Age Discrimination in Employment Act (ADEA): Early Retirement Incentive Programs

2012-10-03 01:25:13 by admin

age discrimination in employment act (ADEA)

age discrimination in employment act (ADEA): General Provisions

age discrimination in employment act (ADEA): Application of the Law

The ADEA, amended in 1990 by the Older Workers Benefit Protection Act, provides a safe harbor for universities to offer early retirement incentive plans (ERIPs) to employees with tenure. ERIPs must be voluntary, made available to eligible employees for a reasonable period of time, and consistent with the age discrimination in employment act’s purpose of prohibiting arbitrary age discrimination in employment. Judicial determinations hinge on the specific details of incentive plans, as courts have divided over plans that require employees to retire by a certain age or either lose the incentive benefits or receive reduced benefits.

Two cases from K–12 settings should be instructive for higher education. In the first, a federal appellate court ruled that a public school board’s incentive plan was a valid ERIP under the age discrimination in employment act; it required teachers to retire after the school year in which they turned 55 if they were eligible with at least 20 years of service or lose a fixed sum payment and accumulated sick leave payment. In contrast, a Second Circuit court rejected a board’s retirement incentive plan that offered incentives to teachers and administrators who retired between the ages of 58 and 61, but no additional early retirement benefits to educators at age 62 and beyond. The court found that this plan violated the age discrimination in employment act, because the ERIP explicitly defined eligibility for the incentives in terms of age.

In sum, the ADEA protects employees and prospective employees who are 40 years or age or older from age-based employment discrimination. The age discrimination in employment act applies to a wide range of basic employment decisions, including hiring, transfer, demotion, dismissal, tenure and academic promotion, benefit and retirement plans, and employer attempts to retaliate against employees for opposing practices unlawful under the statute. Courts overturn employment decisions in hiring, dismissal, and demotion when plaintiffs establish that the actions were age based. Still, appellate courts have split over the legality of early retirement plans that cut off incentives if educators refuse to retire by a specified age. Charges filed with the EEOC under all federal employment discrimination statutes (in addition to the age discrimination in employment act, theEqual Pay Act, theAmericans with Disabilities Act, and Title VII of the Civil Rights Act of 1964) increased 20% from 1997 to 2007 (EEOC, 2009). As the American population ages, one can anticipate that older workers on college and university campuses will continue to rely increasingly on the age discrimination in employment act to press claims of age-based discrimination.