The Age Discrimination in Employment Act (ADEA) is a federal law that generally makes it unlawful for employers to discriminate against applicants or employees on the basis of age.  Here’s what employers need to know about the ADEA:
Which Employers Are Subject to the ADEA?  The ADEA applies to any employer engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.  See 29 U.S.C. § 630(b).
What Employees Does the ADEA Protect?  The protections of the ADEA are generally limited to individuals who are at least 40 years of age.  See 29 U.S.C. § 631(a).
What Does the ADEA Prohibit?  The ADEA makes it unlawful for any employer to:

  1. Fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age;
  2. Limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age; or
  3. Reduce the wage rate of any employee in order to comply with the ADEA.

See 29 U.S.C. § 623(a).
What Exceptions Apply to the ADEA?  The ADEA contains a number of exceptions that allow employers to avoid liability in limited circumstances.  These exceptions include, but are not limited to, the following:

  1. When age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business;
  2. When the differentiation is based on reasonable factors other than age; or
  3. When the employer’s practices involve an employee in a workplace in a foreign country, and compliance with such subsections would cause such employer, or a corporation controlled by such employer, to violate the laws of the country in which such workplace is located.

The ADEA also provides that it is generally not unlawful for an employer to:

  1. Discharge or discipline an individual for good cause;
  2. Observe the terms of a bona fide seniority system that is not intended to evade the purposes of the ADEA and that does not require or permit the involuntary retirement of any individual in violation of the ADEA; or
  3. Observe the terms of a bona fide employee benefit plan that is otherwise compliant with the ADEA.

See 29 U.S.C. § 623(f).
Takeaway:  The EEOC reported receiving 23,465 charges alleging age discrimination in 2011.  To reduce the potential for liability, employers should ensure that their policies and practices are in compliance with the requirements of the ADEA.