Jay P. Krupin and David W. Garland, leading Labor & Employment Law attorneys at US law firm Epstein Becker & Green, explain the age discrimination protections afforded to employees in the USA and how UK and EU employers with operations in North America may respond to those protections to reduce their risk of expensive claims.
Employers operating in the United States are governed by both State and Federal laws. State laws on age discrimination differ from state to state, and may apply depending on where the employer’s place of business is located. In contrast, Federal law applies to all employers in the same way, regardless of where they are based in the US.
The Age Discrimination in Employment Act of 1967 (hereafter “ADEA”) is a federal law that covers all employers in the US who have twenty or more employees. It prohibits employment discrimination against individuals over forty years of age in every aspect of the employment relationship. It guides not only the process of hiring, discharge, and promotion, but also employee benefit plans, such as health coverage and pensions, as well as hiring decisions, including job advertisements.
The following is an overview of the key components of the ADEA that impact UK employers in the US. The ADEA:
- Applies to companies that are incorporated in the UK and are controlled by a US employer;
- Covers US citizens who work in the UK for a US employer;
- Prohibits retaliation i.e. age-related direct discrimination and harassment of an employee who complains about age discrimination;
- In contrast to UK law, does not forbid age discrimination against younger workers. Indeed, employers may engage in so-called reverse discrimination and favour employees over the age of forty without violating the law;
- Allows employees to receive reinstatement, promotion, and back pay. In addition, a willful violation of the ADEA gives rise to liquidated damages, which are often calculated by doubling the amount awarded to the claimant.
Age discrimination can be very costly to employers in the US. Recently, an employer has had to pay $1 million in monetary relief to two individuals who were allegedly retaliated against for complaining about discriminatory practices and to a class of individuals age 40 or older who were not hired for sales positions because of their age. The company indicated both verbally and in writing that it was looking for candidates who were “recent college graduates,” and in their “early 20s or 30s.” The employer even offered its employees a $500 bonus for referral of a “friend’s younger brother and sister.”
In the US, the Equal Employment Opportunity Commission (the “EEOC”) is responsible for enforcing the provisions of the ADEA. Anyone who interferes with the EEOC’s performance of its duties under the ADEA is subject to the criminal penalties of a fine, up to one year of prison, or both. But individuals are permitted to bring ADEA claims in court after receiving a notice of right to sue from the EEOC.
Tips for UK and EU businesses with US operations:
- When posting job advertisements, refrain from using terms such as “youthful,” “college student,” “recent graduate” or specifying any age requirement;
- Analyse your policies, especially pay and benefit policies, to determine if any have an adverse impact on older employees;
- Follow your policies, particularly those relating to discipline, and have a business-related reason to justify any deviations;
- Document the reasons for discipline and termination and include in the employee’s file records that accurately support that reason, such as performance appraisals and counselling memos;
- Do not institute mandatory retirement policies before consulting with US legal counsel.
Defenses to the rule exist. For example, discharging an employee for good cause or basing decisions on reasonable factors other than age, such as job performance, business cutbacks, or lack of qualifications.
Like its UK counterpart, the ADEA also contains certain exceptions, for example the bona fide occupational qualification. This exception allows an employer to justify an age-based employment requirement if it is reasonably necessary to the essence of its business, and if determining each employee’s qualification for the job would be impractical.