Small businesses have even more reason to worry about discrimination laws. The informal atmosphere of a small business makes it easy to act unprofessionally -- even for the boss. Further, a small business doesn’t have the financial resources to hire an attorney to fight an expensive discrimination claim. To avoid falling on the wrong side of the law, learn the basics of anti-discrimination laws.


Discrimination laws apply to the following business decisions:

  • Hiring
  • Recruiting
  • Evaluations
  • Promotions
  • Training
  • Compensation
  • Disciplinary actions
  • Assigned duties
  • Working hours

Discrimination is defined as making decisions about the above based on the following characteristics:

  • Race
  • Gender
  • Religion
  • Pregnancy
  • Military affiliation or service, including anticipated deployment
  • Genetic information
  • Citizenship status
  • National origin
  • The age of workers over the age of 40
  • Disability, including physical and mental disability or HIV status
  • Bankruptcy and bad debts

Note that these are only the criteria laid out under federal law. Some state laws expand discrimination to include sexual preference, gender identity and family status. Check with your state attorney general to see what additional criteria your state laws might list.

Who Is Exempt?

Discrimination laws are outlined under Title VII of the federal Civil Rights Act of 1964 and the Age Discrimination in Employment Act. The first applies only to businesses with 15 or more employees. The latter applies to businesses employing 20 or more workers. The Equal Pay Act mandates that men and women must receive the same pay for performing the same job. This law applies to all businesses. If you have fewer employees than the benchmark set by the federal law, you are not subject to federal antidiscrimination laws. You might, however, be subject to state antidiscrimination law. It is very important to have your legal department check with the state attorney general to know what state laws apply.

Who Is Not Exempt?

Some types of private businesses are never exempt from antidiscrimination laws. Labor unions and other labor organizations are always subject to antidiscrimination laws, regardless of the size of the organization. Similarly, employment agencies are always subject to the provisions of antidiscrimination laws.

Americans With Disabilities Act

The Americans With Disabilities Act is a special kind of antidiscrimination law that applies to disabled Americans and their workplaces. It requires that you make reasonable accommodations for disabled employees. Examples of reasonable accommodations include:

· Putting Braille or large lettering on the elevator buttons for visually impaired workers.

· Lowering shelves for employees in wheelchairs.

· Letting a diabetic employee take regular meal breaks.

The ADA applies to private companies with 15 or more employees.

Avoiding Discrimination Lawsuits

The easiest way to avoid discrimination lawsuits is not to discriminate. Ask all interviewees the same questions. Treat all your employees as equals and make judgments on the basis of job performance alone. Remember that even if you are a small business not under the jurisdiction of antidiscrimination laws there is a lot of bad publicity to be gained by running a workplace that discriminates. The advantages of such business practices are nonexistent.