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AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
Age Discrimination in Employment Act Amendment: Mandatory Retirement for
Executives and High-Level Policy Makers Violates Human Rights
Stephen Chien
University of Southern California
1
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
Executive Summary
Since most Americans aren’t financially capable of retiring and express the act
of working as a means of active aging, social policy must promote old age
employment. Though the Civil Rights Act of 1964 and the 3 amendments to the Age
Discrimination in Employment Act (ADEA) of 1967 addressed the injustice of age
discrimination during the hiring and retirement process, high policy makers in
corporations are still mistreated as a result of this exemption, which is not only
disadvantageous to the individual, but also outdated in using the age of 65, a
biological age referenced from the 1889 German Empire, to arbitrarily mandate a
person’s retirement without consideration of the method’s social risks. Thus, the age
limit in retirement for high-policy makers must be withdrawn.
2
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
Nature of the issue
American exceptionalism characterizes how a great country can prosper under
the wings of free market and personal liberty (Lipset, 1996), yet the ideology blindly
disregards the needs of its struggling people. A country is not exceptional if the
society is suffering outrageous wage inequalities such that only the top 10% of its
citizens enjoy the fruits of the economic growth and the other 90% fail to receive a
dignifying retirement. In United States, the median retirement balance for all
households is around $3000; this figure augments to $12,000 when one nears actual
retirement (Rhee, 2015), but in reality, one needs at least $40,000 per person per year
to cover healthcare and a degree of leisure (O'Hara, 2015). In light of the popularity of
active aging and delayed retirement, 70% have decided to never retire and use their
salary to compensate future expenditures (AARP, 2015). Allowing older Americans,
men and woman, to continue working is paramount.
Drafted in 1948 after World War II by the chair of the Human Rights
Committee, Elanore D. Roosevelt, Article 23 of the Universal Declaration of Human
Rights (UDHR) states that everyone has the right to equal pay without discrimination
(Cox, 2015). The United States adopted UDHR then, but still fails to uphold many of
its principles today. The reason for the nation’s inability to progress in this regard
over the years is because the country prides excessively on people’s self-reliance as
well as sovereignty; conflicting emotions arise in the public and political arena when
welfare or a “social good,” such as health care and civil rights, is used to correct the
injustice manifested by capitalism (Birkland, 2015). Consequently, in the home of the
brave, social problems linger and certain human rights remain withdrawn, for
example, the mandatory retirement of a worker, notably an executive or high-policy
3
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
maker, based upon age. From a human right’s perspective, this exemption from the
ADEA down grades a high-ranking worker such that they exercise less rights when
compared to an average worker, who can’t be legally forced to retire based upon age.
The ADEA has freed all but the high-level policy makers from the tyranny of ageism
(AARP, 2006).
Brief historical summary of the policy
In the 1940’s, prior to the ADEA, the United States spurred from agriculture
to industrialization. Instead of the individual, companies exercised the decision of
when a person retires. A common organizational strategy for lowering costs and
maximizing productivity was to retire older workers early by providing pension plans,
promoting younger lower-waged employees and preventing the recruitment of older
workers. As a result, many able Americans aged 45 and above who were receiving
benefits found themselves not only discarded at a productive age, but also felt
employment discrimination that related to Title VII of the Civil Rights Act of 1964. In
1965, the Secretary of Labor, W. Willard Wirtz was commissioned to investigate the
situation, and concluded that older workers were discriminated based upon concerns
of work performance (Ferrelli, 2015).
