How should we handle transgender dress code?

Q. A new employee refuses to comply with our dress code, which has slightly different requirements for men and women, because the individual is transgender. Though the new employee marked “female” on our employment application, the individual has since told us about identifying as a man. Can we require this employee to follow our dress code for women?

A. In California, “an employer shall allow an employee to appear or dress consistently with the employee’s gender identity or gender expression.” An employee’s gender identity is his or her “internal understanding” of his or her gender—regardless of whether this gender identity matches the person’s biological sex.