2023 Supporting Statement for PRA ADEA Waiver

PAPERWORK REDUCTION ACT SUBMISSION
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
COLLECTION OF INFORMATION - Waivers of Rights and Claims Under the ADEA;
Informational Requirements.
29 C.F.R. § 1625.22
SUPPORTING STATEMENT
A.

Justification

The Age Discrimination in Employment Act (ADEA) allows employees to waive their
rights to challenge termination from employment as age discrimination when several statutory
conditions are met. If a waiver is requested in connection with exit incentives or other
employment termination programs 1 offered to a group or class of employees, (hereinafter
referred to as “programs”) the employer must inform the individual in writing of the class, unit,
or group of individuals covered by such program, any eligibility factors for such program, any
time limits applicable to such program, the job titles and ages of all individuals eligible or
selected for the program, and the ages of all individuals in the same job classification or
organizational unit who are not eligible or selected for the program. The purpose of requiring
the employer to disclose this information to the employee (hereinafter referred to as
“informational requirements”) is to provide an employee with enough information regarding the
program to allow that employee to make an informed choice whether or not to sign a waiver
agreement. The employer does not provide the information to the EEOC. The ADEA and the
implementing regulation solely require that the employer provide this information to applicable
employees.
1.

Circumstances Making the Collection of Information Necessary

The Age Discrimination in Employment Act, 29 U.S.C. § 621, et. seq., allows for
individuals to waive rights and claims protected under the Act, provided certain circumstances
are met; particularly that the waiver is knowing and voluntary. 29 U.S.C. § 626(f)(1). In order
for a waiver in connection with a program to be considered knowing and voluntary, the employer
must
inform[] the individual in writing in a manner calculated to be
1

An “exit incentive program” is a voluntary program offered to a group or class of employees
where such employees are offered consideration in addition to anything of value to which the
individuals are already entitled in exchange for their decision to resign voluntarily and sign a
waiver. “Other employment termination program” refers to a group or class of employees who
were involuntarily terminated and who are offered additional consideration in return for their
decision to sign a waiver. 29 C.F.R. § 1625.22(f)(1)(iii)(A).
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understood by the average individual eligible to participate, as to (i) any class, unit, or group of individuals covered by such
program, any eligibility factors for such program, and
any time limits applicable to such program; and
(ii) the job titles and ages of all individuals eligible or
selected for the program, and the ages of all individuals
in the same job classification or organizational unit
who are not eligible or selected for the program.
29 U.S.C. § 626(f)(1)(H)(i), (ii). The regulation at 29 C.F.R. § 1625.22 clarifies that Section
626(f)(1)(H) of the ADEA addresses two principal issues: to whom information must be
provided, and what information must be disclosed to such individuals. 29 C.F.R. §
1625.22(f)(1)(ii).
A “program” exists when an employer offers additional consideration
for the signing of a waiver pursuant to an exit incentive or other
employment termination (e.g., a reduction in force) to two or
more employees. Typically, an involuntary termination program
is a standardized formula or package of benefits that is available to
two or more employees, while an exit incentive program typically
is a standardized formula or package of benefits designed to induce
employees to sever their employment voluntarily. In both cases,
the terms of the programs generally are not subject to negotiation
between the parties.
29 C.F.R. § 1625.22(f)(1)(iii)(B). The purpose of the informational requirements is to provide
an employee with enough information regarding the program to allow the employee to make an
informed choice whether or not to sign a waiver agreement. 29 C.F.R. § 1625.22(f)(1)(iv). The
required information must be given to each person in the decisional unit who is asked to sign a
waiver agreement. 29 C.F.R. § 1625.22(f)(2).
The information provided must be in writing and must be written in a manner calculated
to be understood by the average individual eligible to participate. 29 C.F.R. § 1625.22(f)(4)(i).
The regulation further specifies how the information supplied to employees must be presented:
Information regarding ages should be broken down according to
the age of each person eligible or selected for the program and
each person not eligible or selected for the program.
In a termination of persons in several established grade levels and/or
other established subcategories within a job category or job title,
the information shall be broken down by grade level or other
subcategory.
If an employer in its disclosure combines information concerning
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both voluntary and involuntary terminations, the employer shall
present the information in a manner that distinguishes between
voluntary and involuntary terminations.
If the terminees are selected from a subset of a decisional unit,
the employer must still disclose information for the entire
population of the decisional unit.
29 C.F.R. § 1625.22(f)(4)(ii)-(v).
2.

Purpose and Use of the Information

As stated above, when a waiver is requested in connection with a program, the employer
must inform the individual in writing of the class, unit, or group of individuals covered by such
program, any eligibility factors for such program, any time limits applicable to such program, the
job titles and ages of all individuals eligible or selected for the program, and the ages of all
individuals in the same job classification or organizational unit who are not eligible or selected
for the program. The purpose of the informational requirements is to provide an employee with
enough information regarding the program to allow that employee to make an informed choice
whether or not to sign a waiver agreement. The employer does not provide this information to
the EEOC; the ADEA and the implementing regulation solely require that the employer provide
this information to any employee it would apply to, and not to the Federal government.
3.

