Re-employment after retirement 再雇用

Hiring people back after the retirement age, usually on lower pay. Also written saikoyo, shokutaku, continued employment.

When a Japanese employee reaches the retirement age, usually 60, their employment ends. Under the continued-employment route most employers use, the company then offers a new contract, typically renewed year by year until 65. The employee often does the same or similar work, and is often paid considerably less, sometimes with a new title that reflects advisory rather than line responsibility.

The pay cut has been tested in court under the equal-pay rules for fixed-term workers. The courts have held that retirement and re-employment are circumstances an employer may take into account, but not without limit: the reasons for each element of the pay difference matter, and cuts to base pay need to be justified.

What it means for a foreign employer

Sources

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General information for employers, not legal advice. Thresholds and dates are checked against the sources listed and dated above; confirm anything you act on with a Japanese employment lawyer or a licensed labour and social security attorney.