Hand adding coin to jar for retirement savings fund. Hand adding coin to jar for retirement savings fund.

Beyond Mandatory Retirement: Exploring Age Discrimination Laws and Protections

Thanks to federal and state age discrimination laws, generally speaking, it is illegal for companies to impose a mandatory retirement age for rank-and-file employees,” said Thomas McKinney, a partner at the employment law firm of Castronovo & McKinney, LLC.

Age discrimination occurs when an applicant or employee is subjected to unfair treatment based on their age. Thus, the Age Discrimination in Employment Act, also known as the ADEA, comes into play. It is a federal law that specifically prohibits age discrimination against individuals who are 40 years old or older. 

Standing at a pivotal position of importance is the fact that the Age Discrimination in Employment Act holds no jurisdiction in bestowing upon protection for workers under the aforesaid age bracket, which is the age of 40. However, errant as it is, some states have enacted laws to safeguard younger workers from age-related discrimination via different legislations.

On the same lines of thought, serving as essentiality is one such aspect of the Age Discrimination in Employment Act that does not make it illegal for employers or other covered entities to favor an older worker over a younger one, even if both individuals are 40 years old or older.

The aforementioned refers to the ideology that the law imposes no prohibition on such preferences exercised by employers in any employment decisions. Hence, not only does it stand important for individuals to be aware of the specific protections provided by the Age Discrimination in Employment Act but also to keep in mind any additional safeguards offered by different state laws.

Unfortunately, as it is, the display of discrimination can still occur in situations where both the victim as well as the individual responsible for the discriminatory behavior are aged 40 or even older. The aforesaid stands as the core reason for highlighting the importance of understanding followed by addressing age-related bias in the workplace in order to ensure fair and justifiable treatment for all those who are employed.

old and young employee
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1. The Age Discrimination in Employment Act’s Applicability 

Delving further into the concept of age discrimination, it is essential to understand the usage aspect meaning to whom the Age Discrimination in Employment Act applies. Safeguarding individuals who are 40 years of age or older, followed by shielding them from any kind of discrimination in the workplace based on their age, is the essence of the aforesaid legislation.

1.1. The Aspect of Coverage Under The Age Discrimination in Employment Act 

The Age Discrimination in Employment Act serves to be of aid to a range of entities, which stands inclusive of private employers with a workforce of 20 or more employees, state and local governments, employment authorities and agencies, labor organizations, as well as the federal government.

1.2. The Age Discrimination in Employment Act and The Prohibited Actions 

Serving to be in accordance with the Age Discrimination in Employment Act, the essence that lies to be restricted vehemently is the aspect of engaging in age-based discrimination that is seen in various ambits of employment. From hiring, firing, promotion, layoff, compensation, and benefits to job assignments and training, harassment of an individual who stands on the basis of their age has been marked to be strictly forbidden.

Not only the aforementioned but also the fact that the Age Discrimination in Employment Act extends its protection to anyone who wishes to file against such harassment. It not only bestows a protective shield against retaliation, which makes it illegal to retaliate against an individual for opposing age-discriminatory employment practices, filing an age discrimination charge, but also for any individual who is deemed to be participating in any capacity in an investigation, proceeding, or litigation under the said regulation.

What serves to be of significance is the arena circling the fact that the Age Discrimination in Employment Act authorizes a permit to employers to give preferential treatment to older workers based on their age, even if such favoritism negatively impacts a younger worker. 

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2. The Protections Under the Age Discrimination in Employment Act

Apart from the idea that the Age Discrimination in Employment Act indulges in endowing crafted safeguards to older employees in a professional setup, it also broadens its use to several other areas of need.

2.1. The Advertisements and Job Notices

Prohibiting the inclusion of age preferences, limitations, and specifications in job notices or advertisements is one of the numerous categories that the Age Discrimination in Employment Act deals with. 

Only under certain situations, when an age limit is considered as a “bona fide occupational qualification” or the BFOQ, can an exception to this rule be witnessed as it would serve to be reasonably necessary for the normal operation of the business.

2.2. The Apprenticeship Programs

Speaking about activities, the apprenticeship programs that stand inclusive of joint labor-management apprenticeship programs are categorically prohibited from performing any acts of discrimination on the foundation of an individual’s age. 

Only if they meet specific exceptions that have been outlined in the Age Discrimination in Employment Act or if the Equal Employment Opportunity Commission grants a specific exemption can age limitations be imposed within the aforementioned apprenticeship programs. 

2.3. The Pre-Employment Inquiries

Along the same lines, the Age Discrimination in Employment Act does not explicitly forbid employers from learning and inquiring about an applicant’s age or date of birth. Parallely, it can be stated that such questions may discourage older individuals from seeking employment as well as could potentially suggest an intention to discriminate based on age, which stands on opposite poles with regard to the objectives curated by the Age Discrimination in Employment Act.

