Is it all right to keep the mandatory retirement age at 60? Employment securing measures to 65 and employment opportunities to 70

Bottom line first: An obligation to employ people until 65 is not the same as an obligation to set the mandatory retirement age at 65. A company may keep a retirement age of 60 and meet the requirement through a continued employment system covering everyone who wants to stay until 65. Up to 70, the duty is a duty to endeavour, and it covers work opportunities not limited to employment.

What ended in April 2025, and what is now mandatory?

The transitional measure under 高年齢者雇用安定法 (the Act on Stabilization of Employment of Elderly Persons) ended on 31 March 2025.

Companies that had set criteria in a labour-management agreement for selecting who would be continued in employment were once able to apply those criteria under a phased transitional measure. Since 1 April 2025 those criteria can no longer be used. A company with a mandatory retirement age below 65 must raise the retirement age, introduce a continued employment system, or abolish the retirement age altogether.

The Ministry of Health, Labour and Welfare states explicitly that the amendment "does not oblige employers to raise the mandatory retirement age to 65". This is the point most often misread.

As for actual practice, of the 237,739 companies that reported as of 1 June 2025, 99.9% had implemented employment securing measures up to age 65. The figure is the same 99.9% for small and medium-sized companies (21–300 employees) and for large companies (301 or more). The obligation itself is close to universal. What is worth examining is whether the system on paper matches what happens in practice.

Is the obligation to employ until 65 the same as an obligation to retire at 65?

It is not. Two separate provisions are involved.

Article 8 of 高年齢者雇用安定法 provides that where an employer sets a mandatory retirement age, that age may not fall below 60. It fixes a floor for the retirement age itself.

Article 9, paragraph 1 requires an employer that has set a retirement age below 65 to take measures to secure stable employment up to 65. That provision is not about the retirement age but about closing the gap up to 65.

A retirement age of 60 therefore remains lawful. If the design that carries an employee from age 60 to 65 satisfies Article 9, there is no legal problem. The statement that "a retirement age of 65 became mandatory in 2025" is wrong.

What needs checking is not the retirement age itself, but whether the gap between retirement and 65 has been closed.

Which of the three employment securing measures should a company choose?

Article 9, paragraph 1 lists three. A company takes one of them.

Measure	Provision	Content	Share as of 1 June 2025
Raising the retirement age	Art. 9(1)(i)	Raise the retirement age itself to 65 or above	31.0%
Introducing a continued employment system	Art. 9(1)(ii)	Keep the retirement age at 60 and continue to employ those who wish to stay	65.1%
Abolishing the retirement age	Art. 9(1)(iii)	Remove the retirement age entirely	3.9%

Two-thirds of companies choose a continued employment system, because it allows the retirement procedure to be completed and the working conditions to be set afresh. Both a rehiring scheme and a service-extension scheme fall under item (ii).

The continuing employer need not be the same company. Under Article 9, paragraph 2, continued employment may take place at a specially related employer such as a group company. In that case, however, the original employer and the specially related employer must have concluded a contract undertaking that the employee will continue to be employed after retirement. Simply having a group company "take them on" without such a contract does not satisfy the requirement.

If a continued employment system is chosen, does it have to cover everyone who applies?

In principle, yes.

The Ministry's Q&A on 高年齢者雇用安定法 (revised 31 March 2025, applicable from 1 April 2025) states that a continued employment system "must cover all who wish to continue". Now that the transitional measure has ended, selection criteria such as "recommended by a supervisor" or "performance rating above a certain level" cannot be placed in work rules or a labour-management agreement.

Two misunderstandings are common.

The first is that "whether to apply is up to the employee, so we do not need to notify anyone". Because the system covers everyone who wishes to continue, the employee must be in a position to express that wish. Unless the company decides how many months before retirement the intention is confirmed, and in what form, it invites the argument that someone was treated as retired without knowing it.

The second is that "anyone who once declined is excluded". The company needs an internal rule stating which point in time the expression of intention is measured against.

When can a company decline to continue someone's employment?

There are exceptions.

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) provide that where a person falls under grounds for dismissal or grounds for retirement set out in the work rules — such as being unable to withstand the work because of a physical or mental disorder, or having an attendance record so poor that they cannot continue to fulfil their responsibilities as an employee — the employer may decline to continue their employment.

Three points matter in reading this.

First, the basis is the grounds for dismissal or retirement set out in the work rules. A separate standard cannot be created solely for continued employment. Conversely, a company whose grounds for dismissal and retirement no longer match reality cannot use this route.

