Ministry of Labor: Employers May Sign Fixed-Term or Indefinite Contracts with Workers Over 65

To promote the employment of middle-aged and older individuals, the Ministry of Labor (MOL) enacted specialized legislation allowing employers to sign fixed-term contracts with workers over the age of 65. Recently, the MOL issued a formal letter to clarify misunderstandings among businesses, emphasizing that this legislation provides flexibility rather than mandating fixed-term contracts exclusively.

Some enterprises incorrectly assumed that hiring workers over 65 required the use of fixed-term contracts. In response, the MOL instructed local labor authorities to inform employers that they may choose between 'fixed-term' or 'indefinite' contracts when hiring individuals aged 65 or older.

The MOL explained that the intent behind the legislation was to accommodate the physical health and personal circumstances of elderly workers by allowing flexible, fixed-term options, thereby encouraging their re-entry into the labor market and boosting labor force participation.

Employers utilizing fixed-term contracts must clearly specify the start and end dates and remain in compliance with all labor laws. Furthermore, if an employer signs a new contract with the same worker within three months of the previous contract's expiration, the total length of service must be calculated in accordance with the Labor Standards Act.