If the aforesaid information circling the essence of age is required for any legitimate purpose, it is advised to obtain it after the individual has been hired in order to not only avoid any potential bias during the hiring process but also to build a level of trust between the applicant and the employer.

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2.4. The Benefits

 The Older Workers Benefit Protection Act of 1990, commonly called the OWBPA, not only brought amendments to the Age Discrimination in Employment Act, which specifically prohibited employers from denying benefits to older employees but also recognized that the cost of providing certain benefits to older workers might be higher than for their younger counterparts. The same was the core reason for the United States Congress to address potential disincentives for hiring older individuals. 

Running on the same lines, it is categorically observed that under certain circumstances, employers may be allowed to adjust certain benefits based on age. However, it must be based on the fact that the cost to provide these benefits to older workers shall not be less than the cost for younger employees.

In addition to the aforesaid, the Older Workers Benefit Protection Act of 1990 has the authority to permit employers to coordinate retiree health benefit plans with eligibility for Medicare or an equivalent state-sponsored health benefit program. 

Such legislation not only aims to help enforce the rules of the protections granted under the older workers’ benefits but also acknowledges the potential variations in costs associated with bestowing the aforementioned. 

2.5. The Waivers of the Age Discrimination in Employment Act Claims or Rights

The Age Discrimination in Employment Act holds the power to establish specific requirements in order to maintain the validity of waivers that revolve around claims or rights in certain situations. 

Taking place in the context of settling discrimination claims or as part of exit incentives or other employment termination programs is the entire notion of waivers. To be considered knowing and voluntary, a valid Age Discrimination in Employment Act waiver must adhere to minimum standards, which are as follows:

  • To be in a written form
  • To be easily understandable
  • To explicitly refer to the Age Discrimination in Employment Act rights or claims
  • To omit waiving rights or claims that might arise in the future
  • To have a process of exchange for valuable consideration beyond what the individual is already entitled to
  • To advise the individual in writing to seek legal counsel before signing the waiver
  • To bestow the individual with a specified amount of time to review the agreement before signing:
    • The individual agreements which are for at least 21 days.
    • The “group” waiver agreements, which are for at least 45 days.
    • The settlements of Age Discrimination in Employment Act discrimination claims, which is for a “reasonable” amount of time.

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3. The Age Discrimination & Employment Policies/Practices

Delving further into the concept of age discrimination, it is observed that an employment policy or practice that applies universally, irrespective of age, shall be considered to be illegal if it disproportionately affects the applicants or employees aged 40 or older in a negative way as well as that lacks a reasonable factor other than age as its foundation of growth.

Elaborating further, the concept of mandatory retirement stands to be in the arena of illegality. Lying in collaboration with specific exceptions, any employer who is subject to the Federal Age Discrimination in Employment Act is not only prohibited from engaging in acts of discrimination against employees aged 40 or above but is also restricted from imposing a mandatory retirement age as it is considered a form of the same, which is similar to involuntary termination. 

The aforesaid stands to be true even if the employer has curated a retirement policy to which the employee has agreed upon when being hired.

4. The Age Discrimination in Employment Act and Its Exceptions

There are two specifically crafted exceptions that prevail under the Federal Age Discrimination in Employment Act.

4.1. The Bona Fide Occupational Qualification

The first exception revolves around granting permission for a mandatory retirement age if the employer can substantiate that age is a “bona fide occupational qualification.” This refers to the fact that to establish a bona fide occupational qualification, the employer must provide evidence circling the essence of an objective safety concern in a profession that includes careers like police or firefighting.

4.2. The Bona Fide Executive or High Policymaking Position

An individual being in a “bona fide executive or high policymaking position” is the second exception, which does not stand to be specifically applicable to every executive or vice president but categorically to all those who wield comprehensive authority over the entire enterprise or a significant portion. The aforementioned stands inclusive of individuals who occupy either a “c-suite” position or head any crucial divisions within a larger company. 

On the same lines of thought, it is essential to pinpoint the fact that for the application of this exception to be valid, the executive or the policymaker must have held such a position for a minimum of two years before approaching retirement, followed by standing to be eligible to receive a pension or a comparable retirement benefit which must amount to at least $44,000 per year post acquiring retirement.

age discrimination
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5. The Concept of Mandatory Retirement

What serves as a highlight is the idea that the matter of mandatory retirement becomes more intricate when the older worker holds the status of an equity partner, which stands to be distinct from being a traditional employee. 

Arising in fields like law, accounting, as well as consulting firms, the Federal Age Discrimination in Employment Act, in regulating the aforementioned scenario, has the power to only explicitly shield employees, not partners, who, as equity partners, are essentially bestowed with the duty to perform functions as the owners of the enterprise.

In the case of Clackamas Gastroenterology Assoc. P.C. v. Wells, 123 S. Ct. 1673, which was brought into existence in 2003, the United States Supreme Court had established a six-part test to discern whether a shareholder in a medical practice is to be considered an employee or an owner. 