Second, grounds relating to age are excluded. A provision stating that no contract will be concluded from a given age below 65 cannot be used.

Third, falling within the grounds does not automatically permit non-continuation. The guidelines require an objectively reasonable ground and require that the decision be socially acceptable. Drawing that line in an individual case is not something this office handles. Where a dispute looks likely, we refer you to a lawyer (Bengoshi). How to divide the work is set out in Who should you turn to when letting an employee go, a Shakai Hoken Roumushi or a lawyer?.

Where ill health is the likely reason, the operation of the leave-of-absence system becomes the real question. Please also see When an employee takes leave for mental health reasons.

Can wages, working days and duties be changed on rehiring?

Changing the working conditions from those before retirement is possible.

The Ministry's Q&A states that whether the work is full-time or part-time, and matters such as working hours, wages and treatment, are things it is "important for the employer and the worker to discuss fully and decide". Arrangements such as a three-day week are described as "considered unobjectionable". There is no requirement to maintain exactly the same treatment as before retirement.

There is, however, no uniform statutory standard for "how far the pay may fall".

The reference point is a Supreme Court decision. On 20 July 2023 the First Petty Bench (2022 (Ju) No. 1293) set aside the lower court's finding that the difference in base pay and bonuses between rehired contract staff and regular staff violated Article 20 of the Labour Contract Act, and remanded the case to the Nagoya High Court. The reason given was that the lower court had not sufficiently considered the nature and purpose of each component of pay, nor the specific course of the labour-management negotiations.

What follows from this is that the question is not whether a given percentage is safe or unlawful, but what the base pay and the bonus are being paid for, and how the matter was discussed between the parties. Where rehiring is on a fixed-term contract, differences in treatment are now addressed under the Part-Time and Fixed-Term Employment Act. On the duty to explain differences in treatment, see How the rules for part-time and fixed-term employment change in October 2026.

What a company can do before setting the wage level is to put into words what the base pay, each allowance and the bonus are payment for.

What should be watched when rehiring on a fixed-term contract?

Many companies operate continued employment through one-year fixed-term contracts, and that in itself is unobjectionable. Two points need care.

The first is that the contract cannot be cut off before 65. The Ministry's Q&A treats a provision stating that no contract will be concluded on or after the day a person reaches an age below 65 as a violation of Article 9. Writing an upper limit such as "until age 63" into a contract or internal rule runs into this.

The second is the conversion-to-indefinite rule. Where fixed-term contracts are renewed for more than five years in total, the worker may apply to convert to an indefinite contract. Rehiring from 60 on one-year renewals reaches that five-year mark shortly after 65.

For this, there is a special measure: Type II Plan Certification (第二種計画認定) under the Act on Special Measures for Fixed-Term Contract Workers. Where the employer prepares a plan for appropriate employment management and obtains certification from the Director of the Prefectural Labour Bureau having jurisdiction over the head office, a fixed-term worker who continues to be employed after reaching the retirement age is treated as not acquiring the right to apply for conversion. Without certification, the special measure does not operate. A company running fixed-term rehiring is well advised to check whether it holds this certification.

Is securing work up to 70 an obligation or a duty to endeavour?

It is a duty to endeavour.

Article 10-2, paragraph 1 provides that an employer must "endeavour" to secure stable employment from 65 to 70. The wording is deliberately distinguished from the "must take" of Article 9.

The provision applies to an employer that has set a retirement age between 65 and under 70, or that has introduced a continued employment system (excluding one that employs a person to 70 or beyond). The common arrangement of a retirement age of 60 plus a continued employment system to 65 falls under "an employer that has introduced a continued employment system".

	Up to 65	Up to 70
Provision	Article 9	Article 10-2
Nature	Obligation	Duty to endeavour
Types of measure	Three (all employment)	Five (three employment plus two business start-up support measures)
Coverage of continued employment	In principle all who wish to continue	Selection criteria may be set
Labour-management consent	Not required	Required for business start-up support measures
Implementation rate as of 1 June 2025	99.9%	34.8%

Article 10-2, paragraph 1 lists raising the retirement age, introducing a continued employment system for those aged 65 and over, and abolishing the retirement age. Paragraph 2 lists two business start-up support measures: securing work through a commissioning contract, and securing work through a social contribution project.

A duty to endeavour does not mean the matter can be left alone. Under Article 10-3, the Minister of Health, Labour and Welfare may give the necessary guidance and advice and, where implementation is markedly insufficient, may recommend that a plan be prepared.

