Early Retirement?

2626987

Our company is experiencing financial struggles, as many are since
the Sept. 11 incident. It is unfortunate but we have implemented
Voluntary Layoffs, shortage of work hours and Forced Layoffs in the
past 9 months. My boss is now looking at an "Early Retirement"
option which he would like to implement in two weeks out of necessity.
We have innvolved our attorney so many times for the above programs
that we are hesitating to call him again for fear of spending every
cent we have on him just to "save the company". Could we please
get your (or anyone's) help on the guidelines for an "Early Retirement"
package. As a company, we have never gone this far before. We are
hoping to "end the madness" by fall and possibly even call a few
employees back by next year. Please help!

WT

Early retirement can thin out the ranks. However, by its very nature it tends to select older employees. Here the ADEA comes into play. To pass muster, a program of this nature needs to give something to employees they would not otherwise receive. Employees must be given time to decide about the program and should be advised to consult an attorney. They should sign some sort of release for their consideration giving up their right to sue for age discrimination under the ADEA. If not, you can end up paying and being sued as well. These requirements have been worked out in various lawsuits filed after such things as incentives or early retirements. Your attorney should be able to give you the list of requirements under ADEA and if you want to go it alone, call the EEOC and ask for some reference materials.

Dorrie D

We had a Negotiated Agreement with our union workers that had an "early retirement incentive" which set out a decreasing amount the older the individual. (We are technology based so being able to introduce new blood is a good thing.) But our Finance Director heard a presentation at some national meeting that courts have held agreements of that sort to be age descriminatory (is not hard to see that one, once we thought about it). The other eyeopener was that our NA called for the retiring employee to receive a percentage of their salary as a "bonus" in the following calendar year, thinking that would be a tax break for them. Not so. IRS says that it is taxable in the year the money is earned, thus it is "earned" on their last day of employment.