Japan’s New Training and Employment System: Coexisting with Foreign Talent

Introduction: Japan’s Labor Market and a New Direction in Foreign Talent Policy

Japan is currently facing a serious labor shortage across many industries due to its rapidly aging population and declining birthrate. To address this challenge, Japan’s policy regarding foreign workers is at a major turning point. Adding to the domestic labor shortage is the intensifying international competition for talent, increasing the need for Japan to become a “country of choice” for foreign personnel. Against this backdrop, the long-standing Technical Intern Training Program (TITP) is being developmentally dissolved (Note: The government uses terms like “developmentally dissolved” or “fundamentally reviewed,” and some view it essentially as a system change or update). In its place, the “Training and Employment System” (育成就労制度 – Ikusei Shuro Seido) has been newly established, moving Japan’s acceptance of foreign talent into a new phase. This new system aims not just to accept labor but to systematically train foreign talent and connect them to the Specified Skilled Worker (SSW) system, striving to build a better future for both Japanese society and foreign personnel. This article will provide a detailed explanation of this Training and Employment System.

What is the Training and Employment System?: Main Objectives and Basic Principles

The Training and Employment System holds the potential to significantly change Japan’s approach to accepting foreign talent. At its core are two clear objectives and the basic principles to achieve them.

“Talent Development” and “Securing Human Resources”: The System’s Two Major Objectives

This system officially states the following two objectives:

1. Talent Development (Ikusei): To cultivate human resources with skills equivalent to Specified Skilled Worker Category 1 (SSW1) in designated industrial fields (Training and Employment Industrial Fields).
2. Securing Human Resources (Kakuho): To secure personnel in those fields.

A major policy shift lies in officially recognizing “securing human resources,” driven by Japan’s domestic situation, as a system objective, unlike the TITP, which primarily cited “international contribution.” This is seen as an attempt to address the long-standing criticism of the “discrepancy between purpose and reality” in the TITP and enhance policy transparency.

Basic Principles for System Operation

The fundamental principles outlined by the government for this system include:

• Developing personnel to the SSW1 level through a training period, generally three years.
• Aligning the target fields principally with the SSW’s specified industrial fields.
• Permitting job transfers (転職 – tenshoku) initiated by the individual under certain conditions.
• Strengthening support and protection systems for foreign workers (e.g., establishing new supervisory and support organizations).
• Ensuring appropriate sending procedures through cooperation with sending countries (e.g., concluding Memorandums of Cooperation – MOCs).

These principles aim to create a system more aligned with reality, considering worker rights protection and career development, based on the lessons learned from the TITP’s issues.

Why the Change?: From the Technical Intern Training Program (TITP) to the Training and Employment System

The creation of the Training and Employment System is a direct response to the necessity of addressing the numerous serious problems plaguing the long-operated TITP. The TITP is being “developmentally dissolved” based on these issues.

Major Problems with the Technical Intern Training Program

During its operation, the TITP faced harsh criticism both domestically and internationally. Key issues included:

• Discrepancy Between Purpose and Reality: There was a significant gap between the official goals of “international contribution” and “skill transfer” and the reality of serving as a labor supply for sectors facing shortages.
• Severe Human Rights Violations: Low wages, illegal overtime (instances exceeding 170 hours per month reported), violence, harassment, unpaid wages (cases totaling ¥11 million reported), and poor living conditions (e.g., lack of personal storage, inadequate fire safety equipment) were rampant. There were even accusations of “slave-like conditions” and cases involving informal rules prohibiting pregnancy and childbirth, posing significant human rights challenges.
• Restrictions on Job Transfers and Increased Absconding: As changing workplaces (transfers) based on the intern’s own volition was generally not permitted, escaping poor working conditions was difficult. Consequently, the number of interns absconding continuously rose, reaching 9,006 in 2022 and a record high of 9,753 in 2023. Low wages and debt problems incurred upon arrival in Japan are pointed out as interconnected factors behind these disappearances.
• Exorbitant Fees and Debt Problems: Cases were widespread where unscrupulous brokers in sending countries or some sending organizations collected high fees and deposits from interns. For example, in Vietnam, an average fee of about ¥650,000 was reportedly collected, with instances exceeding legal limits. Interns incurred large debts before arriving in Japan, leading to situations criticized as “debt bondage,” where they were forced to accept low wages and poor treatment. Structural problems, such as Japanese supervising organizations demanding kickbacks from sending organizations, were also pointed out, undermining the system’s credibility.
• Dysfunction of Supervising Organizations: The supervising organizations responsible for overseeing and guiding implementing companies often failed to adequately perform their functions, overlooking misconduct or prioritizing the companies’ interests over intern protection.
• Lack of Clear Career Paths: The system lacked clear career pathways after completing the training, and transitioning to other statuses like the SSW was not smooth.

