As an HR manager or small business owner, one of the most important employment laws that you need to be aware of is Title VII of the Civil Rights Act of 1964. Despite this fact, many companies are still not clear on the specific details of this fundamental anti-discrimination in the workplace act.
So, what is Title VII, exactly? How does it prevent employee discrimination?
In today’s guide we will discuss what Title VII is, who it protects, and what it prohibits. We will also explain when an employee is entitled to make a claim or allegation against you and share tips to help you stay compliant. That way, you can be sure that you are treating your employees and candidates fairly during each stage of the hiring and employment lifecycle.
Table of Contents
What is Title VII?
Let’s start with the basics. What is Title VII?
Most employment contracts in the US are “at-will”. This means that an employer can dismiss an employee without notice and without having to establish “just cause” for termination. The only exception to this is if the reason for termination is understood as being illegal.
One of the most common forms of illegal termination relates to discrimination. This is where you dismiss an employee as a direct result of their gender, sexual orientation, race, religion, or disability status. And this protection has been made possible thanks to Title VII.
Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employment discrimination and harassment based on race, color, religion, sex (including gender, pregnancy, sexual orientation, and gender identity), and national origin. Title VII specifically prohibits discrimination in the terms and conditions of employment, including hiring, compensation, employment benefits, advancement, employment training, assignments, and termination of employment. Moreover, Congress expanded the Act in the late 1970s by passing the Pregnancy Discrimination Act of 1978. This Act clarifies that pregnancy discrimination is classed as unlawful sex discrimination.
Who does Title VII apply to?
The employee discrimination act, which is enforced by the Equal Employment Opportunity Commission (EEOC), applies to private, state government, and local government employers that employ 15 or more employees. Title VII also applies to federal government employees, public and private universities, employment agencies, and labor organizations. This employment law protects full and part-time employees, suspended employees, and employees on leave or vacation.
The only categories of workers that are exempt from Title VII are:
- Independent contractors
- U.S. citizens who are working abroad for non-U.S.-controlled businesses
- Foreign nationals who are working abroad for U.S.-controlled businesses
- Religious corporations, associations, educational institutions or societies
- Bona fide, tax-exempt private clubs
- Indian tribes
- Businesses on or near an Indian reservation to the extent that they give preferential treatment to individuals living on or near the reservation
- Jobs that require a BFOQ
The 15-employee requirement doesn’t apply if the employer is the federal government. In other words, Title VII protects all federal government employees, regardless of the size of the organization. Moreover, although other types of employers with fewer than 15 employees are not covered by the Act, employees may still be protected from discriminatory employment practices by state or local statutes. It is therefore important that you understand the rules and prohibitions under the Act, as well as any requirements established by your state and local governments.
Employer rules under Title VII
Let’s take a look now at some of the specific employer rules under Title VII.
The seventh amendment of the Civil Rights Act of 1964, known as Title VII, prohibits employers from discriminating against employees and job applicants based on race, color, religion, sex and national origin. Hiring decisions based on stereotypes are also in violation of the law. Furthermore, since Congress amended the Act by passing the Pregnancy Discrimination Act of 1978, pregnancy discrimination is also understood as being unlawful employee discrimination.
Title VII also makes it unlawful to use policies or practices that seem neutral but have the effect of discriminating against people because of their race, color, religion, sex (including pregnancy and related conditions, sexual orientation, and gender identity), or national origin. This is what’s known as disparate treatment.
Other rules under Title VII state that, as an employer, you cannot take a negative action, or retaliate, against a candidate or an employee because they:
- Complained about discrimination, formally or informally
- Filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission
- Participated as a witness in an employment discrimination investigation or lawsuit
What is prohibited under Title VII?
Title VII states the following:
“No person employed by a company covered by Title VII, or applying to work for that company, can be denied employment or treated differently with regard to any workplace decision on the basis of perceived racial, religious, national, sexual, or religious characteristics. No employee can be treated differently based on his or her association with someone who has one of these protected characteristics.
Additionally, employment decisions may not be made on the basis of stereotypes or assumptions related to any protected characteristic.”
In practice, this means that you cannot discriminate in any aspect of employment, including:
- Hiring and firing
- Compensation, assignment, or classification of employees
- Transfers, promotions, layoffs, or recalls
- Job advertisements
- Recruitment
- Testing
- Rights to use employee facilities
- Performance evaluations
- Disciplinary procedures
- Access to training and development programs
- Benefits, including (but not limited to) retirement, vacation, disability leave, and bonuses
- Any other term, condition, or benefit of employment
Under the Act, employers are also prohibited from:
- Retaliation against an individual for filing a charge of discrimination, participating in an investigation, or opposing discriminatory practices
- Making employment decisions based on stereotypes or assumptions about the abilities, traits, or performance of individuals of a protected group (race, religion, national origin, or disability).
