Age Discrimination 2006

Assessing the impact of the Employment Equality (Age) Regulations 2006

Published in Bottomline in Autumn 2006

The Employment Equality (Age) Regulations 2006 came into force on 1st October 2006. The consultation on proposals to legislate on age discrimination was the final stage of implementing the European Employment Directive 2000/78/EC.

The Regulations apply to:

• All workers, applicants for jobs and vocational training (schools are not covered)
• Office holders such as solicitors.

On the same day as the age legislation came in, the minimum wage for people over 21 rose by 30p to £5.35 an hour, the development rate for workers aged 18-21 rose by 20p to £4.45 an hour and the 16-17 year old rate rose by 30p to £3.30 an hour.

Young people

Whilst the variable hourly rates of pay, based on age, have been retained within minimum wage legislation the British Chamber of Commerce has speculated that permitting workers aged under 21 to be paid less than their older colleagues may be discriminatory and still open to legal challenge even though the lower age rate has been exempted under the regulations.

Arguments for a lower rate for young workers are that :

• It gives employers an incentive to employ young workers who would be less likely to be employed if it were otherwise, and that;
• young people would be more likely to leave education at an earlier age to enter employment.

The Chamber of Commerce has speculated whether this will be challenged within the courts but this remains to be seen. If you want further information about the legislation go to www.agepositive.gov.uk

Job vacancies and age restrictions

We have used data from this years annual survey of vacancies in Jobcentres in Greater Manchester (Jobwatch 2006) to assess to what extent employers were complying with the legislation before the regulations and what impact the new legislation might have.

An analysis has been made of age restrictions related to job vacancies since 1997. The proportion of jobs giving lower and upper age limits is calculated and data on the ages at which such limits are imposed are also presented. Since the introduction of the minimum wage, we have also looked at those jobs which give age-related rates, to see in particular whether employers were restricting adult rates to those aged 22 and over, in line with the minimum wage regulations.

Table 1 (page opens in a new window) shows the number of jobs which set various age limits, the proportion these represent of all the jobs which set a lower age limit, and the proportion they represent of all the jobs in the survey. The second half of the table shows the proportions when the number of jobs with a lower age restriction are cumulated.

In total 766 jobs specified a lower age limit, although 22 of these gave the lower age limit as 16, which is the youngest age at which someone could take up the job anyway. These jobs have therefore been excluded from the analysis giving a total of 744 jobs. In 2006, 6.9% of vacancies set a lower age limit. This shows that there is a tendency for fewer and fewer employers to set lower age limits as, for example, in 2005 8.9% of vacancies set a lower age limit which was a reduction from 2004 when 11.5% of jobs set lower age limits and a reduction from 2003 when 15.3% of jobs set lower age limits.

As in previous years, there were three particular ages at which lower age restrictions were imposed: at 18, at 21 and at 25. Similar to last year, more than half of the jobs which gave a lower age restriction placed it at 18. Many hotel and catering jobs have a legal restriction which prevent under 18s working if the post involves bar work and this may explain this concentration of jobs. When figures are cumulated 99% of employers who gave age restrictions wanted workers who were 18 or older. The other relatively common thresholds may relate to employers feeling that such limits suggest a degree of maturity or experience. In addition, age limits of 25 may relate in many cases to employers in driving jobs setting a lower age limit for 'insurance' purposes.

Last year no jobs specified an upper age limit. This year there were 25 instances in which an upper age limit was specified. Seventeen of the job vacancies specifying an upper age limit were apprenticeships. The other eight jobs were mostly traineeships. Four were in office work, two in skilled trades jobs. These six job vacancies specified an upper age limit of 21 years old. The other two job vacancies may indeed be breaking the new Employment Equality (Age) Regulations 2006, one of these jobs was a security job which specified an upper age limit of 60 and one was a skilled trade vacancy specifying an upper age limit of 55 years old. The little use of upper age limits shows that employers are not in general restricting jobs to workers under 22, in order to avoid paying the adult minimum wage and in most of the instances when such a restriction is made the vacancy is an apprenticeship position or a traineeship.

