What is the Retirement and Re-employment Act (RRA)?
According to the Retirement and Re-employment Act, employers must offer re-employment to eligible employees who turn 62, until the age of 67. Age is not a suitable reason to dismiss employees and suitable re-employment must be provided to eligible employees to allow them to continue finding employment in the organization.
If you are unable to offer your employee a suitable position, then you must transfer the re-employment obligation to another employer or offer a one-time employment Assistance Payment (EAP). This employment should be offered on a renewable yearly basis. Your employee is not obliged to accept the re-employment offer by the new company and is entitled to an EAP from the present employer
Employment Assistance Payment
The EAP is only offered as a last resort, meant to help the employee tide over the period of time they use to search for a new job or obtain other financial help. It is equivalent to 3.5 months of the employee’s salary, subject to a minimum of $5,500 and a maximum of $13,000. However, should the employee already have been re-employed for at least 30 months since the age of 62, a lower EAP can be considered, which should be worth two months of salary, subject to a minimum of $3,500 and a maximum of $7,500.
Special Employment Credit (SEC)
Through the SEC, employers who voluntarily re-employ workers aged 65 and older will receive financial help to offset up to 3% of the employee’s wage.
Salary and benefits
Your employee’s salary and benefits may be adjusted according to their new duties and workload assigned to them, which should be negotiated with your employee. The Tripartite Guidelines on Re-employment of Older Employees.
It is important to begin discussions with your employees who turn 62 and the contract should be offered at least 3 months before their retirement date.
For any questions pertaining to the RRA and other HR issues, feel free to contact Prime HR and let us take your HR burdens off of your shoulders.