Q. Is there a law that requires a 45-day waiting period from the time employees are told they’ll be laid off until they receive the severance payment? My supervisor said it’s called a cooling-off period.
A. The law—the Older Workers Benefit Protection Act—says that there must be a 45-day period in which older workers (those 40 and older) involved in a group termination can review any agreement releasing the employer from liability for age discrimination claims. Otherwise, the agreement isn’t enforceable. After signing, the employee has seven days to revoke his or her acceptance.
An employee typically has to sign the release before receiving severance, and will not be paid until after the seven-day revocation period has passed.
A group termination occurs when two or more employees are terminated as part of the same “program,” such as a reduction in force. For an individual termination, the required time period is 21 days.