The Cabinet Office estimates that up to 3.4 million people work as freelancers, or about 5 percent of the nation’s 66 million-strong workforce. Some private-sector estimates put the number at more than 10 million, depending on the definition of freelancing. The number is expected to rise with advances in information technology, which makes it easier for people to work without being tied to an organization, and as more companies allow their employees to take on side jobs. But the move needs to be accompanied by measures to ensure that such workers would not be put at an unfair disadvantage.

As part of its drive to promote diverse and flexible ways of work, the government seeks to build an environment that enables more people to freelance. On the other hand, not a lot has been made known about the specific terms and conditions in which freelancers work. They are not covered by labor-related laws since they are treated as individual business proprietors, and concern lingers over the unstable conditions of their jobs.

According to an earlier survey by the Fair Trade Commission, roughly 60 percent of freelancers experienced some form of disadvantage in dealing with companies that give them business orders. The government plans to legislate steps to enhance the transparency of their terms of contract with businesses so the freelancers will not be treated unfairly by their clients. Last year, the FTC determined that companies that impose irrational terms on freelancer services would constitute a violation of the Antimonopoly Law. It remains to be seen, however, whether or how the FTC decision will effectively protect the interests of freelancers, who are often in a weak position vis-a-vis their clients.

Freelancers include people who provide services in a wide range of fields and conditions, from IT engineers and designers, entertainers and professional sports athletes to construction workers. While the overall number of self-employed people in this country has been steadily declining over the past decades, the ranks of those dependent on specific clients for business orders — close to the definition of full-time freelancers — have been growing. According to the Cabinet Office, people who freelance as their main job account for 2.7 percent of the nation’s workforce — compared with 6.9 percent in the United States.

A key benefit of freelancing is said to be a high degree of latitude in work conditions such as the hours and location. In its updated strategy for economic growth released in June, the government says that freelancers tend to be more content with their jobs than corporate employees in such terms as sense of accomplishment and self-fulfilment, as well as in the upgrading of skills, knowledge and experience.

The 3 million to 3.4 million freelancers in the Cabinet Office estimate include 1 million to 1.6 million company employees and housewives who freelance on the side. There are roughly 1.7 million people who, despite a lack of employment contracts with their clients, have quasi-employment status — being paid for the services they provide to corporate clients on their orders. While many of these freelancers are believed to effectively work the same way as company employees, they are not covered by regulations under the Labor Standards Law and other legislation. The minimum legal wage does not apply to freelancers and they do not have access to benefits such as maternity and child-rearing leave, or paid leave due to illnesses and injuries.

The construction sector accounted for about 20 percent of people who freelance as their main source of income. It is said that many companies in the construction and trucking businesses outsource their work to cut back on personnel expenses such as social security premiums that they would incur by hiring more employees. Some companies view freelancers as an expendable workforce that is easier to let go than employees. Among the “employment glacier age” generation — those who graduated from schools from the mid-1990s to the early 2000s when businesses cut back significantly on new hires following the burst of the economic bubble — many are believed to still hold irregular jobs or work as freelancers because they had no other decent job opportunities.

By working as freelancers, people may be able to give full play to their skills and expertise in a more flexible work environment free of the constraints of the relationships with colleagues and superiors that company employees typically have. However, the safety net remains poor for such people. As more people choose to freelance, measures need to be introduced to make sure that they are not put at an unfair disadvantage due to their generally weak and insecure positions vis-a-vis their corporate clients.

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