Japan to start new residency system for foreign workers
In line with the move, the current technical intern training system will be abolished. The industry sectors to be covered by the new regime, called the "employment for skill development" system, will be unified with those under the specified skills system intended for highly skilled workers that was launched in 2019.
The aim is to systematically develop foreign human resources and ensure they stay in Japanese workplaces for the long term. The government plans to promote a related ministerial ordinance before the end of this summer.
The series of reforms reflects heightened international competition for talent.
The technical intern training program, which began in 1993, was introduced for the purpose of making international contributions by accepting trainees from developing countries and giving them opportunities to acquire knowledge and skills while working.
In reality, however, the system was often used by host companies as a means of securing cheap labor, coming under criticism as a hotbed of human rights abuses due to problems such as unpaid wages and long working hours.
In the meantime, neighboring economies such as South Korea and Taiwan have expanded their acceptance of foreign workers, further intensifying competition for talent.
Japan's relative economic attractiveness to foreign nationals has been declining, with its nominal per capita gross domestic product surpassed by South Korea in 2022. Japan, therefore, has urgently needed drastic system reform in order to become a country of choice for competent foreign human resources.
Under the forthcoming employment for skill development system, foreign nationals accepted as unskilled laborers will be trained over three years to enhance their ability to the level of the specified skill Type 1 residency status, which authorizes holders to work in Japan for up to five years.
Another key feature of the new system is that foreign workers will be allowed to change their place of employment if they meet certain conditions, including job transfers in the same industry sector, an arrangement aimed at creating a more comfortable working environment for them.
Under the technical intern training system, trainees are prohibited from switching their workplaces in principle, a rule cited as one of the reasons for the disappearance of trainees unable to bear the working environment of their employers.
Nevertheless, in order to curb excessive competition for labor among companies, there will be under the new system industry-specific periods of one to two years during which job transfers are not permitted.
To be eligible to switch jobs, trainees will need to satisfy certain criteria in skills tests and Japanese language proficiency tests. The companies accepting such trainees will be limited to blue-chip companies that meet certain standards.
The new system will pay particular attention to acute labor shortages in rural areas. The maximum number of foreign nationals that companies can accept for training and employment will be determined according to the number of their full-time employees. Select companies in rural areas, however, will be specially permitted to accept up to three times more foreign trainees than allowed under the standard rule.
Furthermore, stricter regulations will be implemented regarding job transfers to urban areas, with the aim of preventing the concentration of talent in metropolitan regions where wages are typically higher. The measure is designed to reduce outflows of workers from rural areas and help maintain a balanced distribution of talent across different regions.
Specifically, at host companies, trainees who have transferred from other employers should not comprise more than one-third of all foreign trainees. For companies located in urban areas, the limit is even more stringent, with transferred trainees permitted to account for no more than one-sixth of all foreign trainees on the payroll.
After the decision of the basic policy, the government started formulating detailed policies on operations that will set detailed rules for individual sectors that host trainees from overseas.
The government is expected to adopt the policies by the end of the year after discussions at an expert panel, to finalize the new employment for skill development system.
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