Age Discrimination in Employment Act (ADEA): What It Means for Employers

What it means in practice

The ADEA is a federal civil rights law enforced by the EEOC. The EEOC describes age discrimination as treating an applicant or employee less favorably because of his or her age. It reaches hiring, firing, pay, assignments, promotions, layoff, training and benefits. Its sibling laws are Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA), but the ADEA has its own coverage threshold, defenses and remedies.

Who is protected. The statute limits its protections to individuals who are at least 40 years old (29 U.S.C. 631(a)). A 1986 amendment removed the former age-70 cap, so an employer generally cannot force retirement or otherwise discriminate against someone because they are 70 or older (29 CFR 1625.9). The EEOC notes that the law does not protect workers under 40, although some states do. Favoring an older person over a younger one is not unlawful under the ADEA, even if both are 40 or older, and discrimination can occur when the decision maker is also over 40 (29 CFR 1625.2).

Which employers are covered. Under 29 U.S.C. 630(b), an employer is a person in an industry affecting commerce with 20 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. The term also includes state and local governments. The EEOC counts part-time, seasonal and temporary employees, but not independent contractors or owners, and interrelated businesses may count as one employer. Example: a business had 19 employees all of last year. This year it keeps at least 20 on the payroll every working day for 25 weeks, so it meets the test for this year once it reaches 20 such weeks. Classification matters here; see independent contractor and part-time hours.

What the law prohibits. Section 4 of the Act (29 U.S.C. 623) makes it unlawful to refuse to hire, discharge or otherwise discriminate in compensation, terms, conditions or privileges of employment because of age; to limit, segregate or classify employees in a way that deprives them of opportunities because of age; and to reduce anyone's wage rate in order to comply. It also bars retaliation against anyone who opposed an unlawful practice or made a charge, testified, assisted or participated in an ADEA investigation, proceeding or lawsuit; see retaliation. The EEOC adds that harassment because of age, such as offensive remarks about a person's age, is illegal when it is so frequent or severe that it creates a hostile work environment or leads to an adverse decision like firing or demotion.

Job ads and applications. Help wanted notices may not use terms that limit or deter older applicants. Examples that violate the Act unless an exception applies include "age 25 to 35," "young," "college student" and "recent college graduate" (29 CFR 1625.4). Ads may express a preference for older people, such as "over age 60," "retirees" or "supplement your pension." Asking for age or date of birth on an ad or application is not illegal in itself, but such requests are "closely scrutinized" because they may deter older applicants (29 CFR 1625.4, 1625.5). The EEOC says that if the information is needed for a lawful purpose, it can be obtained after hire. The rules also cover apprenticeship programs: age limits in them are valid only under a statutory exception or an EEOC exemption (29 CFR 1625.21).

Disparate impact and reasonable factors other than age. A policy that applies to everyone can still be illegal if it harms people 40 or older and is not based on a reasonable factor other than age (RFOA), says the EEOC. Under 29 CFR 1625.7, the employer bears the burden of proving the defense, the employee must identify the specific practice causing the disparity, and the defense does not apply when the practice uses age itself as a criterion or to claims of intentional disparate treatment. The employer must show the practice was reasonably designed to achieve a legitimate business purpose and administered in a way that reasonably achieves it. Relevant factors include manager training, limits on subjective judgments, and whether the employer assessed the adverse impact on older workers.

Bona fide occupational qualification (BFOQ). Age may be used only where it is a BFOQ reasonably necessary to the normal operation of the particular business. The EEOC regulation says this exception has "limited scope" and must be narrowly construed (29 CFR 1625.6). The employer must prove the age limit is reasonably necessary to the essence of the business and either that all or substantially all excluded people are in fact disqualified, or that some have a disqualifying trait that cannot be identified except by age. Other statutory defenses include a bona fide seniority system based primarily on length of service (29 CFR 1625.8) and discipline or discharge for good cause.

Benefits: the equal-benefit or equal-cost rule. The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA on benefits. A bona fide employee benefit plan may reduce certain benefits for older workers only where the amount paid or cost incurred for the older worker is no less than for a younger worker (29 U.S.C. 623(f)(2)(B); 29 CFR 1625.10). The exception does not cover paid vacation, uninsured sick leave or wages, and never excuses a refusal to hire or involuntary retirement. Example: in a contributory health plan, a younger employee's premium is $400 a month and the employee pays $100 (25 percent). If an older employee's premium is $600, the regulation allows a higher contribution only so long as the employee's share of the total premium does not rise, so the most that employee could be asked to pay is $150 (25 percent of $600). In an employer-paid plan, older employees cannot be required to contribute anything. A separate regulation allows retiree health benefits to be coordinated with Medicare or a comparable state plan (29 CFR 1625.32).