The Basic Policy on Employment Security Measures for Elderly Persons notified on 31 March 2026 (Ministry of Health, Labour and Welfare Notification No. 132, covering FY2026 to FY2029) sets a target of raising the implementation rate of employment opportunity securing measures up to 70 to 40.0% or more by 2029 — from the current 34.8%.

When can commissioning contracts or social contribution projects be used?

Business start-up support measures secure work opportunities up to 70 in a form other than employment. Article 10-2, paragraph 2 lists two.

Item (i) covers a measure under which, where an elderly person newly starts a business, the employer concludes a commissioning contract or other contract (excluding an employment contract) with that person and secures their work on the basis of that contract. Item (ii) covers a social contribution project carried out by the employer, or by an organisation the employer commissions or invests in, where the party running the project concludes a contract with the elderly person.

Three points should be noted before using them.

First, the consent of a labour union representing a majority of workers — or, where there is none, of a person representing a majority of workers — is required. This appears in the proviso to Article 10-2, paragraph 1. The three employment measures can be introduced without consent; business start-up support measures cannot.

Second, the contract is not an employment contract. Working-hour regulation, premium wages and labour insurance do not, in principle, apply. But a contract called a commissioning contract may still be judged to create worker status if the person in fact works under direction and supervision. That boundary is set out in The line between outsourcing and employment is not drawn by the contract.

Third, they are barely used in practice. As of 1 June 2025, business start-up support measures accounted for 0.1% of all reporting companies. Continued employment systems accounted for 28.3%, abolition of the retirement age 3.9%, and raising the retirement age 2.5%. The option exists, but the centre of gravity is on the employment side.

What happens to social insurance and pension on rehiring after retirement?

Three points change how the work is done.

Same-day loss and acquisition (同日得喪). Where a person aged 60 or over retires and is rehired by the same company without a single day's gap, the employment relationship is treated as having been interrupted, and the notification of loss of insured status and the notification of acquisition of insured status may be submitted at the same time. The standard monthly remuneration is then revised from the month of rehiring to reflect the post-rehiring pay. Since 1 April 2013, this has covered everyone rehired after retirement at or after 60.

Without this procedure, the company must wait for an ordinary occasional revision, and premiums are paid on the higher pre-retirement standard monthly remuneration for months in which the pay has already fallen. The supporting documents are copies of the work rules and the retirement notice together with a copy of the employment contract, or a certificate from the employer stating the date of retirement and the date of rehiring. On the standard monthly remuneration itself, see What is the difference between the santei kiso todoke and the getsugaku henko todoke?.

In-service old-age pension (在職老齢年金). Where a person works while receiving the earnings-related old-age employees' pension, the pension is suspended in whole or in part once the sum of the basic monthly amount and the total remuneration monthly amount equivalent exceeds a threshold. That threshold was 510,000 yen through March 2026; under the 2025 pension reform act (Act No. 74 of 2025) it was revised to 650,000 yen from April 2026. The premise for designing post-rehiring pay has changed. On the calculation, see Hiring someone who is working while drawing a pension.

Continued employment benefit for the elderly (高年齢雇用継続給付). This is an employment insurance benefit paid where wages fall compared with the level at age 60. From 1 April 2025 the ceiling on the benefit rate changed: for a person reaching 60 on or after 1 April 2025, the limit is 10% of the monthly wage. For a person who reached 60 on or before 31 March 2025, the previous 15% still applies. A wage design built on the old assumption that "the benefit will make up this much" no longer holds.

What was added to the safety of older workers in April 2026?

Article 62-2 of the Industrial Safety and Health Act took effect on 1 April 2026. It was newly inserted by the 2025 amendment (Act No. 33 of 2025).

It makes it a duty to endeavour for the employer to take measures — improvement of the working environment in light of the characteristics of older workers, management of the work, and other necessary measures — to prevent industrial accidents involving older workers. Under paragraph 2 of the same article, the Guidelines for the Prevention of Industrial Accidents Involving Elderly Persons (notified 10 February 2026, Guideline Notification No. 1) were established and have applied since the same date, 1 April 2026.

Discussion of retirement and rehiring tends to gravitate towards system design and pay. But if people are actually to keep working to 65 or 70, conditions on the floor — the risk of falls and falls from height, lighting levels, steps, handling of heavy objects, how breaks are taken — are asked about in parallel. The provision is a duty to endeavour, but now that the guidelines exist, doing nothing is harder to explain.

What should a company check in its work rules and annual report?

Finally, the parts where the company does the work.

