The Age Discrimination in Employment Act (ADEA) was enacted in 1967 to combat challenges older workers faced in seeking and maintaining employment. As the title implies, the statute prohibits discrimination against workers aged 40 or older because of age. That means that an employer may not refuse to hire, choose to fire or take certain other actions with regard to an employee who is 40 years of age or older simply because of his or her age.
Specifically, an employer may not segregate or classify older workers in a manner that is detrimental to the employees, such as directly or through placement in a particular role or category depriving them of the opportunity for promotion. In addition, the ADEA contains a unique provision prohibiting an employer from lowering the wages of any employee in order to comply with the statute. Thus, if older workers are being paid less than younger workers by a covered employer, that employer cannot remedy the situation by bringing everyone’s wages down to those of the older employees.
Employers Subject to the ADEA
The determination as to whether or not an employer is subject to the ADEA is a bit more complex than the applicability of other laws imposing obligations on employers. The two factors are:
- Industry: The ADEA is applicable only to employers engaged in “an industry affecting commerce.” This provision has been broadly interpreted, and the vast majority of private employers will meet this qualification.
- Number of Employees: An employer engaging in an industry affecting commerce is subject to the ADEA if the employer has at least 20 employees for each working day in at least 20 calendar weeks during the current or previous year.
Similar restrictions apply to employment agencies.
Labor organizations are also subject to the ADEA. The prohibitions on labor organizations are similar to those placed on employers, though the restrictions relate to membership decisions rather than hiring and firing. Labor organizations are also prohibited from causing an employer to act in a discriminatory manner based on age.
Employees and Applicants Protected by the ADEA
With limited exceptions, the ADEA protects all workers and prospective workers aged 40 and above. However, the ADEA does not apply to independent contractors; the statute is applicable only where an employer-employee relationship exists or would have existed but for the discrimination. In most cases, there’s no high end to the protection–the law applies to anyone who is 40 years old or older.
One exception to the “no cap” aspect of the ADEA is that it does not prohibit compulsory retirement at age 65 or older if that employee meets certain qualifications, such as being a key decision-maker or having a sufficient guaranteed pension.
Employee Benefits Under ADEA
In 1990, the ADEA was amended by the Older Workers Benefit Protection Act (OWBPA). Although this statute protects the rights of older workers to be free from discrimination with regard to employee benefits, there remain some situations in which cost differentials or even denial or termination of benefits are acceptable. Typically, these will be cost-justified distinctions made within the context of a bona fide employee benefit plan.
Extension of the Limitations Period for ADEA Claims
Until 2009, the period during which employers had to be concerned with and prepared to respond to discrimination claims under the ADEA was fairly limited. Most charges were required to be filed within 180 days of the alleged violation, though some claimants had 300 days in which to file a charge. However, under the 2009 amendment, the alleged discriminatory act is deemed to have taken place not just at the time the decision was made, but every time a paycheck reflecting the violation was issued or certain other types of decisions made.
As such, the 180-day limitation re-sets again and again, potentially stretching out the window for determining employer liability for years. This, of course, creates the need for detailed recordkeeping across a much longer period for many employers.
Consult With a Labor and Employment Attorney
As is often the case with anti-discrimination legislation, it can be difficult to determine precisely what employer obligations are in a given situation, or when you will be able to clearly demonstrate non-discriminatory reasons for your decisions. The support and guidance of an experienced labor and employment attorney can help you avoid pitfalls that may create the perception of discrimination. If you have been accused of violating the ADEA, an attorney experienced in this arena may be your best opportunity for a favorable outcome.