Equal Employment Opportunity

Updated on April 17, 2024
Article byPrakhar Gajendrakar
Edited byPrakhar Gajendrakar
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Equal employment opportunity (EEO)?

Equal employment opportunity (EEO) refers to the fair employment opportunities amongst employees without any discrimination. No employer shall be biased or discriminatory towards any applicant or employee while making decisions regarding promotion, termination, hiring, transfer, or compensation.

Equal Employment Opportunity

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The Equal Employment Opportunity Act is a penal law that restricts companies from practicing particular job discrimination in workplaces. The U.S Department of Labor enforces the law’s utility, with two agencies carrying out monitoring and enforcement tasks: the Civil Rights Center and the Office of Federal Contract Compliance Programs.

Key Takeaways

  • Equal employment opportunity (EEO) is a U.S. federal law that monitors the fair treatment of employees in the workplace, especially during the selection and recruitment of new applicants.
  • It comes under the U.S. Department of Labor, and a separate Equal Employment Opportunity Commission regulates and monitors companies, ensuring they abide by the laws.
  • The EEOC notifies the company within 10 days when someone files a charge against it. Therefore, a charge does not imply guilt, and the EEOC conducts an investigation.
  • During the investigation, the company and the complainant will share information, and the EEOC will evaluate it to determine the outcome.

Equal Employment Opportunity Explained

The Equal Employment Opportunity (EEO) is a U.S. federal policy introduced to eradicate workplace discrimination. The Civil Rights Act of 1964 established the Equal Employment Opportunity Commission (EEOC) as an investigative body on July 2, 1965, with its headquarters in Washington DC.

As per the equal employment opportunity definition, there is an EEO-1 Component 1 report, which is a compulsory yearly data collection that mandates all private sector employers with 100 or more employees and other federal contractors with 50 or more employees meeting specific criteria have to report their workforce demographic data, including information by race/ethnicity, sex, and job categories.

Further, the Equal Employment Opportunity Law of 1972 extended the federal civil rights laws under Title VII from employers with 25 or more employees to 15 to 24. Hence, the laws become more strict. If a company is found guilty of discrimination, ill behavior, or power abuses, the EEOC files a lawsuit against them. Most lawsuits end up in a settlement where the company pays the penalty for the violations, but there are cases where the company has proved its innocence.

This legislation establishes that employers cannot discriminate against employees based on color, race, caste, religion, ethnicity, gender, or any other biased reason during the workplace or selection process. Consequently, all employees have an equal opportunity and must be recruited based on merit and qualifications. When employers engage in such discrimination, it demotivates employees and fosters a toxic work culture in the office.

Thus, equal employment encourages employee satisfaction, where the firm can achieve greater heights and better results. Hence, leading to excellent services to clients while enhancing customer requirements and satisfaction.


Let us understand the concept better with the help of examples.

Example #1

Let’s say Jennifer has just finished her master’s degree in business administration. She has exceptional communication skills, is good with client persuasion, and looks forward to making her career in the sales department. When she applies for a sales position in a leading FMCG (Fast moving consumer goods) company and visits the office for an interview, she sees that one of her college classmates, Alan, who could have been better at studies, has also come for an interview. Jennifer knows Alan’s skills and knowledge are mediocre and basic compared to hers.

She can observe that the company is majorly hiring male candidates only and is biased. Alan gets selected for the sales position, and Jennifer is rejected. It is a common practice among companies where they choose candidates based on certain criteria and mistreat other applicants.

It is a typical example of uneequal employment. Jennifer, witnessing this, can file a complaint against the company to the U.S. Department of Labor or go to the EEOC office and ask them to look into the matter. The company may have to pay a penalty or fine to settle the lawsuit against it if found guilty.

Example #2

Excentia Human Services, a non-profit organization, has settled a lawsuit filed against them by the US Equality Employment Opportunity Commission, by agreeing to pay $100,000, and providing other relief services.

The case was that the organization declined to select a candidate for the position of preschool provider because she has cerebral palsy. The applicant was qualified, and the HR department sent her to the worksite after conducting a good interview. The management rejected the candidate after they met her mainly because of her medical condition.

The court issued a three-year consent decree under which Excentia will pay $100,000 and compensatory damages. The decree also enforces monitoring, periodic reporting, and an easement for future disability discrimination complaints. Earlier, the U.S. Equal Employment Opportunity reports suggested significant discrimination in workplaces, mostly regarding color and gender biases, but lately, strict measures have been taken to bring positive changes.


The importance of equal employment opportunity policy can be summarised as:

  • Besides the workplace discrimination induced by employers, EEO plays an integral role in preventing employee-to-employee discrimination.
  • It maintains a workplace ecosystem based on respect, teamwork, and mutual understanding.
  • This law circulates compliance at all company levels in each department and makes it a mandatory requirement.
  • The policy holds great importance in solid business criteria and well-established processes, especially for hiring and selection.
  • Hence, the presence of EEO motivates and supports employees, and therefore, an improved workforce is established.
  • Due to its presence, companies can hire the right people rather than just those who can fit in and may need more essential skills.
  • It is not limited to an investigating authority but provides training and education regarding federal labor laws.
  • Here, the simple idea of equality at all levels is procured with the help of EEO.
  • Moreover, it protects business owners as much as it is for the benefit of staff and workers. If the investigation concludes that there has been no violation from the company, it discourages false accusations.


The disadvantages of equal employment opportunity laws are as follows:

  • Every job design and candidate needs to be assessed by the same process.
  • Companies are always under the threat of an employee going to the EEOC for small discrimination or ill behavior that they feel.
  • False accusations and claims decrease a company’s reputation and goodwill in the marketplace.
  • Even if a company did not do a violation, they have to bear the expense of the whole court proceedings.

Frequently Asked Questions (FAQs)

1. What is equal employment opportunity compliance report?

An Equal Employment Opportunity (EEO) compliance report is a document that provides an organization’s assessment of its adherence to EEO laws and regulations. Hence, these reports are required by government agencies that overlook the employment practices.

2. What are the four equal employment opportunity programs?

The four EEO programs are:
– Civilian Equal Employment Opportunity Process.
– Military Equal Opportunity Process Information and  Referral.
– The  Alternative Dispute Resolution Program, and
– Affirmative Employment and Diversity Initiatives.

3. Who are the members of the Equal Employment Opportunity Commission?

On January 20, 2021, President Biden appointed Charlotte A. Burrows to the position of Chair of the United States Equal Employment Opportunity Commission (EEOC). She was twice nominated to the EEOC to serve as Commissioners: once in 2014 and again in 2019. She was unanimously confirmed to a second term in the U.S. Senate, which ends in 2023.

This article has been a guide to what is Equal Employment Opportunity. Here, we explain its examples, importance, and disadvantages. You may also find some useful articles here –

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