Work rules. Is the retirement age provision set at 60 or above? For continued employment after retirement, does it state who is covered, how the wish to continue is expressed, by when, the contract term and the approach to renewal? Do selection criteria from the era of the transitional measure still remain? Do the grounds for dismissal and retirement match reality? Those four points. On the obligation to prepare and file work rules, see From how many employees are work rules mandatory, and what is not mandatory?.

Annual report on the employment status of elderly persons. Under Article 52, paragraph 1, an employer must report once a year to the Minister of Health, Labour and Welfare on the state of the retirement age, the continued employment system, the continued employment system for those aged 65 and over, and business start-up support measures. The report covers the position as of 1 June each year and is submitted by 15 July through the Hello Work office with jurisdiction. This is an obligation, not a duty to endeavour.

Person in charge of promoting elderly employment. Article 11 requires an employer to endeavour to appoint a person responsible for the work of improving workplace facilities and other conditions in order to promote employment securing measures for elderly persons. It is a duty to endeavour, but in a company that has not designated anyone, neither the report nor the review of the work rules becomes anyone's job.

Subsidies. For raising the retirement age to 65 or above, abolishing the retirement age, introducing a continued employment system for those aged 66 and over, developing employment management systems for elderly persons, and converting fixed-term workers aged 50 or over and below the retirement age to indefinite employment, the Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers offers the Subsidy for Promoting the Employment of Persons Aged 65 and Over. Because the timing of the system change relative to the timing of the application can make a subsidy unavailable, the order of steps needs checking. The reasoning is the same as in Subsidies for hiring are decided at the entrance.

Frequently asked questions

Q. We still have a retirement age of 60. Are we breaking the law?
A. A retirement age is not unlawful provided it is 60 or above (Article 8 of 高年齢者雇用安定法). But because the retirement age is below 65, the employment securing measures under Article 9, paragraph 1 must be taken. Keeping the retirement age at 60 while providing a continued employment system covering everyone who wishes to stay until 65 satisfies this. What needs checking is not the retirement age itself but whether the gap from retirement to 65 has been closed.

Q. May we reduce pay on rehiring? Is there a percentage that is safe?
A. Changing the working conditions from those before retirement is possible, and the Ministry's Q&A treats the matter as one for full discussion between employer and worker. But there is no uniform statutory standard for how far pay may fall. In its judgment of 20 July 2023, the Supreme Court set aside a lower court decision that had ruled without sufficiently considering the nature and purpose of the base pay and bonuses or the course of negotiations. What is asked is less the level itself than whether the company can explain what each element is payment for. Individual disputes are matters we refer to a lawyer.

Q. Can the receiving employer for continued employment be a group company?
A. Yes. Article 9, paragraph 2 permits continued employment at a specially related employer. The requirement is that the original employer and the specially related employer have concluded a contract undertaking that the elderly person covered by the continued employment system will continue to be employed after retirement. Operating without that contract does not count as having taken the measure.

Q. If we have not introduced measures up to 70, will the authorities intervene?
A. Up to 70 the duty is a duty to endeavour, but under Article 10-3 the Minister of Health, Labour and Welfare may give the necessary guidance and advice and, where implementation is markedly insufficient, may recommend that a plan be prepared. The Basic Policy notified on 31 March 2026 also sets a target implementation rate of 40.0% or more by 2029. "It is only a duty to endeavour, so nothing need be done" is becoming harder to maintain.

