If you haven't looked over your employment policies in the past year, now is a good time to do so. Companies should have their employment counsel review such policies annually under any circumstances, simply to assure they remain in compliance with changing rules and regulations, suggests lawyer Jonathan Hyman, a partner at law firm Kohrman Jackson & Krantz.
If that isn't enough reason, however, in March the Equal Employment Opportunity Commission issued a final rule amending Age Discrimination in Employment Act of 1967 regulations that could impact manufacturers in certain circumstances. The purpose of the ADEA is to prevent employment discrimination against employees age 40 or older.
The final rule concerns only "disparate-impact" claims and the "reasonable factors other than age" defense. In layman's terms, that means it addresses employment practices that appear, on their face, not intended to exclude older workers but may have the impact of doing so anyway. The employment policies also must impact groups of people.
Two such examples include policies used to screen employees or procedures employed to lay off workers in broad reduction-in-workforce efforts.
Practically speaking, the final rule impacts only a small subset of circumstances, notes Hyman. However, because it relates to groups of people rather than individuals, the impact of running afoul of the rule could have larger financial implications.
According to the EEOC, "the final rule strikes the appropriate balance between protecting older workers from discriminatory, unreasonable business decisions and preserving an employer's ability to make reasonable business decisions."
The rule, says Hyman, is a "not so gentle, but much-needed reminder" that facially neutral employment policies aren't enough.
What Manufacturers Can Do
Lawyer Eric Martin of McGuireWoods offers several practical steps manufacturers should take to lessen the likelihood of facing challenges on this rule.
- Make sure employment practices used to screen employees closely relate to the work performed. "For example, if the employer imposes a mandatory ability to lift up to 50 pounds -- which would tend to have a greater impact on older employees -- that should be based on actual working conditions that require employees to lift 50 pounds," he says.
- Provide appropriate training to supervisors who have discretion to make employment decisions that could impact older workers.
- For actions such as layoffs, determine whether the selection process impacts older workers disproportionately, and adjust as needed. "For example, selecting employees with higher pay rates for layoff may impact older workers disproportionately." Consider using other factors, he says.
- Use objective criteria for employment decisions. For example, he says, choosing "least productive" employees may feed into a stereotype about older workers. Objective productivity measures such as "units per shift" are better choices.
- Thoroughly document the decision-making process. "Under the new guidelines, manufacturers must be prepared to show that the decisions they make are reasonable."