Overseeing OWBPA: Five Faux Pas
Updated: Jun 23
Now that we’ve explained OWBPA and how it applies to workers in the U.S., let’s review five faux pas when executing OWBPA. In addition to the specific mistakes below, keep in mind that the waiver must be clearly understood. Ensure it’s easy to read and doesn’t contain too much technical jargon, while also avoiding the following:
1. Providing incorrect review period: 21 days vs. 45 days
When offering severance to an individual employee aged 40+, federal law mandates that the employer provide at least 21 days for the employee to review the agreement. If at least two employees aged 40+ are being laid off in a reduction in force (RIF), the employer must provide 45 days to review the agreement. Ensure your deadlines are accurate.
2. Misidentifying the decisional unit
The decisional unit is the group of employees being considered for elimination. If an employer needs to reduce overall headcount by ten employees, the decisional unit is likely “all employees.” If, on the other hand, the employer needs to eliminate five accountants, the decisional unit might be the “accounting team.” The decisional unit must be included in the waiver.
3. Failing to include the list of considered employees
The employer is required to provide a list of the employees, including titles and ages, considered for the severance program. Sticking with the example above, if the decisional unit is all employees, every single employee must be included on the list – those whose positions are eliminated and those who are being kept on board. If the decisional unit is the accounting team, the list would be narrowed to all accounting team members.
4. Making errors on the list
If your human resource information system (HRIS) is inaccurate, your list will be, too. Make sure you check the list once, then check it again; it’s only as accurate as the data that feeds it. Also, if employees within the decisional unit are on leave, they should still be included. To reference our earlier article, only U.S. citizens should be included on the list. If some of the employer’s accountants are non-U.S. citizens working overseas, they should not be included.
5. Mishandling an ongoing RIF
When handling an ongoing or rolling RIF, the information provided should be cumulative. As layoffs continue, each new group of affected employees should receive a comprehensive list including the titles and ages of all terminated (and non-terminated) employees from the decisional unit so far. The total number of employees listed should remain unchanged with each additional wave (barring voluntary departures), but more employees will be moved into the terminated category.
OWBPA should be handled with caution. It’s easy to make mistakes, but it’s also easy to avoid them when you have solutions in place to drive consistency and compliance.
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