On July 15, 2024, Taiwan's Legislative Yuan passed a significant amendment to the Labor Standards Law, marking a new era for senior employment in the country. This amendment, which was approved in its third reading, introduces notable changes to the mandatory retirement age, now allowing workers aged 65 and older to extend their working years under certain conditions.

Key Highlights of the Revised Labor Standards Law

1. Extended Retirement Age Negotiations:

  The revised law allows workers aged 65 and above to negotiate an extension of their mandatory retirement age with their employers. This change eliminates the previous fixed retirement age of 65, giving workers the flexibility to continue working if both parties agree.

2. Continued Labor Insurance and Retirement Benefits:

  Workers who choose to extend their retirement age will continue to receive labor insurance and retirement benefits. Employers are required to maintain labor insurance coverage and provide pensions for both new and existing employees, regardless of their age.

3. Prohibition of Differential Treatment:

  Employers are prohibited from treating workers who extend their retirement age differently. Non-compliance with this regulation can result in fines ranging from NT$300,000 to NT$1.5 million, along with mandatory public disclosure of the employer's name.

4. Employment Insurance Restrictions:

  Current regulations limit employment insurance for workers over 65, and while the amendment does not address this directly, discussions are ongoing regarding potential relaxations of these restrictions.

5. Increased Annuity Benefits:

  Workers who are 65 and eligible for labor insurance old-age annuities will see their benefits increase by 4% for each year they delay claiming their pension, up to five years, with a total possible increase of 20%.

This legislative update is part of Taiwan's response to its aging population and declining birth rates. It aims to safeguard the rights of older workers and encourage their continued participation in the workforce.

What the Amendment Means for Employers and Workers

The amendment to the Labor Standards Law emphasizes that employers cannot force workers under the age of 65 to retire and must adhere to the new negotiation framework for retirement extensions. Employers must also continue to provide labor insurance and pensions for employees who choose to postpone retirement.

Additionally, the law now mandates that employers cannot reduce wages or alter working conditions for employees over 65, unless justified by specific reasons. Violations of this rule will incur substantial fines and mandatory public disclosure.

Ongoing Discussions and Future Considerations

Despite the amendments, some labor groups argue that the changes are more symbolic than substantive. They advocate for the complete removal of the mandatory retirement age to fully protect older workers' rights. Concerns remain about employers potentially undermining the intent of the law by imposing unfavorable conditions on senior workers.

As Taiwan adapts to these changes, the focus will be on ensuring that senior workers are adequately supported and that their contributions to the workforce are valued and protected.