Diversity Insight

Is There Harm In Asking? Questioning Employees About Their Plans to Retire

Retirement decisions cannot be divorced from a person’s age. When asking questions about retirement, employers should be cognizant of age discrimination laws and the implications of making such inquiries. 

Applicable laws

Age discrimination is governed by both federal law and the laws in most states. The federal Age Discrimination in Employment Act (ADEA) applies to public- and private-sector employers with 20 or more employees and forbids discrimination against older workers, defined as individuals over the age of 40. The Equal Employment Opportunity Commission (EEOC) received more than 20,000 age complaints under federal law in 2016.

Employers often have legitimate explanations for policies or practices that implicate age. An employer’s legal justification for an age-related policy or practice is called a “reasonable factor other than age.” Common examples of reasonable factors other than age include decisions based on an employee’s salary or seniority level, even though those things are often tied to age. Age discrimination issues often arise when an employer undertakes succession planning or begins planning for an employee’s retirement.

Age and retirement

Generally, employers cannot mandate that employees retire based on age. There are very few exceptions. The most common applies to employees who are bona fide executives or high-level policy makers for two years before they reach retirement age and are eligible for a specific amount of annual retirement benefits. It’s important to remember that the exception is very limited. Courts have allowed mandatory retirement for high-level employees like college presidents and state court judges. However, courts have rejected mandatory retirement for middle managers and even attorneys.

Tension may arise when an employer attempts to ferret out an employee’s plans for retirement and the employee perceives that he is being forced out. Retirement questions can be a legitimate inquiry for succession planning purposes, and retirement eligibility may qualify as a reasonable factor other than age on which to base an employment decision. However, assuming an employee is less dedicated to her job because she has future or pending retirement plans is a stereotype that implicates the protections of the  ADEA and state laws. Also, a barrage of questions about when someone will retire can make an employee feel that she’s being pushed out.

Stereotypes are prevalent in age discrimination cases. Many courts say they look for “code words” to decipher whether an employer had a discriminatory intent. In age discrimination cases, code words are typically premised on the stereotype that older workers are resistant to change, set in their ways, inflexible, or grumpy, while younger workers are job hoppers, narcissistic, entitled, uncommitted, and too reliant on technology.

You should be cognizant of code words based on age and scour them from your job postings and performance evaluations. Words matter, and stereotypes are not harmless. The best policy is to train your supervisors to avoid stereotypes and age-based generalizations at all times.

Bottom line

So how do you prepare for vacancies due to retirement or begin to implement a succession plan? You are allowed to make reasonable inquiries about an employee’s retirement plans. There’s no hard-and-fast rule for what constitutes a reasonable inquiry. It might be once a year, it might be quarterly—or it might not be appropriate at all in certain scenarios.

Follow your intuition. If an employee seems uncomfortable with questions about his retirement plans, back off. While it isn’t ideal to be left in the dark about an employee’s future plans, it’s important to remember that most Iowa employees are at will, meaning they can be terminated for any legal reason or no reason at all. It also means they can resign without much notice. If an employee won’t share her retirement plans, it might be frustrating for your organization and hamper your ability to plan for the future, but there’s little you can lawfully do.

Michele L. (Warnock) Brott is an attorney with  Davis Brown Law Firm in Des Moines, Iowa. She may be contacted at michelebrott@davisbrownlaw.com.