Partner Article

Change in retirement legislation poses difficulty for SMEs

Many small businesses will be forced to reconsider their working practices after the default retirement age is abolished this autumn.

When the act comes into force, businesses will no longer be able to force their staff to retire on their 65thbirthday due to age alone.

ELAS have found that most SMEs were unaware of the practical issues involved in the new legislation. Of the companies that offer death in service benefits or private health cover, 57% did not realise that the cost of these would soar for employees over 65.

A further 54% said they would no longer honour staff benefits of costs rose, which would force staff reaching 65 to accept potentially worse pay and conditions to stay in work.

ELAS’s head of employment law, Peter Mooney said: “Most businesses we speak to are now aware that they cannot force staff to retire due to age alone, but it seems that many businesses haven’t actually thought about how the new law will affect them in practice.”

“Expensive death in service and healthcare benefits are just two examples of how employing older workers will affect businesses – risk assessments, access requirements and adjustments for disability may also need revision as workforces grow older.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .