LGBTQ rights in the workplace (USA)| Netchex payroll software

In a landmark ruling handed down earlier this week, the Supreme Court of the United States has ruled that employers may not discriminate based on sexual orientation or gender identity in employment. In a 6-3 decision, the court ruled that federal workplace laws prohibit employers from firing gay, lesbian, and transgender workers. This decision to protect LGBTQ rights in the workplace applies to all employers with 15 or more employees.

What the decision means

The decision was a response to three separate cases, all of which concerned employment discrimination based on gender and sexual orientation under Title VII of the Civil Rights Act of 1964. There has been significant debate for decades about the definition of “sex” under Title VII. Originally, many assumed that it meant only that men and women could not be treated differently, but over the years the Supreme Court has interpreted the definition to include certain characteristics or expectations related to gender. Previous decisions, however, had not yet provided a definitive answer as to whether sexual orientation and gender identity were protected—until now, and that answer is an unequivocal “yes” to protect LGBTQ rights in the workplace.

Several circuit courts of appeal had already ruled that sex included sexual orientation, gender identity, or both, and many states have their own civil rights laws to protect these characteristics in the context of employment (often at a lower employee count). Additionally, the Equal Employment Opportunity Commission (EEOC), which enforces Title VII, has for years held the position that sex includes sexual orientation and gender identity, and has sued employers for discrimination based on that interpretation.

How companies must react to the decision 

Because of the rulings, laws, and interpretations already in play, most employers have been operating under the assumption that discrimination based on sexual orientation or gender identity is or could be found illegal. As a result, today’s rulings should not require most employers to change their policies. But even for companies with an inclusive culture, the ruling should prompt a review of policies and benefits to ensure compliance.

For other companies though, this will mean a significant (and long overdue) rewrite of company policies. A company must treat sexual orientation and gender identity the as gender, race, and national origin, all of which are now required to receive equal treatment under federal law. You cannot fire someone for being gay or transitioning from one gender to another, not can refuse to hire someone because they are gay or transgender. In addition to policy updates and training to comply with the ruling, companies will also need to consider changes to employee benefit plans, including overall benefit offerings, medical plan design, disability plans, and mental health to ensure all are covered under the new ruling protecting LGBTQ rights in the workplace. 

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