In 1967, ADEA initially preserved the rights for only private workers aged 45
to 65. In 1974, an amendment expanded the law’s coverage to federal workers and
companies of at least 20 workers, previously 25. In 1978, the second amendment
made several changes. While the upper age limit for private employees was increased
from 65 to 70 years old, federal workers gained the right to have no mandatory
retirement, which meant there was no longer any restriction upon retirement based on
age. However, this rule made exceptions toward specific federal workers, such as air
traffic controllers, fire fighters, law enforcers, the Foreign Service, and Central
4
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
Intelligence Agency, in acknowledgment of the job’s high physical demands; faculty
members who had unlimited tenure in higher education institutes were given an age
limit of 70, provisioning the employment opportunities created for young minority
teachers; high policy makers above the age of 65 mandated a retirement, provided that
a benefit package of at least $27,000 per year, excluding Social Security and other
collectable benefits (Ferrelli, 2015). 8 years later, in 1986, by popular consent, the
amendment removed the maximum age limit for all private employees (Bea &
VandenBerk Attorneys at Law, 2014), but the exemption from this law that existed
for high-policy makers remains.
Description of those affected
Bona-fide executives or high policymakers that are at least 65 years old,
worked in the position for 2 years and have at least $44,000 in sum offered for
retirement (Equal Employment Opportunity Commission, 2015). Bona-fide executive
means that the person is the head of a regional or national division of a corporation or
the head of several departments. High policymaker means that the person provides
direct influence on corporate decisions and is highly ranked in the organizational chart
(Ferrelli, 2015).
Recommendations and rationale
Provide scientific-based evidence and assessment tools to companies. High-
policy makers of big corporations will be judged every 5 years after age 70 for
cognitive competence. This approach is important because companies often struggle
between age and ability when deciding when to retire a person (Painter, 2014). Data
shows that as a person grows old, cognition naturally declines and risks for age
related disease, such as dementia, increases. However, countering this trend are the
individual differences and the positive cognitive benefits attributed to an executive’s
5
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
lifestyle, such as exercise, leisure time, access to education, healthy food, and brain
stimulating activities (Gooding, Abner, Jicha, Kryscio, & Schmitt, 2014). It is also
counterintuitive to retire a person that’s in a role, which can strongly benefit from age
and experience. Henceforth, using one or devising a series of relevant tests, including
the Mini-Mental State Examination that is used to determine degenerative cognition
and dementia, will act in best interest for the company and the individual.
Abolish the exemption for bona-fide executives or high policymakers and
allow no mandatory retirement based on age. First of all, from a human rights
perspective, there shouldn’t be any segregation of civil rights dependent upon a
person’s rank in the company and no lesser sympathy for highly paid personnel that
are seemingly more privileged than others. A low or middle-income citizen who has
worked hard to climb up the corporate ladder and loves the occupation should deserve
the right to continue working in that position. Lastly, the $44,000 benefit per year
provided to a retired executive is only sufficient for one person. The amount
anticipates neither the needs of the widowed spouse nor the possible devastation of
the person’s accumulated assets, such as securities or real estate, in the course of
cyclical economic turmoil or catastrophic events. On the premise that the person has
lost most of the retirement savings, when compared to someone younger and equally
competent for the same job, the older person is less likely to be employed (Cox,
2015). Although less retired person actually pursue a full time job compared to self-
employment (Hudson, 2014), this trend sheds no positive light in terms of future
prospects because 97% of start-ups fail. Ultimately, allowing a person to work within
a company as long as possible is a viable method in minimizing the social
consequences of retiring someone too early.
In sum, high policy makers are no less human than any other workers, who are
6
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
equally subject to financial turndowns, familial burdens, unanticipated healthcare
expenses, and poor financial decisions. The improved health and lifespan jeopardizes
the older retirees by increasing the room for error and the likelihood to experience
unexpected events. Given that older workers have less capacity to rebound or sustain
a pitfall, there must be an amendment to the ADEA’s exemption for high policy
makers.
Bibliography
AARP. (2006). Age Discrimination: What Employers Need To Know. Retrieved
December 9, 2015, from AARP:
http://assets.aarp.org/www.aarp.org_/articles/money/employers/age_
discrimination.pdf
AARP. (2015). Social Policy for an Aging Society. In C. B. Cox. New York: Springer
Publishing Company LLC.
Bea & VandenBerk Attorneys at Law. (2014). Can you force retirement? Retrieved
September 10, 2015, from Bea & VandenBerk:
http://www.beavandenberk.com/small-business/can-you-force-
retirement/
Birkland, T. A. (2015). An introduction to the policy process (3rd Edition ed.). New
York, New York, United States of America: Routledge.
