Expanding your business is tough. Let legal issues get in the way and it gets even more difficult.
Employment discrimination law is one of those areas that can make or break your business growth plans. Miss a step and you face significant consequences. Nail it and business growth becomes much easier.
The reality is…
Business owners typically think about revenue, marketing, and operations when planning for growth. Employment discrimination compliance tends to fall by the wayside. But missing the mark in this area can derail the best-laid growth strategies.
What you’ll learn:
- Employment Discrimination Law Is Here to Stay and Businesses Need to Plan Around it
- Discrimination Lawsuits Aren’t Fun and You Don’t Want to Deal With Them
- Compliant Growth Strategies Work and Help Businesses Scale
- Pay Attention to the Following Areas
Employment Discrimination Law Is Here to Stay and Businesses Need to Plan Around it
Employment discrimination law was designed to protect workers. They include a range of federal and state laws that prohibit employers from treating employees or job applicants unfairly based on race, color, sex, age, disability, religion, national origin, or other protected characteristics.
Employment discrimination law isn’t going away anytime soon.
The EEOC received 88,531 new charges of discrimination in fiscal year 2024. This represents a 9.2% increase over FY 2023. More employees are aware of their rights and willing to make a claim.
So what does this mean for businesses trying to grow?
It means that as a company scales it needs to focus on employment discrimination law. Hiring more employees, opening new locations, and other growth moves are closely watched by the government. A company that is looking to expand needs to have a solid legal foundation in place.
The best way to do this is to work with an Alabama Discrimination Lawyer or other legal counsel in your jurisdiction that can ensure that your employment practices meet federal and state guidelines.
The simplest way to look at this is that employment discrimination law and business growth have to work in tandem. One supports the other when handled properly.
Discrimination Lawsuits Aren’t Fun and You Don’t Want to Deal With Them
If you are thinking discrimination lawsuits aren’t going to happen to you and your business and that they won’t impact the bottom line, think again.
Discrimination court cases can cost employers anywhere from $50,000 to over $1,000,000. That includes attorneys’ fees, court costs, expert witness fees, and potential punitive damages.
The financial pain goes way beyond legal fees though…
- Reputation damage: Discrimination lawsuits that become public can damage a company’s brand. Customers and potential employees see the negative news reports. Trust goes out the window.
- Lost productivity: Time spent fighting a discrimination claim in court or through a settlement is time away from growing the business. Management is in depositions instead of developing new products.
- Employee morale: Current employees see how a company responds to discrimination allegations. They are unlikely to stay with a company they think does not have their backs. This leads to increased turnover and the need to recruit more employees.
When it comes to the math, it is much easier to make the investment in compliance upfront than it is to pay for and fight discrimination lawsuits down the road.
Compliant Growth Strategies Work and Help Businesses Scale
Planning for growth while following employment discrimination law isn’t impossible. In fact, it makes scaling a business much easier.
Business growth and employment discrimination compliance need to work together. This is not just about lawsuits. Compliance with anti-discrimination law is also about building a fair workplace that makes business growth easier.
This is how to make it happen…
Audit Your Current Practices
Before scaling your business and adding more employees, it is critical to look at your current practices. This includes your hiring process, criteria for promotion, and your termination procedures.
Specific questions to ask include:
- Do job descriptions contain discriminatory language?
- Are hiring decisions made based on objective criteria?
- Are promotion opportunities available to all employees who qualify for advancement?
- Is there a clear process in place to address discrimination complaints?
Identifying problems before growth starts is much better than having a crisis when a new location is opened or more employees are hired.
Create Clear Policies
Written policies are your friend. Not only do they provide guidance to employees, but they also protect you in the event of a discrimination claim.
Every business needs a set of written policies that cover at least:
- Anti-discrimination and harassment policies
- Complaint reporting procedures
- Investigation process
- Requests for accommodation due to disabilities or religious practices
Policies should be reviewed and updated regularly. Employment discrimination law changes. Company practices need to change with the law.
Train Managers
Managers and supervisors make day-to-day decisions that can create legal liability for the business. It is critical that they are trained on the basics of employment discrimination law.
Manager training should include topics such as:
- Recognizing discriminatory behavior and responding appropriately
- Handling complaints
- Making objective employment decisions
- Documenting issues that arise with employees
Untrained managers are one of the most significant risks for an employer. Period.
Document Everything
Documentation can be the difference between winning and losing a discrimination case. Keeping good records is a best practice for all businesses. Specific documents to keep include:
- Job postings and applications
- Interview notes and hiring decisions
- Performance evaluations
- Disciplinary action
- Termination decisions
When discrimination claims are made, this documentation can be used to show the legitimate business reasons for employment decisions.
Pay Attention to the Following Areas
Employment discrimination law has some areas that deserve special attention during business growth phases.
Hiring Practices
Rapid expansion often requires rapid hiring. This is a recipe for disaster.
Rushed hiring decisions often lead to patterns of discrimination even when there is no intent. Policies for background checks, interview questions, and final selection criteria all need to be reviewed.
Structured interviews with standardized questions for all candidates reduce the chances of biased decisions. Using diverse hiring panels reduces unconscious bias.
Pay Equity
Pay disparities can develop as a company grows. This can happen when employees with similar job duties receive different pay without explanation.
Periodic pay audits can help to identify potential issues before they become lawsuits. Transparent compensation structures can also help.
Accommodation Requests
The ADA and other laws require employers to provide reasonable accommodations for qualified employees. This is something that businesses will see more of as they grow.
It is critical to have a process in place to evaluate and respond to requests for accommodations. Interactive dialogue with an employee who is requesting accommodation demonstrates good faith effort on the part of the employer.
Retaliation Prevention
Retaliation claims are the most numerous EEOC charges. Employees who file discrimination complaints or participate in investigations are legally protected from retaliation.
If an employee experiences a negative employment action after filing a complaint or participating in a discrimination investigation, this will be subject to scrutiny by the courts. Training management to avoid retaliatory behavior is critical.
Wrapping Things Up
Alignment of business growth strategies with employment discrimination law is not optional. It is a necessary part of doing business.
The data show that enforcement efforts are ramping up. The costs of non-compliance are only increasing. Businesses that choose to ignore employment discrimination compliance during growth phases do so at their own risk.
Smart businesses see compliance as a competitive advantage, not a cost center. These companies build fair workplaces that attract top talent and avoid litigation.
To review:
- Audit current employment practices before scaling
- Create and maintain written anti-discrimination policies
- Train managers on compliance requirements
- Document all employment decisions
- Focus extra attention on hiring practices, pay equity, and accommodations
Business growth and employment discrimination law work together when they are aligned. Companies that understand and respect this relationship set themselves up for long-term success.
Compliance is an investment that pays dividends. Fair treatment of employees leads to better employee relations, less legal risk, and a stronger company reputation which all lead to healthier business growth.
It is the right way to build a business.
Don’t wait for a complaint to start taking action. Align your business growth strategies with employment discrimination requirements today.