Use of Information Technology and Burden Reduction

This collection of information is a matter of third party disclosure, and not one of
reporting to the Federal government. The EEOC does not mandate the means by which the
information collection is carried out. Accordingly, the EEOC has no knowledge of the manner
by which respondents are collecting the information, or using information technology to reduce
burden.
4.

Efforts to Identify Duplication and Use of Similar Information

The regulation which implemented the ADEA waiver informational requirements, 29
C.F.R. § 1625.22, carefully tracks the statute, and does not impose any requirements above and
beyond what Congress imposed in the ADEA itself. In implementing the regulation, the EEOC
was careful not to add any burden to the minimum that Congress established.
5.

Impact on Small Business or Other Small Entities

Again, the regulation which requires this collection of information does not impose any
burden more stringent than what is contained in the ADEA itself. Accordingly, the burden
imposed is the minimal burden required under the law.
6.

Consequences of Collecting the Information Less Frequently
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The statute requires that the information be disclosed each time the employer seeks
waivers from employees in connection with an exit incentive or other employment termination
program that is offered to a group or class of employees. EEOC cannot dispense with the
disclosure requirement or allow an employer to make the disclosure less often.
7.

Special Circumstances Relating to the Guidelines of 5 C.F.R. § 1320.5

There are no special circumstances applicable to this third-party disclosure.
8.

Comments in Response to the Federal Register Notice

The notice required by 5 C.F.R. § 1320.8(d), informing the public of EEOC’s intent to
request an extension of the information collection requirements from OMB, was published in the
Federal Register on June 12, 2023. 88 FR 38047-49. No comments were received in response to
this notice.
9.

Explanation of any Payment or Gift to Respondents

This information collection does not involve any payments or gifts to respondents.
10.

Assurance of Confidentiality Provided to Respondent

No assurances of confidentiality are provided to employers who make the third-party
disclosures.

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11.

Justification for Sensitive Questions

This collection of information does not involve any sensitive questions.
12.

Estimate of Burden Hours Including Annualized Hourly Costs

Number of Respondents

1,489

Burden Hours per Respondent

16.19

Total Annual Burden Hours

24,107

Number of Respondents
The 2020 aggregate information was derived from the monthly Challenger Job Cut
Report. 1 This source of data on layoffs is considered an authoritative source of data on layoffs
in the U.S. and has been used in mass layoff research conducted by the Federal Reserve Bank. 2
For 2023, to calculate the number of respondents for the current collection, EEOC utilized an
estimate 3 of the total number of unique U.S. firms reporting a layoff in calendar year 2022.
Additionally, for purposes of this estimate, EEOC assumes that:
• every firm reporting a layoff will request an ADEA waiver. EEOC does not have data
on the proportion of firms requesting an ADEA waiver, and an exhaustive search of the
legal, business, and social scientific literature by EEOC research librarians on the
proportion or number of firms requesting an ADEA waiver yielded no relevant
information. The use of this approach will estimate an upper bound, most likely erring
on the side of overestimating the actual total burden; and,
• there is one ADEA waiver program per employer as EEOC does not have data as to the
existence of multiple programs per employer.
Burden Hours per Respondent
In 2016, the EEOC conducted a limited survey as the foundation for estimating the
burden hours per Respondent. The estimated burden hours per Respondent are a combination of
the estimated hours to create an ADEA waiver and the estimated hours to distribute an ADEA
waiver to employees as part of an exit incentive program or other employment termination
program. The goal of the 2016 survey was to identify the actual costs of creating and
distributing ADEA waivers and to better understand what type of employees were involved in
CHALLENGER, GRAY & CHRISTMAS, INC., CHALLENGER REPORT (FEB. 2023), The-Challenger-ReportFebruary23-1.pdf (omscgcinc.wpenginepowered.com). Aggregate data provided by Colleen Madden Blumenfeld,
Director of Public Relations and Research, Challenger, Gray & Christmas, Inc. (personal communication, April 6,
2020)
2
Alison Weingarden, Fed. Reserve Bd., 2017-088, THE TIMING OF MASS LAYOFF EPISODES: EVIDENCE FROM U.S.
MICRODATA, https://www federalreserve.gov/econres/feds/files/2017088pap.pdf
3
Challenger, Gray & Christmas, Inc. (personal communication, April 6, 2020) provided the number of firms
(2,425) associated with the published number of employees laid off (592,556). Assuming there were a similar
number of employees per layoff (244) in 2022 when a reported 363,824 employees were laid off, EEOC estimates
that approximately 1,489 firms reported layoffs in 2022.
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this process. The EEOC learned that the human resource managers (both senior and junior) and
legal counsel and staff (both internal and external counsel) carry most of the paperwork and
human capital burden for drafting and distributing the waivers to employees.
In sum, the burden hours for the creation of the ADEA waiver are estimated to be 8.25
per Respondent (i.e., employer), while burden hours for the distribution of the ADEA waiver are
estimated to be 7.94 per Respondent (i.e., employer). Thus, the total burden hours per
Respondent (i.e., employer) is 16.19.
Total Annual Burden Hours
The Total Annual Burden Hours is calculated by multiplying the Number of Respondents
by the Burden Hours per Respondent [1,489 x 16.19 = 24,107].
TABLE 1: Computations related to preparing and drafting ADEA waiver burden estimate*
MEDIAN
WAGE
PROJECTED
COST
RATE
HOURS PER
PER
TOTAL
(HOUR)1
EMPLOYER
FIRM
COST
Number of Respondents: 1489
CLERICAL STAFF
$19.08
0.11
$2.10
$3,125.11
SENIOR HUMAN RESOURCE
$60.69
0.26
$15.78
$23,495.53
MANAGERS
INTERNALCORPORATE LEGAL
$61.54
2.23
$137.23
$204,341.72
COUNSEL
EXTERNAL CORPORATE LEGAL
$61.54
2.00
$123.08
$183,266.12
COUNSEL
CHIEF EXECUTIVE OFFICERS
$47.59
0.12
$5.71
$8,503.38
COMPUTER SPECIALIST (IT
$27.84
0.42
$11.69
$17,410.58
PROFESSIONAL)
HUMAN RESOURCE SPECIALIST
$29.95
1.61
$48.22
$71,798.84
PARALEGAL
$27.03
1.50
$40.55
$60,371.51
SUB TOTAL
$335.26
8.25
$384.36
$572,312.78
*Totals may not sum due to rounding.
1
Wage hour rates are based on 2021 Median Pay, the most recent year available, for the occupation indicated. They
were obtained online from the U.S. Dept. of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook,
http://www.bls.gov/ooh/. Accessed April 4, 2023.

