ADEA - Horton Management Law

There are probably many lawyers who went to law school because they don’t like dealing with numbers. I’m not one of them. So, I thought I would address some of the most significant numbers in employment law.

Many of these numbers establish thresholds, especially for coverage issues. But others are caps, dates, or other parameters.

(If you prefer words, click here for my free Employment Law Dictionary.)

1 – Employee threshold for many employment laws

One is the number of employees an employer must have before being covered by the federal minimum wage and overtime laws. It also establishes coverage for many other federal laws, including immigration, health and safety, and labor law requirements. So, if you have just one employee, you’re already responsible for employment law compliance.

$7.25 – Minimum wage

This is the current nationwide minimum wage for most employees under the Fair Labor Standards Act (FLSA). Many states and some cities have higher minimum wage requirements for their employers.

11 – OSHA recordkeeping threshold

Non-governmental employers with at least 11 employees must maintain records of serious work-related injuries and illnesses.

12 – Annual FMLA leave allowance, in weeks

The employer can determine what 12-month period counts as a year for its employees. The best option is usually a rolling year measured back from the date on which a particular employee will use the leave. Other options include the calendar year, the employer’s fiscal year, or a forward rolling year from the date the employee first takes FMLA leave.

15 – Several federal discrimination laws kick in

Employers with 15+ employees are subject to Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA). Title VII prohibits discrimination because of race, color, sex, religion, and national origin. The ADA prohibits discrimination against qualified individuals with disabilities and requires employers to make reasonable accommodations. GINA prohibits discrimination based on genetic information, which is broadly defined.

20 – ADEA and COBRA coverage

The Age Discrimination in Employment Act (ADEA) prohibits discrimination because of age for employee 40 years of age or older.

Employees with at least 20 employees also become subject to COBRA insurance continuation requirements. COBRA entitles employees and/or their families to continue their group health insurance coverage for up to 18-36 months (depending on circumstances) after employment ends. The employees usually pay the coverage.

40 – FLSA overtime/ADEA age thresholds

Under the FLSA, employers must pay non-exempt employees overtime once they work more than 40 hours in a work week. The overtime rate must be at least time-and-a-half the employee’s regular rate.

As mentioned, employees also become protected by the ADEA when they turn 40.

50 – Affordable Care Act, FMLA, and WARN coverages

Employers with 50+ “full-time equivalents” qualify as large employers under the Affordable Care Act. This triggers various requirements, including the obligation to provide affordable health insurance to employees (or pay a penalty).

The Family and Medical Leave Act (FMLA) applies to employers with at least 50 employees.

The Workforce Adjustment Retraining Notification Act (WARN) requires employers to give written notice before mass layoffs and plant closings that will cause employment loss for at least 50 employees, sometimes more.

60 – Days in advance WARN notices must be issued

The employer must notify not only the affected employees (or their unions), but also certain government officials. There are exceptions to the notice obligation. If circumstances require the employer to act suddenly, the employer usually must give as much notice as possible.

75 – FMLA geographic proximity requirement

To become eligible for FMLA leave, among other conditions, an employee must work within a 75-mile radius of at least 49 other employees.

100 – WARN and EEO-1 thresholds

Non-governmental employers with 100 or more employees are potentially subject to WARN notice obligations and also must file annual EEO-1 reports. (Many federal contractors must file EEO-1 reports even if they have less than 100, but more than 50 employees.)

The EEO-1 form reports on company employment data by race/ethnicity, gender and job category. Read more about the status of EEO-1 reporting here.

$455 – Required weekly salary for some FLSA exemptions

To qualify for the most common FLSA exemptions, employees must receive a salary of at least $455 per week. The U.S. Department of Labor tried to increase this to $913 per week in 2016. Courts rejected that change, as has the current administration in Washington, which is reviewing an alternative approach.

1250 – Required annual hours worked for FMLA eligibility

If an employee has not worked 1250 hours for the employer in the past 12-months, they are not eligible to take FMLA leave.