Cox, C. B. (2015). Social Policy, Human Rights, and Older Adults. In C. B. Cox,
Social Policy for an Aging Society (p. 32). NY, NY: Springer Publishing
Company, LLC.
Equal Employment Opportunity Commission. (2015, September 10). The Age
Discrimination in Employment Act of 1967. Retrieved September 10,
7
AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT
2015, from Equal Employment Opportunity Commission:
http://www.eeoc.gov/laws/statutes/adea.cfm
Ferrelli, M. (2015). Tracing the Conception and Meaning of the Age
Discrimination in Employment Act: Where Are We with Mandatory
Retirement? The Journal of Sociology & Social Welfare , 12 (2), 7.
Gooding, L. F., Abner, E. L., Jicha, G. A., Kryscio, R. J., & Schmitt, F. A. (2014).
Musical Training and Late-Life Cognition. American Journal of
Alzheimer's Disease & Other Dementias , 29 (4), 333-343.
Hudson, R. B. (2014). The New Politics of Old Age Policy. Baltimore, Maryland,
United States of America: Johns Hopkins University Press.
Lipset, S. M. (1996). American Exceptionalism. Retrieved November 22, 2015,
from The Washington Post: http://www.washingtonpost.com/wp-
srv/style/longterm/books/chap1/americanexceptionalism.htm
O'Hara, C. (2015, March). How Much Money Will You Need to Retire: it all depends
on what you've saved and how well you wish to live. Retrieved November
22, 2015, from AARP: http://www.aarp.org/work/retirement-
planning/info-2015/nest-egg-retirement-amount.html
Painter, C. K. (2014). Mandatory Retirement: Diminishing the Goals of the Age
Discrimination in Employment Act. University of Louiseville Law Review ,
52 (405), 405-428.
Rhee, N. (2015). The retirement savings crisis: Is it worse than we think? In C. B.
Cox, Social Policy for an Aging Society: A Human Rights Persepctive (pp.
161-162). New York: Springer Publishing Company LLC.
8

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PolicyBrief

  • 1. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT Age Discrimination in Employment Act Amendment: Mandatory Retirement for Executives and High-Level Policy Makers Violates Human Rights Stephen Chien University of Southern California 1
  • 2. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT Executive Summary Since most Americans aren’t financially capable of retiring and express the act of working as a means of active aging, social policy must promote old age employment. Though the Civil Rights Act of 1964 and the 3 amendments to the Age Discrimination in Employment Act (ADEA) of 1967 addressed the injustice of age discrimination during the hiring and retirement process, high policy makers in corporations are still mistreated as a result of this exemption, which is not only disadvantageous to the individual, but also outdated in using the age of 65, a biological age referenced from the 1889 German Empire, to arbitrarily mandate a person’s retirement without consideration of the method’s social risks. Thus, the age limit in retirement for high-policy makers must be withdrawn. 2
  • 3. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT Nature of the issue American exceptionalism characterizes how a great country can prosper under the wings of free market and personal liberty (Lipset, 1996), yet the ideology blindly disregards the needs of its struggling people. A country is not exceptional if the society is suffering outrageous wage inequalities such that only the top 10% of its citizens enjoy the fruits of the economic growth and the other 90% fail to receive a dignifying retirement. In United States, the median retirement balance for all households is around $3000; this figure augments to $12,000 when one nears actual retirement (Rhee, 2015), but in reality, one needs at least $40,000 per person per year to cover healthcare and a degree of leisure (O'Hara, 2015). In light of the popularity of active aging and delayed retirement, 70% have decided to never retire and use their salary to compensate future expenditures (AARP, 2015). Allowing older Americans, men and woman, to continue working is paramount. Drafted in 1948 after World War II by the chair of the Human Rights Committee, Elanore D. Roosevelt, Article 23 of the Universal Declaration of Human Rights (UDHR) states that everyone has the right to equal pay without discrimination (Cox, 2015). The United States adopted UDHR then, but still fails to uphold many of its principles today. The reason for the nation’s inability to progress in this regard over the years is because the country prides excessively on people’s self-reliance as well as sovereignty; conflicting emotions arise in the public and political arena when welfare or a “social good,” such as health care and civil rights, is used to correct the injustice manifested by capitalism (Birkland, 2015). Consequently, in the home of the brave, social problems linger and certain human rights remain withdrawn, for example, the mandatory retirement of a worker, notably an executive or high-policy 3