These problems drew international criticism, leading a government expert panel to propose the “developmental dissolution” of the TITP and the creation of a new system aligned with reality. The shift to the Training and Employment System is thus an inevitable response to this legacy of failure and dysfunction.

What’s New in the Training and Employment System!: Main Features and Changes

The Training and Employment System incorporates many new mechanisms and ideas based on the lessons from the TITP’s challenges. Let’s look at the main features in detail.

What are the Target Industrial Fields?

The industrial fields targeted by the Training and Employment System are, in principle, aligned with the “specified industrial fields” of the Specified Skilled Worker (SSW) system. This aims to create a structure where personnel trained under the new system can smoothly transition to SSW1 status.

As of 2024, the following 16 fields are designated as specified industrial fields and are candidates for the Training and Employment System:

1. Nursing care
2. Building cleaning management
3. Industrial machinery, electric/electronic information related industries (formerly Machine parts & tooling/Industrial machinery/Electric, electronics and information industries)
4. Construction
5. Shipbuilding and ship machinery
6. Automobile repair and maintenance
7. Aviation
8. Accommodation
9. Agriculture
10. Fishery and aquaculture
11. Manufacture of food and beverages 12. Foodservice industry  
12. Road transportation (added 2024)
13. Railway (added 2024)
14. Forestry (added 2024)
15. Timber industry (added 2024)

However, even within these fields, areas deemed “unsuitable for domestic training” may be excluded. The final list of target fields and detailed rules for each field will be determined by the “Field-Specific Operational Guidelines” (分野別運用方針 – Bun’ya-betsu Un’yō Hōshin) to be formulated. Another new feature is the setting of an “Expected Number of Acceptances” (受入れ見込数 – Ukeire Mikomisuu) for foreign workers in each field, which will serve as an upper limit managed by the government. Furthermore, for fields with high seasonality, such as agriculture and fisheries, acceptance through dispatch work arrangements is expected to be permitted based on operational needs.

Required Skills and Japanese Language Proficiency for Foreign Talent

The Training and Employment System requires foreign workers to acquire skills and Japanese language proficiency incrementally, from entry throughout the training period. This reflects an emphasis on “development” geared towards a smooth transition to SSW status and aims for skill standardization, rather than merely securing labor.

Conditions at Entry/Start of Employment

• Skills: No specific skill requirements are imposed.
• Japanese Language Proficiency: Before starting work, individuals must have passed a Japanese Language Proficiency Test (JLPT) N5 equivalent (CEFR A1 level) or higher, or have completed an equivalent Japanese language course.

Goals and Evaluation Criteria During the Training Period (Generally 3 Years)

• Training Goal: To reach skill levels equivalent to SSW1 and Japanese proficiency equivalent to JLPT N4 (CEFR A2 level) through three years of employment.
• Evaluation Milestones:
  • By the end of the first year: Pass the “Basic Grade” (基礎級 – Kiso-kyu) skills test or equivalent. Also, pass the A1 exam by this point if not passed before entry.
  • At the time of transfer initiated by the worker (after 1-2 years of work): Pass the Basic Grade skills test or equivalent, AND pass a Japanese proficiency test set for the specific field (within the A1-A2 range).
  • At the time of transition to SSW1 (generally at the end of 3 years): Pass the “Grade 3” (３級 – San-kyu) skills test or equivalent, or the SSW1 evaluation test, AND pass a Japanese proficiency test equivalent to JLPT N4 (CEFR A2 level) or higher.

The period of stay is generally three years, but an extension of up to one year may be permitted for re-taking exams if the worker fails, provided certain conditions are met (e.g., the receiving organization provided appropriate training). Note that accompanying family members are generally not permitted under the Training and Employment status.

What is the “Training and Employment Plan”?: Certification and Specific Content

Central to the Training and Employment System is the “Training and Employment Plan” (育成就労計画 – Ikusei Shuro Keikaku), created and certified for each individual foreign worker. The receiving organization (employer) creates this plan, which must be certified by the newly established “Organization for Nurturing Employment for Foreign Nationals” (ONEFN – 外国人育成就労機構). This certification process is a crucial mechanism to ensure the receiving organization fulfills its obligations regarding training, support, and working conditions, thereby enhancing accountability.

The Training and Employment Plan primarily includes the following:

• Duration of training and employment (generally within 3 years)
• Training goals (job details, skills to be acquired, target Japanese level, etc.)
• Training content and methods (OJT, Off-JT, Japanese language learning support, etc.)
• Working conditions (wages, hours, holidays, etc., compliant with labor laws)
• Support system (living support, consultation system, etc.)
• Confirmation that fees paid by the foreign national to the sending organization are not unreasonably high.