- Denying employment opportunities to a person because of marriage to, or association with, an individual from a protected group.
- Employee discrimination because of participation in places of worship associated with a particular racial, ethnic, or religious group
- Harassing an employee because of race, color, religion, sex (including sexual orientation and gender identity), or national origin
- Refusing or failing to make reasonable adjustments to workplace policies or practices that allow individual workers to observe their religious beliefs
Other Title VII rules for employers
There are a couple of other specific rules for employers under this law. These relate to harassment and the use of discriminatory employment practices and policies.
Sexual harassment
Title VII protects employees from sexual harassment in the workplace. According to the Act, sexual harassment is defined as unwelcome conduct in the form of sexual advances, requests for sexual favors and other physical conduct of a sexual nature, where failure to submit to advances either has an express or implied impact on an individual’s employment, unreasonably interferes with the employee’s work performance, or creates a hostile work environment.
The employee discrimination law also prohibits conduct that creates a hostile working environment for any other protected class. This could include jokes, comments, or other forms of harassment.
Discriminatory policies
The seventh amendment of the Civil Rights Act of 1964 prohibits the use of discriminatory employment practices and policies. This includes disparate treatment (intentional discrimination), disparate impact (unintentional discrimination), and adverse impact (the effect an employment practice has on a protected class). For example, it is illegal to only hire white people in a predominantly white area or only interview males for management positions. Title VII also prohibits seemingly neutral job policies that have a disproportionate impact on protected groups.
Examples of discriminatory policies might include:
- Discriminatory dress codes (such as bans on culturally or religiously significant garments)
- Forced retirements
- Pregnancy termination policies
- ‘U.S. Citizen-Only’ policies
The only exception to this rule is when the lack of a protected characteristic is a bona fide occupational qualification (BFOQ) for a particular job. For example, if a production company is looking to hire an actor to play the role of James Bond, then they would be entitled to only consider white males without it being deemed as legal discrimination on the basis of race and sex.
Equal Employment Opportunity Commission and Title VII
Title VII of the Civil Rights Act of 1964 is enforced by the Equal Employment Opportunity Commission (EEOC). Congress created the EEOC, a federal agency, in 1964. Its role is to investigate charges brought against employers regarding discrimination against employees and job applicants.
If an employee believes that they are a victim of workplace discrimination, then they can file one of a number of legal claims.
These claims include, but are not limited to:
- Disparate treatment: When an employer intentionally discriminates against an employee or job applicant as a direct result of their race, color, religion, national origin, or sex.
- Disparate impact: When a seemingly neutral practice unduly impacts employees in a protected class, often unintentionally.
- Harassment: Including quid pro quo harassment and the creation of a hostile work environment.
- Retaliation: The intentional punishment of an employee or applicant who opposes an employment practice that violates Title VII or testifies or participates in a Title VII investigation or proceeding.
- Negligence: Usually relates to when an employer fails to prevent harassment or discrimination from taking place.
If an employee files a complaint, the EEOC will notify the employer that an investigation has begun. This complaint must be filed within 180 days of the discriminatory offence taking place. The results of this investigation determine the course of action that the EEOC will take.
This might be:
- A federal lawsuit, if the results of the investigation prove that a violation has occurred.
- Mediation, if both parties express an interest in resolving the matter out of court.
- Dismissal, if the EEOC finds that there is no evidence of a violation to support the claim.
Compliance tips for employers and managers
We are now going to share a few tips to help you stay compliant with the employer obligations defined in Title VII.
Create an anti-discrimination policy
If you don’t already have one, you should create a detailed employee handbook that clearly defines your workplace rules, guidelines, and internal policies. That way, your employees will understand what their rights are and what’s expected of them. Documenting your policies will also help you establish your procedures for hiring, promotions, training, employee discipline, and termination.
Make sure your handbook includes an anti-discrimination policy. This policy should include a statement about your commitment to zero tolerance for harassment or discrimination. It should also include an equal opportunity statement to protect your business from potential lawsuits.
If you already have an anti-discrimination policy, review it to make sure it complies with Title VII.
