Mandatory Retirement Act In United States
Mandatory Retirement Act In United States
Mandatory retirement is an institution that allows employers to force any employee to retire at a certain age. Usually the age of retirement in this situation is 65 years. In the US, during the 60s and 70s, mandatory retirement was practiced quite commonly. However, things changed in 1978 with the enactment of Mandatory Retirement Act, which is a part of the Age Discrimination in Employment Act (ADEA).
In 1978, the Congress outlawed mandatory retirement before the age of 70 and in 1986, mandatory retirement was abolished altogether.
During the era of mandatory retirement, nearly 50 percent men, who were part of the US workforce, were covered by the compulsory retirement rule. However, civil rights activists, and many aging people protested against this. The United States decided to abolish mandatory retirement because of these protests. However, the main reason for abolishing compulsory retirement was the fact that the Social Security did not have sufficient funds to cover pensions of all those retiring.
However, Mandatory Retirement Act in the US brought about certain unintended results. It was seen that elderly employees were not being promoted and there was still unemployment amongst the elderly. This started a debate on the efficiency and moral legitimacy of the Act.
ADEA bans employers with 20 or more employees from using an employee’s age as a criteria for not hiring or discharging a person. Government employees, labor organizations and employment agencies are covered by the act. However, employers with less than 20 employees are not penalized in any way if they fire an older employee or refuse to hire an older employee.
Proponents of the Mandatory Retirement Act in the United States feel that the Act has helped to show the society that older employees can be useful and can contribute to an organization if given an opportunity.
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