In 1990, Congress amended the Age Discrimination in Employment Act (ADEA), adding the Older Workers Benefit Protection Act (OWBPA) to clarify the prohibitions against discrimination on the basis of age. 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. Under the Older Workers Benefit Protection Act, employees over 40 are entitled to various employee benefits such as severance pay and cannot be pressured into signing legal waivers. It establishes specific requirements for a “knowing and voluntary” release of ADEA claims to guarantee that an employee has every opportunity to make an informed choice whether or not to sign the waiver. It acts as a safety net to ensure older and vulnerable workers aren’t unfairly laid off from work and don’t experience age discrimination.
[Last updated in July of 2020 by the Wex Definitions Team]