Australian companies are less likely to employ older workers due to false perceptions that they are resistant to change and "won't fit in", according to the Human Rights Commission.

Age and Disability Commissioner Susan Ryan has begun an inquiry into employment discrimination against older workers, which she describes as a "huge problem".

"Some research says there are about 2 million people over 55 who would like to work and can't get work. That's massive," she said.

Ms Ryan said many employers still have deep prejudices about older workers, which she hopes the Willing to Work inquiry will help to eliminate.

"They fear they won't be productive, they won't learn the new systems, especially IT systems," she said.

"They won't get on with younger employees and they fear they will have more sick leave.

"None of these fears can be supported, in fact the evidence is all the other way."

Ms Ryan said discrimination can sometimes be difficult to prove, while at other times employers are in clear breach of anti-discrimination laws.

"I'm amazed that some employers do just say 'you're too old' or 'you're too old to retrain'," she said.

The commission said unemployment and under-employment amongst older Australians cost the economy over $10 billion a year.

Attorney-General George Brandis launched the inquiry, which will also examine workplace discrimination against those with disabilities.

He said the opportunity to work is essential for an individual's self-worth and mental health.

"Employment rates for older Australians and people with a disability remain at disturbingly low levels and we know that's largely as a result of discrimination," he said.

"We need to think about how we can change negative attitudes and stereotypes."

The inquiry will consult with individuals and employers across Australia, and could recommend changes to Commonwealth laws.

The Human Rights Commission has been asked to provide research into the prevalence of age and disability discrimination and identify effective solutions.

The commission will provide its report to the Attorney-General by July 2016.