(Bloomberg View) -- Nearly every day, hundreds of Americans over the age of 50 lose their jobs due to corporate downsizing. These workers remain unemployed for longer periods than do younger workers and are more likely to leave the workforce entirely. The rise of long-term joblessness among middle-aged Americans is straining public resources, contributing to drug use and harming economic growth.
What can be done? Paradoxically, federal laws against age discrimination also discourage companies from taking a chance on older job applicants. That's why the key to helping older workers find jobs is to reduce the costs of letting them go.
The United States has been a global leader in protecting workers from employment discrimination on the basis of age. The federal Age Discrimination in Employment Act (ADEA) and similar state laws bar employers from treating older workers differently than their younger counterparts with respect to wages, benefits, and other working conditions. These laws have had a largely beneficial effect for older people who already have jobs. But they make it harder for the unemployed to find work.
Companies tend to assume that older job applicants will be problematic employees. Older workers often must adjust to lower salaries than they're accustomed to and may bristle at working for younger supervisors. Because older workers belong to a protected class under age-bias laws, employers face potential legal action if they attempt to fire disgruntled or unproductive employees. The easier route is to avoid the problem altogether -- and not consider job applicants over the age of 50.
There are essentially two ways to deal with this problem: sticks and carrots. The most readily available sticks are lawsuits filed by job applicants who believe they've been victimized by age bias. But such an approach can only go so far. The law gives employers considerable latitude when it comes to hiring decisions, and effective challenges to hiring bias are extremely rare. Job seekers are not told why their applications are unsuccessful; even when employers adopt across-the-board rules against hiring older workers, such discriminatory policies are rarely written down and thus difficult to prove.
Carrots are more effective. Specifically, the government should allow for wider use of “safe harbors” – essentially administrative rules that give employers a risk-free opportunity to hire older workers and then evaluate whether the perceived drawbacks actually materialize.
The agency responsible for enforcing the federal statute barring age discrimination is the Equal Employment Opportunity Commission. The EEOC has the authority to grant exemptions, also termed safe harbors, from the ADEA. Early on in the agency’s history, the EEOC promulgated safe-harbor-type guidelines to encourage affirmative action programs and careful use of aptitude tests. The U.S. Supreme Court itself announced a kind of safe harbor in its 1998 rulings telling companies when they will be held liable for sexual harassment committed by supervisors (and when they likely will not).
The safe-harbor approach could be used to experiment with ways to overcome hiring barriers confronting older workers. For example, the EEOC could declare that job applicants may be hired for a two-year probationary period. Workers employed under the safe-harbor authority would be protected by all other laws, including laws against harassment and unequal benefits. But if an employer chose to terminate them during the probationary period, the employees would not be permitted to challenge the decision in court.
If this safe-harbor approach proved effective in helping older workers find jobs, the EEOC could consider extending it to other groups who face obstacles in the hiring process. These might include people with certain physical disabilities, such as blindness, that are costly to accommodate, or workers with criminal or credit records.
Use of the safe-harbor provision provides a way to promote anti-discrimination objectives without any serious downside. It would give older Americans left out of the labor market a chance to persuade employers they can be productive contributors to the new workplace.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Samuel Estreicher is a law professor at New York University and director of its Center for Labor and Employment Law.
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