Many employers in Texas and across the country began offering early retirement options for employees as a result of the economic downturn due to the COVID-19 pandemic. As many businesses have continued to struggle, or to reassess the nature of the work they are asking of employees, employers have continued to think through whether it is beneficial for their companies to offer early retirement packages or options to employees. For a number of employers, early retirement packages are offered in lieu of layoffs, according to CNBC.
Regardless of the specific reasons you are considering the possibility of offering early retirement to employees at your business, it is important to consider the benefits and limitations. Our Frisco employment law attorneys can provide you with more information about the “dos” and “don’ts” of offering early retirement.
What You Should Do When It Comes to Offering Early Retirement in Texas?
When you do offer early retirement packages to employees, it is important to consider all of the following:
- Be certain that the incentives you are offering to your employees will ultimately benefit your company in the long run financially, whether you will actually experience a reduction in payroll costs, or you will be able to hire new employees with additional benefits or advantages for your company.
- Offer enough severance pay that the employees will be likely to accept the offer without undermining the benefits of early retirement to your business.
- Recognize the need for employees to have extended health insurance benefits in most circumstances if they are not yet eligible to receive Medicare.
- Tailor the early retirement package to the specific employee, taking into account what the employee’s annual pay would have been and the benefits the employee would have received relative to the offer.
- Understand that early retirement packages are a form of severance agreements and consider issues such as non-disclosure agreements and other clauses to protect your business.
- Understand that anything you do in this area is likely to implicate the Older Workers Benefit Protection Act. Thus, ensure you are complying with all requirements of the OWBPA and the ADEA.
What You Should Not Do Concerning Early Retirement Options for Your Employees
What should you avoid when you are thinking about offering early retirement packages? Consider the following:
- Do not offer an early retirement package that will ultimately cause your business additional financial distress in the short-term or long-term.
- Avoid one-size-fits-all early retirement options.
- Recognize the need to ensure that you are not engaging in unlawful discrimination at any point in drafting or offering an early retirement package.
Contact Our Frisco Employment Law Attorneys Today
If you have questions about drafting early retirement packages or offering early retirement options to your employees, seek advice from an experienced employment law attorney in Frisco. Early retirement packages can be complicated, and you will want to take steps to ensure the future health of your company while avoiding liability. Contact Simon Paschal PLLC today for additional information about how our firm can assist your business with any questions about offering early retirement.
