Navigating Retirement Age: How to Retain or Hire Employees Over 58?

Hi All, I have a query; I'm unable to find a solution in the posts already available. As per our Company Standing Orders, the retirement age is 58. So, I would like to know how to:

Retain Existing People

a) Retain existing people

Hire New People as Applicable

b) Hire new people as applicable

Hiring Category Options

Under what category can we hire them:

1. Employee (Will all benefits be applicable? - I understand only PF will not apply)

or

2. Cannot come under the employee category but should hire as a Consultant or in some other capacity; if so, what are the implications?

Kindly let me know how to proceed as per statutory/legal terms.

Thanks,
Nitya

I am Santhosh, an HR Consultant from Chennai. May I know where you are from? I have a query; I am unable to find a solution in the posts already available. As per our Company Standing Orders, the retirement age is 58. I would like to know how to:

a) Retain existing people

b) Hire new people as applicable

Under what category can we hire them?

1. Employee (Will all benefits be applicable? - I understand only PF will not apply)

or

2. Cannot come under the employee category but should be hired as a Consultant or under some other head; if so, what are the implications?

Kindly let me know how to proceed as per statutory/legal terms.

Thanks,
Nitya

You can hire them on a contract basis with the contract letter renewal every year. No PF or ESI will be applicable, only PTax deduction as per the state-wise regulations.

Regards

If you wish to hire a person above 58 years of age or retain those who have completed 58 years of age, you can designate them as consultants and keep them. You may pay them 'fees' and deduct 10% TDS from their fees. You may issue them a certificate under Form 16-A for the TDS deductions, and they can file their income tax returns.

However, if you wish to continue the services of a superannuating employee (having PF), give a break of 2 months before taking him as a consultant. The employee's PF should be settled before he can be re-appointed in the company. In such a case, even if he is re-appointed as an 'employee', PF need not be deducted as he will be considered an 'exempted employee'.

Please be aware that if his salary is less than 15,000, ESI will still have to be deducted since for the purpose of ESI, he will not be considered an 'exempted employee' as ESI does not have any age limit.

Regards,