The Age Discrimination in Employment Act (ADEA) of 1967 makes it unlawful for an employer to fail or refuse to hire, or to discharge, any individual at least 40 years of age or otherwise discriminate against any individual with respect to his or her compensation, terms, conditions, or privileges of employment, because of the individual 's age; or to advertise for employment indicating any preference or specification based on age. All claims under the statute, not just those involving discriminatory discharge, are subject to the age-40-and-above requirement. (In addition, many states have antidiscrimination laws that cover age discrimination, and in many cases, these laws extend protection to a broader class of individuals than those over 40.)
However, the ADEA does allow employers to take actions that would otherwise be prohibited when age is a bona fide occupational qualification that is reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age. In addition, actions motivated by legitimate business reasons that also have disproportionate adverse effects on older workers do not necessarily constitute illegal age discrimination. Such business reasons may include the desire to reduce labor costs, to increase operating flexibility, or to seek workers with experience in new technologies.
Few employers today would state as a matter of company policy, “I won't hire you because your age is over 40.” But one key purpose of the ADEA is to prevent employers from taking adverse actions against older workers based on stereotypes of what older workers are like. Thus, it is a violation of the ADEA to act on the assumption that an older worker would not fit into a workplace, would be slow to learn new skills or to understand the projects being developed, would not accept salaries at the level that characterize those of entry-level positions, or would not like the pace of the workplace, because of his or her age. Employers may not be aware that acting on such assumptions violates the law, but reliance on them as a factor in hiring or promotion decisions amounts to treating workers differently because of age.
As a rule, the courts grant employers reasonably broad latitude in defining job requirements as long as there is a plausible business case that those requirements are relevant, and the employer's legal responsibility is to refrain from disparately applying them. Historically, factors such as the number of years of experience, the salary level, the working hours, and the currency of an applicant's skills are all examples of requirements that the courts have found legitimate.