$100,000 – “Highly compensated employee” exemption

The FLSA has special exemption rules for employees who receive at least $455/week in salary and $100,000/year in total compensation. These employees may be exempt even if they don’t satisfy the full standard exemption tests.

$300,000 – Highest cap on Title VII damages

Employers with more than 500 employees may be liable for up to $300,000 in compensatory and punitive damages for violations of Title VII’s anti-discrimination provisions. The caps are lower for employers with fewer employees: 15-100 employees = $50,000; 101-200 employees = $100,000; 201-500 = $200,000.

Some state employment discrimination laws have no caps. Thus, employees often sue under both state and federal laws to maximize their potential recovery.

No caps apply to damages for lost wages/benefits or attorneys fees under Title VII.

Employment Law Is Daunting

It’s not just the numbers. Employment law relies on many complicated words and phrases too. I’ve written a concise Employment Law Dictionary to help with that. Get your free copy here.

The federal Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination against employees 40 years or older because of their age. In 1990, Congress amended the ADEA through the Older Workers Benefit Protection Act (OWBPA). The OWBPA includes specific requirements that employers must meet if they want to obtain enforceable employee releases of ADEA claims.

Employers most often seek releases from employees at the end of employment. They typically offer severance pay or other benefits in exchange for a waiver of claims. But if the release doesn’t meet the OWBPA requirements, then the employee may still be able to claim age discrimination.

OWBPA Requirements for Employee Releases

The waiver of claims must be part of a written agreement between the employee and the employer. The agreement must be written in a manner “calculated to be understood by such individual, or the average individual eligible to participate.”
The release must specifically refer to rights or claims arising under the ADEA.
The employee cannot waive rights or claims that may arise after the release is signed.
The employee must receive something of value in exchange for the waiver of rights. It must be something that the employee did not already have the right to receive.
The employer must advise the employee in writing to consult with an attorney before signing the release agreement.
The employer must give the employee at least 21 days to consider the release agreement.
The release agreement must give the employee at least 7 days after signing to revoke the agreement. The agreement does not become enforceable before the end of the revocation period.

Additional Requirements for Group Programs

The OWBPA contains additional requirements for waivers connected to an “exit incentive or other employment termination programs offered to a group or class of employees.” This includes both voluntary and involuntary programs. Thus, it applies both to voluntary resignation programs and involuntary reductions in force. Most likely, it applies to any situation where you ask more than one employee to sign a release related to the same decisionmaking process. It does not, however, necessarily apply when an employer fires two employees around the same time, but for unrelated reasons

For group programs, the employer must allow employees least 45 days to consider the release agreement, rather than 21.

In addition, the employer must give the following information to employees at the beginning of the 45-day consideration period:

A description of any class, unit or group of employees covered by the program, any eligibility factors, and any applicable time limits.
A list of job titles and ages of all employees eligible or selected for the program, and the ages of all employees in the same job classification or organizational unit who are not eligible or selected for the program.

Many employers especially hesitate to provide the age lists required in group programs. However, failing to do so would render the waiver of ADEA claims unenforceable.

Use of OWBPA as a Guideline

The OWBPA only applies to waiver of ADEA claims. Accordingly, many employers choose not to follow all of its requirements for releases by employees under the age of 40. However, an employee could challenge any waiver as unenforceable on basic legal principles. Essentially, an employee could claim that they did not understand what they were signing. Using the OWBPA requirements for all employment releases promotes greater enforceability. If it is good enough for Congress and its federal age discrimination law, shouldn’t it be good enough for all employee waivers?

To reiterate, many employee releases should still be enforceable even if they don’t satisfy some aspects of the OWBPA. But it’s usually not worth taking that risk.

Of course, employers should not try to obtain a waiver of legal claims without the assistance of an experienced lawyer. Each situation may be different and necessitate different approaches.

Tag: ADEA

U.S. Employment Law by the Numbers