This plan serves as the central document in operating the system, clearly stating the specific obligations of the receiving organization regarding training, support, and working conditions.

The Three Main Organizations Supporting the System and Their Roles

Receiving Organizations (Companies providing training, etc.)

These are the companies that directly employ foreign workers and provide training based on the certified Training and Employment Plan. They are required to offer OJT and necessary training, ensure proper working conditions, and provide support for daily life.

Supervisory Support Organizations (New oversight bodies)

These organizations replace the “supervising organizations” (監理団体 – Kanri Dantai) of the TITP. They operate under a permit system and are subject to stricter standards than their predecessors, including the mandatory installation of external auditors, aiming for improved quality. They conduct audits and provide guidance to receiving organizations, support plan creation, handle applications, respond to worker consultations, and offer job placement services. Regulations are also strengthened to prevent conflicts of interest, such as prohibiting concurrent positions, to avoid collusion with receiving organizations.

Organization for Nurturing Employment for Foreign Nationals (ONEFN: The system’s core institution)

Established by reorganizing the Organization for Technical Intern Training (OTIT – 外国人技能実習機構), ONEFN certifies Training and Employment Plans. Additionally, it is newly tasked with providing support and protection to Training and Employment foreign nationals (consultations, information provision), particularly supporting job transfers initiated by the individuals themselves. Furthermore, its role expands to include consultation and assistance services for SSW1 foreign nationals, placing a greater emphasis on worker protection.

How Will “Job Transfers” (Tenshoku) Change?: Conditions and Impacts

One of the most notable changes in the Training and Employment System concerns the regulations on job transfers. Changing workplaces based on the worker’s own intention, which was generally prohibited under the TITP, becomes possible under certain conditions. This transfer rule attempts to strike a balance between strengthening worker rights protection (addressing a flaw of the TITP) and addressing employer concerns (risk of talent outflow, recovery of training investment) and issues like regional/inter-company personnel imbalances.

Main Conditions for Worker-Initiated Transfers

• Minimum Work Period: Must have worked for the same receiving organization for a certain period set for each field (currently planned to be “in the range of 1 to 2 years,” aiming for transfers after one year but potentially longer depending on the field). If the period exceeds one year, measures to improve treatment, such as pay raises after one year, are also being considered.
• Skills and Japanese Language Proficiency: Must have passed the “Basic Grade” skills test or equivalent, AND pass a Japanese proficiency test set for the specific field (within the “A1-A2 equivalent” range).
• Scope of Work: The job at the new workplace must be within the same “work category” (業務区分 – Gyomu Kubun) as defined in the previous Training and Employment Plan.

Transfers due to “unavoidable circumstances” such as the bankruptcy of the receiving organization or abuse are also planned to have expanded scope and more flexible procedures than before. Mechanisms are also being considered to allow for fair compensation for costs incurred by the previous receiving organization (e.g., initial costs) at the time of transfer.

While this transfer system strengthens worker protection, it also creates risks for employers of losing trained personnel after 1-2 years and concerns about talent imbalances, particularly concentrating workers in urban areas away from rural regions.

Stepping Up to Specified Skilled Worker (SSW) Status

Conditions for Transitioning to SSW1

The system is designed with the transition to SSW1 at its core. Generally, completion of the three-year Training and Employment Plan and passing the following exams are required:

• Skills Test: Grade 3 skills test or equivalent, or the SSW1 evaluation test.
• Japanese Language Proficiency Test: JLPT N4 equivalent (CEFR A2 level) or higher.

It is also possible to transition to SSW1 earlier, even during the training period, if these exam requirements are met and a certain period of employment is completed. The period of stay for SSW1 is capped at a total of five years, and accompanying family members are generally not permitted.

Path to SSW2

It is possible to transition from SSW1 to SSW2, which requires more advanced skills. SSW2 status has no limit on the number of renewals for the period of stay and allows for family members (spouse, children) to accompany the worker if requirements are met, effectively opening a path towards long-term residency or permanent residence.

When Does It Start?: System Enforcement Timing and Transitional Measures

The revised laws introducing the Training and Employment System were promulgated on June 21, 2024. The system will come into effect on a date specified by cabinet order within three years from the promulgation date (no later than June 20, 2027). Some reports suggest an target enforcement date of April 1, 2027.

After the system takes effect, the TITP will not be immediately abolished. A transitional period of approximately three years is planned, during which both systems will coexist. Full transition is expected around 2030. As a transitional measure, individuals already residing in Japan as technical interns on the enforcement date can basically continue their training based on their existing TITP plans. Transitioning to the next stage under certain conditions (e.g., from TITP Grade 1 to 2, or Grade 2 to 3 (limited)) will also be permitted. However, it’s important to note that they cannot switch from the TITP to the new Training and Employment System.

