Multicolored wheel divided into 7 equal sections Recruitment, Training and Development, Benifits and Compensation, Communicating, Employee Relations, Recordkeeping, and Health safety and security with Legal compliance written on the outer edge and company strategy in the center employee relations is emphasized

Mandatory Retirement: Is It Legal?

Question:

Our company has a mandatory retirement and requires our employees to retire at age 67.  We don’t discriminate….everyone is required to retire.  I just had someone “push back” when I started discussing their retirement saying I was being discriminatory.  I told them everyone is asked to leave at age 67, is that a problem?

Answer:

Well….it definitely could be.  Mandatory retirement is illegal under the Age Discrimination in Employment Act UNLESS there is a Bona Fide Occupational Qualification (BFOQ) or they are age 65 and are a “Bona Fide Executive” or in a “High Policymaking Position”.

BFOQ’s are hard to prove.  Employers are required to first show that the duties are necessary for the job, AND then show that the individual’s age prohibits them from doing that qualification safely and/or efficiently.  It is hard to provide and most roles that have been able to do this include roles in public safety or public transportation.  

The next two defensible reasons are a little easier to prove.  To summarize: A “Bona Fide Executive” (defined by the EEOC) is someone who:

  • Manages the company or organization or a subdivision of the company or organization,
  • Directs the work of at least two other employees,
  • Has the authority to hire or terminate other employees or has significant influence in such decision,
  • Has and uses discretionary authorities, and
  • Spends no more than 20 percent of his or her work time on activities unrelated to the activities required herein (40 percent for retail or service companies).

A “High Policymaker” (defined by the EEOC) is someone who is a top level employee (and not a Bona Fide Executive) but who plays a significant role in developing and implementing corporate policy.

If you can show that the individual fits one of those categories, you could consider mandatory retirement for the individual.  It is important, however, to challenge the “thought’ of mandatory retirement for employees, even if they are defensible.  Age is just that….an age.  There are 75 year olds ‘outperforming’ 35 year olds all of the time.  Age should not be a defining factor in most instances of retention.  Be sure you are doing the right thing, for the right reasons, when considering such a policy.

For definitions and specifics of these allowances, click here.

 

One of the stickiest aspects to human resources management is Employee Relations. Are you having difficulties in your company that stem from employee-employer related issues? Strategic HR, inc. has years of experience in employment relations Visit our Employee Relations page to learn how we can help you resolve some of your toughest ER problems.