Age Discrimination: The Low-Down on ADEA / OWBPA
Updated: Jun 15
Age is but a number — except when it comes to employee separation agreements. When letting employees go, a written agreement isn’t mandatory, but it can protect against future claims, including those related to age discrimination. If you’re parting with employees 40 years and older, it’s important to understand the provisions required by the Older Workers Benefit Protection Act (OWBPA), a part of the Age Discrimination in Employment Act (ADEA).
First, let’s do a refresher on the ADEA. The ADEA offers protection to workers at least 40 years old by eliminating age discrimination and providing equal employment opportunity. In particular, the present-day ADEA prohibits discrimination in the following key areas:
Layoffs and Terminations
Wages and Compensation
The ADEA was signed into law in 1967, and in 1990, Congress amended the ADEA by adding the OWBPA, which serves as an extra layer of protection for workers 40 and older. The OWBPA safeguards older workers in a number of ways, including mandatory requirements when asking parting employees to “knowingly and voluntarily” waive their rights under the ADEA.
The Equal Employment Opportunity Commission (EEOC) pinpointed seven criteria that must be met to ensure a waiver of rights is knowing and voluntary under the OWBPA. Waivers must:
Be written in a manner that can be clearly understood.
Specifically refer to rights or claims arising under the ADEA.
Advise the employee in writing to consult an attorney before accepting the agreement.
Provide the employee with at least 21 days to consider the offer.
Give an employee seven days to revoke his or her signature.
Not include rights and claims that may arise after the date on which the waiver is executed.
Be supported by consideration in addition to that to which the employee already is entitled.
Further, employers must get it right the first time. If the waiver doesn’t meet all of these requirements, it’s as though it wasn’t provided at all. Plus, you can’t make a defective waiver valid by issuing a subsequent letter with information that wasn’t included in the original agreement.
But wait—there’s more. Even stricter measures are enacted if a group (two or more) of older workers is being laid off. In those cases, employers must give employees written notice of the layoff and a 45-day period to consider signing the waiver. In addition to the “knowing and voluntary” criteria above, the waiver in a group layoff must provide detailed information about other employees who were or were not laid off, including titles and ages.
It’s critical to make sure that your separation agreements are executed with precision that properly enforces the requirements under the OWBPA. Even if affected employees waive their rights, the EEOC has the right and responsibility to ensure that your decisions are free from all types of discrimination that could result in adverse impact. It’s important to get it right from the start.
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