Age Discrimination in Employment Act of 1967

From Federalism in America
Jump to: navigation, search

The federal Age Discrimination in Employment Act (ADEA–P.L. 90-202) was enacted in 1967 to protect workers against discrimination based exclusively on their age. Age discrimination (AD) in the workplace is based on several assumptions and stereotypes about older workers: that they should appropriately step aside and make room for younger workers who need to support their families, are rigid and unable to learn new skills, and are less productive than their younger counterparts. AD has several negative effects on older employees: loss of wages and benefits, emotional distress, and greater difficulty in finding another job compared to younger workers. The ADEA, however, was not the first law designed to combat AD in employment; the states enacted such laws earlier. Both federal and state laws were designed to ensure that older workers would receive the same employment protections as younger workers, while at the same time enjoying preferential treatment due to their unique circumstances. The issues addressed in these several laws included the types of prohibited practices, entities to which the legislation applied, age limits, exclusions and exemptions, penalties, and enforcement.

STATE INITIATIVES, 1903–PRESENT

State AD laws predate the ADEA by nearly sixty-five years. In 1903, Colorado was the first state to enact any law banning AD; employees aged 18–60 could not be fired due to their age by any person, firm, corporation, or association doing business in the state. As of 1934, Louisiana disallowed age as a standard in hiring and firing for persons aged 50+, while Massachusetts protected persons aged 45–65 against discrimination in hiring and firing. Many state laws were enacted during the 1950's and mid-1960's: 10 states and Puerto Rico amended existing antidiscrimination laws to include age. Seven passed separate laws barring such discrimination, while seven incorporated AD into their Fair Employment Practices Acts. By 1967, 24 states had some form of prohibition against age bias in the workplace.

The states continued to innovate even after the ADEA was passed. By 1972, only the District of Columbia and 19 states (the majority in the South and the Rocky Mountain regions) lacked AD laws. Characteristically, state laws applied to employers, labor organizations, and employment agencies; state and local employees were not always included. Age limits varied, but half of the states defined the protected group as between 40 and 65, the same standard as the ADEA. Exemptions included small employers, with the number of employees ranging from three to twenty-four; domestic workers; and family employees. In 3 states, public safety employees were excluded. Prohibited practices in state laws always covered AD in hiring, and nearly all covered firing, with a majority prohibiting discrimination in compensation and the conditions and privileges of employment as well. Slightly more than half made it illegal to advertise or classify jobs by age. Twenty-six of the 31 states with AD laws had penalties consisting of fines, generally ranging from $100 to $500; days in jail ranging from 30 to 365; or both fines and imprisonment.

Although 11 states and the District of Columbia still had no AD statutes as of 1976, the states continued to exercise leadership. Florida abolished mandatory retirement in 1976 for all public employees, while California eliminated virtually all mandatory retirement for public and private employees in 1977. The ADEA was amended in 1978 to include this provision; it also allowed employees to choose between federal and state protection, whichever was most favorable. A Supreme Court decision in 1979 held that plaintiffs must file initially at the state level and sixty days later at the federal level. As of 1990, 49 states and 3 U.S. territories had enacted AD laws. Ten years later, all 50 states had AD laws with widely varying provisions; 35 have laws that are applicable to employers with fewer than fifteen employees, thereby extending protections to employees working for small firms beyond federal requirements. Still, many states (e.g., California and Utah) have large proportions of very small employers, the employees of which are not protected by either state laws or the ADEA.

FEDERAL INITIATIVES, 1956–PRESENT

Although the ADEA was not passed until 1967, federal efforts predate that effort. In 1956, the U.S. Civil Service eliminated AD in hiring federal employees. Eight years later, Executive Order 11141 created a policy against AD among federal contractors. AD also was considered by Congress during debates on Title VII of the Civil Rights Act in 1964. Although age was excluded from that Act’s provisions, a Department of Labor study was mandated. In 1965, the Department of Labor report identified arbitrary discrimination as a major older worker problem and determined that a national policy was needed to provide protection for persons in states without AD laws and to fill the gaps in existing state laws. The goals of the resulting legislative proposal were to eliminate arbitrary AD in employment, adjust institutional arrangements detrimental to older workers, increase the availability of work for older workers, and educate employers about older worker abilities and needs, as well as the pitfalls of continued discrimination.

