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CBI, the employers' lobby group, has called on employment tribunals to take a common-sense approach to applying the age regulations, which come into force on 1 October.
Employers fear that the new regulations, which ban discrimination on grounds of age, will lead to a landslide of claims.
The introduction of anti-age discrimination legislation in the US resulted in a 40% increase in claims, with ageism cases increasing at a quicker rate than any other form of discrimination claim. In Ireland, age is now the basis of 19% of all employment cases.
There is no cap on the amount of compensation that can be awarded if an employer is found guilty of age discrimination.
Susan Anderson, CBI director of human resources policy, said UK businesses already recognised the valuable contribution older workers bring to the workplace and acknowledged the need for these new rules.
"This is a big adjustment for firms, and it is essential that tribunals take a common-sense approach to applying the new law so that employers can continue to recruit and retain the right people for the right job," she said.
"The new rules will impact on employment practices for people of all ages, from recruitment, training, pay, benefits and performance management to redundancy, retirement and pensions," she said. "They challenge many previously accepted practices, from job ads asking for 'youthful' or even 'experienced' candidates, to ageist office banter and birthday cards."
There are areas where employers can legitimately discriminate on age. They can recognise longer service through more holiday allowances or other improved benefits.
Organisations can continue to set a normal retirement age of 65, although they will be required to consider requests to postpone retirement beyond that.
