Newsletter Sign-up

By ALEICIA LATIMER, risk claims director and associate general counsel for AlphaStaff Inc., a human resource outsourcing company

Since the nation's economic crisis took hold in September 2008, businesses of all sizes have been searching far and wide for new ways to cut costs. With salary and benefits expenses at the top of the target list, many policy experts have feared that the United States might witness an explosion of age discrimination lawsuits, as more costly, older workers are forced out in favor of younger, less expensive replacements. Unfortunately, some of the data suggests that this fear may be well-founded. According to the U.S. Equal Employment Opportunity Commission, there has been a 17 percent increase in the number of age discrimination complaints filed in the last two years.

For starters, it is absolutely essential for companies to comprehend the specific provisions of the Age Discrimination in Employment Act (ADEA) of 1967 and to make sure they are being followed in the areas of hiring, termination, retention, retirement, benefits and disciplinary actions. On the benefits front, for instance, the law and subsequent amendments prohibit employers from denying benefits to older employees. While companies are allowed to offer reduced benefits based on age, these reduced offerings must be equivalent in value to those provided to younger workers.

Some recent legal developments are also working in favor of employers. In June 2009, a Supreme Court decision (Gross v. FBL Financial Services) made it more difficult for employees to prove age discrimination. The decision reversed a longstanding rule that required employers to prove that they had a legitimate reason other than age for layoffs or demotions if employees could show age played any role in the action. Under the new ruling, the employee bears the full burden of proving that age was the deciding factor. While this decision may discourage some employees from pursuing age discrimination claim, employers would be wise not to rely on this new development alone.

Ultimately, complying with the ADEA and creating a strong anti-discrimination atmosphere requires coordination across a number of operational areas, from benefits administration to legal compliance and day-to-day employee management. It requires HR managers involved in developing and implementing personnel oversight to ensure that their written anti-discrimination policies implement the three Cs: the language must be clear, concise and the policy must be implemented in a consistent manner.

BEYOND THE LAW

To minimize legal risk and encourage best practices in employment, companies must do more than just comply with the law. Simply put, they should work to identify employee concerns early on, create a culture where managers understand issues related to age discrimination and work to show employees that the company is fair in its employment practices.

Employees who are terminated or whose benefits are modified for legitimate reasons may be more likely to take legal action based on a discrimination claim if they have an existing perception that their company has been unfair to employees in the past. As a result, it is critical for organizations to spot and stop the spread of this type of negative perception early on.

Companies should adopt an open-door policy for employees to express their concerns, comment on company gossip and ask questions. Those businesses with HR departments should make sure all employees know they can talk to the HR staff at any time, and they should consider developing a system for registering and responding to complaints. Those organizations without in-house HR staff should identify a manager who will be responsible for answering employee questions and comments.

By implementing comprehensive training programs for management and all employees as well, companies will help ensure compliance with the law, while also establishing a culture where employees understand discrimination in any form is simply not acceptable. HR leaders and managers must receive training on the specific requirements of the ADEA and instruction on how best to create an open environment where personnel understand the company's overall commitment to fair employment practices. Managers responsible for hiring, reviewing and terminating must be instructed on what they can, should say and do during interviews, disciplinary procedures and terminations.

Employees at every level should receive training and should be encouraged in these training sessions to report any instances of discrimination they believe may exist. In this way, businesses will go a long way toward identifying potential problems, while also showing employees their company is fair and open.

In addition to training, communication is key to compliance and culture. An anti-discrimination policy should never be a surprise to employees; it should be clearly posted in a physically visible location, on the company's intranet (if applicable) and in an employee handbook. Clear written policies should be in place regarding benefits, retirement, discipline and termination. These policies should be highlighted in a new hire orientation process or in annual trainings. Employers should require their employees to familiarize themselves with company policy. Finally, through newsletters, payroll messages, e-mail bulletins, company intranets and on-site bulletin boards, businesses should emphasize the steps they have taken to combat age discrimination. They should also clearly and repeatedly let employees know how they can be involved.

While communication and training are essential steps, there are specific, concrete proofs companies may want to issue proactively. Businesses may want to consider providing information about the number of their active employees who are over 40 to all workers. If an employee has a concern, the company may want to provide statistics regarding the ages of those employees who were terminated, promoted, given monetary increases--provided the numbers demonstrate all employment actions are across all ages.

The fact is, any employee who is terminated or demoted or whose salary is negatively adjusted may file an age discrimination complaint if he or she feels age was an issue in the action. In the eyes of the courts, no discrimination complaint is fraudulent, and once filed, will move forward through the system. As a result, the best way for employers to fight age discrimination claims is to prevent them from ever being filed. By following some of the key steps listed above, companies can create better, more aware managers; impress upon employees their commitment to fairness; and spot potential problems before they occur.

January 1, 2011

Copyright 2011© LRP Publications