When a business has to lay off employees, for whatever reason, it’s essential that they give extra consideration to the older employees of their workforce. There are a number of key things that employers are not allowed to do in relation to older employees, including:
- Specifically targeting older workers when reducing the workforce
- Terminating employment on the grounds of age
- Giving workers no choice but to sign waivers for age discrimination claims
These rules are governed by the Older Workers Benefit Protection Act (OWBPA). But what exactly is the OWBPA, and what do employers and employees need to know?
What Is the Older Workers Benefit Protection Act?
OWBPA is an Age Discrimination in Employment Act (ADEA) amendment and is designed to protect employees over the age of 40 from age discrimination. This includes all cases of:
- Hiring new employees
- Terminating employee contracts
- Work duties
Under OWBPA, to prevent older workers from vulnerability in the working environment, they’re entitled to additional benefits, like no pressure to sign waivers and severance pay. Understanding OWBPA and ADEA rules are crucial to protect the rights of employees and businesses in every industry sector.
The OWBPA applies to workforce reductions, involuntary terminations, exit incentive plans, voluntary departures, insurance provisions, and early retirement plans.
OWBPA and Worker Layoffs
In order to terminate the employment of an employee over the age of 40, a business has to make sure that they provide other grounds for termination that are not related to age. The employer must also provide extra worker considerations when laying off older workers – to prevent issues arising with OWBPA and ADEA.
The regulations are given an even greater weight when an event arises that means more than one employees layoff occurs at once – known as group termination. Age discrimination waiver claims will need to be signed and severance pay information provided, even in cases where group reductions occur with a considerable time in between.
The employer will also need to share essential information with employees, so that the employee can decide for themselves if they wish to agree to the age discrimination waiver. This information includes:
- Eligibility and time limit of the offer
- Age of employees retained
- Age and title of employees terminated
OWBPA and Claim Release
When terminating the employment of an employee over 40, and drafting their release, the employer must follow set rules for a valid claim, including:
- Contemplation Time – 21 days to consider and 7 days to revoke for individual termination and 45 days to decide for group termination.
- Legal Consultation – Employers should suggest employee legal consultation.
- Written Release in Simple Language – Employers must write the release in a way that is easily understandable.
- Accurate Information – All information provided should be clear and not misleading in any way.
- ADEA Reference – Employees must refer to the ADEA.
- Voluntary Consent – Release should be signed completely voluntarily.
Additional consideration must then be given to benefits given, that are more than the current entitlement of the employee. Examples of benefits, include:
- Expenses for Relocation
- Severance Pay
- Health Benefits
- Notice Pay
- Services for Outplacement
- Additional Bonuses
- Extra Vacation Pay
OWBPA is essential in protecting the rights of all parties involved in employment termination. If you’re worried about employment termination as the employee or employer, and need help understanding the provision of insurance benefits, or where you stand with insurance, then please contact us today.