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.

A survey by the Japanese government revealed that 27.9% of Japanese organizations 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 aging, a law that took effect in April 2021 requires all organizations to make every effort to keep their employees on their payroll until age 70.

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

Among them, 78.1% of the organizations had systems in place to allow employees to stay on beyond their designated retirement ages. The survey also found that 14% of the organizations 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 organizations are taking steps to ensure that employees up to the age of 70 have access to employment opportunities. Working in collaboration with labor unions, the labor ministry says it remains committed to providing support to organizations in adjusting their wage and personnel systems.

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