Basis for this article

• 高年齢者等の雇用の安定等に関する法律 (Act No. 68 of 1971), Article 8 — where an employer sets a mandatory retirement age, that age may not fall below 60
• Article 9, paragraph 1 — an employer that has set a retirement age below 65 "must take" one of: (i) raising the retirement age, (ii) introducing a continued employment system, (iii) abolishing the retirement age
• Article 9, paragraph 2 — a continued employment system includes one based on a contract with a specially related employer
• Guidelines on the Implementation and Operation of Employment Securing Measures for Elderly Persons under Article 9, paragraph 3 (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: (i) raising the retirement age, (ii) introducing a continued employment system for those aged 65 and over, (iii) abolishing the retirement age. Under the proviso, business start-up support measures require the consent of a labour union representing a majority of workers or, in its absence, a person representing a majority of workers
• Article 10-2, paragraph 2 — (i) securing work through a commissioning or other contract (excluding an employment contract) with an elderly person starting a business, (ii) securing work through a contract relating to a social contribution project
• Article 10-3 — guidance and advice by the Minister of Health, Labour and Welfare, and recommendation to prepare a plan where implementation is markedly insufficient
• Article 11 — an employer "must endeavour to appoint" a person in charge of the work of improving workplace facilities and other conditions (duty to endeavour)
• Article 52, paragraph 1 — an employer "must report" once a year on the state of the retirement age, the continued employment system, the continued employment system for those aged 65 and over and business start-up support measures; the position as of 1 June is submitted by 15 July through Hello Work
• Ministry of Health, Labour and Welfare, Q&A on 高年齢者雇用安定法 (Employment Securing Measures) (revised 31 March 2025, applicable from 1 April 2025) — a continued employment system "must cover all who wish to continue"; working hours, wages and treatment are matters for the employer and worker to "discuss fully and decide"; arrangements such as a three-day week are "considered unobjectionable"; a provision that no contract will be concluded on or after the day a person reaches an age below 65 violates Article 9; continued employment at a specially related employer requires a contract
• Ministry of Health, Labour and Welfare, "Amendment of 高年齢者雇用安定法" — the transitional measure ended on 31 March 2025; the amendment "does not oblige employers to raise the mandatory retirement age to 65"
• Guidelines on the Implementation and Operation of Employment Opportunity Securing Measures for Elderly Persons (Ministry of Health, Labour and Welfare Notification No. 351 of 30 October 2020)
• Basic Policy on Employment Security Measures for Elderly Persons (Ministry of Health, Labour and Welfare Notification No. 132 of 31 March 2026, covering FY2026–FY2029) — target of an implementation rate of 40.0% or more for employment opportunity securing measures up to 70 by 2029
• Ministry of Health, Labour and Welfare, "Aggregate Results of the 2025 Report on the Employment Status of Elderly Persons" (as of 1 June 2025; 237,739 reporting companies) — 99.9% had implemented employment securing measures up to 65 (raising the retirement age 31.0%, continued employment system 65.1%, abolition of the retirement age 3.9%); 34.8% had implemented employment opportunity securing measures up to 70 (continued employment system 28.3%, abolition of the retirement age 3.9%, raising the retirement age 2.5%, business start-up support measures 0.1%)
• Industrial Safety and Health Act, Article 62-2 (newly inserted by the Act Partially Amending the Industrial Safety and Health Act and the Working Environment Measurement Act, Act No. 33 of 2025; in force 1 April 2026) — it is a duty to endeavour for the employer to improve the working environment in light of the characteristics of older workers, to manage the work, and to take other necessary measures. The Guidelines for the Prevention of Industrial Accidents Involving Elderly Persons under paragraph 2 (notified 10 February 2026, Guideline Notification No. 1) apply from 1 April 2026
• 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; for a person who reached 60 on or before 31 March 2025 it remains 15%
• 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; the standard monthly remuneration is revised from the month of rehiring (in force 1 April 2013). Supporting documents are copies of the work rules and retirement notice together with a copy of the employment contract, or a certificate from the employer stating the dates of retirement and rehiring
• Ministry of Health, Labour and Welfare, "Special measure on the conversion-to-indefinite rule for elderly persons in continued employment (Type II Plan Certification)" — where certification of a plan for appropriate employment management is obtained from the Director of the Prefectural Labour Bureau, a fixed-term worker who continues to be employed after reaching the retirement age does not acquire the right to apply for conversion
• Supreme Court, First Petty Bench, judgment of 20 July 2023 (2022 (Ju) No. 1293) — on the difference in base pay and bonuses between rehired contract staff and regular staff, the relevant part of the lower judgment was set aside for failure to consider the nature and purpose of each component of pay and the course of labour-management negotiations, and the case was remanded to the Nagoya High Court
• Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers, "Subsidy for Promoting the Employment of Persons Aged 65 and Over" — three courses. Amounts and application periods change by fiscal year and are not stated in this article
• Public materials and statutory provisions were checked on 20 August 2026

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 preparing and amending work rules and internal regulations on retirement and continued employment, designing the form and internal workflow for confirming an employee's intention, preparing and filing the annual report on the employment status of elderly persons, the same-day loss and acquisition procedure for social insurance on rehiring after retirement, applications for Type II Plan Certification, and the Subsidy for Promoting the Employment of Persons Aged 65 and Over. 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). Company incorporation and licensing for those starting a business after retirement are handled by 四葉行政書士事務所 as a separate business entity. If 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.

四葉不動産株式会社, 四葉行政書士事務所, and 四葉社会保険労務士事務所 each accept work as separate, independent business entities. Where we introduce another professional, we do so on the basis that you contract with them directly, and we receive no referral fee.

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).