Further protection against age discrimination in the workplace was provided in 1990 when Congress amended the ADEA through a law known as the Older Workers Benefit Protection Act (OWBPA). The OWBPA prohibits age discrimination in relationship to benefits. The OWBPA makes it unlawful for an employer to favor younger workers over older ones when offering severance agreements or early retirement packages.
However, it is lawful in some circumstances for an employer to reduce benefits to older employees, if the reduction makes the cost of providing the reduced benefits to older workers the same as the cost of providing benefits to younger employees. Employers are permitted to coordinate retiree health benefit plans with a worker’s eligibility for Medicare or a comparable state-sponsored benefit.
If an employer requests that an employee waive their rights under the ADEA in order to settle a claim or as part of a severance or termination agreement, then specific minimum standards must be met. These standards are set by the ADEA as amended by the OWBPA and adherence to them is necessary for a waiver to be considered knowing and voluntary.