The idea that was termed to be of essentiality was the application of the Age Discrimination in Employment Act to partners not only holding to be variable but the fact that some federal courts have extended the Age Discrimination in Employment Act’s protection to partners, especially in cases where the partnership is sizeable, and the partner possesses limited authority and autonomy, was an arena that stood out.

In such aforestated instances, the courts holding positions in various ambits have found minimal distinctions between an ordinary partner in a large partnership and an ordinary employee, marking the fact that the extension of the Age Discrimination in Employment Act leads to granting protection to partners.

Running on the same plane of thought, though employers are generally restricted from engaging in the act of enforcing mandatory retirement policies or using age as a criterion for termination, the fact that there are specific exceptions, which have been outlined above, leads to the essence that the legal landscape is to a certain extent lenient when it comes to inquiring about an older employee’s retirement plans. 

Complemented with the aforesaid, the permissibility of such an inquiry hinges on the manner in which it has been asked and the purpose behind using the information derived from the said question.

If the aforesaid question is brought into play as a way to understand succession planning, it is likely considered lawful. However, when the discerning of information through the inquiry is presented in a way that subtly emphasizes the fact that the employer wants the employee to leave due to their age, it shall be viewed as evidence of depicting an age bias, which could potentially be regarded as discriminatory and unlawful. 

As stated prior, the legality of such inquiries depends not only on the context, and intent but also on how they align with employment laws as well as the anti-discrimination regulations.

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6. The Employers Who Are Subjected to the Age Discrimination in Employment Act

In order to understand whether the concept of not imposing mandatory retirement falling under the ambit of the Age Discrimination in Employment Act is applicable, it is essential to shine a light on the structure of the organization.

Determining whether an employer is subject to the said legislation involves a slightly more intricate process compared to other laws that impose obligations on them, and this is based on two key factors, which are described as follows:

  • The Industry: The Age Discrimination in Employment Act stands to be applicable solely to employers who are involved in “an industry affecting commerce.” The aforesaid provision has been broadly interpreted, and the fact that the majority of private employers are likely to meet this qualification serves to be of importance.
  • The Number of Employees: For an employer engaged in an industry that has an effect on commerce, the Age Discrimination in Employment Act serves to be of utility. If the employer has at least 20 employees for each working day during at least 20 calendar weeks in the current or previous year, then the Age Discrimination in Employment Act is applicable as this criterion establishes the threshold for the number of employees that are necessary to trigger the usage of the regulation.

On the same lines, the same employment agencies are also subject to restrictions under the Age Discrimination in Employment Act, meaning that they are prohibited from engaging in age discrimination in any ambit of their practices, which stands inclusive of arenas involving recruitment, placement, as well as referral of applicants.

Not only the aforesaid, but labor organizations are as well inclined to enforce rules stated under the Age Discrimination in Employment Act, with prohibitions similar to those imposed on employers. 

What holds a pivotal arena of importance is the fact that the restrictions for labor organizations revolve around membership decisions rather than circling the aspects of hiring or firing employees. Complementing the same, labor organizations are barred from causing an employer to act in a discriminatory manner based on age, which underscores the comprehensive scope of the Age Discrimination in Employment Act. The aforesaid takes under its umbrella various entities involved in the employment process in order to prevent discrimination on the basis of age across the board.

7. The Extension of the Limitations Period for Age Discrimination in Employment Act Claims

As referred to the claims filed under the Age Discrimination in Employment Act above, it is essential to understand the liability that arises when the said filing period is crossed. Until the year 2009, employers had a relatively limited timeframe to not just address but also to respond to discrimination claims under the Age Discrimination in Employment Act. 

Most of the charges were required to be filed within 180 days of the alleged violation, although some leeway was granted to the claimants where they were authorized to file a charge within the 300-day time limit. 

It was only after the 2009 amendment to the Age Discrimination in Employment Act that the scope of the alleged discriminatory act was seen to be expanded. It is now considered to occur not just when the decision was brought into existence but every time a paycheck reflecting the violation was issued or certain other types of judgments were made.

The aforesaid refers to the idea that the 180-day limitation is made to reset each time, which potentially extends the period for determining employer liability over several years. The aspect that proved to be difficult was, under the said grant, to keep detailed recordkeeping over a much more extended period for many employers, which pinpoints the importance of accurate documentation as well as compliance efforts.

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Mandatory retirement is an aspect that falls under the ambit of age discrimination, which the employees face by their employers. The Age Discrimination in Employment Act solely deals with negating the initiation of such age-biased decisions revolving around imposing retirement upon employees who have achieved the age of 40 years or are older. 

From understanding the essentiality of the legislation to the aid the regulation provides, in terms of protections and benefits granted, which takes under its umbrella the concept of restricting mandatory retirement, the Age Discrimination in Employment Act has been a vital rule book for all the employees aged 40 and above and helps them fight any discrimination prevailing in the ambit of age. 

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