  • 4. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT maker, based upon age. From a human right’s perspective, this exemption from the ADEA down grades a high-ranking worker such that they exercise less rights when compared to an average worker, who can’t be legally forced to retire based upon age. The ADEA has freed all but the high-level policy makers from the tyranny of ageism (AARP, 2006). Brief historical summary of the policy In the 1940’s, prior to the ADEA, the United States spurred from agriculture to industrialization. Instead of the individual, companies exercised the decision of when a person retires. A common organizational strategy for lowering costs and maximizing productivity was to retire older workers early by providing pension plans, promoting younger lower-waged employees and preventing the recruitment of older workers. As a result, many able Americans aged 45 and above who were receiving benefits found themselves not only discarded at a productive age, but also felt employment discrimination that related to Title VII of the Civil Rights Act of 1964. In 1965, the Secretary of Labor, W. Willard Wirtz was commissioned to investigate the situation, and concluded that older workers were discriminated based upon concerns of work performance (Ferrelli, 2015). In 1967, ADEA initially preserved the rights for only private workers aged 45 to 65. In 1974, an amendment expanded the law’s coverage to federal workers and companies of at least 20 workers, previously 25. In 1978, the second amendment made several changes. While the upper age limit for private employees was increased from 65 to 70 years old, federal workers gained the right to have no mandatory retirement, which meant there was no longer any restriction upon retirement based on age. However, this rule made exceptions toward specific federal workers, such as air traffic controllers, fire fighters, law enforcers, the Foreign Service, and Central 4
  • 5. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT Intelligence Agency, in acknowledgment of the job’s high physical demands; faculty members who had unlimited tenure in higher education institutes were given an age limit of 70, provisioning the employment opportunities created for young minority teachers; high policy makers above the age of 65 mandated a retirement, provided that a benefit package of at least $27,000 per year, excluding Social Security and other collectable benefits (Ferrelli, 2015). 8 years later, in 1986, by popular consent, the amendment removed the maximum age limit for all private employees (Bea & VandenBerk Attorneys at Law, 2014), but the exemption from this law that existed for high-policy makers remains. Description of those affected Bona-fide executives or high policymakers that are at least 65 years old, worked in the position for 2 years and have at least $44,000 in sum offered for retirement (Equal Employment Opportunity Commission, 2015). Bona-fide executive means that the person is the head of a regional or national division of a corporation or the head of several departments. High policymaker means that the person provides direct influence on corporate decisions and is highly ranked in the organizational chart (Ferrelli, 2015). Recommendations and rationale Provide scientific-based evidence and assessment tools to companies. High- policy makers of big corporations will be judged every 5 years after age 70 for cognitive competence. This approach is important because companies often struggle between age and ability when deciding when to retire a person (Painter, 2014). Data shows that as a person grows old, cognition naturally declines and risks for age related disease, such as dementia, increases. However, countering this trend are the individual differences and the positive cognitive benefits attributed to an executive’s 5
