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
- Remove any criteria from the work rules. Performance or health thresholds for rehiring at 60 are no longer valid.
- Rehire everyone who asks. Refuse only on grounds that would justify dismissal, and document them.
- Review re-employment pay. With a smaller benefit, steep cuts at 60 bite harder and are open to equal-pay challenge.
- Plan for 70. Offering work to 70 remains an effort duty since April 2021.
Sources
- Act on Stabilisation of Employment of Elderly Persons, Article 9, and supplementary provisions of Act No. 78 of 2012 (promulgated 5 September 2012), transitional measure ending 31 March 2025.
- Ministry of Health, Labour and Welfare, Q&A on employment security measures for older persons.
- Employment Insurance Act, continued employment benefit for older workers, rate change from 1 April 2025.