HR and the Small Business Owner — Part One: Title VII of the Civil Rights Act

As a small business owner, undoubtedly you wear many hats. During any given day you juggle between accountant, office manager, inventory clerk, customer service representative and many more. One hat you may not even realize that you wear is that of human resources manager. There are several laws that govern the employment relationship. It is advisable that small business owners not only be aware that these laws exist, but to ensure their compliance with these laws. Everything from employment applications to terminating employees and everything in between is governed by some aspect of employment law. This article series will tackle what I like to call, The Big Five. The employment laws included in The Big Five are: Title VII, Family Medical Leave Act, Americans with Disabilities Act, Age Discrimination in Employment Act and Fair Labor Standards Act. This article series will serve as a good primer to get some knowledge under that new human resources hat.

The most widely known employment law is probably Title VII of the Civil Rights Act. Essentially Title VII makes it illegal to discriminate against employees and applicants on the basis of race, color, religion, sex or national origin and pregnancy. People that fall into either of these categories are considered “protected classes”. Employers having 15 or more employees are required to comply with this law. Even if you have less than 15 employees, it is a good and prudent business practice to comply with this law voluntarily.

The main purpose of Title VII is to provide equality in the employment and educational arena for those that have historically experienced discrimination. The intent is for employment decisions to be made based on merit and not race, gender or any other protected category. Title VII applies to every employment action from recruitment to termination. For example, an employer cannot disregard a resume or application because the applicant has an ethnic or foreign name. Likewise an employer is prohibited from asking questions in an interview that are not job related, such as marital or parental status. The same applies for employment tests. Tests administered as part of the hiring process can not intentionally (adverse impact) or unintentionally (disparate impact) negatively impact any group of people. The test must also be a reliable predictor of future job performance if the hiring decision will be based in whole or in part on the outcome of the test.

In 1978, Title VII was amended to include The Pregnancy Discrimination Act. This act requires that “women who are affected by pregnancy, childbirth or related medical conditions be treated the same as any other employee who is similarly able or unable to work.” (Bland) The employer must apply the same policies for sick leave, job reinstatement, and health benefits during leaves to pregnant women and all other employees. In addition when an employer offers benefits of any sort, including retirement, health insurance, or disability benefits-it must cover pregnancy and related medical conditions in the same way it covers other medical conditions.To maintain fairness, it is important that small business owners have a written policy that governs sick and disability leaves. Having a written policy will promote the consistent and fair application of disability and related policies for all employees. Some small businesses may also be required to comply with the Family Medical Leave Act (see part 2 of this article).

You at this point may be thinking, “All of this sounds really good, but I’m too busy running my business to keep up with all of these laws.” While the fact that a small business owner takes the term “busy” to another level, the penalties for non-compliance are worth making the time to make sure your business is compliant.

According to SHRM, for “intentional discrimination, employees may seek a jury trial, with compensatory and punitive damages up to the maximum limitations established by the Civil Rights Act of 1991 according the employer's number of employees: 15-100 employees, a maximum of $50,000; for 101-200 employees, a maximum of $100,000; for 201-500 employees, a maximum of $200,000; and for over 500 employees, a maximum of $300,000. Remedies of back pay, reinstatement, and retroactive seniority are available for all types of discrimination, whether intentional or disparate impact.”

So what can you do today to get on the road to compliance or better compliance? I’m glad that you asked:o

• Take a look at your interview material. If you have not thoroughly reviewed your interview materials in the past 12 months, now is a good time to do so. If you do not have standard interview materials, now is prime time to create them. “Winging-it “on an interview does not work for applicants and it does not work for employers. Ideally, interview questions should be consistent from one interview to the next, job related and focused on helping you assess the candidate’s qualifications.

• Be careful with biases. Sometimes biases creep in unintentionally and you may have good intentions at heart, but discrimination for whatever reason is illegal. It may be tempting for an owner of a janitorial service to only seek male applicants for a porter position or for a restaurant owner to seek only female employees for service staff. Resist this temptation. There are very few jobs that meet the bona fide occupational qualification criteria which allow employers to make hiring and retention decisions based on applicant qualities or characteristics that would normally be discriminatory. All candidates should be given equal opportunity for any position.

• Become gender neutral. Review the job titles used in your business. Do any of the titles suggest a certain gender? If so, it could be time for a job-title overhaul. For example the terms waitress and stewardess are female skewed and, policeman and fireman are male skewed. Instead titles such as wait staff and police officer could be used.

This article is intended as information only and is not a substitute for legal or professional advice. For more information on this subject, send an e-mail to hrcoach@gmail.com.