Legal Protections for Transgender, Nonbinary and Gender-Nonconforming Employees: What You Need to Know

By Skye Schooley,
business.com writer
| Updated
Jul 15, 2020
Image Credit: monkeybusinessnessimages / Getty Images

Learn what laws protect your transgender, nonbinary and gender-nonconforming employees and how they should be treated.

As society demands diverse and inclusive work environments, knowing how to properly treat your employees is becoming a critical element of running a successful business. It is important for employers to be aware of the current human rights and equality regulations in place, as the social and political climate is ever progressing. For example, the LGBT+ community had a big win this year, earning long-overdue federal protections against sex discrimination in the workplace. 

Discrimination in the workplace

Although society is taking small strides toward inclusion and fair employment, employers still need to do a tremendous amount of work to close the gap. According to the National Center for Transgender Equality, more than 75% of transgender people have experienced some form of discrimination in the workplace, and more than 1 in 4 have lost a job due to bias. 

Gillian Branstetter, spokesperson for the National Center for Transgender Equality, said that transgender people are three times more likely to be unemployed than the general population, fueling the high rates of poverty and homelessness among transgender people. 

The statistics for all transgender, nonbinary and gender-nonconforming employees are staggeringly similar. As the U.S. edges toward inclusion, employers should be aware of and abide by the new and existing equality policies. 

Kryss Shane, a leading LGBT+ expert at ThisIsKryss.com, said failure to comply with equality regulations can be detrimental to a business's health. 

"Employers whose behaviors lead them to be accused of discrimination against LGBT+ people often end up with a public relations nightmare," Shane told business.com. "Boycotts and lawsuits can result in a significant drop in business or even lead to the closing of a business." 

Discriminatory practices to avoid as an employer

Many actions in the workplace can be identified as discriminatory against transgender, nonbinary and gender-nonconforming employees. These actions range from small transgressions to major offenses and should be avoided at all costs. 

"Paying someone less for the same work, firing someone, moving someone away from client-facing roles, or mandating a dress code that does not align with a person's sexual orientation and/or gender identity in general or after an employee comes out to their employer are all discriminatory practices in the workplace," said Shane. 

Additionally, Branstetter listed the following as inappropriate behaviors in the workplace:   

  • Refusing to use someone's correct name and pronouns
  • Outing someone as transgender against their will
  • Asking invasive or inappropriate questions about a transgender person's health or anatomy
  • Making rude jokes or comments about a person's transition or appearance
  • Retaliating against someone who reports anti-transgender treatment
  • Denying someone a promotion or job opportunity because they are transgender 

Whether the listed behavior is illegal or not, it is important to be aware of what inappropriate offenses should be prohibited in your workplace. 

Anti-discrimination laws for LGBT+ employees

Under Title VII of the 1964 Civil Rights Act, employers are prohibited from discriminating based on race, color, religion, sex (including sexual orientation and gender identity) or national origin. Although the ambiguity of the term "sex" previously allowed room for speculation and disagreement as to whether the same protections applied to an employee's gender identity or sexual orientation, that recently changed. 

Supreme Court ruling for LGBT+ rights in the workplace

On June 15, 2020, the U.S. Supreme Court ruled that workplace discrimination based on an individual's sexual orientation or gender identity is now prohibited, as it is covered under the term "sex discrimination." Keep in mind that Title VII only applies to employers who have 15 or more employees (including part-time and temporary) for 20 weeks in the preceding calendar year, so smaller companies will have to pay closer attention to state anti-discrimination laws. 

"Under Title VII of the Civil Rights Act of 1964, it is illegal to discriminate in any aspect of employment, including hiring, firing, compensation, assignment, classification, transfer, promotion, layoff, recall, job advertisements, recruitment, testing, use of company facilities, training and apprenticeship programs, fringe benefits, pay, retirement plans, disability leave, or other terms and conditions of employment," said Edith A. Pearce, lawyer and founder of The Pearce Law Firm, Personal Injury and Accident Lawyers P.C. 

