On February 18, 2010, the Equal Employment Opportunity Commission (EEOC) published a Notice of Proposed Rulemaking (NPRM) addressing the meaning of the “reasonable factors other than age” defense under the Age Discrimination in Employment Act (ADEA). The ADEA prohibits employers from discriminating against employees or job applicants based upon their age, but protects only those employees or applicants who are 40 years or older. In addition, the ADEA provides employers with statutory defenses, which include provisions for a “bona fide occupational qualification" defense and a “reasonable factors other than age” defense.
The “reasonable factors other than age” (RFOA) defense precludes liability for actions otherwise prohibited under the ADEA so long as the employment decision is based upon reasonable factors other than age. The EEOC’s NPRM takes into consideration two relatively recent United States Supreme Court cases, Smith v. City of Jackson and Meacham v. Knolls Atomic Power Laboratories, which each evaluated disparate impact claims under the ADEA. Disparate impact claims involve the allegation that an employer’s practice, although neutral on its face, has a discriminatory impact on a protected class – under the ADEA, workers aged 40 years or more.
Specifically, and with the Supreme Court’s Smith and Meacham holdings in mind, the EEOC proposes to revise the federal regulations to illustrate that under the RFOA defense, the evaluation of an employer’s practice “turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.” Thus, the EEOC’s proposed approach attempts to balance employers’ rights to make reasonable business decisions with the ADEA’s goal of protecting older workers from facially neutral employment practices that disparately impact their employment. In addition, the proposed amendments provide guidance as to the factors that will be considered in evaluating an employer’s facially neutral practice under the ADEA.Continue Reading EEOC Issues Proposed Regulations Defining Employers’ Affirmative Defense Under ADEA
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Employers offering severance payment to employees are typically uncertain about the payroll taxes that may apply to these additional payments. Severance pay is treated as “supplemental wages” because it is not a payment for services in the current payroll period but a payment made upon or after termination of employment for an employment relationship that has