A person has completed 60 years of age. Can he be given an extension of service? If yes, then for how many years? Can the same salary be provided? Can P.F. and EPF be given? What is the alternative and the best way to extend the services that are beneficial to the employee.
Thank you.
From India, Mumbai
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Thank you.
From India, Mumbai
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If an organization employs 50 or more persons, the retirement age is 58 years. In this case, the individual will not be considered an employee but can continue under an individual agreement. Provident Fund (PF) contributions will need to be continued, but the employer's pension contributions will stop after the individual reaches 60 years of age.
From India, Mumbai
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274From India, Mumbai
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Yes, an extension of service can be given. There is no mandatory upper age limit for employment in the private sector. An extension can be granted until the management deems the services economically viable. Such extended employees are covered under all government acts like PF, ESIC, PT, etc. However, EPF should be discontinued after 58 years.
Regards,
Ganesh S Iyer
From India, Mumbai
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Regards,
Ganesh S Iyer
From India, Mumbai
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Retirement Age in the Private Sector
As per my understanding, there is no specific age limit in the private sector for retirement or superannuation. However, if you delve deeper into this topic, there is a specific update for private sector employees in Karnataka. Recently, the government has mentioned the retirement age for private employees under the Industrial Employment (Standing Orders) Act, 1946 as 60. Even though this will not be applicable to IT, IT-enabled services, startups, BPOs, and other knowledge-based industries at least until January 25, 2019. The government has exempted these industries from the Karnataka Industrial Employment (Standing Orders) Rules 1961 until this date. In other parts of India, if you have a standing order stating that the retirement age is 58, it can be followed.
EPF Act and Superannuation
According to the EPF Act, upon attaining 58 years of age, the PF membership of the employee can be ceased by considering it as superannuation. However, it doesn't mention that an employee working in the private sector has to mandatorily retire at the age of 58. Therefore, the employee can still work in the organization if he is fit to fulfill his primary job responsibilities. But for gratuity, this age factor is not considered as a criterion.
Post-Retirement Employment Options
In this particular case, after the completion of the age of 58, the employee can be offered a consultant position for a fixed period or a contractual position for a fixed period. In that case, a fresh offer letter needs to be extended to the employee by ensuring that there is a gap between the first and last tenure. Also, with the consent of the employee, the process for settling his gratuity can be initiated. If the company is offering a service for a period of fewer than 5 years (4.6 years), then gratuity may not come into the picture. In this context, the company can save a good amount of money as employer contributions to PF, Gratuity, etc., wouldn't be required. It is also very important to ensure that before offering the consultant/contractual offers, the full and final settlement of the employee is completed as well as the proper exit documents are issued to the employee.
To my knowledge, this would help the company save a lot from the CTC for that employee. However, statutory contributions such as Professional Tax, Income Tax will be applicable to the employee.
Appreciating the views of HR seniors regarding my above-mentioned points.
Thanks,
Syam
From India, Bengaluru
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As per my understanding, there is no specific age limit in the private sector for retirement or superannuation. However, if you delve deeper into this topic, there is a specific update for private sector employees in Karnataka. Recently, the government has mentioned the retirement age for private employees under the Industrial Employment (Standing Orders) Act, 1946 as 60. Even though this will not be applicable to IT, IT-enabled services, startups, BPOs, and other knowledge-based industries at least until January 25, 2019. The government has exempted these industries from the Karnataka Industrial Employment (Standing Orders) Rules 1961 until this date. In other parts of India, if you have a standing order stating that the retirement age is 58, it can be followed.
EPF Act and Superannuation
According to the EPF Act, upon attaining 58 years of age, the PF membership of the employee can be ceased by considering it as superannuation. However, it doesn't mention that an employee working in the private sector has to mandatorily retire at the age of 58. Therefore, the employee can still work in the organization if he is fit to fulfill his primary job responsibilities. But for gratuity, this age factor is not considered as a criterion.
Post-Retirement Employment Options
In this particular case, after the completion of the age of 58, the employee can be offered a consultant position for a fixed period or a contractual position for a fixed period. In that case, a fresh offer letter needs to be extended to the employee by ensuring that there is a gap between the first and last tenure. Also, with the consent of the employee, the process for settling his gratuity can be initiated. If the company is offering a service for a period of fewer than 5 years (4.6 years), then gratuity may not come into the picture. In this context, the company can save a good amount of money as employer contributions to PF, Gratuity, etc., wouldn't be required. It is also very important to ensure that before offering the consultant/contractual offers, the full and final settlement of the employee is completed as well as the proper exit documents are issued to the employee.
To my knowledge, this would help the company save a lot from the CTC for that employee. However, statutory contributions such as Professional Tax, Income Tax will be applicable to the employee.
Appreciating the views of HR seniors regarding my above-mentioned points.
Thanks,
Syam
From India, Bengaluru
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1. Yes, an extension can be given to the said employee as long as the employer and employee are both willing to continue the employer-employee relationship.
2. The law always sets the minimum limit when it comes to the benefits of employees. You can continue to extend all statutory benefits like PF, Gratuity, Bonus, and ESI, etc.
3. The option to continue lies with both.
From India, Thane
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2. The law always sets the minimum limit when it comes to the benefits of employees. You can continue to extend all statutory benefits like PF, Gratuity, Bonus, and ESI, etc.
3. The option to continue lies with both.
From India, Thane
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Hi,
There is no restriction in private firms on having employees beyond 58 years. The Employees' Provident Fund (EPF) can also continue beyond 58 years. However, the 8.33% contribution towards pension will now go towards the Provident Fund.
Anil Raina
+91 9810180148
From India, Delhi
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There is no restriction in private firms on having employees beyond 58 years. The Employees' Provident Fund (EPF) can also continue beyond 58 years. However, the 8.33% contribution towards pension will now go towards the Provident Fund.
Anil Raina
+91 9810180148
From India, Delhi
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