The Older Workers Benefit Protection Act (OWBPA), passed in 1990, amends the Age Discrimination in Employment Act (ADEA) of 1967. It protects workers aged 40 and older from discrimination related to benefits and severance agreements. The OWBPA ensures these workers get fair benefits and fully understand the implications before waiving their rights. This protection is crucial, as older employees face challenges like targeted layoffs or reduced benefits.
The OWBPA mandates specific actions from employers to ensure older employees are treated fairly in terms of benefits and severance agreements. Setting guidelines for severance agreements and providing equal benefits offers vital protections for older workers who may otherwise be vulnerable to unfair treatment.
Key Provisions of the OWBPA
The OWBPA addresses common challenges faced by older employees. Here’s a look at its main provisions:
- Equal Benefits for Older Workers
Employers must provide equal benefits to older employees or offer compensation that matches those benefits if costs are too high. Employers cannot reduce benefits like health insurance or pensions just because an employee is over 40. This provision promotes fairness and prevents older workers from being singled out due to higher benefit costs.
If equal benefits are too costly, employers can offer alternative compensation with equal value. This ensures older workers aren’t left disadvantaged because of the expense of providing benefits.
2. Waiver Requirements for Age Discrimination Claims
When offering severance packages, employers often request that older employees waive their right to bring age discrimination claims. The OWBPA has strict rules to ensure these waivers are voluntary and fully understood. To be valid, a waiver must meet specific criteria:
- Be written clearly.
- Allow 21 days for consideration (45 days for group layoffs).
- Include a 7-day revocation period.
- Explicitly reference ADEA rights.
- Provide additional compensation beyond what the employee is entitled to.
These rules protect employees from being coerced into waiving their rights, giving them time to seek legal advice. Waivers must be straightforward, ensuring employees fully understand their agreement.
3. Group Layoff Disclosure Requirements
Employers must provide details about the job titles and ages of laid-off and retained employees for group layoffs. This promotes transparency and fairness, allowing workers to see the reasoning behind layoff decisions and assess if age discrimination might be involved.
This transparency helps older workers recognize potential discrimination patterns and ensures employers follow fair decision-making processes.
Why the OWBPA Matters
The OWBPA prevents older workers from being pressured into waiving their rights or receiving lesser benefits. It ensures they have the time and information to make informed choices during layoffs or early retirement offers. This law empowers older workers to carefully review severance agreements and understand their rights before making decisions.
The OWBPA offers clear guidelines for employers to avoid legal issues and maintain a fair work environment. Following the OWBPA helps ensure older employees are treated fairly, reduces litigation risks, and promotes a positive, inclusive workplace culture, making older workers feel more secure and valued.
OWBPA and Severance Agreements
The OWBPA is especially crucial during severance negotiations. Employers must adhere to waiver rules, giving older employees time to review offers and consult with a lawyer. If these requirements aren’t met, the waiver could be invalid, potentially leading to legal action.
Older employees should be aware of their OWBPA rights when negotiating severance packages. This law gives them the opportunity to understand their options and make informed decisions without undue pressure—especially important during a vulnerable time like impending unemployment.
Fair Treatment for Older Workers
The OWBPA ensures that older workers receive fair treatment, especially regarding benefits and severance agreements. It’s essential for employees facing job transitions and employers looking to maintain a fair workplace. If you’re an older worker considering a severance offer, talk to an employment lawyer today!
About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.