A look into the Older Workers Benefit Protection Act (OWBPA)

 

To amend the Age Discrimination in Employment Act of 1967, the OWBPA is a federal law that requires employers to offer older workers (those who are at least 40 years old) benefits that are equal to or, in some cases, cost the employer as much as, the benefits it offers to younger workers. The OWBPA also sets minimum standards for an employee waiver of the right to sue for age discrimination, designed to ensure that the waiver is knowing and voluntary. There are instances where older workers are discriminated because of their age. They may be denied jobs, or not allotted challenging tasks, purely because of their age. It becomes essential to protect the interests of all such employees, which is where the Older Workers Benefit Protection Act (OWBPA) comes in handy.

What is the Older Workers Benefit Protection Act (OWBPA)?

The Age Discrimination in Employment Act (ADEA) was amended to add the Older Workers Benefit Protection Act (OWBPA). This act clarifies the prohibitions against age discrimination. Under this act, employees, who are at least 40 years old, need to be offered benefits that are equal or in certain cases cost the employer as much as what is being offered to young employees.

Who is Covered by the OWBPA?

The ADEA which includes the OWBPA applies to all employers with 20 or more total employees. Furthermore, in certain jurisdiction, some smaller companies may be covered by a similar state regulation. As for employees, the OWBPA covers employees who are 40 years old or older. If you work at a company that employs at least 20 people and you are at least 40 years old, you have important rights under the Older Workers Benefit Protection Act.

What is the purpose of the OWBPA Act?

The purposes of the Older Workers Benefit Protection Act OWBPA) are to make it illegal for an employer to:

  • Use an employee’s age as the basis for discrimination in benefits.
  • Target older workers for their staff-cutting programs.
  • Require older workers to waive their rights without observing certain safeguards.

The OWBPA prohibits age discrimination in the provision of fringe benefits, such as life insurance, health insurance, disability benefits, pensions, and retirement benefits. However, employers are allowed to reduce benefits to older workers when justified by significant cost considerations. In most situations, employers must provide equal benefits to older and younger workers. For some types of benefits, however, employers can meet this nondiscrimination requirement by spending the same amount on the benefit provided to each group, even if older workers receive lesser benefits as a result.


Release of Claims under OWBPA

Employers must comply with certain rules when drafting their release of age discrimination claims. In order for the release to be valid, the release must fulfill the following specifications:


Practice knowing and voluntary consent

Employees should sign the waiver of claims on their own accord without any external pressure.


Be in written form

The release must be in writing so that the employee can easily understand it.


Use simple language

Language should be plain, clear, and void of complex sentences and technical jargon.


Provide succinct and accurate information

Employers must not mislead or misinform the employee in any way. This includes exaggerating the benefits or limitations of signing the release of claims.


Refer to ADEA

The release of claims must specifically refer to the ADEA.


Encourage legal consultations

Employers must advise older workers (in writing) to consult an attorney before signing the release of claims.


Allow time to contemplate

Employees must be given enough time, depending on circumstances, to consider the waiver and its consequences. Employees have at least 21 days to consider the offer and an additional 7 days to revoke their signature.

Employees over the age of 40 are entitled to receive employee benefits in the form of severance pay. Under no circumstances can they be pressured to sign legal waivers. The crux of this act lies in protecting the interests of older employees, helping them make informed choices, and to prevent unfair lay-offs purely on the grounds of old age.  


Benefits of the Older Workers Benefit Protection Act (OWBPA):

  • The Older Workers Benefit Protection Act (OWBPA) prohibits age discrimination in making available fringe benefits to older employees. Such benefits include life insurance, health insurance, pension, disability and retirement benefits.
  • This act sets minimum standards for an employee waiver of the right to sue in the case of age discrimination. It is expected for the waiver to be knowing and voluntary.

  The Older Workers Benefit Protection Act (OWBPA) is applicable to all employers, who have 20 or more employees working for them. However, there may be a few jurisdictions, in which smaller companies may have to abide by this act as a result of a similar state regulation.   As an older employee, if you were worried about safeguarding your interests, then with the Older Workers Benefit Protection Act (OWBPA) in place, you no more have to be worried about-facing discrimination purely based on your age. With OWBPA, it is time to have a level playing field for young and old employees alike.

 

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Older Workers Benefit Protection Act (OWBPA)
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Older Workers Benefit Protection Act (OWBPA)
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To amend the Age Discrimination in Employment Act of 1967, the OWBPA is a federal law that requires employers to offer older workers (those who are at least 40 years old) benefits that are equal to or, in some cases, cost the employer as much as, the benefits it offers to younger workers. The OWBPA also sets minimum standards for an employee waiver of the right to sue for age discrimination, designed to ensure that the waiver is knowing and voluntary.
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