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The phrase “equal opportunity employer” is often used in job descriptions or at the top of the careers section of a company’s website. But what does it mean?

Dictionaries differ, but one possible definition of the phrase, based on federal regulations, is:

“An employer that pledges to not discriminate against employees based on race, color, religion, sex, national origin, age, disability or genetic information.” 1

Unfortunately, this definition doesn’t define each and every situation where discrimination may or may not occur. Moreover, anti-discrimination laws at the federal, state and local levels often require that employers offer “equal opportunity” to job-seekers. So why bother identifying your company as an equal opportunity employer? Where does that phrase even come from?

The origin of its common use goes back to the Civil Rights Act of 1964, which made equal opportunity employment a federal law. The legislation made it illegal for companies to discriminate against employees or potential employees based on race, color, religion, sex or national origin.

Title VII of the law established the Equal Employment Opportunity Commission (EEOC), whose main purpose is to investigate claims of employment discrimination. The 1972 Equal Employment Opportunity Act amended Title VII and expanded the EEOC’s powers, giving the agency the authority to enforce anti-discrimination laws more directly.

Several laws have been passed since the Civil Rights Act of 1964 which further expanded the characteristics that are protected from discrimination in an employment setting: for example, these protected classes may include race, color, religion, sex (including pregnancy, gender identity and sexual orientation), national origin, age (40 or older), disability, and genetic information.

If it’s illegal for employers to disobey labor laws and the EEOC’s anti-discrimination guidelines, then it would follow that every business, by default, should be an equal opportunity employer. So why do companies label themselves in this way?

It turns out that there are a few exceptions to the federal rules under which certain organizations are not required to follow EEOC guidelines. For example, religious organizations are exempt because hiring people from other religions could be at odds with their mission.

A larger exception is that many small businesses and labor organizations are exempt from the EEOC guidelines if they have fewer than a certain number of employees. Here’s a summary of which small organizations are required to comply with EEOC regulations:

Employer Type Subject to EEOC General Provisions Age Discrimination (Age 40 or older) Equal Pay Act
Private businesses >14 employees for at least 20 calendar weeks this year or last year >20 employees Yes*
State and Local Government Agencies >14 employees for at least 20 calendar weeks this year or last year Any number of employees Yes*
Federal Agencies All federal agencies are covered All federal agencies are covered Yes*
Employment Agencies Any number of employees or referrals Any number of employees or referrals Yes*
Labor Unions and Joint Apprenticeship Committees >14 members for at least 20 calendar weeks this year or last year >24 members or if it operates a hiring hall Yes*

* Virtually all employers are covered by the Equal Pay Act, with few exceptions, which makes it illegal to pay different wages to men and women if they perform substantially equal work in the workplace.

As small businesses scale up to more than 15 employees, they may find themselves in need of qualified human resources professionals to counsel them on compliance with the EEOC rules and other anti-discrimination laws, such as state and local statutes.

One thing that hiring managers and HR professionals should bear in mind when trying to make their organization compliant with anti-discrimination laws is that—even though it’s a common practice—federal law does not require that the phrase “equal opportunity employer” has to be used in job advertisements or on a company’s website. Still, as the EEOC once pointed out, including the phrase might be a good way for employers to encourage members of historically marginalized groups to apply to their company’s job postings.

1 While the EEOC does not explicitly define the term, this definition is based on EEOC guidelines for recognizing types of discrimination and guidelines for determining which businesses are eligible for coverage.