I would like to know if an employee can work after reaching the retirement age of 58 years. If so, there are several queries that arise, as stated below:
1. Will he work for us as a temporary or permanent employee?
2. Does he work for the company on the roll or off the roll?
3. Who will generate the salary for him?
4. Will his salary be mentioned with the other employees' salary or not?
We have a condition that requires us to take him on board at any cost. Please suggest the compliance and statutory requirements for this situation.
Kindly advise.
From India, Delhi
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21. Will he work for us as a temporary or permanent employee?
2. Does he work for the company on the roll or off the roll?
3. Who will generate the salary for him?
4. Will his salary be mentioned with the other employees' salary or not?
We have a condition that requires us to take him on board at any cost. Please suggest the compliance and statutory requirements for this situation.
Kindly advise.
From India, Delhi
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You can have an employee work after the age of 58 by hiring them as a consultant. A proper agreement should be made between the employee and the management outlining the terms and conditions of the work and payment.
Salary can be paid either as a cash voucher or through a bank payment (with TDS deductions). If the individual is engaged as a consultant, there is no requirement to include them on the payroll, offer PF, bonuses, or other amenities.
From United Kingdom, London
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Salary can be paid either as a cash voucher or through a bank payment (with TDS deductions). If the individual is engaged as a consultant, there is no requirement to include them on the payroll, offer PF, bonuses, or other amenities.
From United Kingdom, London
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Thank you for your valuable feedback. I want to ask one more thing—can we proceed with him with the same salary, or do we have to revise it upon his completion of the retirement age? Is there an obligation for proceeding the same?
Thank you again, in anticipation!
Best Regards,
Manpreet Kaur
Sr. HR Executive
Corporate HR
From India, Delhi
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Thank you again, in anticipation!
Best Regards,
Manpreet Kaur
Sr. HR Executive
Corporate HR
From India, Delhi
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You are always welcome as a member of citehr and should help others by sharing knowledge. We also have two employees whom we are continuing to employ after retirement. If you would like a copy of the agreement, I can help you out.
From United Kingdom, London
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From United Kingdom, London
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I retired from Larsen & Toubro after 31 years of service. I was asked to continue for two more years as a Consultant. The compensation calculated was 80% of the last drawn salary. No other benefits are provided, unlike a regular employee. Everything is calculated and included in the compensation amount.
Agreement for Consultant Role
Draw up an agreement where you should list out all his responsibilities. Being a consultant, at times the organization may not empower the consultant to have executive powers, signing authority, etc. These factors need to be discussed, perhaps with a labor lawyer, as it may have legal implications.
From India, Bengaluru
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Agreement for Consultant Role
Draw up an agreement where you should list out all his responsibilities. Being a consultant, at times the organization may not empower the consultant to have executive powers, signing authority, etc. These factors need to be discussed, perhaps with a labor lawyer, as it may have legal implications.
From India, Bengaluru
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I realize that your query was pertaining mostly to the statutory and compliance part; however, I thought I'd make a few points to look at it from a different perspective.
Changing Perspectives on Retirement
When you attain an age like that of retirement, there is a lot of anxiety, which is mostly in the mind. I am not getting into the cultural aspects; however, I'd just say, let's replace the word "retired senior" with "Veteran" and "work" with "being engaged." Just this little thought in itself can change the whole thinking process, allowing the senior individual to bring accrued experience and wisdom to the workplace.
The Advantage of Veterans in Your Ranks
The most significant aspects of having veterans in your ranks are that they bring with them a sense of dedication and loyalty, a strong work ethic, and their own brand of fundamental core values, integrity, character, focus, discipline, and principles!
It is widely felt that veterans, during their course of professional life, would have received incredible training and performed under pressure in some of the toughest conditions. They can understand the important skills that make an organization successful. The general consideration is that veterans are professionals who, in their days as employees, were seen as high integrity professionals who achieved great things under several critical and trying conditions. They can never be underestimated.
Veterans can actually be a significant source of productivity and talent. They can add a great deal of value with their energy, which can help strengthen the leadership pipeline. Veterans can be seriously good with mission-driven projects and teamwork skills.
Challenges Companies Might Face When Hiring Veterans
The first challenge is the inability to find extremely successful hardcore professionals, and when you find them, the worrying factor is their acclimatization to people and the new environment.
They can be rigid in their thinking, not willing to easily accept what the younger generation would have to say on issues.
