The Older Workers Benefit Protection Act Severance Agreement: What You Need to Know
The Older Workers Benefit Protection Act (OWBPA) is a federal law designed to protect older workers from discrimination in the workplace. One of its provisions is the requirement for an employer to provide a severance agreement that includes certain disclosures and protections for workers over the age of 40.
What is a severance agreement?
A severance agreement is a legal contract between an employer and an employee that outlines the terms of separation, including any financial compensation or benefits. Severance agreements are commonly offered to employees who are laid off or terminated without cause.
What are the requirements of the OWBPA for severance agreements?
The OWBPA requires that employers provide certain information and protections to employees over the age of 40 who are offered a severance agreement. These requirements include:
1. Time to consider the agreement: The employer must provide the employee with at least 21 days to consider the agreement before signing it.
2. Right to revoke: The employee has seven days after signing the agreement to revoke it, and the agreement cannot become effective until this revocation period has passed.
3. Disclosure of all eligible employees: The employer must provide a list of all employees who are eligible for the severance agreement, along with their ages and job titles.
4. Information about the job positions: The employer must provide information about all available job positions within the company that are equivalent to or better than the employee`s current position.
5. Information about benefits: The employer must provide information about any benefits that will be continued or terminated as a result of the employee`s separation.
6. Legal advice: The employer must advise the employee to seek legal advice before signing the agreement.
Why are these protections important for older workers?
Older workers are more likely to experience age discrimination in the workplace, and the OWBPA`s requirements for severance agreements help to ensure that they are not unfairly targeted. By providing employees with ample time to consider the agreement, the opportunity to revoke it, and information about job positions and benefits, employers can help to ensure that older workers are not being unfairly targeted or discriminated against in any way.
In conclusion, the Older Workers Benefit Protection Act Severance Agreement provides important protections and disclosures for employees over the age of 40. Employers should be aware of these requirements and ensure that their severance agreements comply with the OWBPA to avoid any potential legal issues. For employees, it is important to carefully review any severance agreement and seek legal advice if needed before signing.