Age Discrimination and Retirement Benefits Under the OWBPA
The Age Discrimination Employment Act of 1967, or the ADEA, is a law designed to protect those over the age of 40 from refusing to hire on the basis of age. This effects all employers, labor organizations, and employment agencies. There are exceptions and exemptions to its coverage (such as in cases of law enforcement), but as a whole, forced, involuntary retirement because of age is prohibited.
In 1985, June Betts grew unable to work due to medical reasons at the age of 61. Her employers gave her two options: continue to work or retire to receive further medical testing. However, because Betts was over the age of 60, she was denied disability retirement benefits. These benefits would have granted Betts more than double the amount a normal retirement salary granted her. As a result, Betts filed an age discrimination charge with the U.S. Equal Employment Comission (EEOC), insisting the ADEA was violated.
In direct response to Betts’ case, Congress passed the Older Workers Benefit Protection Act of 1990, or the OWBPA, which amended the ADEA to cover a few key details:
- Prohibition on discrimination against older workers in all employment benefits unless reductions are justified by “significant cost considerations.”
- The amount of payments/costs incurred on behalf of an older worker for each benefit/benefit package cannot be less than what is made by a younger worker.
- Minimum ages for retirement may be set with early retirement benefits, but forced early retirement on the basis of age is never allowed.
- Reduction of long-term disability benefits under a bona-fide benefit plan by the amount of any pension benefits, other than those attritubtable to employee contributions
- Employee benefit plans must comply with the ADEA regardless of when said plans were adopted.
There are only special circumstances in which the ADEA can be waved:
- ADEA cannot be waived unless the waiver is knowing and voluntary
- An ADEA waiver must: be a part of an agreement between the employer and individual, specifically refer to rights and claims arising under the ADEA, state that the individual is not waiving claims that may arise in the future, state that these rights are being waived only in exchange for addition consideration.
- The individual must consult a lawyer prior to signing the waiver.
- The individual must be given a minimum of 21 days to consider signing. If it is part of an exit or termination program to a group/class of employees, all must have at least 45 days to consider before signing. It must clearly state and explain eligibility factors and list job titles and ages of those who are not eligible.
- The individual must be allowed seven days to revoke after signing.
To legally enforce the waiver, courts closely study the language, circumstances surrounding the waiver, and the employee’s educational/business experience. Waivers that do not comply with the requirements may be considered defective, and courts may refuse to enforce them.
The ADEA and OWBPA were specially designed to protect the rights of older men and women in the workforce. If you feel your rights may have been violated, act sooner rather than later so you can receive the benefits you deserve.
