For employers in the financial services industry, 2012 is already shaping up to be a mixed bag. While showing some signs of life, the economy continues to be a primary driver of employment law issues as it struggles to emerge from the recession. We have compiled the following list of 12 issues and trends of particular relevance to the financial services industry – involving employment, executive compensation and benefits, and immigration law – for in-house counsel and human resources professionals to consider and steps to take during the remainder of the year.
As restructuring and downsizings continue, employers should keep an eye on certain related legal issues:
1. Older Workers Benefit Protection Act
Employers frequently provide severance to employees who have been terminated as part of a reduction in force. Many of those employers seek a release of claims from employees who receive such severance. Employers should be aware that in order to validly release federal age discrimination claims, separation and release agreements must strictly satisfy certain requirements. For example, the Age Discrimination in Employment Act (“ADEA”), as amended by the Older Workers Benefit Protection Act (“OWBPA”), requires that employees age 40 and older receive at least 21 days (or 45 days if part of a “group” layoff) to review a separation and release agreement. Further, once they sign, these employees must be afforded the opportunity to revoke the agreement for a period of at least seven days. The OWBPA also requires employers to provide other information, such as an age/title census for the employee’s review, and a statement advising the employee to seek legal counsel.
2. Worker Adjustment Retraining and Notification Act
If layoffs are significant in terms of the numbers of employees being let go, the federal Worker Adjustment Retraining and Notification (“WARN”) Act and applicable state plant closing laws may come into play. Jurisdictional rules vary, depending on the law implicated, but these laws generally require that, in cases of plant closings or mass layoffs, employees must be provided with sufficient notice of termination. Notice must also be provided to certain government officials and employee representatives, where applicable. Employers are subject to penalties, which, depending on the circumstances, could be substantial, if they fail to comply with these notice rules.
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