Not Rehiring Retirees

Margie

I think I may know the answer but I want to make sure. Can a company establish a policy where they decide not to rehire retirees? We have had a situation where an employee retired, collected her pension monies and returned to work as a part timer 7 months later. She is now again on our pension plan and the bosses do not seem too happy about that. I am not sure if that would qualify as age discrimination.

Any input would be greatly appreciated.

Rockie

I would not single out "retirees" as being ineligible for rehire. This could certainly be construed as discriminatory. If something is offered to any employee and if a "retiree" qualifies, they would have to be treated the same. For example: If a retired person is on Medicare, the employer still has to cover them under the health plan if they otherwise qualify and the employer's health plan is primary.

Some companies simply do not rehire former employees. This policy would be acceptable, but you are boxing yourself into a corner (especially in a tight job market).

Margie

Thank you Rockie,

I thought so, but I just wanted some reassurance.

Cheryl S SPHR

I agree this could easily lead to allegations of age discrimination.

Personally, I consider retirees a great resource in this tight labor market, especially when the need for temporary help arises. They are frequently familiar with your business and require little training. We use several of our retirees in this manner.

atherese

We do rehire retirees into positions, but our pension plan states that any retiree receiving a monthly benefit, rehired and works over 1,000 hours per year their pension benefits are suspended until they terminate their employment (again). At that time, benefits are recalculate and adjusted to reflect their additional vesting service. Some retirees then choose to not come back due to the monthly benefit suspension or choose to work as a fill in so to not go over the 1,000 annual hours.