The federal age discrimination act is actually called the Age Discrimination in Employment Act (ADEA). Like other federal acts, this federal age discrimination act was formed to protect the rights of older employees. It's unfortunate, but many companies will lay off or discharge older employees as a way to save money by not having to pay higher salaries or more costly benefits. These practices, and many others, are illegal under the ADEA, and companies that practice them may be prosecuted under the law. A federal age discrimination act doesn't ensure that an older (40 or older) employee will not fall victim to some form of age discrimination. It does, however, set the standard for what an employer can and cannot do, and if they violate one of the conditions set forth in the ADEA, an older employee has the right to file a claim of discrimination.