  • 6. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT lifestyle, such as exercise, leisure time, access to education, healthy food, and brain stimulating activities (Gooding, Abner, Jicha, Kryscio, & Schmitt, 2014). It is also counterintuitive to retire a person that’s in a role, which can strongly benefit from age and experience. Henceforth, using one or devising a series of relevant tests, including the Mini-Mental State Examination that is used to determine degenerative cognition and dementia, will act in best interest for the company and the individual. Abolish the exemption for bona-fide executives or high policymakers and allow no mandatory retirement based on age. First of all, from a human rights perspective, there shouldn’t be any segregation of civil rights dependent upon a person’s rank in the company and no lesser sympathy for highly paid personnel that are seemingly more privileged than others. A low or middle-income citizen who has worked hard to climb up the corporate ladder and loves the occupation should deserve the right to continue working in that position. Lastly, the $44,000 benefit per year provided to a retired executive is only sufficient for one person. The amount anticipates neither the needs of the widowed spouse nor the possible devastation of the person’s accumulated assets, such as securities or real estate, in the course of cyclical economic turmoil or catastrophic events. On the premise that the person has lost most of the retirement savings, when compared to someone younger and equally competent for the same job, the older person is less likely to be employed (Cox, 2015). Although less retired person actually pursue a full time job compared to self- employment (Hudson, 2014), this trend sheds no positive light in terms of future prospects because 97% of start-ups fail. Ultimately, allowing a person to work within a company as long as possible is a viable method in minimizing the social consequences of retiring someone too early. In sum, high policy makers are no less human than any other workers, who are 6
  • 7. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT equally subject to financial turndowns, familial burdens, unanticipated healthcare expenses, and poor financial decisions. The improved health and lifespan jeopardizes the older retirees by increasing the room for error and the likelihood to experience unexpected events. Given that older workers have less capacity to rebound or sustain a pitfall, there must be an amendment to the ADEA’s exemption for high policy makers. Bibliography AARP. (2006). Age Discrimination: What Employers Need To Know. Retrieved December 9, 2015, from AARP: http://assets.aarp.org/www.aarp.org_/articles/money/employers/age_ discrimination.pdf AARP. (2015). Social Policy for an Aging Society. In C. B. Cox. New York: Springer Publishing Company LLC. Bea & VandenBerk Attorneys at Law. (2014). Can you force retirement? Retrieved September 10, 2015, from Bea & VandenBerk: http://www.beavandenberk.com/small-business/can-you-force- retirement/ Birkland, T. A. (2015). An introduction to the policy process (3rd Edition ed.). New York, New York, United States of America: Routledge. Cox, C. B. (2015). Social Policy, Human Rights, and Older Adults. In C. B. Cox, Social Policy for an Aging Society (p. 32). NY, NY: Springer Publishing Company, LLC. Equal Employment Opportunity Commission. (2015, September 10). The Age Discrimination in Employment Act of 1967. Retrieved September 10, 7
  • 8. AGE DISCRIMINATION IN EMPLOYMENT ACT AMENDMENT 2015, from Equal Employment Opportunity Commission: http://www.eeoc.gov/laws/statutes/adea.cfm Ferrelli, M. (2015). Tracing the Conception and Meaning of the Age Discrimination in Employment Act: Where Are We with Mandatory Retirement? The Journal of Sociology & Social Welfare , 12 (2), 7. Gooding, L. F., Abner, E. L., Jicha, G. A., Kryscio, R. J., & Schmitt, F. A. (2014). Musical Training and Late-Life Cognition. American Journal of Alzheimer's Disease & Other Dementias , 29 (4), 333-343. Hudson, R. B. (2014). The New Politics of Old Age Policy. Baltimore, Maryland, United States of America: Johns Hopkins University Press. Lipset, S. M. (1996). American Exceptionalism. Retrieved November 22, 2015, from The Washington Post: http://www.washingtonpost.com/wp- srv/style/longterm/books/chap1/americanexceptionalism.htm O'Hara, C. (2015, March). How Much Money Will You Need to Retire: it all depends on what you've saved and how well you wish to live. Retrieved November 22, 2015, from AARP: http://www.aarp.org/work/retirement- planning/info-2015/nest-egg-retirement-amount.html Painter, C. K. (2014). Mandatory Retirement: Diminishing the Goals of the Age Discrimination in Employment Act. University of Louiseville Law Review , 52 (405), 405-428. Rhee, N. (2015). The retirement savings crisis: Is it worse than we think? In C. B. Cox, Social Policy for an Aging Society: A Human Rights Persepctive (pp. 161-162). New York: Springer Publishing Company LLC. 8