Although this decision is currently about sex discrimination in the workplace, Pearce said it could also impact efforts in other areas, such as education, housing and, for transgender individuals, participation in collegiate sports. 

City and state anti-discrimination laws

Since Title VII only applies to employers with 15 or more employees, smaller businesses must pay especially close attention to the state laws governing employee protection. For example, 22 states and D.C. already had their own legal protections prohibiting discrimination based on sexual orientation and gender identity, even before the recent changes to the federal anti-discrimination law. 

"Many of the state laws are similar in nature and language to the Federal Civil Rights Title VII laws but cover smaller employers with few employees," said Pearce. "There is hope that most state courts will interpret their existing sex nondiscrimination laws that generally apply to both small and large employers in a way that is consistent with the Supreme Court's Bostock decision. However, only time will tell if indeed all employees, no matter the size of the employer, will receive protection." 

Regardless of how the federal court or state laws protect your employees, it is important to create an inclusive work environment where every employee is treated fairly and free from harassment.

What employers can do to support and protect transgender employees

It is important to understand how your employees identify themselves so you can properly address them and comply with their needs. To do this, familiarize yourself with the correct definitions of terminology like "transgender." 

PFLAG defines "transgender" as describing a person's gender identity that does not necessarily match their assigned sex at birth. It can sometimes be referred to as "trans," "female to male (FTM)," "male to female (MTF)," "assigned male at birth (AMAB)," "assigned female at birth (AFAB)," "genderqueer" or "gender-expansive." 

Other common terms you should have a clear understanding of are "gender," "cisgender," "gender nonconforming," "intersex," "LGBTQ+" and "nonbinary." Although definitions can vary by state, you can find a complete definition of working terms on the PFLAG National Glossary of Terms

Regardless of what state or federal nondiscrimination protections apply to each of your employees, you can enhance diversity and inclusion in the workplace by making and enforcing inclusive internal policies. 

"Employers can add 'sexual orientation and gender identity' to their own nondiscrimination policies and hold themselves accountable," said Shane. "This can provide great opportunities to hire the best in the industry, as it does not allow for discrimination to occur the way it may in competitors' businesses, which can give your business a great advantage." 

When you introduce new inclusive policies into your company handbook internally or through a PEO service, host mandatory training seminars to inform your staff of the changes. If you are still unsure of how to create a diverse and inclusive workplace, you can reach out to LGBT+ experts for assistance in ensuring that your business practices are LGBT+ inclusive. 

"It is not a matter of if a transgender person will join your workplace, but when," said Branstetter. "Discrimination against transgender people can be prevented with HR policies reflecting the legal and moral necessity to foster an inclusive workplace." 

Expert Q&A: Human resources policies for transgender employees

We talked to various HR and legal professionals for their insights on how companies can promote transgender inclusion, support their employees, and update nondiscrimination policies. 

How can employers promote transgender inclusion in the workplace?

"Include sexual orientation and gender identity in your nondiscrimination policies. Find health insurance policies that include hormone treatment and gender confirmation surgeries. Write your policies in a gender-neutral way. Include your pronouns on your email signatures. Have gender-neutral policies whenever possible." – Ruth B. Carter (they/them), of counsel attorney at Venjuris P.C. and owner of Carter Law Firm PLLC 

"Bias training is essential to make sure that discrimination does not take place in the workplace. Human resources must develop a training program that defines and explains terms such as 'unconscious bias,' 'diversity,' 'sensitivity' and 'inclusion.' It is critical that a training program describe what an 'unbiased,' inclusive workplace looks like and explain the benefits to all employees, and the overall organization, of hiring a diverse workforce. Review the elements of the law at play, such as equal employment opportunity and affirmative action, and explain to employees the consequences to the company for not complying with the law." – David Reischer, employment attorney and CEO of LegalAdvice.com 