Retirement and the executive exception. No benefit plan or seniority system may require or permit involuntary retirement because of age (29 CFR 1625.9). The one narrow exception is for a bona fide executive or high policymaking employee who is at least 65, held such a position for the full 2 years before retirement, and is entitled to an immediate, nonforfeitable annual retirement benefit from the employer's plans of at least $44,000 in the aggregate (29 CFR 1625.12). The regulation says it does not reach middle managers "no matter how great their retirement income," and the employer must show every element is met.

Severance releases under OWBPA. An employee may waive ADEA rights only if the waiver is knowing and voluntary (29 U.S.C. 626(f); 29 CFR 1625.22). At a minimum, the agreement must be in writing in plain language the person can understand; refer to the ADEA by name; not waive claims arising after signing; give consideration beyond anything the person is already entitled to; advise the person in writing to consult an attorney; allow at least 21 days to consider it (45 days for an exit incentive or other termination program offered to a group); and allow at least 7 days after signing to revoke, with the agreement not effective until that period ends. For a group program, the employer must also give, in writing at the start of the period, the decisional unit, eligibility factors, time limits, and the job titles and ages of those selected and not selected.

How the waiver timing works. The 21 or 45 days run from the employer's final offer, and material changes restart the clock (29 CFR 1625.22(e)). An employee may sign early if that choice is not induced by the employer, but the 7-day revocation period cannot be shortened. Example: an individual release is finalized and handed over on Monday, March 2, 2026. The employee has until at least Monday, March 23, 2026 to decide. If she signs on March 10, she can revoke for at least 7 days, through March 17, and the agreement cannot take effect before that period expires. A waiver cannot bar filing an EEOC charge or taking part in an EEOC investigation, and an employee challenging it does not have to return the severance first (29 CFR 1625.23). These steps often fall during offboarding.

Charge deadlines. A person must file an EEOC charge within 180 days of the alleged unlawful practice. The EEOC says that for age claims the deadline extends to 300 days only if a state law prohibits age discrimination in employment and a state agency enforces it; a local law alone does not extend it. Weekends and holidays count, but a deadline that lands on one moves to the next business day. Example: for a termination on Monday, January 5, 2026, day 180 is Saturday, July 4, 2026, so the deadline moves to Monday, July 6, 2026; in a 300-day state, day 300 is Sunday, November 1, 2026, moving to Monday, November 2. A lawsuit may not be filed until 60 days after the charge, and the right to sue expires 90 days after receiving the EEOC's notice of dismissal or termination (29 CFR 1626.18).

Remedies. The ADEA is enforced through the remedies of the Fair Labor Standards Act: amounts owing are treated like unpaid minimum wages or overtime, and courts may order hiring, reinstatement or promotion (29 U.S.C. 626(b)). Jury trials are available. The EEOC says that in age cases victims cannot recover compensatory or punitive damages, but may be entitled to liquidated damages equal to the back pay awarded, and the statute allows them only for willful violations. Example: if a court awards $40,000 in back pay and finds the violation willful, liquidated damages would be another $40,000, for $80,000 before any fees and costs. Attorney's fees, expert fees and court costs may also be recovered.

Recordkeeping and posting. Under 29 CFR 1627.3, every employer must keep for 3 years payroll records showing each employee's name, address, date of birth, occupation, rate of pay and compensation earned each week. Personnel records about applications, hiring refusals, promotion, demotion, transfer, training, layoff, recall, discharge, tests, physical exams used in a decision, and job ads must be kept for 1 year from the related action. Written benefit plans and seniority or merit systems must be kept while in effect and for at least 1 year after they end. Once an enforcement action begins, related records must be kept until final disposition. Section 8 of the Act also requires a posted EEOC notice; the EEOC "Know Your Rights" poster covers age.

Where states differ. The ADEA does not preempt state age discrimination laws (29 CFR 1625.10(g)), and many states go further. Two examples from official state pages: the California Civil Rights Department says the Fair Employment and Housing Act protects age 40 and over, applies to employers of 5 or more employees, and generally allows three years to file a complaint. The New York State Division of Human Rights says the Human Rights Law covers every employer in the state regardless of size and, for acts on or after February 15, 2024, allows three years to file. Other states differ.

FAQ: Can a 35-year-old bring an ADEA claim? No. Federal protection starts at 40, though some state laws protect younger workers.

FAQ: Can we set a mandatory retirement age? Generally no. Apart from narrow cases such as a valid BFOQ, the executive exception requires age 65, two years in a qualifying role and a $44,000 annual benefit.

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