Advise your employees of their rights
Title VII requires employers to post workplace notices explaining the rights this law gives employees. This includes an employee’s right to be free from retaliation in the event that they report an EEO violation. Make sure you post these notices in high-traffic areas so that all employees have access to them.
Maintain accurate records
Make sure you create an effective record-keeping system to document all processes that occur in your business. This includes documents relating to recruitment, hiring, firing, promotions, performance evaluations, training opportunities, and disciplinary procedures. You should also maintain a written record of any issues that arise, especially if they relate to internal claims of discrimination.
In terms of record-keeping, if your company has 100 or more employees, you also need to file an EEO-1 form every year. The EEO-1 form details the racial, gender, and ethnic demographics of your workforce and provides data on your company’s nondiscrimination efforts. You must retain a copy of this form for three years.
Promote inclusivity and address your biases
Most companies are aware of the importance of promoting DEIB (diversity, equity, inclusion, and belonging) and inclusive leadership in the workplace. By implementing these measures you can create an environment where all your employees feel that you respect them and treat them fairly.
You should also establish a training program that helps all your employees understand what workplace discrimination is and how they can promote a sense of inclusion for all. It’s also a good idea to offer your hiring managers bias training. This will help them identify and understand any conscious or subconscious prejudices, such as gender bias recruitment or issues with ageism and promotion.
Use the right tools and software to ensure compliance
Using the right tools and software can help you create an environment that is free from discriminatory employment practices. The right tools will help you avoid any costly compliance errors and maintain consistency across all departments in your company. They can also help you improve your communication, document management, and reporting processes.
For example, Factorial’s ‘all-in-one’ centralized HR software platform includes a vast array of features that help your company stay labor compliant. In addition to features that help you stay compliant, our application includes features for applicant tracking, performance management, reporting, and document management. Plus, you get access to a DEI dashboard. You can use this dashboard to monitor all your diversity, equity, and inclusion metrics. That way, you can continuously improve your diversity and inclusion levels and further protect your employees from discrimination.
Penalties for non-compliance
As we mentioned above, if the EEOC finds that an employer has violated the terms of Title VII, then the offending company could be subject to a penalty for non-compliance. As of February 2022, this penalty stands at $612 per Equal Employment Opportunity (EEO) violation. However, fines can rise sharply if the EEOC determines that the violation was intentional.
Penalties for intentional discrimination depend on the size of the offending company:
- 15-100 employees: a maximum of $50,000
- 101-200 employees: a maximum of $100,000
- 201-500 employees: a maximum of $200,000
- Over 500 employees: a maximum of $300,000
Related legislation
We have discussed the importance of understanding Title VII. We have also mentioned the impact of The Pregnancy Discrimination Act of 1978, and The Civil Rights Act of 1991. However, there are a couple of other federal discrimination laws that you need to be aware of. These are The Age Discrimination in Employment Act (ADEA) and The Americans with Disabilities Act (ADA).
Let’s finish by taking a look at these two federal laws.
The Age Discrimination in Employment Act
The Age Discrimination in Employment Act (ADEA) of 1967 protects workers who are age 40 and older from workplace discrimination. It prohibits employers from making decisions to hire, fire, or promote employees based on their age.
The ADEA outlines a comprehensive ban on discriminatory practices based on age. Specifically, it prohibits the following:
- Discrimination in hiring practices, the awarding or withholding of promotions, wages, terminations, and layoffs.
- The use of or making statements regarding certain age preferences or limitations.
- Harassing older employees because of their age.
- Denying benefits to older employees.
- Mandatory retirement at a certain age.
The Americans with Disabilities Act
The Americans with Disabilities Act of 1990 (ADA) makes it unlawful to discriminate in employment against a qualified individual with a disability (ableism in the workplace). The ADA also outlaws discrimination against individuals with disabilities in State and local government services, public accommodations, transportation and telecommunications. This Act protects the rights of both employees and job seekers.
The Equal Employment Opportunity Commission enforces the ADA together with State and local civil rights enforcement agencies. Moreover, although not responsible for enforcing the Act, the Department of Labor’s (DOL) Office of Disability Employment Policy (ODEP) offers technical assistance on the basic requirements of the law. This includes the obligation to provide reasonable accommodations to qualified job applicants and employees with disabilities.
Finally, aside from Title VII and the other federal laws we have discussed here, you also need to be aware of any local or state employee discrimination laws that may apply to your business. Keeping up to date with all local, state, and federal legal obligations will ensure your business is compliant and protected from potential violation penalties. It will also help you build a fair and diverse organization where your employees can thrive, and your business can grow.
