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Overt discrimination is the blatant act of mistreating one person or a group of people based on a prohibited basis. A prohibited basis would be race, religion, national origin, gender, marital status, age, or mental capability.
Overt discrimination can be found when borrowing a loan, applying for a job, or purchasing items at a store. Thankfully, there are government agencies that prevent any form of discrimination in financial institutions and businesses.
As far as the workplace, the U.S. Equal Employment Opportunity Commission (EEOC) enforces prohibitions against employment and promotion discrimination. The EEOC enforces multiple Civil Rights, Equal Pay, Discrimination, and Rehabilitation Acts to prevent mistreatment in the workplace.
Overt discrimination may take place at a job in one of the following forms:
Under The Equal Credit Opportunity Act (ECOA), the FDIC prohibits any discrimination in a credit transaction. This includes all times during the lending process: the original loan inquiry, the approval process, and the repayment term.
Overt discrimination may take place at a financial institution in one of the following forms:
If you believe a lender has discriminated against you, you can submit a complaint with the Consumer Financial Protection Bureau. You can submit a complaint online or give them a call at (855) 411-2372.
If you believe an employer has discriminated against you, you can file a Charge of Discrimination with the EEOC. This is a signed statement that explains the employer, union, or labor organization engaged in employment discrimination.
Alternatively, you can file a discrimination lawsuit against the employer or lender. However, in some cases, you will have to file a complaint with one of the agencies above before opening a court case. For instance, you will need to file a Charge of Discrimination before arranging a job discrimination lawsuit for all laws except the Equal Pay Act.
Overt discrimination is the most obvious form of discrimination, which makes it easy to catch and punish. However, other, more subtle forms of discrimination have just as big of a negative impact.
Disparate Treatment and Disparate Impact are different forms of discrimination that are harder to catch.
Disparate Treatment refers to when a particular group of people is treated differently than others. This is the most common form of discrimination. An example would be when a lender subtlety declines a loan application based solely on the applicant’s race. The key difference between this and overt discrimination is it is subtle, whereas overt is open and obvious.
Disparate Impact is when a neutral policy or practice is implemented that has an unfair impact on a specific group of people. The procedure is applied to all customers or employees but disproportionately excludes or burdens certain people. An example of this is when a loan promotion grants lower interest rates to people above a certain age. This renders unfair treatment to older individuals. It is important to note that this form of discrimination is very controversial.
Whether the discrimination is intentional or unintentional, your business can still be penalized. If you own a business, follow the tips below to prevent discrimination in your workplace.
If you are a business owner, you want to treat your customers with the utmost respect and have your employees feeling comfortable in their job. To prevent discrimination, it is crucial to educate all employees on all forms of discrimination and the adverse effects. This will prevent employees from mistreating each other and your business’s customers.
Communication is vital for understanding exactly how your workers and customers feel. Make it easy for both to share their opinions anonymously. This will bring alert to any discrimination that has happened so that you can enforce a comfortable environment. Gain as much feedback as possible and randomly ask if they have experienced mistreatment firsthand or witnessed it.
Clearly establish a list of rules and post it where it is visible to everyone working for you. Policies against discrimination should be a part of the employee handbook that every employee receives when hired. This prevents subtle and overt discrimination among workers and towards customers.
It is not a good idea to offer promotions that are directly or indirectly unfair to a particular group of customers. Be general with your promotions and never pick out certain people who are eligible or ineligible. Remember, unintentional discrimination happens, so it is wise to review any and all future promotions. This applies to all promotions, including seasonal discounts and job advertisements.
Routinely self-reflect to ensure that you aren’t indirectly being unfair to a particular group of people. Your actions will be observed by customers and employees alike, so it is crucial to lead by example. It is also good to use fair and non-accusatory language when dealing with discrimination complaints. Take all complaints seriously and enforce disciplinary action when required. Follow protocols established in the employee handbook and be consistent for all employees.
Not having a base understanding of business law could leave you and your business prone to discrimination lawsuits. It is wise to have a good understanding of what is and isn’t legally acceptable. For instance, there are significant legal problems that could arise when not correctly firing an employee. Understanding how to legally terminate an employee will help prevent possible lawsuits.
Although not as prevalent, overt discrimination still happens in today’s culture. If you are a customer that has been mistreated, do not be afraid to take action. It is a good idea to talk with an attorney if you plan on taking legal action.
If you are a business owner, reevaluate your current employee handbook. Clearly and routinely go over any new procedures with your employees to prevent mistreatment of each other or your customers.
Additional resources for business owners:
Opportunity Business Loans is the leading small business lender and is trusted by millions of business owners across the nation every year. We take pride in offering fair lending services that help businesses thrive, despite your race, religion, age, or gender. Apply for a small business loan today to get the financing you need to take your business to the next level.
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