Transgender Equality in the Workplace: What Employers Need to Know

Transgender Equality in the Workplace

Have you updated your policies for transgender equality in the workplace? If you haven't, according to the EEOC, you're legally behind schedule.

When was the last time you reviewed your policies around transgender equality in the workplace? Are your handbooks and training up to date? According to the U.S. Equal Employment Opportunity Commission (EEOC), if you haven't updated your policies, you're behind schedule.

The numbers prove that transgender and LGBT discrimination is an issue in need of serious attention from employers. Over the last five years, for example, one in four LGBT employees reported experiencing employment discrimination, according to Out & Equal Workplace Advocates. Among transgender employees more specifically, 75 percent say they take steps to avoid mistreatment at work. And over 25 percent of transgender workers in the last year reported being turned down for a job or promotion — or fired — because of their gender identity.

In 2002, only three percent of Fortune 500 companies had discrimination protections for gender identity in place; by 2017, that number had increased to 82 percent, according to Out & Equal Workplace Advocates. But should all companies include these kinds of policies? Is blocking discrimination against gender identity a legal obligation or just a best practice?

Title VII and gender discrimination

In 2012, the EEOC concluded that discrimination against an applicant for federal employment based on gender identity is discrimination based on sex. In June 2020, the Supreme Court held that discrimination on the basis of sexual orientation or transgender status falls under Title VII of the Civil Rights Act's protection against sex discrimination. These protections apply despite contrary laws in any state or local jurisdiction. According to Mollie Mantia, director of risk and compliance at ADP, since gender identity is considered a protected class under federal law , employers could face significant financial exposure if an aggrieved individual were to file a discrimination lawsuit.

According to the EEOC, unlawful discrimination includes unfair treatment in the "terms, conditions, or privileges of employment," for example offering lower salaries to employees because of their gender identity or sexual orientation. The EEOC has also stated "although accidental misuse of a transgender employee's preferred name and pronouns does not violate Title VII, intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful work environment."

Similarly, employers may not deny spousal health insurance benefits to a female employee because her legal spouse is a woman while allowing a male employee to carry spousal health insurance benefits for his female spouse. And with respect to health care services, employers cannot "deny, limit coverage, or impose additional cost sharing for sex-specific recommended preventive services due to an individual's gender identity or recorded gender being different from one to which such health services are ordinarily provided," writes the National Law Review.

The Future of transgender equality in the workplace

According to Mantia, explicit transgender protections in the workplace are still relatively new. Last year, however, both California and New York City enacted legislation allowing individuals to use their preferred name instead of their legal name, Mantia notes. California also amended the law that requires employers to provide mandatory anti-harassment training to employees, to require anti-harassment training focused on gender identity and expression, as well as sexual orientation. And the California Gender Recognition Act has legally acknowledged nonbinary gender. With this newly introduced legislation, Mantia believes that more states and jurisdictions will be passing similar legislation in the future.

This is an area that employers would be well-advised to pay close attention to as the law evolves. Employers should monitor developments so that their workplace policies, procedures, training and communications are compliant with the law and provide a safe workplace for all employees.

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