One of the questions that arises as to older employees, is whether and under what circumstances they can be forced to retire at a particular age. Here are some of the rules.
Federal:
The federal age discrimination in employment act (ADEA) of 1967 protects employees age 40 or older and prohibits discrimination based upon their age.
Federal law prohibits forced or mandatory retirement age. The two major exceptions are as follows:
- executive or high policy positions of persons over 65 years who of work for the company for at least two years before retirement, can be retired if their immediate retirement benefit from the company is at least $44,000 a year
- if the company can show the retirement is occasioned by a bona fide occupational qualification. This means that the job duties can only be performed by a younger person.
- Under a voluntary early retirement incentive plan (section 623(f)(2)(B)).
These provisions only apply to companies with with 20 or more employees (19 U.S.C. Section 630(b)).
California:
The rules in the state as the mandatory retirement are under the fair employment and housing act (FEHA). This also prohibits mandatory retirement age, and less. There are essentially the same exceptions as above. This applies to employers with a minimum of 5 employees that are regularly employed for each working day for a 20 week period sometime in the last two calendar years (Gov. Code Section 12916 (d)). These employees need not be located. The same worksite for the employer. Not surprisingly, the California rules are more protective of employees and are usually the ones used by plaintiffs lawyers.
One of the exceptions is certain executives or high policymaking employees. But they must be entitled to a annual retirement benefit of at least $27,000 (Gov. Code 12942 (c)(3)).
Settlement and release agreements:
It is permissible to enter into an incentive-based settlement agreement in which the employee agrees to the mandatory retirement in exchange for consideration (29 USC Section 626(f)). It must be knowingly and voluntarily entered into and among other factors, gives the employee the right to consult with an attorney, have 21 days to review the agreement, and seven days thereafter to revoke it.
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