An overview of the U.S. Equal Employment Opportunity Commission and how it can impact your business.
Hiring decisions are never easy for small-business owners. You have to take into account a number of competing interests: the needs of the job, the “fit” of the candidate with your company’s culture, how much you can pay versus how much they want and of course federal, state and local laws. It’s no wonder that many small businesspeople don’t look forward to the process. As your business–and staff–grows, the chances increase that you may be paid a visit or are subject to an investigation from the Equal Employment Opportunity Commission (“EEOC”).
Background on the EEOC
The EEOC enforces federal laws that prohibit discrimination against job seekers and employees based on gender, age, national origin, race, ethnicity, religious beliefs, disability or genetic information. The EEOC also ensures that people who file a discrimination complaint are treated fairly.
The EEOC doesn’t just police large companies. Any company with at least 15 employees is subject to EEOC compliance. In the case of discrimination due to age, such as not hiring older workers simply because they are older, companies with at least 20 employees or more are subject to compliance. Employment agencies and labor unions are also required to comply with the EEOC.
EEOC regulations apply to numerous situations in which an employee or candidate could potentially be discriminated against. This includes hiring, firing, promotions, access to training, wage and salary decisions, access to benefits and claims to harassment.
The Power of EEOC
If your company is large enough to be under EEOC jurisdiction this agency can:
- Initiate an investigation on behalf of the aggrieved party to address allegations of discrimination
- Negotiate a settlement with the company on behalf of the aggrieved party
- File a federal lawsuit against a company when a settlement can’t be reached
- Act preemptively to prevent discrimination through training, seminars and outreach programs.
The EEOC doesn’t always need an individual to claim discrimination to take action against a company. It also has the power to “protect the public interest,” meaning it can take action against any company under its jurisdiction.
How Worried Should You Be?
According to the latest statistics offered by the EEOC Office of Information, Resources and Planning, over 90,000 charges of discrimination are filed with the EEOC annually. Discrimination due to race, gender (including discrimination due to pregnancy) and retaliation are the three categories that consistently comprise the vast majority of cases over the past ten years.
The good news for small business owners is that the EEOC doesn’t automatically sue at the claim of discrimination. On average about 1 percent of the complaints that are filed with the EEOC result in a lawsuit. Simply going through an investigation, however, is time consuming, expensive and can tarnish your company’s reputation even if you are ultimately found to be in compliance.
Here are some recommendations to minimize the chances of having an EEOC complaint filed against your company. This advice will also help you get through an investigation.
1. Have clear, consistent HR policies. Many small businesses fail to implement formal policies and procedures when it comes to hiring, promoting and firing. Make sure that yours are based on legitimate business requirements.
2. Document everything. Your policies and procedures should be documented and well organized. All employees, even if there are only a few, should sign an acknowledgement form indicating they are familiar with the policies and procedures. And make sure you have a paper trail of employee reviews.
