In April 2006, Japanese companies will be required to give their employees the option to work until they turn 65.  Revisions to the Law Concerning the Stabilization of Employment for the Aged in 2004 included provisions for raising the retirement age in Japan.   Beginning in 2006, companies must guarantee jobs for 62 year old employees.  Companies can raise their retirement age, abolish age restrictions, or rehire those employees set to retire in order to comply with this policy.

With the deadline fast approaching, companies must now begin developing new hiring schemes.  Some companies have already made small increases in their retirement ages.  Other companies have developed new programs where 55 year old employees can inform the company if they want to work past the age of 60.  Companies have also been trying to find ways to comply with the legislation without increasing labor expenses.

Japan faces a potential labor shortage with the large baby boomer population that is quickly approaching 60 years old.  The Japanese government proposed this new legislation in order to deal with the country´s aging society.  Japanese officials believe that increasing the birth rate would be too difficult and the key to solving the aging dilemma is to boost elderly participation in the workforce.  However, this means companies in Japan must now work on plans to deal with the raise in the retirement age.