The transitional measure letting a labor-management agreement screen who stays in continued employment ended at the end of March 2025. What changed?

Bottom line first: The transitional measure that let employers screen who was covered by continued employment through a labor-management agreement ended on 31 March 2025. From 1 April 2025, continued employment up to 65 covers everyone who wishes to stay. Any selection criteria left in the work rules or the labor-management agreement can no longer be used.

What is the "transitional measure" for continued employment, and when did it end?

The transitional measure was an arrangement that allowed, for the time being and only for those at or above a certain age, the screening of who would be covered by continued employment according to criteria set in a labor-management agreement. It ended on 31 March 2025.

The background makes it clearer. Under the old framework that took effect in 2006, even where a continued employment system was introduced, an employer could cover only some of those who wished to stay if it set criteria for selecting the continued-employment population in a labor-management agreement with a union representing a majority of workers (or, in its absence, a person representing a majority of workers).

This was revised by the Act Partially Amending the Act on Stabilization of Employment of Elderly Persons (Act No. 78 of 2012). Under that amendment, continued employment became, in principle, something that covers everyone who wishes to stay. But because requiring full coverage at once of employers that had already set selection criteria in a labor-management agreement was too abrupt a change, a transitional measure was placed in the supplementary provisions of the amending act. It allowed those criteria to continue to be used for persons at or above the age at which the earnings-related portion of the old-age employees' pension begins.

Because that pension-start age was raised in stages, the floor age for using the criteria rose in stages too and eventually disappeared.

Period	Age at which the criteria could be applied
1 April 2013 – 31 March 2016	61 and over
1 April 2016 – 31 March 2019	62 and over
1 April 2019 – 31 March 2022	63 and over
1 April 2022 – 31 March 2025	64 and over
From 1 April 2025	Transitional measure ended (criteria cannot be used)

For example, from April 2022 to March 2025 the selection criteria could be used only for those aged 64 and over; everyone under 64 was covered as of right. Then, from 1 April 2025, even this last "64 and over" band disappeared, and across all ages up to 65 everyone who wishes to stay is covered. In line with the ending, the supplementary-provision rules on the enforcement-ordinance side were also tidied up by the Ordinance Partially Amending the Enforcement Regulations of the Act on Stabilization of Employment of Elderly Persons and others (Ministry of Health, Labour and Welfare Ordinance No. 30 of 2025, promulgated 28 March 2025, in force as a rule from 1 April 2025).

From April 2025, what happens now that you can no longer screen with criteria?

A company operating a continued employment system up to 65 must cover everyone who wishes to stay.

The Ministry of Health, Labour and Welfare Q&A on the Act (applicable from 1 April 2025) states that where a continued employment system is introduced, it "must cover all who wish to continue". Selection criteria such as "those recommended by a superior", "those with a personnel rating at or above a set level", or "those with a good attendance record over the past several years" lost their footing from April 2025. Declining continued employment because a person does not meet the criteria means failing to take the employment securing measure under Article 9.

What is easy to misread here is the reaction that "the transitional measure ended, so a retirement age of 65 has become mandatory". It has not. Article 8 of the Act sets the floor for the retirement age at 60, and a retirement age of 60 is still lawful. Article 9, paragraph 1 requires an employer with a retirement age below 65 to take one of: raising the retirement age, introducing a continued employment system, or abolishing the retirement age. Keeping a retirement age of 60 while providing a continued employment system covering everyone who wishes to stay until 65 is enough. What changed is "whether the continued-employment population can be screened with criteria", not "whether the retirement age must be 65". For how to choose among the three measures and the whole picture up to 70, see when having employees work to 65 or 70 after retirement.

Where do you need to fix the existing labor-management agreement and work rules?

The first thing to check is whether a selection-criteria clause remains.

Work rules and labor-management agreements drawn up in the era of the transitional measure sometimes contain a clause reading "continued employment covers those who meet all of the following criteria". From April 2025 this clause cannot be operated as it stands. Left in place, the field decides eligibility by the old criteria and ends up in the impermissible response of "not rehiring because the criteria are not met". Here are the points to review.

Where to check	What it should be
Who is covered by continued employment	That everyone who wishes to stay is covered; the selection-criteria clause deleted
Expressing the wish	When the intention is confirmed before retirement, in what form, and the deadline for applying
Contract term and renewal	For what term the contract runs up to 65, and how it is renewed
Working conditions	How wages, workdays and duties are set where they change from before retirement
Grounds for dismissal and retirement	Whether the work-rule grounds match reality (they are the premise for the exception below)

Where selection criteria remain in the labor-management agreement, the agreement itself must be revised, or at least switched to an operation that does not apply the clause. Amending the work rules requires the procedures of hearing opinions and filing. For the duty to prepare and amend work rules itself, see from how many employees are work rules mandatory.

Where continued employment is run on a one-year fixed-term contract, the relationship with the conversion-to-indefinite rule (a cumulative five years) comes into play. For rehiring after retirement there is a special measure, Type II Plan Certification under the Act on Special Measures for Fixed-Term Workers, under which, once certified, the right to apply for conversion to indefinite does not arise. This is also covered, as part of rehiring design, in when having employees work to 65 or 70 after retirement.

