Japan’s Foreign Employment System
Bongsoo Jung, Korean labor attorney at KangNam Labor Law Firm
I. Introduction
Japan’s labor law system has had a great impact on the formation of labor laws in Korea. In 1953, when many of Korea’s labor laws were enacted (the Labor Standards Act, the Labor Union Act, the Labor Relations Adjustment Act, and the Labor Relations Commission Act), Japan’s labor laws were an important reference point. The Immigration Act of the Justice Ministry has also been influenced by Japan's Immigration Control and Refugee Recognition Act (hereinafter referred to as the "Immigration Control Act"), which is still influential in the management of foreigners in Korea. Japan enacted its Immigration Act (which strictly controlled foreigners) in 1951, and has adhered to two principles when it accepts foreigners. First, acceptance is in principle limited to foreigners engaged in professional work, and not to those engaged in simple labor. Second, acceptance for immigration under the premise of permanent settlement and permanent residence in Japan is not permitted in principle. While there is a gradual shift toward more accommodation for foreigners due to the recruitment of highly-talented individuals and a lack of manpower due to aging/low fertility, the basic principles are still observed.
II. Status of and Policy Direction for Foreign Workers in Japan
According to immigration statistics the Ministry of Justice, the total number of foreigners staying in Japan exceeded 1 million in 1989, 2 million in 2005, and was about 2.69 million at the end of 2015; a figure which accounts for 2.2% of the total population of 121.71 million, and which has been increasing by an average of 8.1% since 2011. As of the end of October 2015, there were about 908,000 foreign workers in Japan, including approximately ①168,000 persons for training purposes, ②367,000 persons with status as overseas Japanese, ③167,000 persons recognized as employed in the "professional and technical fields", ④192,000 other persons such as overseas students, and ⑤ those in "specific activities" (nurses/caregivers, and highly-talented professionals who received preferential treatment through the point system). As of 2016, there were also about 6.2 million illegal immigrants, including those who were not employed.
Japan’s policy of introducing foreign workers has consistently maintained a stance of attracting specialized foreign workers in the professional and technical fields, but of not importing unskilled foreign workers in principle. In response to labor shortages caused by the aging and declining population, the Japanese government now prioritizes the participation of Japanese nationals such as women and the elderly in the labor market. Among foreign workers, professionals and overseas Japanese descendants are actively accepted through institutional preferences, while unskilled foreign workers have been restrained by the Industrial Trainee System, which is based on the principle of "replacement circulation". Recently, however, the Abe government has been reviewing an expansion of the system which would introduce non-skilled foreign workers, focusing on industries with a shortage of manpower, “in order to expand the utilization of female workers and economic growth.” It is now actively introducing unskilled personnel such as homeworkers in addition to the introduction of foreign professionals.
III. Foreign Worker Employment System
1. Japan's unskilled foreign workers
The official position is that Japan does not introduce unskilled foreign workers. Currently, the Technical Intern Training Program is not designed to use foreigners as workers, but is rather a program that trains workers in developing countries in Asia and prepares them to work in industries in those countries. Although this intention was initially maintained to a certain extent, foreign workers are now being used by small and medium-sized enterprises (SMEs) because of the insufficient labor force in Japan, and the society’s tendency to avoid what Korea calls “3D jobs” (dirty, difficult, dangerous) jobs. However, it is obvious that the worker still provides work in his/her trainee status, while yet maintaining the original intent.
The introduction of simple laborers in Japan can be divided into two stages, and can be explained according to each stage. The first stage was the Foreign Trainee Program (1993-2010); under this program, foreigners worked as trainees, not as workers. As a result, many human rights violations occurred due to the failure to apply labor laws, and so the Technical Intern Training Program (2010-present) was introduced to improve the situation. However, even in this second stage, the exploitation of foreign workers was severe and violation of the labor law did occur, which led to the Foreigners’ Technical Intern Training Act (2016), which was introduced to strengthen labor law protections.
In 1990, SMEs accepted foreign trainees for the purpose of cultivating manpower for developing countries. In 1993, the Trainee Program was implemented so that foreigners who had completed one year of training could work in Japan for a maximum of two years. 'Training' referred to not only lectures, but also to training in the field. Because trainees were not workers, a 'training allowance' was paid in place of a wage. In actual fact, companies paid foreign trainees low wages, and even the training allowance was less than the minimum wage. There were many cases where Japanese SMEs exploited the Foreign Trainee Program by using young workers from developing countries as a low-cost labor force without the protection of the Labor Standards Act or the right to the minimum wage. Such violations of human rights and the poor treatment of trainees soon became social problems.
In order to address the human rights violations, Japan abolished the existing Foreign Trainee Program in July 2010 and replaced it with the Technical Intern Training Program, and from the beginning introduced low-skilled foreign manpower as having employee status. Technical trainees were allowed to stay in Japan for a maximum of three years, less the two-month training period. Permission for the entry of technical trainees was structured so that the accepting company or the supervising organization applied to the local immigration office. By the end of June 2016, there were about 210,000 technical trainees nationwide, composed of Chinese (85,000), Vietnamese (72,000), Filipinos (21,000), Indonesians (17,000), and others.
The Technical Intern Training Act of November 2016 classifies trainee status as "Technical Intern Training No. 1" for the first year of entry, "Technical Intern Training No. 2" for the second and third years, and "Technical Intern Training No. 3" for the fourth and fifth years. The target jobs are relative to the needs of the sending countries, and job descriptions established by the Technical Skill Evaluation System, in accordance with the notification from the Minister of Health and Labor. (As of March 31, 2017, these comprised 74 jobs and 133 jobs respectively).
