Employees in Japan can choose to stay longer in the workforce

With Japan facing a talent shortage as the population ages, firms are encouraged to do more to support older employees who want to continue working.
By: | January 10, 2023

A survey by the Japanese government revealed that 27.9% of Japanese organisations allow their employees to stay on the job until the age of 70, an increase of 2.3 percentage points from the previous year.

As Japan’s population is rapidly ageing, a law that took effect in April 2021 requires all organisations to make every effort to keep their employees on their payroll until age 70.

Approximately 230,000 organisations with at least 21 employees were surveyed by the labour ministry last June about the situation with older employees. According to the survey, 20.4% of large organisations have implemented systems allowing employees to continue working until the age of 70, while 28.5% of smaller organisations have done the same.

Among them, 78.1% of the organisations had systems in place to allow employees to stay on beyond their designated retirement ages. The survey also found that 14% of the organisations abolished retirement ages altogether, 7.5% raised their working-age limits, and 0.1% had systems for outsourcing contracts and social contribution projects.

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Based on the survey results, the ministry noted that organisations are taking steps to ensure that employees up to the age of 70 have access to employment opportunities. Working in collaboration with labour unions, the labour ministry says it remains committed to providing support to organisations in adjusting their wage and personnel systems.