Japan: 2025, Looking Ahead

Here are changes implemented now and upcoming implementations that will affect the employment scheme in Japan.

 

Amendment to the Mandatory Retirement Age System

Under the Act on Stabilization of Employment of Elderly Persons, employers with a retirement age set below 65 are required to take one of the following measures to ensure the continued employment of older workers for all employees wishing to remain employed until they reach 65 years of age:

1. Raise the retirement age,
2. Abolish the retirement age, or
3. Introduce a continuous employment system (e.g., rehire or extend employment).

Starting April 2025, these measures will become mandatory for all employers, including small and medium-sized enterprises. Employers will be obligated to employ all eligible employees who wish to continue working until the age of 65. This change will necessitate adjustments to work rules and a review of internal operations for all employers.

Furthermore, for employees who reach the age of 65, employers are encouraged to implement one of the following measures to extend employment opportunities until they reach 70:
(a) Raise the retirement age,
(b) Abolish the retirement age,
(c) Introduce a continuous employment system, or
(d) Adopt alternative arrangements, such as continuous outsourcing contracts or systems allowing employees to engage in social contribution activities, based on a labour-management agreement.

It should be noted, however, that these measures for employees aged 65 to 70 are only an obligation for employers to make such efforts and are not mandatory. Employers are not subject to sanctions for failing to implement these measures.

Amendment to the Child Care and Nursing Care Act

Under the Child Care and Nursing Care Act, several amendments have already been implemented to provide employees with more flexible leave options. These include:

• New childcare leave for fathers immediately after the birth of a child,
• Childcare leave that can be split into two periods and shared between spouses,
• Child nursing and family care leave available on an hourly basis, and
• Extended childcare rights for fixed-term employees.

Employers are required to update their work rules to reflect these changes.

Upcoming Amendments Effective 1 April 2025

The Child Care and Family Care Leave Act has been revised further, with most revisions set to take effect on April 1, 2025, and the following updates will require all employers to adjust their work rules and internal operations:

1. Expansion of Flexible Working Styles Based on the Child’s Age
(a) Employers must implement measures enabling flexible working styles for employees raising children aged three years or older but not yet in elementary school. These measures, tailored to workplace needs, must offer at least two options from the following:

• Adjusted start times,
• Remote work,
• Shorter working hours,
• Additional leave options, or
• On-site childcare facilities.

(b) The scope of exemption from overtime work will extend to employees raising children aged three years or older but not yet in elementary school.

(c) Currently, employees may take up to five days of childcare leave annually (10 days if they have two or more children) to care for preschool children who are injured or ill. The revised law extends this provision to include children up to the third grade and allows leave for school closures or participation in school events. Additionally, new employees will be eligible for childcare leave immediately upon joining.

(d) Employers will be encouraged to promote telework for employees raising children under three years old who are not taking childcare leave.

(e) Employers must consult with employees who notify them of pregnancy or childbirth to understand their preferences for balancing work and childcare and consider these preferences in workplace accommodations.

2. Measures Regarding Childcare Leave Acquisition

Currently, employers with over 1,000 full-time employees must disclose childcare leave acquisition rates annually. The revised law extends this requirement to employers with over 300 full-time employees.

Additionally, employers with more than 100 employees will need to monitor childcare leave acquisition rates and set numerical targets for improvement.

3. Strengthening Support Systems for Balancing Work and Nursing Care

(a) Employers must individually inform and confirm employees’ intentions regarding nursing care leave and support systems for balancing work and nursing care when employees request nursing care leave. Early information about nursing care leave and related support systems must also be provided to employees aged 40 and above.

(b) Employees currently entitled to up to five days of nursing care leave annually (10 days for multiple family members) will now include newly hired employees under this entitlement.

(c) For employees caring for family members requiring nursing care but not taking nursing care leave, employers will be required to encourage remote working options.