Older workers benefit protection act
What is the OWBPA?
The older workers benefit protection act (OWBPA) prohibits the discrimination of workers over the age of 40 for age-related reasons. It makes it illegal for an employer to discriminate in benefits based on age, target older workers for staff cutting programs and to require them to waive their rights without following certain safeguards. The OWBPA also grants workers over 40 benefits like severance pay.
The older workers benefit protection act protects against age discrimination in providing fringe benefits like life insurance, health insurance, disability benefits, pensions and retirement benefits.
In the event of significant cost considerations, however, employers can lower benefits for older workers as well although they still need to provide equal benefits regardless of age. In some cases, an employer can provide fewer benefits to older workers if they balance out the difference with other benefits. The rules can vary, depending on the type of benefit.
If a company wants an older employee to waive their right to sue the company, the older workers benefit protection act requires them to include specific language and follow certain safeguards.
Since longer-tenured employees usually cost more in salary, older workers are often targeted in staff cuts. In order to incentivize the workers to waive their right to sue the company for age discrimination, employers provide a higher severance pay than what is the standard company policy, for example.
The older workers benefit protection act states that an employee must be given at least 21 days to decide whether they want to sign a waiver suggested to them individually.
The older workers benefit protection act places a number of restrictions on what agreements not to sue are legal:
- The waiver must be understandable for the average person eligible for the program to prevent
- The waiver can not cover rights that employees discover are available to them after they sign.
- The employer has to offer the worker something of value in addition to what is already owed to them.
- Employees have to be advised in writing that they may consult a lawyer before signing the waiver.
- If the offer is made to a group of people, this group has to be clearly defined - what age group and position.