Can older employees be forced to retire?

Mandatory retirement is outlawed under the 1967 Age Discrimination in Employment Act. Workers over 40 are protected if working in a business with more than 20 employees. (However, those under 40 years of age, or who work for smaller employers often are protected by state law.) In fact, a March,1998 three-judge appellate panel decision out of New York held that for purposes of the 20-or more rule, the non-U.S. overseas employees of a foreign corporation may be counted in determining whether or not the foreign company, which had fewer than 20 U.S. employees, was large enough to be subject to the Age Discrimination in Employment Act.

Your boss can offer older workers a voluntary retirement package without violating ADEA. Typically, should you accept the package, you will be asked to sign a waiver of your right to sue under the ADEA.

Case Studies: Mandatory Retirement and Age Discrimination

Case Study 1: Voluntary Retirement Package

John, a long-time employee at a large corporation, reached the age of 65 and was offered a voluntary retirement package by his employer. The package included certain incentives, but John was concerned about potential age discrimination. After consulting with an attorney, he learned that his employer could offer voluntary retirement packages without violating the Age Discrimination in Employment Act (ADEA). John decided to accept the package and signed a waiver of his right to sue under the ADEA.

Case Study 2: Counting Overseas Employees

Karen, an employee of a foreign corporation based in the United States, was informed that her employer planned to implement mandatory retirement at age 62. Concerned about the legality of this policy, Karen sought legal advice. Her attorney explained that under the ADEA, employers with 20 or more employees are subject to the age discrimination protections, and this includes overseas employees of a foreign corporation. Therefore, her employer’s policy of mandatory retirement at age 62 violated the ADEA.

Case Study 3: State Law Protection

Robert, who worked for a small company with fewer than 20 employees, was informed that he would be required to retire at age 60. Uncertain about the legality of this policy, Robert consulted with an attorney who informed him that while the ADEA does not apply to his employer due to its size, he may still be protected by state law. The attorney advised Robert to research the specific age discrimination laws in his state to determine if he had grounds for a legal challenge.