This March, transgender rights endured a setback when theSupreme Court declined to hear a case about a transgenderstudent’s right to use the bathroom that corresponds with theirgender identity.

Related: The state of transgender healthcare

It’s clear that transgender rights can be a contentious topic.However, employers should take steps now to minimize risk and buildan inclusive, safe, and compliant environment for allemployees.

Studies have shown that the majority of transgender workersface workplace discrimination. Respectedcompanies, such as Apple, Starbucks, and Nike, havetaken action and continue to build transgender-inclusiveworkplaces.

While policy changes and advocacy for transgender rights fromlarge corporations often make the news, transgender individualsare just as likely to work for small and medium-sized businesses(SMBs). It is therefore imperative that HR leaders and all-sizedcompanies make an effort to build inclusive company cultures.

Here are four simple, yet effective steps to create and maintainan inclusive and welcoming workplace for transgender employees.

1. Building the right culture starts at the top

Developing the right corporate culture is the most crucial thingan employer can do to be welcoming. As always, it starts withleading by example. If an executive, founder, or other companyleader promotes inclusion and support of transgender employees,other employees are more likely to follow suit.

Related: Ruling: Civil Rights Act protects LGBTworkers

At the very least, they are much less likely to activelydiscriminate. Creating such an inclusive culture can be backed upby a handbook policy that has a clear, no tolerance policy onbullying, harassment, or discrimination of any kind. Employeesshould contact their HR team if their employee handbooks need to beupdated.

As a best practice, employers should require every employee toread and agree to the handbook annually so that they know what’sexpected of them.

Sensitivity training can also help with instilling the rightcompany culture. A 2015 university study highlighted thatproviding education on the experiences of transgender individualsincreases acceptance. It’s important to note that the study alsofound that some participants remained hostile after beingeducated.

This demonstrates how crucial building this kind of inclusiveculture along with compliant workplace policies can be, as it wouldhelp discourage employees from taking actions that make theworkplace less supportive to transgender employees.

2. Respecting names and pronouns

As part of the hiring process, all employers should ask new orprospective employees what they prefer to be called. This willallow transgender (as well as other) employees to be called bytheir preferred name and pronouns in work communications.

It’s crucial to note that for the purposes of compliance, legalnames must be presented to the IRS, Department of HomelandSecurity, or other agencies based on the correct legaldocumentation the employee presents at the time of hire.

For the purposes of every day interaction, however, make itclear that employees should be addressed by the name and pronounthat matches their gender identity.

3. Protecting privacy and health information

Strict confidentiality when it comes to gender and medicalinformation on transition status is paramount to supporting anorganization’s transgender employees. Similar to any other privatehealth, personal life, or employment matter, the birth-gender andtransition status of an employee should be handled with the utmostdiscretion.

Information about either should not be released without advancedwritten permission from the employee and only for lawful purposesthat relate to the individual’s employment.

Related: Few employers offer transgender-inclusive healthcare

4. Allowing for freedom of appearance

Company dress codes should adhere to standards that aregender-neutral. They should apply equally to all employees andshould not be contingent on gender-identified stereotypes.

For example, requiring females to wear skirts or dresses andhigh heels while allowing males to wear flat shoes and pants haveopened companies to controversy and accusations of discrimination.However, a dress code requirement that prohibits tennis shoes andblue jeans is much more gender-neutral in nature.

Transgender acceptance mitigates risk to your business

Implementing and following best practices fortransgender-friendly workplaces can also reduce the risk ofdiscrimination or harassment claims and lawsuits.

Such claims can disrupt business productivity, damage acompany’s reputation, lead to public boycotts, and linger longenough to scare off customers and quality employees. Ultimately, aworkplace that doesn’t protect transgender employees may be athreat to that company’s bottom line.

Furthermore, building a non-discriminatory workplace also meansbuilding an accepting, all-inclusive work environment that may leadto better employee retention, morale, and productivity.

Inclusiveness creates a stronger workforce; and the best ways tomake transgender employees feel welcome are building the rightculture, respecting names and pronouns, protecting privacy andhealth information, and allowing for freedom of appearance.

By implementing the steps above and baking them into theircompany culture, employers can create dynamic and welcomingworkplaces that attract and retain a diverse and dedicatedworkforce.