Some jobs specify variable pay rates according to age. Since 1999, the data have been analysed in terms of the age at which the adult rate would be paid in order to detect the effect of the minimum wage regulations which allow employers not to pay the adult rate until age 22. Twenty-five of the jobs (0.2% of all jobs) stated the age at which the adult rate would be paid. This compares with 0.5% in 2005, 0.9% in 2004, 1.6% in 2003, 3.7% in 2002, 2.3% in 2001, 4.8% in 2000 and 7.2% in 1999. Table 3 (page opens in a new window), shows the numbers which gave specific ages at which the adult rate was payable and the proportion these represent of the jobs which gave such an age.

Table 2: Jobs with age-dependant rates (page opens in a new window)

As the adult minimum wage rate is not paid until the age of 22, it might be expected that employers using age-related rates would pay the adult rate at the same age. Just under half of the jobs using age-related rates (48.0%) did use 22 as the threshold for the adult rate. However, just under 4 in 10 (36.0%) specified 18 as the age at which the adult rate would be paid. In the last year there has been an increase in the proportion of age-related jobs specifying 22 as the age at which adult rate is payable from 37.3% to 48.0%. There has also been a fall in the proportion of age-related jobs paying the adult rate at age 18.

Only a very small minority of employers in the survey used age-related pay rates. This year the majority of these employers set 22 as the threshold for the adult rate. Overall, the survey indicates that employers do not generally set lower rates of pay for younger workers.

Age restrictions according to Jobcentre

Table 3 (page opens in a new window) shows the proportions of jobs which gave lower age limits and the proportion of jobs which set rates which varied with age in 2005 and 2006. The table is ranked by the proportion of jobs giving a lower age limit.

There was a substantial variation between Jobcentres in terms of the proportions giving lower age limits. Wigan had 11.3% of jobs using lower-age limits whereas 4.7% of jobs in Trafford specified lower age limits. Overall the proportion of vacancies giving lower age limits fell for the fifth consecutive year and eight of the Jobcentres had a fall in the proportions of vacancies with lower age limits.

An indicator whether employers are making use of different minimum wage rates is the extent to which vacancies gave age-dependent rates. This varied between Jobcentres with 0.0% of vacancies in Bolton, Tameside, Salford, and Bury displaying age-related rates compared with 0.8% in Oldham. In general, there were very few jobs which paid different rates depending on age.

Age restrictions according to occupation

There was significant variation between occupations in terms of the extent to which they employed age restrictions. Table 4 (page opens in a new window) shows the proportion of jobs giving lower-age limits and the proportion employing age-related rates in 2005 and 2006. The table is ranked by the proportion of jobs giving a lower age limit in 2006.

As was the case in last year’s survey, security and driving were the two occupations making the greatest use of lower age limits. Over three in ten of all security jobs and driving jobs used lower age limits. There were also significant proportions of catering (17.5%), shop work (12.6%) and cleaning (11.9%) jobs using lower age limits. The main use of lower age limits in driving is because of “insurance” reasons. The main use of lower age limits in catering is in relation to the age limit of 18 below which individuals cannot serve alcohol in bars, pubs, cafes and restaurants.

In terms of age-dependent rates, sales was the occupation most likely to advertise such rates. Even in this case only 4.0% of sales jobs used such rates. Eleven occupations (security, driving, hairdressing, leisure, factory, care, skilled trades, motor trade, engineering, managerial, and nursing) had no jobs with age-dependent rates. In the remaining six occupations (clothing, catering, professional , shop work, cleaning, and office work) there were some age-dependent rates this ranged from only 0.1% of professional jobs to 2.7% of shop work jobs. Clearly very limited use is made of age-dependent rates and moreover the use of such rates has fallen over the last few years.

Conclusion

Our data shows that The Employment Equality (Age) Regulations 2006 need have little impact at the stage of advertising job vacancies as very few jobs use upper or lower age restrictions or age related rates of pay. In the cases were upper age has been specified the vacancy is usually an apprenticeship or traineeship. Most use of lower age limits are due to the age required for serving alcohol or insurance cover. At this early stage it would seem that the main impact of implementing the new regulations will be in the work place itself in instances of harassment by other colleagues about age or victimisation when the worker is treated unfairly as a result of making a complaint about age discrimination.