Can you decline to rehire on grounds of health or work performance?

It is not that there is no exception at all, but the gateway is narrow.

The Guidelines on the Implementation and Operation of Employment Securing Measures for Elderly Persons (Ministry of Health, Labour and Welfare Notification No. 560 of 9 November 2012) state that "where a person falls under grounds for dismissal or retirement set out in the work rules—such as being unable to withstand the work because of a physical or mental disorder, or having a markedly poor attendance record and being unable to continue to fulfil the responsibilities of an employee—the employer may decline to continue employment".

There are three points in how to read this. First, the ground is "grounds for dismissal or retirement set out in the work rules". You cannot newly create a separate standard just for continued employment; so an employer whose work-rule grounds for dismissal or retirement do not match reality cannot use this gateway. Second, grounds relating to age are excluded. Third, falling within the grounds does not automatically make it all right not to continue employment: the guidelines require an objectively reasonable ground and social acceptability. This line is highly case-specific, and the final determination in a given case is made by a qualified professional. Whether continued employment may be declined in an individual case, and negotiation or litigation once it is contested, are the lawyer's field, not the Shakai Hoken Roumushi's. For how to divide referrals, see when letting an employee go, which to rely on, a Shakai Hoken Roumushi or a lawyer.

Alongside the end of the transitional measure, what to watch in social insurance, pension and benefits after rehiring?

The end of the transitional measure is about "whom to continue to employ", but recent reforms also overlap on the procedures after continued employment. When designing a rehiring, looking at the following at the same time reduces inconsistencies.

• Same-day loss and acquisition. Where a person aged 60 or over is rehired by the same company without a single day's gap after retirement, the employment relationship is treated as interrupted, and the notifications of loss and of acquisition of insured status can be submitted together to revise the standard monthly remuneration to one matching the post-rehiring wage. For how the standard monthly remuneration works, see how the base-calculation notification differs from the monthly-amount-change notification.
• In-service old-age pension. The suspension threshold where an old-age employees' pension is drawn while working was 510,000 yen through March 2026 but was revised to 650,000 yen from April 2026 by the 2025 pension reform act (Act No. 74 of 2025). For the detail of the calculation, see employing someone who works while drawing a pension.
• Continued employment benefit for the elderly. For a person reaching 60 on or after 1 April 2025, the ceiling of the benefit rate fell to 10% of the monthly wage. This affects a design premised on cutting wages on rehiring. For the content of the reduction, see the reduction of the continued employment benefit for the elderly.

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A "design from the era when you could screen with criteria" and "a premise of making up a wage cut with benefits" can both go out of date at the same time. The end of the transitional measure is a good occasion to review the regulations and procedures around rehiring once.

How should the duty to endeavour for employment up to 70 be understood?

Keep them apart. Up to 65 is an obligation; up to 70 is a duty to endeavour.

Against the "must take" of Article 9 (employment securing measures up to 65), Article 10-2, paragraph 1 writes "must endeavour" for securing work from 65 to 70. The transitional measure that has now ended belongs to the world of Article 9—that is, the question of whether the continued-employment population up to 65 can be screened. It is a separate scheme from the employment opportunity securing measures up to 70.

	Up to 65	Up to 70
Basis	Article 9	Article 10-2
Nature	Obligation	Duty to endeavour
Who is covered by continued employment	In principle everyone who wishes to stay (the transitional measure ended March 2025)	Selection criteria may be set

What is easy to confuse here is that, in the measures up to 70, the population can be limited with criteria. Up to 65 was made full-coverage by the end of the transitional measure, yet limitation with criteria is permitted up to 70. Misreading this as "because screening ended up to 65, everyone is covered up to 70 too" leads to over-designing the system. For the whole picture of the measures up to 70 (the three employment measures and the two business-start-up support measures, and whether the consent of a majority representative is required), see when having employees work to 65 or 70 after retirement.

Frequently asked questions

Q. From April 2025, is it a breach not to set the retirement age at 65?
A. No. Under Article 8 of the Act, a retirement age is lawful provided it is 60 or above, and a retirement age of 60 is still permitted. What ended was "the transitional measure allowing the continued-employment population to be screened with criteria in a labor-management agreement", not "making a retirement age of 65 mandatory". Keeping a retirement age of 60 while providing a continued employment system (Article 9, paragraph 1, item 2) covering everyone who wishes to stay until 65 satisfies the requirement. What to check is not the retirement age but whether the gap from retirement to 65 is closed for everyone who wishes to stay.

Q. Our work rules say "continued employment covers those with a personnel rating of B or above". May we keep operating this?
A. From April 2025 you cannot. With the end of the transitional measure, the continued-employment population cannot be screened with criteria; everyone who wishes to stay is covered. The Ministry's Q&A also states that a continued employment system "must cover all who wish to continue". Delete this clause and rewrite it into the method and deadline for expressing the wish, the contract term and the approach to renewal. Amending the work rules requires the procedures of hearing opinions and filing.

