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My Employee Just Switched Genders!  Now What?

The rights of transgender persons have been very much in focus lately. A prohibition against gender discrimination is not new in California, however. Employment discrimination against transgender persons has been unlawful since 2004, and the law was strengthened in 2011. This year, the California Fair Employment and Housing Council has proposed regulations regarding transgender discrimination in the workplace.

A transgender person is someone whose gender identity or gender expression is different than their sex assigned at birth. A transsexual person is one who transitions from one sex to another, typically via hormone treatments or sex-reassignment surgery. Transsexual persons are protected by the laws prohibiting gender discrimination but it is not necessary for a person to have any particular medical procedure in order to qualify as transgender. 

No Discrimination. California law is clear that employers may not discriminate against transgender persons in hiring or employment. Exclusion or segregation of transgender persons cannot be justified by “customer preference” or other employees’ religious objections.

Names and Pronouns. A transgender employee should be addressed by his or her chosen name and pronoun (e.g., “he” or “she”). You can require evidence of a legal name change before changing an employee’s official employment record, however. California courts offer a streamlined name-change procedure where the change is the result of a gender transition. Where a transgender employee has changed names, you can also require proof of a name change with the Social Security Administration before changing payroll records.

Health Insurance. Under new rules based on the Affordable Care Act, a health plan need not provide coverage of sex-specific services to a transgender person whose biological sex is not consistent with that service. Prostate exams need not be covered for a transgender male who does not have a prostate, for example. The ACA rules permit a health plan to inquire of a plan member’s biological sex on the plan application and in the event coverage is denied as the result of a binary gender/billing code mismatch. While these rules presently apply only to government-funded plans, they provide a potential preview of how these matters might be addressed for private employer plans too.

Which Restroom? Much controversy and confusion surrounds the issue of which restroom a transgender employee should use. Federal and state law is now clear that employees must be allowed to use restrooms, locker rooms and changing rooms that correspond to their gender identity. You may make a unisex restroom available for transgender employees, but you may not require its use. Objections by other employees to a transgender employee’s use of their restroom or locker room is not a valid basis for prohibiting such use.

Dress Code. You may enforce dress codes, but you must allow transgender employees to follow the dress code that aligns with their gender identity. You may prohibit wearing of certain items for safety reasons (dangling earrings or high heels, for example) so long as the prohibition applies to all employees of a given gender.

Training. Managers should be trained regarding the prevention of harassment and discrimination against transgender employees and applicants. A portion of the required AB 1825 training should be devoted to transgender issues so that managers do not unwittingly discriminate, and so they will be alert for incidents of co-worker harassment. Sensitivity training for employees should be considered as well if transgender employees are a part of your workforce. Some employees may have a difficult time accepting a transgender co-worker and, without training, might subject your organization to liability for harassment or discrimination.

James J. McDonald, Jr. is managing partner of the Irvine, California office of the labor and employment firm Fisher Phillips. He is the author of California Employment Law: An Employer's Guide, published this year by the Society for Human Resource Management. He may be reached at

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