Explanatory notes on Recycling fees
- Recycling fees
Recycling fee is paid by an employer when the latter terminates an employee’s contract of employment under certain conditions. This fee is paid into the employee’s NSF account.
- Employers liable to recycling fees
All employers, including a job contractor and a person who shares the profit or gross earnings of a shareworker, are liable to pay recycling fees.
However, the following employers are not required to pay recycling fees:
- Employer in the sugar industry in respect of employees who voluntarily retires.
- Government in respect of public officers
- Local authority/Statutory in respect of employees who are entitled to a pension or a compassionate allowance under a pension law
- Other employers in respect of part-time workers, migrant worker or a non-citizen and employees having less than 180 days continuous employment.
The rates at which recycling fees are paid are as follows:
No. of months of continuous employment Rate paid for every 12 month of continuous employment Between 12 months and up to 120 months 6 days’ basic wage or salary Above 120 months up to 240 months 10 days’ basic wage or salary More than 240 months 15 days’ basic wage or salary
Recycling fee are payable on the basic wage or salary of the employee and is not subject to a maximum.
- Due date
The payment of recycling fees should be made within 30 days from the date the employee’s contract has been terminated or 30 days from the date of expiry of the determinate agreement.