Skip to Content

Coronavirus (COVID-19) Information. Click here.

The Effects of LGBT and Gender Requirements on Small Businesses and Their HR

It’s common for HR professionals to field questions about compliance and discrimination concerns. One question that some small business owners ask is how LGBT and gender requirements can impact their company. There are many laws and protections in place to prevent discrimination based on gender identity or sexual orientation that employers should know about.

Image of rainbow-colored people. Learn about the effects of LGBT and gender identity requirements for small businesses.

LGBT and Gender Discrimination Laws and Protections

To start, The U.S. Equal Employment Opportunity Commission (EEOC) is in charge enforcing federal laws that make discrimination illegal. This means that the EEOC “interprets and enforces Title VII's prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation. The protections apply regardless of any contrary state or local laws.”

The courts have held that Section 4112 of the Ohio Revised Code does not apply to sexual orientation. However, there have been state and federal government actions that do offer Ohio employees some protections from discrimination. 

Gov. John Kasich used Ohio Executive Order 2011-05K to declare that persons employed by the state would not be discriminated against based on their sexual orientation in matters of hiring, layoff, termination, transfer, promotion, demotion, or rate of compensation. Former Gov. Ted Strickland also issued Executive Order 2007-10S that prevented the discrimination based on gender identity. In addition, former President Barack Obama signed Executive Order 13672-2014, which prohibits federal contractors and subcontractors from discriminating against others based on both sexual orientation and gender identity.

Additional protections against discrimination involve insurance coverage. According to, “An insurance company that offers health coverage to opposite-sex spouses must do the same for same-sex spouses.” Insurance companies can’t discriminate against same-sex couples who are legally married in a jurisdiction that can authorize the marriage. This is the case regardless of the state where the couple lives, where the insurance company is based, and where the plan is sold, renewed, or in effect.

Potential Transgender Workplace Issues

Aside from hiring, layoff, termination, transfer, promotion, demotion, or rate of compensation decisions, there are other potential issues that employers should consider for transgender employees. For instance, the state of Ohio allows a transgender person to change their name and employers must accept this change.

Another issue involves company bathrooms. According to Obergefell and LGBT Employment Law, “If fellow employees do not want the transgendered person, either before her gender transformation or during it, to use their bathroom, the employer must still offer the transgendered employee a bathroom. There is no law to force employers to honor the new gender for bathroom assignment. The best practice is to have the transgendered person use the bathroom that is identified with her gender identity and tell employees who do not want to share with her to use an alternate bathroom.”

Preventing LGBT and Gender Discrimination Claims

Over the years, the EEOC has received “1,412 charges that included allegations of sex discrimination related to sexual orientation and/or gender identity/transgender status.” Examples of LGBT-related sex discrimination claims include failing to hire an applicant because she’s transgender or harassment of an employee because of their sexual orientation or gender identity.

Of those 1,412 charges, the EEOC resolved 1,135 of them, leading to employers paying out $3.3 million in monetary relief for the affected workers and to make changes to prevent future discrimination.

As discrimination laws continue to evolve, it’s crucial that business owners make sure that they are following every regulation in place to prevent discrimination in the workplace. A Professional Employer organization can provide human resource management to make sure your business is following all the necessary laws and that any important internal documents, such as your employee handbook, are updated 

for any changes in LGBT and gender discrimination laws and protections. Contact us today to talk to one of our experts about how we can help your business today.

Return to Blog