Q. Does a labor-management agreement concluded in the era of the transitional measure become void automatically, or is a procedure needed to revise it?
A. With the end of the transitional measure, the selection-criteria clause becomes inoperable. Rather than relying on an automatic mechanism to lapse the agreement, it is safer to delete or revise the clause, or at least switch to an operation that does not apply it, and align it with the continued-employment provisions in the work rules. Old criteria left in the text are a cause of the field mistakenly applying them.

Q. We have not introduced a system to employ people to 70. Is this also a breach?
A. Up to 70 is a duty to endeavour. Article 10-2, paragraph 1 of the Act provides "must endeavour", distinguished from the "must take" of Article 9 (up to 65). The transitional measure that has now ended concerns continued employment up to 65 and is a separate scheme from the employment opportunity securing measures up to 70. Unlike up to 65, the measures up to 70 also permit limiting the population with criteria.

Basis for this article

• Act on Stabilization of Employment of Elderly Persons (Act No. 68 of 1971), Article 8 — where a retirement age is set, it may not fall below 60
• Article 9, paragraph 1 — an employer with a retirement age below 65 must take one of raising the retirement age, introducing a continued employment system, or abolishing the retirement age, to secure stable employment up to 65
• Act Partially Amending the Act on Stabilization of Employment of Elderly Persons (Act No. 78 of 2012), supplementary provisions — a transitional measure under which an employer that had set, before the amendment, criteria for limiting the continued-employment population in a labor-management agreement could apply those criteria only to persons at or above the age at which the earnings-related portion of the old-age employees' pension begins; the age at which the criteria could be applied rose in stages—61 for 1 April 2013 to 31 March 2016, 62 for 1 April 2016 to 31 March 2019, 63 for 1 April 2019 to 31 March 2022, 64 for 1 April 2022 to 31 March 2025—and ended on 31 March 2025
• Ordinance Partially Amending the Enforcement Regulations of the Act on Stabilization of Employment of Elderly Persons and others (Ministry of Health, Labour and Welfare Ordinance No. 30 of 2025, promulgated 28 March 2025, in force as a rule from 1 April 2025) — tidying of the enforcement regulations following the end of the transitional measure
• Ministry of Health, Labour and Welfare, Q&A on the Act (Employment Securing Measures) (applicable from 1 April 2025) — a continued employment system "must cover all who wish to continue"
• Guidelines on the Implementation and Operation of Employment Securing Measures for Elderly Persons (Ministry of Health, Labour and Welfare Notification No. 560 of 9 November 2012) — where a person falls under grounds for dismissal or retirement set out in the work rules, such as being unable to withstand the work because of a physical or mental disorder or having a markedly poor attendance record, the employer may decline to continue employment; an objectively reasonable ground and social acceptability are required
• Article 10-2, paragraph 1 — an employer that has set a retirement age of 65 or over but under 70, or that has introduced a continued employment system, must endeavour to secure stable employment from 65 to 70 (duty to endeavour)
• Employees' Pension Insurance Act, supplementary provisions (the staged raising of the age at which the earnings-related portion of the old-age employees' pension begins) — the criterion age of the transitional measure is linked to this pension-start age
• Employees' Pension Insurance Act, Article 46, paragraph 3, and the 2025 pension reform act (Act No. 74 of 2025) — the suspension threshold for the in-service old-age pension was 510,000 yen through March 2026 and 650,000 yen from April 2026
• Employment Insurance Act (continued employment benefit for the elderly) — for a person reaching 60 on or after 1 April 2025 the ceiling is 10% of the monthly wage
• Japan Pension Service, "Where a person aged 60 or over is rehired without a single day's gap after retirement" — the employment relationship is treated as interrupted, and the notifications of loss and of acquisition of insured status are submitted together to revise the standard monthly remuneration (same-day loss and acquisition)
• Provisions and public materials were checked on 31 October 2026. The criterion ages of the transitional measure and the periods they correspond to, and the enforcement date of the ordinance, were confirmed from materials published by the Ministry of Health, Labour and Welfare

This article does not determine whether any particular case qualifies. 四葉社会保険労務士事務所 can advise on reviewing the work rules and regulations on continued employment, revising the labor-management agreement following deletion of selection criteria and the move to full coverage, designing the form and internal workflow for confirming an employee's intention, the same-day loss and acquisition procedure for social insurance on rehiring after retirement, and applications for Type II Plan Certification. Tax treatment of retirement allowances and corporate pensions is a matter we connect you with a tax accountant (Zeirishi) for. Whether continued employment may be declined in an individual case, and negotiation or litigation once the terms of rehiring become contested, are not handled by this office; we refer you to a lawyer (Bengoshi). Where a different professional is needed, each is contracted separately, and there is no referral fee. Fees are set out in the fee schedule, and frequently asked questions are collected in the FAQ.

This article is general information. Individual determinations are made by a qualified professional after a consultation, in light of individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).