Mar 29

Do You Have Local Employees Aged 60 & Above? Know Your Obligations Under The Retirement & Re-Employment Act!

As a business owner, you may be aware of common MOM statutory employment regulations, such as having to offer paid leave, overtime pay and CPF contributions for your employees. A bill has recently been passed to announce that the Retirement and Re-Employment Age raised to 63 and 68 respectively beginning 1 July 2022. Besides that, to strengthen support for senior workers to remain in the workforce, the CPF contribution rates will also be raised to boost retirement adequacy.

Age Bands Before 1 Jan 2022 1 Jan 2022 Long Term Target
≤55 37%(No Change)
>55-60 26% 28% 37%
>60-65 16.50% 18.50% 26%
>65-70 12.50% 14% 16.50%
>70 12.5%(No Change)

 

Generally in Singapore, local manpower is well protected under the legislation. Therefore as an employer, you will need to familiarise yourself with the statutory obligations when hiring people.

For a start, have you heard about the Retirement & Re-Employment Act (RRA)? This act serves to protect the employment rights of senior workers, especially those who are reaching the official retirement age of 62 years.

SWG

We have extracted some key points for you to note under the RRA:

  1. Employers are not allowed to dismiss any employee who is below 62 years old based solely on the account of his age.
  2. Employment contracts that provide explicitly for a retirement age less than 62 years old are invalid.
  3. An employee is deemed to be eligible for re-employment up to 67 years old if he meets the following criteria:
                  a. Born on or after 1 July 1952
                  b. Have at least satisfactory work performance; and
                  c. Being medically fit to continue working
  4. Employers may be required to offer an employment assistance payment if eligible employee(s) are not being re-employed, with exceptions to certain circumstances.

It is by no means an easy feat for employers to recruit, train, manage and retain senior workers in the companies. There are simply too many challenges to look out for!

However, fret not as help is available! 

To support more businesses in retaining their senior workers in the workforce, the government has launched the Senior Worker Grants to offer some relief and assistance.

If you are a business owner who:

(a) has local employees aged 60 and above; and

(b) open to the idea of raising your company’s own internal retirement age

You may apply for the grant to get a potential funding of $5,000 per senior worker, capped at $250,000 per company.

The Senior Worker Grants has received an overwhelming response since its introduction in July 2020. It was, in fact, suspended for a short while due to the extremely strong take-up rate among SMEs. However back by popular demand, the good news is that the grants have since been re-launched after the Budget 2021 announcement.

So, if you are an eligible business that hires local senior workers, do hurry and submit your application for the grants now. You will not want to miss the opportunity before it gets closed (again)!

To find out more about the grants, contact our team of friendly consultants at 6515 7906 or send us an email to enquiry@361.com

Interested to find out more?

About The Author