Companies are gearing up for the implementation next month of a law that will oblige them to continue employing all workers who wish to stay on until age 65.
The legislation came about because the age employees will become eligible to receive public pensions is to be raised to 61 from the current 60 in fiscal 2013, which begins April 1, and then to 65 by fiscal 2025, in stages.
Among major businesses, Toyota Motor Corp. will introduce a “half time” system on a trial basis, in which those aged above 60 will be re-employed and either work only in the morning or afternoon, or on every other day. The roughly 12-month trial will be launched in July, Toyota officials said.
Japan’s leading automaker also plans to have its elderly workers carry out light duties, such as cleaning.
Heavy machinery maker IHI Corp. will meanwhile introduce a system to allow employees who reach the age of 59 to choose their retirement age between 60 and 65.
At food and beverage group Suntory Holdings Ltd., management will adopt a pay system linked to the group’s earnings and each employee’s individual performance.
JFE Steel Corp. intends to review its current pay grades for re-employed elderly staff and increase the performance-based portion of their salaries to make better use of their skills and knowhow. An employee in charge of one of the firm’s steelworks, for instance, could see a pay rise of some ¥35,000 a month, JFE Steel officials said.
Many companies introducing new measures in line with the legislation are bound to see overall labor costs increase in the years to come.
Major leasing firm Orix Corp., which plans to raise the retirement age for its workers to 65 from 60 in April 2014, expects annual labor costs to swell by hundreds of millions of yen.
Meanwhile, Nippon Telegraph & Telephone Corp. is set to introduce a new pay system in October aimed at curbing the pace of pay raises for employees in their 40s and 50s at four group companies, including NTT DoCoMo Inc., to offset the costs of continuing to hire elderly workers.