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Older Workers Benefit Protection Act: Compliance tips

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in Employment Law,Human Resources

The Older Workers Benefit Protection Act forbids discrimination by employers based on age when providing employee benefits, like severance. The OWBPA also ensures that no employee is coerced or pressured into signing legal waivers of rights under the Age Discrimination in Employment Act (ADEA).

In 1990, Congress enacted the OWBPA to protect older workers from discrimination by employers based on age, when providing employee benefits, including severance benefits.  The Act, which amends the Age Discrimination in Employment Act (ADEA), ensures that older workers are not compelled or pressured into waiving their rights under the ADEA.

The ADEA prohibits employers from discriminating against employees 40 years of age or older, in any conditions or terms of employment. 

Under the OWBPA, employees eligible for early retirement incentive plans must be provided with complete and accurate information concerning what benefits are available under the plan.  If certain conditions of the OWBPA are met, employees may legally sign waivers of their ADEA rights to sue for age discrimination.

Editor's Note: Do your supervisors know which job-related questions spark lawsuits? Or which words written in performance evaluations are almost GUARANTEED to trigger discrimination lawsuits? — Get Employment Law 101 for Supervisors to help your managers understand the implications of their actions and prevent your organization from winding up in court. 

Key Definitions

Older workers are employees who are 40 years of age or older as defined under the ADEA.

Waivers involve voluntary relinquishment of a known right.  A waiver is sometimes referred to as a release.

Conditions Required for Waiver

There are eight main conditions an employer must provide in its retirement waiver in order to comply with the OWBPA.

  1. The waiver must be part of an agreement between the employer and the employee and must be written in clear and unambiguous language, absent of any jargon or legalese, and “calculated to be understood” by the employee.

  2. The waiver must specifically refer to rights or claims arising under the ADEA, i.e., discrimination because of age in employment or employment benefits.

  3. An employee may not waive rights or claims which may arise after the date the waiver is executed.

  4. In return for signing the waiver, the employee must be given something more than what he/she is already entitled to by right.  If an employer provides a severance package to all employees as a matter of right, then older employees must be given something of value in excess of the severance pay in exchange for their waiver of ADEA rights.

  5. The employee must be advised in writing to consult with a lawyer before signing the agreement.

  6. The employer must provide employees with sufficient time to consider the waiver.  Before signing the agreement, an employee negotiating a waiver must be given 21 days to consider the matter.  If the employee is part of a group of employees being offered an early retirement incentive program or other employment termination program, he/she must be provided 45 days to consider the matter before signing the agreement.

  7. After signing the agreement, the employee has seven days to revoke it, and the agreement is not effective until the end of the seven days.

  8. Prior to the execution of any waiver in connection with an incentive or other employee retirement termination program offered to a group of employees, the employees must be informed in writing about the class, unit, or group covered by the program, any eligibility factors for the program, and any applicable time limits.  The employer also must make clear to employees the job titles and ages of all individuals eligible for the program, and the ages of all individuals in the same job classification, or organizational unit who are not eligible or selected for the program.

{ 2 comments… read them below or add one }

Rick Wilson February 7, 2016 at 11:34 am

if i don’t have a lawyer because of cost for a review of my severance is there a state official i can take it to to be read and determined i am getting my just deserved? i had 35 years with this company and been a very diligent hard working employee and i am also a employee owner and have a considerable amount of stock withholding’s due to me and was wondering if with the severance offered it is stated i also am in tilted to something of value as well as what is offered with the severance correct? i never in a million years had expected anything like this to happen to me and they have done the same to others just before they were about to retire and i just want whats right and what’s due to me. i love the people and loved the job and can’t see why they want to eliminate it seeing i was bring in a substantial amount of money back t the company in the position i was doing just don’t make sense to me. this is why i ask for your help because i want to retire at 62 in 5 months after working 35 years with them and having a liver transplant a year ago October. i don’t want trouble just what’s right for me. thank you for your time and hope I’m not a bother God Bless


alex July 28, 2015 at 7:29 am

I am a spammer , am I a legal employee


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