TABLE 2: Computations related to distributing ADEA waiver burden estimate*
MEDIAN
WAGE
COST
RATE
PER
PROJECTED HOURS
(HOUR)1
PER EMPLOYER
FIRM
Number of Respondents:
1489

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TOTAL COST

HUMAN RESOURCE
SPECIALIST

$29.95

0.27

$8.09

$12,040.80

CLERICAL STAFF

$19.08

0.50

$9.54

$14,205.06

$60.69

0.85

$51.59

$76,812.30

$61.54

2.08

$128.00

$190,596.76

$61.54

2.00

$123.08

$183,266.12

PARALEGAL

$27.03

1.50

$40.55

$60,371.51

PAYROLL SPECIALIST

$21.52

0.20

$4.30

$6,408.66

$47.73

0.27

$12.89

$19,188.89

$47.59

0.27

$12.85

$19,132.61

$376.67

7.94

$390.88

$582,022.70

SENIOR HUMAN
RESOURCE MANAGERS
INTERNALCORPORATE
LEGAL COUNSEL
EXT CORPORATE
LEGAL COUNSEL

ADMINISTRATIVE
SERVICES MANAGER
DEPARTMENT
EXECUTIVE
SUB TOTAL

*Totals may not sum due to rounding.
1
Wage hour rates are based on 2021 Median Pay, the most recent year available, for the occupation indicated. They
were obtained online from the U.S. Dept. of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook,
http://www.bls.gov/ooh/. Accessed April 4, 2023.

13.

Estimate of Total Annual Cost Burden to Respondent or Recordkeepers

Per Table 1 and 2 below, EEOC found that the approximate cost of preparing the ADEA
waiver notice is $384.36 per Respondent (i.e., employer), and the approximate cost of
distributing the ADEA waiver notice is $390.88 per Respondent (i.e., employer). Thus, the total
cost per Respondent is $775.24. For all 1,489 Respondents (i.e., employers) who are projected
to have reductions in force and request waiver notices, the total preparation cost is $572,312.78,
and the total distribution cost is $582,022.70. Thus, the total cost for all 1,489 Respondents (i.e.,
employers) is $1,154,334.70 [$572,312.78 + $582,022.70]. Table 1 reflects the calculation of
the costs of creating the ADEA waiver and Table 2 reflects the calculation of the costs of
distribution of the ADEA waiver.
No capital expenses are expected as a result of this collection of information.
14.

Annualized Cost to the Federal Government

As the recordkeeping requirement in this collection of information concerns only
disclosures to third parties and not reporting to the government, there is no annualized cost to the
Federal government.
15.

Explanation for Program Changes or Adjustments
There are no changes or adjustments to this collection of information.
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16.

Plans for Tabulation and Publication
The results of this collection of information will not be published.

17.

Reasons Display of OMB Expiration Date is Inappropriate
EEOC is not seeking an exemption to display of the expiration date.

18.

Exception to Certification
There are no exceptions to the certification statement.

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