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Illinois Employers Alert!: There is A New Illinois Law regarding Severance and Release Agreements!
As many readers may be aware, there are several new and significant employment laws that were recently passed in Illinois which become effective January 1, 2020.
One of these new Illinois laws, the Workplace Transparency Act, places certain strict legal requirements on Illinois employers in the use of Severance and Release Agreements.
21 DAYS TO CONSIDER: Under the Illinois Workplace Transparency Act, effective January 1, 2020, the Illinois employee must be offered, in writing, 21 days to think over signing the Separation and Release Agreement regardless of the age of the Illinois employee. This legal requirement is brand new!
Comparison to Federal law: Under Federal law (the Older Workers Benefit Protection Act of 1990), only employees who are 40 years of age and older are required to be given 21 days in writing to think over signing a Separation and Release Agreement (or 45 days to think it over if it is a “group release”-in other words, two or more employees terminated at the same time from the same decisional unit).
Under the Workplace Transparency Act, Illinois employees (regardless of age) must be given 21 calendar days to consider if they want to sign the Separation and Release Agreement, although the Illinois employee may sign the Separation and Release Agreement at any time before the end of the 21-day review period, knowingly and voluntarily waiving in writing any further time for consideration. Note that such a waiver must be in writing!! A trap for the unwary Illinois employer!
7 DAYS TO REVOKE: Under the Workplace Transparency Act, effective January 1, 2020, the Illinois employee (regardless of age) must also be given 7 calendar days to revoke his/her acceptance (change his or her mind) of the Separation and Release Agreement. This 7-day revocation period can be “knowingly and voluntarily” waived IN WRITING.
Comparison to Federal law: Under the Federal law (Older Workers Benefit Protection Act of 1990), the employee may not waive the 7-day revocation period, even if put in writing and done so willingly and voluntarily. Under Federal law, the employee must be given the 7 days in which the employee may change his/her mind. This Federal legal right cannot be waived!
RIGHT TO REVIEW BY ATTORNEY OR REPRESENTATIVE: Also, under the Workplace Transparency Act, effective January 1, 2020, the Illinois employer must notify the employee, in writing, of the employee’s right to have an attorney or representative of his/her choice review the Separation and Release Agreement before it is executed (i.e., before the parties sign the agreement).
Caution: Different states can (and do) have different laws about separation and release agreements. Therefore, relevant state laws should be carefully researched before entering into a Separation and Release Agreement. Laws in this area are changing rapidly, granting additional legal protections to the employee.
For assistance with Separation and Release Agreements, difficult terminations, IDES benefits claims, etc., contact Attorney Nancy E. Joerg who can be reached at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at firstname.lastname@example.org.
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