As the cost of living continues to increase, more Americans are working longer and retiring at older ages. Even Social Security is changing the vesting age from 62 and four months in 2018 to 66 and 6 months. Full retirement age is set to increase by two months each year until it reaches 67. Because Americans are working longer, age discrimination becomes a more prominent concern in the workplace. The South Carolina employment lawyers at Gignilliat, Savitz & Bettis are experienced in helping employers implement policies and practices that work to prevent discriminatory hiring, employment, and firing practices.
What is the Age Discrimination in Employment Act (ADEA)
In 1967, Congress implemented the ADEA to prohibit age discrimination in employment. Lawmakers determined that affluence and productivity of workers was on the rise and was causing an unfair disadvantage to older employees, particularly when older workers, determined to be workers over the age of 40, were trying to find new work. Congress intended the ADEA to accomplish three things:
- to promote employment of older workers;
- to prohibit arbitrary age discrimination in employment; and
- to help employers and workers solve problems that arise from the impact of age on employment.
What is Prohibited Under the ADEA?
The ADEA makes discriminatory employment practices unlawful, including:
- Failing, refusing to hire, or firing, or otherwise discriminating against a person because of age;
- Limiting, segregating, or classifying employees in a way that adversely affects their employment status because of their age;
- Reducing the wage of any employee because of age; or
- Determining job assignments, promotions, layoffs, trainings, fringe benefits or any other term of employment because of their age.
Interestingly, the ADEA does permit an employer to favor older workers based on age even if doing so adversely affects a younger worker who is 40 or older. The ADEA prohibits intentional discrimination, known as disparate treatment, as well as practices that appear neutral but have the effect of harming older workers more than younger workers, known as disparate impact.
What does the ADEA cover?
The ADEA’s protections begin before the employee/employer relationship is formed, and employers in South Carolina need to be cognizant of potential age discrimination when posting job notices. When advertising a job opening and recruiting new employees, age limitations, preferences, or specifications may generally not be included in these notices or advertisements, unless age is a bona fide occupational qualification, explained in more detail below.
Most employers in South Carolina know there are some questions they should not ask when interviewing job candidates to avoid the appearance of discriminatory hiring practices. While the ADEA does not specifically prevent an employer from asking a candidate’s date of birth or age, inquiries into an applicant’s age will be closely scrutinized should the applicant file a claim for discriminatory hiring practices based on age. Inquiries into an applicant’s age may also deter the applicant from pursuing the opportunity. If information about an applicant’s age is needed for lawful purposes, the age can be obtained after the employee is hired.
As aforementioned, employers cannot treat employees in a discriminatory fashion based on the employee’s age if the employee is over 40 years old. This protection extends to employment benefits as well. As with the ADEA, Congress saw that employers might be prone to giving older workers various benefits because the cost to provide them to older workers was higher. As a result, Congress passed the Older Workers Benefit Protection Act (OWBPA) in1990 to amend the ADEA to prevent employers from denying benefits to older employees. Employers are permitted to coordinate Medicare or comparable state-sponsored health benefit with retiree health benefit plans.
It can be commonplace for employers to ask employees to waive ADEA rights or claims when giving the employee an exit incentive. The ADEA and OWBPA set forth specific requirements for this to occur. The ADEA waiver must:
- Specifically refer to ADEA claims/rights;
- Not waive rights or claims in the future;
- Be in exchange for consideration beyond what the employee is currently entitled to;
- Advise the employee to consult an attorney prior to signing;
- Provide the employee at least three calendar weeks to consider the agreement and one calendar week to revoke the agreement after signing; and
- Be in writing.
Who Must Follow the ADEA?
The ADEA protects employees as well as job applicants. Organizations or companies that must comply with the ADEA are those with 20 or more employees, including state local governments, labor organizations, and employment agencies. Apprenticeship programs, including joint labor-management programs, must not discriminate based on an individual’s age.
Recent Changes to the ADEA’s Application
In November 2018, the United States Supreme Court issued a unanimous ruling that has been interpreted at a blow to small public-sector employers currently battling age discrimination lawsuits. The court ruled that the ADEA applies to all state and political subdivisions regardless of the number of employees the entity has, as opposed to applying to state and political subdivisions employing more than 20 people. This ruling will affect many local governments and special districts created by local governments or the state of South Carolina, like municipal fire departments and could make it more difficult for them to terminate older workers. Now the ADEA applies to all government employers, regardless of size, just like the Fair Labor Standards Act applies to all government employers. The OWBPA will also apply to all government employers, which could make layoffs more challenging.
This ruling could make it easier for claimants to bring claims against individuals for direct liability under the ADEA, but the Court did not consider this specific issue in November.
Defenses to an ADEA claim
If a person has made a claim against an employer for a disparate impact violation of the ADEA (policies that appear neutral but have the effect of harming older workers more than younger workers), the employer could be absolved of liability if the employer can show the practice is based on a reasonable factor other than age (RFOA).
If a person has made a claim against an employer for discriminatory hiring practices, the employer may be absolved of liability if it can show that age is a bona fide occupational qualification (BFOQ) which is reasonably necessary to the normal operation of the business. BFOQs should relate to an essential job duty. They allow employers to hire people based on race, sex, age, and national origin if one of these is a BFOQ. The employer must prove the requirement is necessary to the success of the business and that a definable class or group of employees would not be able to perform the job safely or efficiently. The inquiry for a BFOQ focuses on the necessity of using an expressly forbidden classification. An example of an age-related BFOQ would be the mandatory retirement ages for bus drivers and pilots, which is imposed for safety reasons.
Consult an Experienced Employment Law Attorney in SC
As experienced employment law attorneys in South Carolina, we know how financially challenging it can be for an employer to defend any kind of employment claim. Employers, particularly those which are small government entities, should review their job posting, hiring, employment, and termination practices to ensure compliance with ADEA is maintained. Contact one of our dedicated employment law attorneys at Gignilliat, Savitz & Bettis to review your workplace policies and practices for compliance with the ADEA.