department manager two years later. Due to his injury, the manager was unable to operate certain power equipment that required both hands. However, he successfully delegated the task to associates and worked as a manager for six years. Lowe’s was aware of his disability throughout his hiring and promotion process. In 2015, they alerted him that he would no longer receive his reasonable accommodation, and they demoted him to a non-supervisory role. The manager’s pay was cut by over $4 an hour. In 2018, a three-year consent decree settled the suit. Lowe’s restored the manager’s position and paid him $55,000 in monetary relief. They also agreed to conduct an ADA training at the store where the violation took place. 

Did you know?Did you know?: In 2021, the EEOC resolved 21 discrimination lawsuits, awarding $15 million to nearly 800 individuals.

Make a better workplace for everyone

Every business or company should work to uproot discriminatory practices and to treat and pay all employees fairly. EEO compliance is only the beginning of this important process. The ideal workplace should accommodate employees’ needs, offer them a safe way to report EEO violations or harassment without fear of retribution, and encourage open communication and collaboration. Fostering a fair, safe and inclusive workplace not only protects your employees from unfair treatment and your company from EEOC lawsuits, but also helps your business meet its goals. 

Image Credit: Inside Creative House / Getty Images
Max Freedman
Max Freedman
Business News Daily Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.