Creating an Inclusive Workplace for Transgender Employees

While the Human Rights Campaign’s 2023-2024 Corporate Equality Index report found that 72 percent of Fortune 500 companies offer transgender-inclusive healthcare — up from zero percent in 2002 — there is still work to be done when it comes to transgender employees and the workplace. As of March 2025, over half of all states have enacted laws banning or restricting gender-affirming care.

For legal advice on creating inclusive work environments and employment policies, talk to an employment attorney.

Transgender Anti-Discrimination Protections in Employment

Federal laws, including Title VII of the Civil Rights Act of 1964, prohibit employment discrimination against protected classes. In its 2020 landmark case Bostock v. Clayton County, the U.S. Supreme Court ruled that Title VII’s prohibition of sex discrimination includes protections for gender identity and sexual orientation.

About half of the states also prohibit employment discrimination based on gender identity. An employment law attorney can explain which laws apply to your workplace and how best to comply with state and federal employment regulations.

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Business and State Gender Identity Protections

Illinois, where employment and labor attorney Lori Ecker practices in Chicago, is among those states with stronger protections for gender-affirming care. Ecker says that while the conversation goes well beyond gender neutral bathrooms, that topic was recently critical to the tune of more than $200,000 in August 2021.

“The Illinois Appellate Court ruled against Hobby Lobby, which for years had refused to allow a trans woman employee to use the designated women’s bathroom,” Ecker says. “The way they claimed they were solving the problem was by having one [gender-neutral] bathroom, but that wasn’t always available. Ultimately, she was awarded $220,000 in emotional distress damages, which I believe is the highest such award out of the Illinois Human Rights Commission. Hopefully, the possibility of a six-figure award will encourage employers across the state to clean up their act.”

Setting Inclusive Language Practices

Employers need to consider their communication protocol in addressing and referring to their trans employees. Inclusive language practices include identifiers on email signatures and business cards. It could include messaging about how the employee should be addressed, for example.

“It’s one thing to occasionally forget how to address a coworker by his or her preferred name or pronoun,” Ecker says. “But when it continues, it’s harassment. Those communication procedures should be set forth in an employee handbook.”

Providing Diversity Training for an Inclusive Environment

Employers should also consider training current employees on what’s appropriate and not appropriate to ask or comment on. “Sometimes coworkers meet a transgender person for the first time, and they tend to use them as their ‘guinea pig’ and ask all sorts of ridiculous questions,” Ecker says. “This is one of the more common microaggressions you’ll find in the work environment. If people would stop for a second and really think about what they were asking, they might see, ‘This is grossly inappropriate.’ But that’s not happening.”

Ecker had a client with one such case. The woman came to Ecker after requesting training from management after she noticed her colleagues not only didn’t know how to communicate with her but also how to interact with transgender customers. “The employer said the trans woman should be the one to provide the training,” Ecker says. “The onus should not be on the employee. It starts at the top. Ownership and management need to make it clear that LGBTQ+ new employees are welcome and promulgate policy in writing.”

Creating Clear and Welcoming Trans-Inclusive Workplace Policies

When it comes to inclusive policy-making, employers should consider transitioning employees. “Certain individuals who are transitioning undergo permanent hair removal, but before that can happen, they need to grow out their beards,” Ecker says. “People generally don’t want to be at work during that time, so giving FMLA, PTO, or sick leave for situations like that would certainly be a welcoming policy.” Dress codes should be considered in a trans-inclusive way to meet employee needs, she adds.

“There really needs to be cooperation with the employee to identify not only how but the timeframe of when they’d like the news announced,” she says. “This should be a coordinated effort and not something the employer imposes on the employee.” It’s crucial the relationship extends to human resources as well, Ecker adds.

“I think in a few years, in that amount of time, the idea of trans men and trans women in the workplace will be pretty basic,” she says. “The future workforce—today’s young people—are disavowing gender classification, period. Employers who have very strict dress code policies and things of that nature are going to find themselves treading water, if not drowning in it, if they don’t get their act together with regard to [transgender individuals].”

Find an Experienced Employment and Labor Law Attorney

Creating an inclusive culture can include everything from recruitment to layoffs. Transgender inclusion can also help employers attract the broadest applicant pool and retain talented non-binary workers. If you have questions on how to build a more inclusive workplace and provide a safe space for workers, see our overview of employment law or consult with an experienced labor and employment lawyer.