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Statement of Need: Current EEOC regulations interpret the ADEA as prohibiting an employment practice that has a disparate impact on individuals within the protected age group unless it is justified as a business necessity. The Supreme Court's holding in Smith v. City of Jackson validated the Commission's position that disparate impact analysis applies in ADEA cases. The holding, however, differed from the Commission's position that the business necessity test was the appropriate standard for determining the lawfulness of a practice that had an age-based disparate impact. The EEOC is revising its regulation to reflect the Smith decision.

Summary of the Legal Basis: Section 9 of the ADEA authorizes the EEOC "to issue such rules and regulations it may consider necessary or appropriate for carrying out this chapter ...." 29 U.S.C. section 628.

Alternatives: The Commission will consider all alternatives offered by the public commenters.

Anticipated Costs and Benefits: The proposed rule, which makes no change to covered entities' compliance obligations under the ADEA, brings the Commission's regulations into conformity with a recent Supreme Court interpretation of the statute. This revision to EEOC's regulation, informed by the comments of stakeholders, will be beneficial to courts, employers, and employees seeking to interpret, understand, and comply with the ADEA.

Risks: The proposed regulation will reduce the risks of liability for noncompliance with the statute by clarifying the rights and responsiblities of job applicants, employees, and covered entities. The proposal does not address risks to public health, safety, or the environment.