For GCs, Legal Issues Abound as Workforce Ages

By Mark Wilson, Esq. on January 13, 2015 | Last updated on March 21, 2019

It's no secret that America's workforce is getting older. The Baby Boomer generation is currently approaching the age where they qualify for the senior discount at Denny's.

While that's great for workers 65 and older who love cheap breakfast, it's not so good for companies that are losing employees to retirement. About a quarter of HR professionals who responded to a Society for Human Resource Management survey about older workers said the loss of talent due to retirement will be a problem within the next 10 years.

And with aging workers comes new legal challenges for your company that go beyond just losing people to retirement.

An Early Retirement Buy-Out

Though SHRM's survey is about losing employees to retirement, many companies want employees gone long before then. It's cheaper to hire newer, younger employees than to keep paying older employees. This leads to early retirement buyouts, which can be fraught with problems.

An early retirement buyout should be accompanied by a waiver of age discrimination claims, but a waiver has to be "knowing and voluntary" under the federal Older Workers Benefit Protection Act. Among the requirements, an employee has to have at least 21 days to consider the agreement (45 days if it's a class offer) and 7 days to change his or her mind after executing the agreement. If properly conducted, an early retirement buy-out can solve a lot of concerns at once.

The Americans With Disabilities Act

If you're retaining more older employees, then the Americans With Disabilities Act looms large. Being old isn't itself a disability, but some of the associated conditions -- like arthritis, hearing loss, or any other ailment that "substantially limits one or more major life activities" -- can be. This means that, as employees become older and develop ADA-protected physical impairments, they're going to require accommodations.

Age Discrimination

That's important because you can't just fire someone for being old. Older age is protected in the context of hiring, firing, promotions, and other conditions or benefits of employment. Workers over 40 are covered by the Age Discrimination in Employment Act in much the same way race and gender are protected by Title VII of the Civil Rights Act. Consequently, it's illegal to make comments about an employee's age, or to give younger employees more opportunities to the detriment of otherwise-qualified older ones.

Age also can't factor into a reason not to hire someone, either. The problem is exacerbated by LinkedIn and social media, where recruiters and HR employees can easily see how old someone is, which complicates a decision not to hire him or her. To avoid litigation, age should be treated like any other personal characteristic that's protected by statute.

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