As “baby boomers” come of retirement age, employers may find themselves between a rock and a hard place: they can either ask employees about their retirement plans and risk being accused of age discrimination, or they can avoid those conversations and risk being woefully underprepared for the retirements of key employees.
When done right, succession planning affords employers an opportunity to train the next generation of company leaders, ensure continuity in key roles, and manage all aspects of the transition. However, when done wrong, succession planning can expose employers to significant liability under federal and state age discrimination laws.
The federal Age Discrimination in Employment Act applies to employers with 20 or more employees and prohibits discrimination against workers 40 years of age or older. The Older Workers Benefits Protections Act imposes procedural safeguards for releases that waive rights protected by the ADEA. Additionally, state laws in many jurisdictions provide further protection.
Courts have consistently held that merely asking employees about their retirement plans does not constitute age discrimination. However, insulating your company from liability during the succession planning process involves careful consideration of the succession plan itself. Employers can reduce the risk of violating federal and state discrimination laws by avoiding the following: Continue Reading