With well document population problems—including a rapidly aging populace—creating challenges to the economy, Japan has adopted new amendments hoping to facilitate employment opportunities for citizens up to the age of 70.
CHROs and HR Executives with employee populations in Japan should take note of the changes to ensure ongoing compliance. Further, as is detailed below, hard requirements may be on the way.
The amendments to Japan’s Act on Stabilization of Employment of Elderly Persons, as explained by eminent Japanese Law Firm Anderson Mori & Tomotsune (AMT), went into effect on April 1, 2021 and require Japanese firms to make “best efforts” to ensure employment opportunities for employees up to the age of 70 – an increase from the current requirement of age 65. Paths to demonstrating “best efforts”, per AMT involve adopting one of the policies below:
- Raise the mandatory retirement age to 70;
- Remove the mandatory retirement age provision;
- Introduce a continuous employment system for employees up to the age of 70;
- Introduce a system to execute outsourcing contracts for employees continuously up to the age of 70; or
- Introduce a system to allow former employees up to the age of 70 to be continuously involved in social contribution activities carried out by or funded by the business. (Requires Union or Worker Rep approval)
AMT details the basic compliance steps, including drafting and publishing a plan. Importantly, the firm’s writeup further notes that the expectation is that the age 70, at some point goes from a “demonstrate best efforts” standard to a hard requirement, pointing to the process from which the age previously went from 60 to 65.
HR Policy Global’s Take: Firms operating in Japan should be aware that internal policies with regard to mandatory retirement and opportunities for employees over 65 will need to be updated.
