ProPublica and the Urban Institute recently issued a report with startling conclusions about the lasting impact of age discrimination against employees. While age discrimination has long been prevalent in the workplace, the crippling damage it causes to employees’ retirement and savings accounts are now receiving more study and attention.
A lay off or other involuntary job disruption usually has long-term implications for retirement finances that reverberate even if the employee is able to find another job.The report analyzed data collected since 1992 of approximately 20,000 people from when they turn 50 onward. The data showed that from when older employees enter the study at age 50 through when they leave paid employment:
56 percent are laid off at least once or leave jobs under such financially damaging circumstances that it’s likely they were pushed out rather than choosing to go voluntarily.
Significantly, 90% of these employees never earn as much money as they did before their separation from work. According to the report, “even years afterward, the household incomes of over half of those who experience such work disruptions remain substantially below those of workers who don’t.”
The Age Discrimination in Employment Act (ADEA) and related state laws prohibit discrimination against older employees. To prove an initial (prima facie) case of intentional age discrimination in a selection decision, the employee must show:
- that they belong to a protected class
- that they applied for and were qualified for a job for which the employer was seeking applicants
- that despite their qualifications they were rejected
- that the position remained open after their rejection and the employer continued to seek applicants similar to their qualifications.
A defendant must then show a legitimate reason for the taking the employment action. In response, a plaintiff can show by preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reason, but were a pretext for discrimination.
Approximately 1 in 5 discrimination charges received by the Equal Employment Opportunity Commission (EEOC) are age discrimination claims, and in 2017 the EEOC received over 18,000 age discrimination charges.
The more information employees have about potential discrimination and its effects, the better they can plan financially for disruptions along the way (not to mention potential legal options). This type of preparation can hopefully mitigate the fiscal impact of an involuntary separation from a roadblock to a bump in the road on the way to retirement.AgeDiscriminationLawyers_Infographic