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EEO Laws: What They Are And How To Be Compliant

by Karyn H. Rhodes | SHRM-SCP, SPHR on Dec 28, 2021 10:38:28 AM

In 2020, the US Equal Employment Opportunity (EEO) Commission received 67,448 charges of workplace discrimination, with the agency securing $439.2 million for victims. With this high level of enforcement, you may be wondering if you’re at risk of an EEO violation. The first step in gauging your exposure is understanding who EEO laws apply to and what you need to do to comply.

Complete Payroll Solutions’ certified HR professionals assist thousands of companies stay  compliant with employment laws and regulations like EEO. To help you learn what you can do to reduce the chance of a claim of discrimination at your company, here we’ll discuss:

  • What are EEO laws
  • What companies do EEO laws apply to
  • What should I do to stay compliant
  • What are the penalties for violations

After reading this article, you’ll understand the requirements when it comes to EEO to ensure that your business avoids the risk of an EEO charge.

What are EEO laws?

EEO laws prohibit discrimination against a job applicant or employee based on their race, color, religion, sex, age, national origin, and physical or mental disability in all aspects of employment, including promotion, training, and other personnel actions. Keep in mind this prohibition extends to sexual harassment because, under Title VII, the federal government classifies sexual harassment as sex discrimination.  

The Equal Employment Opportunity Commission’s (EEOC’s) role is to investigate charges of discrimination by assessing the allegations and make a finding. In cases where the EEOC determines discrimination has occurred, it will try to settle the charge and, if unsuccessful, can file a lawsuit to protect the rights of individuals.

What companies do EEO laws apply to?

If you have at least 15 employees, you’ll have to comply with Equal Employment Opportunity laws. The EEOC has the authority to investigate charges of discrimination against employers who are covered by the laws.

It’s important to note that some state laws have mini EEO laws that apply to companies with fewer employees.

What should I do to stay compliant?

As a covered employer, you’ll need to take several steps to ensure EEO compliance. These include:

  1. Don’t discriminate. Follow anti-discrimination and anti-harassment laws when recruiting, hiring, and managing your workforce.
  2. Post required notices. You’ll need to post the “EEO is the Law” poster describing the federal laws that prohibit job discrimination. This poster summarizes the applicable laws and how an employee or job applicant can file a complaint. It should be placed in a conspicuous location where other notices are typically posted. In addition, you should post an electronic version on your internal website. You can find a poster for downloading on the EEOC website. At CPS, we include a copy of it with the poster service we offer.
  3. File EEO reports. If your company has 100 or more employees, or you’re a federal contractor with at least 50 employees and $50,000 in contracts, you’ll need to file an EEO-1 form every year to stay compliant with EEO laws. This form details the racial, gender, and ethnic makeup of your workforce in Component 1 as well as pay data in Component 2. For 2021, data collection is tentatively scheduled to open on April 12, 2022. The reports must be submitted online via the EEOC’s online filing system.
  4. Maintain employment records. You should keep all employment records, including payroll, for 7 years.
  5. Don’t retaliate. If any applicant, employee, or former employee reports discrimination or participates in an investigation, it’s important that you don’t punish them since retaliation is illegal, even if the charge doesn’t have merit.

What are the penalties for violations?

If you fail to comply with EEO laws, as we discussed earlier, you may be faced with a penalty as part of a settlement with the EEOC. For failure to post the “EEO is the Law” notice, the fine in 2021 was $576.

If you don’t file your EEO-1 report, the EEOC may compel you to file it by obtaining an order from the US District Court; penalties for failure of a federal contractor or subcontractor may include termination of the contract and debarment from future contracts.

The larger risk for companies is when the EEOC takes legal action following the filing of a charge of discrimination. When the EEOC determines discrimination has occurred, the goal of the law is to put the victim in the same position that they would have been if it hadn’t happened. There are various types of relief depending on the effect on the victim. For example, if someone wasn’t selected for a job promotion because of discrimination, the remedy may include placing them in that position and back pay and benefits. Victims may also be able to recover attorney’s fees and court costs. In addition, compensatory and punitive damages may be awarded if the discrimination was intentional up to a certain amount. The limits for damages a person can recover depend on your size:

  • For employers with 15-100 employees, the limit is $50,000.
  • For employers with 101-200 employees, the limit is $100,000.
  • For employers with 201-500 employees, the limit is $200,000.
  • For employers with more than 500 employees, the limit is $300,000.

The Best Way to Avoid Workplace Discrimination

Beyond reducing the risk of penalties, businesses complying with EEO laws also creates a culture of equality and respect that fosters productivity and loyalty.

To help create a workplace free of discrimination, the key is to develop strong policies, hold training for managers and supervisors, and ensure everyone understands and is accountable for the consequences of their actions.

If you lack the expertise or resources to guide you through developing policies and protocols, you may want to consider teaming with an outsourced HR team who can help. If you decide to go this route, Complete Payroll Solutions may be a good fit for you if you:

  • Want advice from a team of certified HR professionals
  • Would like help with other related HR tasks as well like training on the EEO requirements for managers and supervisors
  • Prefer the option to have an poster service from the same provider to keep you compliant

To learn more about our HR offerings, visit our dedicated HR page. Or get details on what our outsourced HR packages include and cost in our next article.


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