They could always take you back to their domain/industry experiences, which could be far too different from the present domain/industry.
One could have trouble with skills mismatch and transformation, especially their defensive stereotype thinking, which the young easily say is negative thinking.
You can't deploy them easily onto whatever you want, as you have to take several things into consideration before making the move. These could range from physical, mental, personal to professional aspects.
Veterans do have another challenge, and that's their temperament and the feeling of being the boss, just because of the number of years behind them.
Lastly, there would be the terms on which they can be employed, what they would be offered, including perks and timings, etc. Clearly, there is a gap between the recognition of veterans' strengths and the ability to develop those strengths to meet the needs of the company.
If the veteran has a significant amount of experience, he could be chosen to be a "consultant" in a similar type of industry, by which one can not only derive the benefit of his experience but also utilize the veteran's contacts and the goodwill created in the past. I've known several who were retained by textile companies, metallurgy companies, finance companies, banks, insurance, and IT too.
The ways in which they get engaged is as an "advisor," and they receive what companies call a "Consulting Fee," which will be a certain bulk sum of money paid to them monthly with a 10% TDS deduction. They will also mutually fix the timings of availability, and the fee is negotiated accordingly. The veteran will have to file IT Returns based on the expenditure incurred. The veteran is not eligible for any other deductions or benefits such as Medical Coverage, PF, Gratuity, etc., that employees receive during the course of their employment.
If one is fortunate to get the right veteran on board, then the company stands to gain enormously.
Just for you to know, and please do not misunderstand me, for you might think I am "blowing my own trumpet," I am retired for well over three years now. I have made the transition smoothly, I keep myself up-to-date on several topics, evolving all the time. I believe in being trendy, I never risk advising people, especially unsolicited, but certainly do all that is best to arouse inner spark in those who need my guidance. My nickname is "COACH," and I am held in high regard both professionally and accepted with respect as a veteran.
Trust this information will be useful.
Best wishes,
Warm regards,
From India, Hyderabad
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Changing Perspectives on Retirement
When you attain an age like that of retirement, there is a lot of anxiety, which is mostly in the mind. I am not getting into the cultural aspects; however, I'd just say, let's replace the word "retired senior" with "Veteran" and "work" with "being engaged." Just this little thought in itself can change the whole thinking process, allowing the senior individual to bring accrued experience and wisdom to the workplace.
The Advantage of Veterans in Your Ranks
The most significant aspects of having veterans in your ranks are that they bring with them a sense of dedication and loyalty, a strong work ethic, and their own brand of fundamental core values, integrity, character, focus, discipline, and principles!
It is widely felt that veterans, during their course of professional life, would have received incredible training and performed under pressure in some of the toughest conditions. They can understand the important skills that make an organization successful. The general consideration is that veterans are professionals who, in their days as employees, were seen as high integrity professionals who achieved great things under several critical and trying conditions. They can never be underestimated.
Veterans can actually be a significant source of productivity and talent. They can add a great deal of value with their energy, which can help strengthen the leadership pipeline. Veterans can be seriously good with mission-driven projects and teamwork skills.
Challenges Companies Might Face When Hiring Veterans
The first challenge is the inability to find extremely successful hardcore professionals, and when you find them, the worrying factor is their acclimatization to people and the new environment.
They can be rigid in their thinking, not willing to easily accept what the younger generation would have to say on issues.
They could always take you back to their domain/industry experiences, which could be far too different from the present domain/industry.
One could have trouble with skills mismatch and transformation, especially their defensive stereotype thinking, which the young easily say is negative thinking.
You can't deploy them easily onto whatever you want, as you have to take several things into consideration before making the move. These could range from physical, mental, personal to professional aspects.
Veterans do have another challenge, and that's their temperament and the feeling of being the boss, just because of the number of years behind them.
Lastly, there would be the terms on which they can be employed, what they would be offered, including perks and timings, etc. Clearly, there is a gap between the recognition of veterans' strengths and the ability to develop those strengths to meet the needs of the company.
If the veteran has a significant amount of experience, he could be chosen to be a "consultant" in a similar type of industry, by which one can not only derive the benefit of his experience but also utilize the veteran's contacts and the goodwill created in the past. I've known several who were retained by textile companies, metallurgy companies, finance companies, banks, insurance, and IT too.
