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Generally Speaking, Employers Should Avoid Forcing Retirement

Posted:

Forcing a private-sector employee to retire generally violates the Age Discrimination in Employment Act (ADEA), the federal law forbidding age discrimination against workers aged 40 or older.

Human Resources
Human Resources

A company manager at a manufacturing and distribution company allegedly asked questions of a direct report as she approached her 65th birthday. According to the U.S. Equal Employment Opportunity Commission (EEOC), the questions included "When are you going to retire?", "Why don't you retire at 65?", "What is the reason you are not retiring?".

The EEOC further alleged that after the employee responded that she had no plans to retire, the company informed the employee that it was eliminating her position due to economic uncertainty.

According to its press release, the EEOC claimed the company hired a man in his thirties less than a month later for the same position the company claimed to have eliminated.

It probably dawned on J&M Industries that protracted litigation would not improve an already bad situation. So, it settled before the parties took any formal discovery.

Under the three-year consent decree settling the suit, the employer agreed to pay the former employee $105,000 in back pay and liquidated damages, conduct training, revise policies, provide regular reports to the EEOC, and post a notice affirming its obligations under the ADEA.

Though things did not work out so well for J&M Industries, there are situations where an employer can force early retirement without violating the ADEA, but they are limited:

The ADEA has two exceptions:

  1. An employer can force retirement where age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the particular business or duties of the position. Think safety-sensitive positions. And even then, call a lawyer first.
  2. The second exception applies to workers 65 years of age, who, for the two years immediately before retirement, are employed in a bona fide executive or higher policymaking position, if such employee is entitled to an immediate nonforfeitable annual retirement benefit from a pension, profit-sharing, savings, or deferred compensation plan, or any combination of such plans, of the employer of such employee which equals, in the aggregate, at least $44,000.

As a general rule, private-sector employers should not force their workers to retire.

Posted In: Discrimination, Illegal; Equal Employment Opportunity Commission (EEOC); Quit, Resigned, Termination of Employment, etc.

Want to know more? Read the full article by at The Employer Handbook

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