Law urges companies to keep workers until 70

Apr 01, 2021 | News On Japan

Apr 01, 2021 (NHK) - A new law requiring companies to try to keep their workers on the payroll until age 70 takes effect on Thursday in Japan.

A survey by the ministry of internal affairs found there were a record 9.06 million working people aged 65 or older last year. Those older workers accounted for 13.6 percent of the entire workforce.

The number of elderly workers is expected to keep going up due to the declining birthrate and graying population as well as labor shortages.

Currently, companies are required to retain their employees that want to work until the age of 65.

The revised law gives companies five options for keeping older employees. They may extend the retirement age to 70, abolish it outright, or allow workers to stay on past the age limit.

Companies can also outsource work to retirees who start their own businesses or go freelance. Finally, they can support employees who move on to work for nonprofits and other entities that provide a public benefit.

The law says that companies and employees should come to agreement on the chosen option.

However, the Labor Standards Act doesn't apply to contract workers and those who work for nonprofits. In such cases, some workers may not be eligible for unemployment benefits.

For this reason, companies with a majority of unionized workers must receive the union's consent to exercise the last two options.

The labor ministry's guidelines call on companies to ensure the revision will not lead to unstable employment for each worker.

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