Stakeholder Voices: Expectations and Concerns

The introduction of the Training and Employment System carries different implications and impacts for various stakeholders.

What the Government Aims For

The government aims to resolve the issues of the TITP and build an attractive and sustainable system for foreign talent. Key benefits cited include clear dual objectives (talent development and securing personnel), structured career paths, enhanced worker rights protection, and promotion of a harmonious society.

Employer (Receiving Organization) Perspectives

For receiving companies, there are potential opportunities like securing a talent pipeline and smoother initial communication. However, there are also burdens and concerns, such as increased hiring costs, the risk of talent outflow due to transfers, and the need to enhance training and support systems. Concerns about talent outflow are particularly strong among companies in rural areas and SMEs, which may struggle to compete on wages. Business organizations have also made recommendations regarding the role companies should play, including efforts towards wage increases, multilingual manual preparation, strengthened human rights protection, presentation of career plans, and enhancement of living support, indicating that receiving organizations are also expected to adapt.

Potential Benefits and Drawbacks for Foreign Workers

For the workers themselves, there are potential advantages such as clearer long-term career paths and improved rights protection. The possibility of reduced initial debt burden exists, but this depends on the effectiveness of MOCs with sending countries and efforts towards fee transparency and regulation. However, challenges and vulnerabilities remain, including hurdles in meeting transfer requirements (minimum work period, exams), pressure to pass exams, the persistent risk of exploitation, and restrictions on family accompaniment during the Training and Employment and SSW1 periods.

Views of Labor Unions and Other Groups

Labor unions, bar associations, and similar groups acknowledge the system’s direction to some extent but raise numerous concerns and demand stricter operation and system improvements from a worker protection standpoint. Specifically, they strongly call for ensuring the system doesn’t become merely a means to secure cheap labor, thorough implementation of equal treatment (equal pay for equal work) compared to Japanese workers, more flexible transfer rules (e.g., freedom to transfer after one year), the establishment of effective supervisory and support systems, and the eradication of human rights abuses.

Future Challenges and Prospects

While the Training and Employment System represents a significant step forward for Japan’s foreign worker policy, its success hinges on overcoming numerous challenges.

Major Hurdles to Overcome

• Establishing Effective Human Rights Protection and Exploitation Prevention: A core goal, but its effectiveness will be tested, learning from TITP failures. Raising human rights awareness at the worksite level, not just formally, is essential.
• Ensuring Substantive Skill Development, Not Just Nominal: Creating mechanisms for training to proceed as planned, enabling workers to reliably improve skills, and verifying its implementation are crucial.
• Addressing Broker Problems and Exorbitant Fees in Sending Countries: Effective measures through MOCs are urgently needed. Strengthening cooperation with sending country governments and establishing specific rules for fee transparency and regulation are required.
• Managing Personnel Imbalances Between Regions and Companies due to Transfers: Measures utilizing regional councils involving local governments are planned, but effective operation is needed to prevent talent drain to urban areas and help resolve rural labor shortages.
• Ensuring the Effectiveness of New Supervisory and Support Organizations (ONEFN, Supervisory Support Orgs.): A critical factor for the system’s success; securing their independence, expertise, and strict operation is vital. Building a system with sufficient personnel and budget to accurately grasp and guide field situations is necessary.

The success or failure in resolving these challenges depends on future operation and continuous review.

The System’s Future and Japan’s Future

The Training and Employment System strengthens ties with the SSW system and represents significant progress from previous systems by offering a longer-term career perspective for foreign workers. However, it’s noteworthy that alongside this reform, requirements for permanent residency are also being clarified and tightened, for example, by adding non-payment of taxes or social insurance premiums as grounds for revocation. This may suggest a complex balancing act in Japan’s policy towards foreign personnel: promoting longer stays in specific fields to meet labor demands while maintaining stricter control over eventual permanent settlement. Amidst intensifying global competition for talent, ongoing verification through operational results will be essential to determine if this new system truly enhances Japan’s attractiveness and constitutes sufficient reform to become a “country of choice.”

Conclusion: Towards a Society of Harmonious Coexistence with Foreign Talent

The Training and Employment System marks a crucial turning point in Japan’s foreign worker policy. It aims to address the worsening labor shortage while protecting the human rights of foreign talent and providing better career paths. However, achieving these goals depends not only on the system’s sophisticated design but also on its strict and fair implementation in the field, the effective functioning of related organizations, practical cooperation with sending countries, and the development of a receptive environment throughout society. In particular, preventing the recurrence of human rights violations and unfair fee collection that plagued the TITP, and ensuring substantive “development,” will be key to the system’s credibility. It is hoped that this new system will be fruitful for both Japan and the foreign talent involved, serving as a cornerstone for realizing a truly harmonious society. Careful monitoring of future developments and the flexibility to revise the system as needed will be required.