The following features are understood as relates to the Technical Intern Training Program:
First, the period of stay for technical trainees is limited to three years. Since foreigners work for three years and then must return to their home country, employers do not give them an opportunity to acquire important skills, but provide only simple repetitive work, and so foreign workers are unable to get any further technical education. Companies regard foreign workers as those who need to be replaced after a certain period of stay, similar to a dispatch worker.
Second, re-entry is prohibited. The Technical Intern Training Program does not give the skilled foreign workers the opportunity to re-enter after their stay of three years, and companies do not recognize the skilled or semi-skilled abilities of such workers. Industry is constantly demanding an extension of stay in order to utilize skilled foreign workers.
Third, the program strictly observes a restriction ban against foreign families living in Japan. Although it is natural for families to reunite, the program prohibits family members from coming with the trainees, and restricts temporary family invitations for simple-functioning foreign workers, similar to Korea.
Fourth, there are a limited number of jobs available for foreign workers. Since the purpose of the Technical Intern Training Program began with industrial trainees, it limits the scope of industries that can retain trainees. Foreign workers can continue to work for three years if their employers do not have any business problems, but if their company closes, re-employment is difficult. It is also difficult to transfer to another job in the same industry, and changes of workplace are prohibited.
Fifth, foreign workers are subject to social insurance. These mandatory social insurances are employment insurance, industrial accident compensation insurance, national health insurance, and employee pensions.
2. Japanese foreign descendants (Nikkeijin)
As descendants of Japanese, Nikkeijin have been institutionally recognized for their special relationship with Japan, and can stay with a "resident" visa (a newly-introduced residence qualification according to the revised Immigration Act of 1989). The Nikkeijin are estimated to comprise more than 3 million people. Since the mid-1980s, entries into Japan by Nikkeijin have begun to increase, mostly coming from South American countries such as Brazil and Peru. Their initial entries were in the form of visits to relatives, after which they gradually entered the labor market. As foreign nationals, they have permanent residence status, so there are no restrictions on their activities or employment.
Most Nikkeijin do not speak Japanese well and are engaged in simple labor. In the 1980s and 1990s, during labor force shortages even among Nikkeijin residents, there were cases where they became mid-level employees of small and medium-sized companies, but the majority of them had irregular employment contracts as dispatched workers or subcontractors. As a result, Nikkeijin began to search for more advantageous working conditions. This led to a gap between the alien registration system and the residence status of foreigners in their self-governing regional provinces, which made it difficult to determine their status, and caused social problems such as not registering for social insurance, not sending their children to school, etc.
Japan has activated the employment of Nikkeijin in order to decrease the employment demand for unskilled foreign workers. The number of employed Nikkeijin is more than twice that of unskilled foreign workers, which helps to prevent the social burdens caused by the hiring of foreign workers receiving relatively low wages.
3. Professional Foreign Workers in Japan
The number of foreign persons in Japan’s professional and technical field increased from 129,414 in 2003 to 167,301 in 2015 (Ministry of Justice Statistics on Foreign Residents). Persons are regularly placed in technology development in the fields of information processing (27.6%), translation/interpretation (12.0%), sales/marketing (9.9%), education (9.8%), technology development in other fields of information processing (7.9%), design (7.5%), overseas work (5.5%) and trade work (2.1%). Of these numbers, 47.1% received a monthly remuneration of between JPY 200,000 and 300,000 for the period. Of employing companies, 25.9% had annual sales between JPY 100 million and 1 billion, while 9.7% had annual sales exceeding JPY 100 billion. By business size, 65% of foreigners work in establishments with less than 300 employees.
Regarding foreigners with a high level of specialized knowledge and skills (so-called high-ranking foreign workers), there was no limit to the number of labor market tests available, or to the number of people who could be accommodated in the market, where they were allowed to work freely. As globalization and industrial activities continued to progress, promotion of the employment of foreign talent at such a high level was regarded as one of the measures that the government should take in the Employment Measures Act, which was revised in 2007. In June 2010, the "New Growth Strategy" announced the introduction of a point system, which would grant preferential treatment to highly-skilled foreign laborers on the basis of immigration laws, and a notification was issued in March 2012 and enforced in May of that year. This high-level talent point system was revised in December 2013 to review the preferential measures, and in June 2014 the Immigration Act was revised (Act 74 of 2014).
The point system is the method whereby the immigration office allocates points for items such as academic achievement, proficiency, and annual income, according to their guidelines, in three areas (advanced academic research activities, advanced professional and technical activities, and advanced management and management activities). This is a system to entice highly-qualified foreign talent to Japan by giving preferential immigration treatment when a specific score is reached. Preferential measures include the granting of multiple statuses of residence, the granting of five years of stay, alleviation of permanent residence permit requirements relating to residence history, priority handling of immigration and stay procedures, employment of spouses, family employment of a foreign housekeeper, etc.
IV. Conclusion
The introduction of foreign workers in Korea has been made with reference to the industrial trainee system in Japan, but has evolved with very significant differences in direction and scale. In view of the foreign employment system in Japan, Korea should benchmark the following points regarding Japan’s policy:
First, it should minimize the incidence of human rights violations or social problems due to the long-term stays by minimizing the importation of unskilled foreign workers or observing the principle of short-term circulation.
Second, in the policy of accepting Korean foreign descendants, it is necessary to actively benefit from their employment.
Third, the Japanese government is actively attracting foreign professional workers through consistent policy support and improved immigration control laws. In Korea, it is essential to attract foreign professional manpower in order to develop high-tech industries and maintain industrial competitiveness. In the future, it will be necessary to improve the immigration system and for industry to cooperate with the government to attract professional foreign workers.
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