Discrimination in the workplace can have devastating consequences on the offender and the victim. The Civil Rights Act, the Equal Pay Act and the Age Discrimination in Employment Act are three federal laws that legally protect employees from workplace harassment and discrimination. However, not all discrimination is overt: subtle forms include limiting an employee's training or forcing someone into early retirement with an enticing benefit package. When workplace discrimination is widespread, morale drops, trust is broken and, ultimately, the company's bottom line is affected.

Decreased Employee Productivity

When an employee is discriminated against, he often feels helpless and anxiety-ridden, and may suddenly lack interest in job responsibilities, career advancement or the company's welfare, says Douglas N. Silverstein, a Los Angeles-based employment and labor law attorney at Kesluk & Silverstein, P.C. An employee who feels like an outsider because of his religious beliefs or nationality might lose self-esteem and stop contributing ideas. His morale begins a downward spiral, which can result in absenteeism, disregard for others' time and lack of motivation to complete assignments on deadline.

Disgruntled Employees

Getting unfairly passed up for promotions based on gender or sexual orientation can lead to frustration and anger. A male fire chief, for instance, might refuse to promote women firefighters because he believes men inherently perform better at the physical duties, or a boss may continuously send out an attractive female employee on new-business meetings instead of a seasoned salesperson. According to attorney Silverstein, these forms of devaluing discrimination can make employees feel resentful and helpless, which can lead to friction with management.

Financial

If an employee quits to escape discrimination, the employer must spend money recruiting a replacement. In addition, when employee morale is down, employers often hire costly team-building experts to motivate and encourage employees. Hiring new employees is also a strain on the company's budget because administrating, educating and training employees on policies and technology can be time-consuming and expensive, according to Recruiter.com, a website offering recruiting and career advice to professionals.

Physical Effects on Employees

An employee may rack up sick days or be continuously late to escape discrimination. Absenteeism can take a toll on an employee's workload, causing her to appear nervous and stressed about looming deadlines or presentations. As a result, she may take anti-depressant medication. Another physical sign of discrimination is someone who refuses to participate in friendly conversation, look co-workers in the eye, smile or keep good grooming habits. This is especially detrimental to the company if it's a salesperson or receptionist representing the company.

Legal Trouble

An employee can bring legal action against the company in the form of a complaint to the government. If a company is found guilty by the U.S. Equal Employment Opportunity Commission of docking an employee's pay, for example, the employer is forced to pay back wages. A company that wrongfully fired an employee may be required to re-hire the person. If the commission cannot resolve the issue or prove discrimination, it will close the case without filing a federal lawsuit and give the employee 90 days to file a personal lawsuit.