"Companies can promote transgender inclusion by hiring transgender people. Firms can do this by encouraging applications from a diverse range of applicants, and promoting the company and its job openings in places where transgender persons might be exposed to the advertisement. However, at the end of the hiring process, employers should always hire the best person for the job based on objective job-related criteria. Just as employers should not attempt to impose hiring quotas of women and other groups, firms should not hire a transgender applicant specifically because of his or her status. This could potentially trigger a state or federal discrimination claim by excluded persons if a protected class (race, color, religion, gender, disability) is implicated." Robert C. Bird, professor of business law and Eversource Energy Center chair in business ethics marketing at the University of Connecticut 

How can employers support transgender employees?

"Accept and support the name and pronoun a person wants to use, even if it's not their legal name. Don't use their dead name or old pronouns. If you make a mistake, correct yourself and move on. Make all single-user bathrooms gender neutral. Have low tolerance for sexist or transphobic comments and jokes – the way you would have low tolerance for racist statements. Ask your transgender employees what more you can do to support them. Get educated from proper sources about what it means to be transgender, the risk of violence, discrimination and the challenges of being trans in a cisgender-centric society." – Carter 

"A good training program should identify the dangers of different stereotypes associated with age, race, culture, ethnicity, educational background, socioeconomic status, sexual orientation and gender. Make sure to point out the role that any false assumptions play in the areas of personal biases and prejudice." – Reischer 

"Keep the lines of communications open so that all employees can frankly, and without retaliation, express whatever concerns they have. Those concerns should be addressed according to established workplace policies and consistently across all employees. The best workplace for transgender persons is one that is supportive, concerned and engaged with its entire workforce." – Bird 

"Now is the time for all employers to implement some best practices, including asking transgender employees which pronoun they prefer to be used; if an employment background check reveals the employee formerly identified as a male/female, ask the applicant respectfully whether he or she was previously known by a different name; update personnel records when a transgender employee transitions during his or her employment; follow the Occupational Safety & Health Administration (OSHA) guidance to employers on best practices regarding restroom access for transgender workers with access to restrooms that correspond to their gender identity; update EEO policies to include sexual orientation and gender identity; and provide training to employees about protections under the law based on sexual orientation and gender identity, emphasizing this protection is on the same level as those afforded based on race, national origin or age." Pearce 

How should employers handle name-change requests from transgender employees?

"It should be an easy process, similar to what someone would do when changing their name after getting married." – Carter 

"An employer should elicit from the transgender employee their preference on communicating the name change to the staff at large. If the employee would like a public announcement, then that may be the most suitable option. Alternatively, if the employee prefers to privately announce the name change, that is the prerogative of the transgender employee. The important thing is to respect the decision of the employee, so their dignity is preserved by being allowed to make the decision on such a personal matter." – Reischer 

"A preferred-name policy is something that every organization should have. These policies aren't just of benefit to transgender and nonbinary folks, but also to anyone who uses a variation of their first name, a nickname or any name other than their legal name. These policies should outline when the use of a preferred name is acceptable, such as on business cards or in email addresses, and when, for legal purposes, they cannot be used, such as on payroll, tax and legal documents." – Jessi Jaymes Purdy, LGBTQ+ rights activist and CEO of FIC Human Resource Partners LLC  

"Employers should treat this like any other request and follow relevant state, federal, and local regulations. Transgender employees should not be punished or sanctioned for making such a request." – Bird 

Marisa Sanfilippo contributed to the reporting and writing in this article. Some source interviews were conducted for a previous version of this article.

Skye Schooley is an Arizona native, based in New York City. She received a business communication degree from Arizona State University and spent a few years traveling internationally, before finally settling down in the greater New York City area. She currently writes for business.com and Business News Daily, primarily contributing articles about business technology and the workplace, and reviewing categories such as remote PC access software, collection agencies, background check services, web hosting, reputation management services, cloud storage, and website design software and services.
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