Unlike the Civil Rights Act on which it was modeled, the ADEA was enacted with little controversy. The law provided that individuals age 40–65 cannot be limited, segregated, or classified in any way that would restrict employment opportunities or otherwise adversely affect their status as employees. Age per se cannot be used in decisions about hiring, firing, advancement and training practices, compensation, layoffs, or demotions, or in advertising jobs. Exceptions included the Bona Fide Occupational Qualification (BFOQ): AD is appropriate in instances where such discrimination is reasonably necessary for the normal operations of a particular business, for example, airline pilots. Other exceptions included following the terms of a bona fide seniority system, of particular concern to labor unions, or a bona fide benefit plan, for example retirement and insurance. In addition, executives in major leadership or policy-making positions with sizeable pension benefits can be required to retire. The Department of Labor’s Wage and Hour Division was responsible for ADEA enforcement. However, the role of states with their own AD statutes was explicitly recognized, with enforcement generally first deferred to the state agency responsible for enforcing antidiscrimination laws, usually the department of labor or employment, human/civil rights commission, or state labor commissioner. The number of AD complaints rose quickly to 1,000 in 1969 and five times that amount in the mid-1970's.

Initially the ADEA did not apply to all older workers. In 1974, AD protection was extended to employers with a minimum of twenty employees and to all federal, state, and local government employees. In 1978, occasioned by a Supreme Court ruling that ADEA did not prohibit mandatory retirement, the law was amended to raise the upper age limit to age 70, eliminate mandatory retirement for most federal employees, and prohibit benefit plans requiring or permitting involuntary retirement. The right to a jury trial was granted, as were delaying the higher mandatory retirement age until 1982 for tenured faculty and allowing mandatory retirement at ages 65–69 for persons in high executive positions. In 1979, ADEA enforcement was given to the Equal Employment Opportunity Commission.

ADEA provisions continued to be changed in the 1980's and 1990's by Congress and the courts. In 1986, the age 70 cap for mandatory retirement was removed, although not for high-ranking executives. Congress also granted temporary exceptions for police, firefighters, and tenured faculty until the end of 1993; the last exemption was subsequently eliminated. In 1987, ADEA provisions were changed to address the age-based treatment of employee benefit plans; and in 1988 and 1990, Congress extended the statute of limitations on filing claims due to EEOC problems in processing claims on a timely basis. Also in 1990, Congress enacted the Older Workers Benefit Protection Act, negating yet another Supreme Court decision permitting employers to provide different employee benefits on the basis of age. In 1996, Congress reenacted ADEA exemptions for police and firefighters that had expired in 1993, permitting state and local governments to impose certain maximum hiring ages and mandatory retirement ages for individuals in those occupations. In addition, apprenticeship programs were no longer permitted to impose age limits on participation.

Studies have shown that AD federal and state laws boost employment of older workers, especially those age 60+, and reduce retirement of older individuals. Yet, AD in the workplace still exists, as revealed by the numbers of complaints and lawsuits filed in the areas of discharge and employee benefits. AD in hiring practices is harder to prove and lawsuits have been less effective in increasing the hiring of older workers, particularly those under the age of 60. Employers have been able to restructure defined benefit pension plans to induce retirement at a desired age; early retirement incentive plans that are offered for a specific time period have been a favored mechanism. By contrast, defined contribution plans, combined with the elimination of mandatory retirement, do lead to later retirement. The continued growth of those plans, plus indications that the baby boomer generation intends to work longer, may lead to more delayed retirements in the future.

Finally, the courts are likely to continue their role in refining and applying the ADEA. However, the impact of these rulings is not all positive for older workers. For example, a Supreme Court ruling in 2000 held that state employees are not authorized to sue states under the ADEA. Lawsuits for age-based dismissals against major corporations, such as Lucent and Ford, have been successful; however, success rates are usually less than 5 percent. On the whole, AD laws have been an important way to ensure that most older workers have greater choices in determining the timing of their retirement.

BIBLIOGRAPHY:

D. Neumark, “Age Discrimination Legislation in the United States,” working paper 8152 (Cambridge, MA: National Bureau of Economic Research, 2001).

Phoebe Liebig

Last updated: 2006

SEE ALSO: Age Discrimination