Taiwan will have to overcome numerous challenges to reverse the low labor participation rate of middle-aged and elderly people, despite a draft act the Cabinet approved last month, experts said.
The bill, which covers rules allowing employers to offer contracts to workers aged 65 or older, increases the flexibility of existing regulations, which include mandatory retirement at 65.
The new rules are a legislative breakthrough and should boost re-employment and improve the labor force participation rate, said Hsin Ping-lung (辛炳隆), an associate professor at National Taiwan University’s Graduate Institute of National Development.
However, under the Labor Standards Act (勞動基準法), the fixed-term contracts outlined in the draft are only permitted for certain types of jobs, while the relaxation of age restrictions could lead to employers cutting labor costs by hiring older people instead of younger workers, Hsin said.
Yang Tsung-bin (楊宗斌), a spokesman for online job bank yes123, said that the government should create a friendlier employment market for middle-aged and elderly people by revising regulations or adopting measures to encourage employers to hire them, such as through the provision of subsidies.
Clear-cut regulations governing new contracts for older people need to be formulated, including contract terms that are at least one year in duration, to ensure that their experience is passed on to younger employees, Yang said.
In response to the relatively low labor force participation rate of those aged 55 or over amid a rapidly aging population, the Cabinet on July 19 approved a draft act that would allow employers to hire people aged at least 65 on fixed-term contracts while ensuring that they are given fair employment opportunities.
The bill stipulates that employers cannot subject people to unfair treatment because of their age. Discrimination refers to disadvantageous actions taken against job applicants or employees related to their recruitment, job allocation, performance evaluation, promotion, training, wages and benefits, retirement or redundancy payments.
The draft proposes fines ranging from NT$300,000 to NT$1.5 million (US$9,561 to US$47,807) for breaches of age discrimination rules.
Middle-aged workers are defined as those aged 45 to 65, while elderly workers are those over 65, the draft rules say.
Last year, about 4.6 million middle-aged or elderly people were working in the private sector — an increase of about 1.01 million from 10 years earlier — with about 280,000 of those aged 65 or older, data compiled by the Ministry of Labor showed.
Yu Ai-chun (余璦君), director of the ministry’s Senior Workforce Development Service Center in New Taipei City, said that since the center was established five years ago, it has helped 7,000 middle-aged and elderly people return to the workplace and matched 4,000 of them with employers.
Taiwan has one of the lowest birthrates in the world and its society is rapidly aging.
The Ministry of the Interior last year announced that Taiwan had officially become an “aged society,” with those aged 65 or over accounting for 14.05 percent of the population.
The National Development Council expects Taiwan to become a “super-aged society” — defined as at least 20 percent of the population being 65 or older — by 2026.
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