The ways in which they get engaged is as an "advisor," and they receive what companies call a "Consulting Fee," which will be a certain bulk sum of money paid to them monthly with a 10% TDS deduction. They will also mutually fix the timings of availability, and the fee is negotiated accordingly. The veteran will have to file IT Returns based on the expenditure incurred. The veteran is not eligible for any other deductions or benefits such as Medical Coverage, PF, Gratuity, etc., that employees receive during the course of their employment.
If one is fortunate to get the right veteran on board, then the company stands to gain enormously.
Just for you to know, and please do not misunderstand me, for you might think I am "blowing my own trumpet," I am retired for well over three years now. I have made the transition smoothly, I keep myself up-to-date on several topics, evolving all the time. I believe in being trendy, I never risk advising people, especially unsolicited, but certainly do all that is best to arouse inner spark in those who need my guidance. My nickname is "COACH," and I am held in high regard both professionally and accepted with respect as a veteran.
Trust this information will be useful.
Best wishes,
Warm regards,
From India, Hyderabad
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The suggestions for your queries would depend on your HR policy. Irrespective of the policy, if you have it, no problem; otherwise, on the legal side, there is no bar to continue him/her by extending the service conditions. However, fixing his remuneration is at your own discretion and the employee's acceptance. His EPF can also continue, and he is presumed not eligible for ESI & Bonus as he/she would have crossed that threshold long ago. Many employers have set their retirement age at 60, or even beyond 60 if their health permits. Therefore, you can extend it up to 60 for the present and consider retaining him beyond that as a consultant or a contract employee, as you see fit.
Whether to include this in the payroll or separately would depend on your decision regarding the above.
Thank you.
From India, Bangalore
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Whether to include this in the payroll or separately would depend on your decision regarding the above.
Thank you.
From India, Bangalore
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Thank you, TSK Raman - that was very useful. As I work in a school, often when we struggle to find good qualified teachers, at times we invite retired teachers to come on part-time. It is very facilitative as they already know the system, and in fact, act as informal mentors - by their own choice! Everyone seems happy with the arrangement.
From India, Mumbai
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From India, Mumbai
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Dear Manpreet,
As best said by Shri T.K. Raman, having a man with good values is a must for progress. The term veteran is an understatement; they will help the company progress in all aspects through observation. Leaps and bounds can be crossed with ease, and real progress can be achieved if a valued veteran is brought in.
Since you have mentioned the retirement age as 58, it is hoped that they are retired government employees who have, in many cases, helped institutions progress in all aspects.
Terms of Perks and Benefits
The terms of perks can be established with due respect and honor. There should be no restrictions in providing good benefits. TDS should be deducted at the source rather than calculated afterwards. Additionally, the annual lump sum or consolidated amount can be determined to reflect their value and commitment. Everything depends on the requirements.
Thank you.
From India, Arcot
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As best said by Shri T.K. Raman, having a man with good values is a must for progress. The term veteran is an understatement; they will help the company progress in all aspects through observation. Leaps and bounds can be crossed with ease, and real progress can be achieved if a valued veteran is brought in.
Since you have mentioned the retirement age as 58, it is hoped that they are retired government employees who have, in many cases, helped institutions progress in all aspects.
Terms of Perks and Benefits
The terms of perks can be established with due respect and honor. There should be no restrictions in providing good benefits. TDS should be deducted at the source rather than calculated afterwards. Additionally, the annual lump sum or consolidated amount can be determined to reflect their value and commitment. Everything depends on the requirements.
Thank you.
From India, Arcot
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I suggest keeping the retired professional on a contract basis. Keeping them as a consultant means you have to deduct 10% of their pay/fee as TDS, and they will lose a good chunk of earnings as the refund after IT return filing is onerous on them.
Contract Basis Employment for Retired Professionals
On a contract basis, you can also cover them under PF (the EPS portion is not applicable to them). Leaves may be decided as per your company policies.
Regards,
Pon
From India, Lucknow
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Contract Basis Employment for Retired Professionals
On a contract basis, you can also cover them under PF (the EPS portion is not applicable to them). Leaves may be decided as per your company policies.
Regards,
Pon
From India, Lucknow
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Dear Mr. Pon1965, I am engaged as a Consultant (not an employee), and I find the 10% TDS much more beneficial. EPF, etc., are out of the question. You can get an engagement letter; it needn't be a contract, with the arrangement of one month's notice either way. This system has been working pretty perfectly. Not only for retired people, but there are also some consultants who prefer an arrangement of receiving a consulting fee of Rs. 'x' annually and Rs. 'x/12 - 10% TDS.'
Regards,
TSK. Raman
From India, Hyderabad
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Regards,
TSK. Raman
From India, Hyderabad
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Senior Staff Continuation and HR Policy
Senior staff can continue their work subject to the HR policy regarding promotion and seniority. Salary is mutual, as it is what motivates individuals to work. However, a senior person who extends their service cannot claim a promotion or salary hike in the future.
Regards,
Ravigi
From India, Calcutta
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Senior staff can continue their work subject to the HR policy regarding promotion and seniority. Salary is mutual, as it is what motivates individuals to work. However, a senior person who extends their service cannot claim a promotion or salary hike in the future.
Regards,
Ravigi
From India, Calcutta
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Engaging Employees After Retirement
Employers can engage employees after retirement but on a contract. The terms can be agreed upon depending on whether one will be working full-time. It is important that such provisions be included in your HR policy, including terms and payment.
For example, universities employ professors after retirement on a contract as a professor emeritus. They are not usually paid a full salary and other employment benefits.
From Kenya, Nairobi
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Employers can engage employees after retirement but on a contract. The terms can be agreed upon depending on whether one will be working full-time. It is important that such provisions be included in your HR policy, including terms and payment.
For example, universities employ professors after retirement on a contract as a professor emeritus. They are not usually paid a full salary and other employment benefits.
From Kenya, Nairobi
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Dear Seniors, Thank you very much for your reply. Sir, I need to know that do we need to provide him a relieving letter on the day of his retirement ?
From India, Delhi
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From India, Delhi
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Very good response from all members and particularly useful tips from Mr. N.K. Sundaram in the interest of the individuals retained in service after retirement, and logical justifications for the utilization of the experience and expertise of the veterans from Mr. T.S.K. Raman in the interest of the organization.
Let me also share my views on the subject matter. No law prescribes the maximum age of employment, and it is left to the discretion of the employer. If I am correct, there is no age of retirement for employees other than the Managing Director in Sony Corporation. Maybe it is an exception. But in actual practice, the age of superannuation is fixed in the Standing Orders or Service Rules or Letter of Appointments, as the case may be.
The Pertinent Question
The pertinent question, therefore, is how to treat the services of a superannuated employee on his retention beyond the age of retirement. Of course, there will be no problem in the case of persons holding senior positions as they can be retained as consultants. In the case of lower cadre, for example, a clerical assistant or an office boy, either their services can be extended beyond the age of superannuation or they can be re-appointed afresh after having been allowed to retire. The pay and other perks are to be decided mutually.
From India, Salem
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Let me also share my views on the subject matter. No law prescribes the maximum age of employment, and it is left to the discretion of the employer. If I am correct, there is no age of retirement for employees other than the Managing Director in Sony Corporation. Maybe it is an exception. But in actual practice, the age of superannuation is fixed in the Standing Orders or Service Rules or Letter of Appointments, as the case may be.
The Pertinent Question
The pertinent question, therefore, is how to treat the services of a superannuated employee on his retention beyond the age of retirement. Of course, there will be no problem in the case of persons holding senior positions as they can be retained as consultants. In the case of lower cadre, for example, a clerical assistant or an office boy, either their services can be extended beyond the age of superannuation or they can be re-appointed afresh after having been allowed to retire. The pay and other perks are to be decided mutually.
From India, Salem
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Dear Mr. Anand,
I would like to ask you if any employee has completed the age of 58 years, can I extend his service and keep him a part of PF and ESI benefits as previously after his retirement. Is this possible or not? What changes will be there in filling the PF Challan for particular employees?
Please suggest to me how to do this. I hope you will give your valuable time to me for this query.
Thanks,
Himanshu Dwivedi
Sr. Executive-HR
From India, Bengaluru
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I would like to ask you if any employee has completed the age of 58 years, can I extend his service and keep him a part of PF and ESI benefits as previously after his retirement. Is this possible or not? What changes will be there in filling the PF Challan for particular employees?
Please suggest to me how to do this. I hope you will give your valuable time to me for this query.
Thanks,
Himanshu Dwivedi
Sr. Executive-HR
From India, Bengaluru
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Extension of retirement age of teachers in Maharashtra 25.2.2011.pdf