Elderly Employment Stabilisation Act: continued employment to 65 must now be open to everyone who wants it

The transitional rule letting some employers limit continued employment by criteria ended on 31 March 2025. Since 1 April 2025, every employee who wants to keep working after a retirement age of 60 must be kept on to 65, unless there are grounds for dismissal.

Status
In force
Effective
1 April 2025
Decided
5 September 2012
Type
Statute amendment
Applies to
Employers that meet the duty to employ to 65 through a continued employment system and used selection criteria agreed before April 2013

What changes

Japanese employers must secure employment to 65 by raising the retirement age, abolishing it, or offering continued employment after retirement. Most use continued employment, usually rehiring at 60 on a fixed-term contract.

Until 2013, employers could limit continued employment to people who met criteria agreed with a union or employee representative. The 2012 amendment (Act No. 78 of 2012, promulgated 5 September 2012, in force 1 April 2013) abolished that option. A transitional measure let employers that already had such criteria keep applying them to employees above the starting age for the earnings-related part of the employee pension, which has risen in stages. That measure ended on 31 March 2025.

Since 1 April 2025, an employer using continued employment must offer it to everyone who wants it until 65. The only exceptions are cases that would justify dismissal or resignation under the work rules, such as serious misconduct or inability to work.

A related change took effect the same day: the employment insurance benefit for workers aged 60 to 64 whose pay falls below 75% of their pay at 60 was cut from up to 15% of wages to up to 10% for those turning 60 on or after 1 April 2025.

Who it applies to

Employers that had selection criteria in place before April 2013, but every employer's re-employment practice should be checked against the rule.

Action for employers

Sources

General information for employers, not legal advice. Dates and thresholds 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.