Living in Japan

Japan to Accept 40,000 Workers Under New Residency Visa in First Year: Is Japan Ready?

Japan will accept approximately 40,000 workers in the first year of implementation of the “Specified Skills” residency visa status, to ameliorate labor shortages in fourteen designated industries.

The draft amendment to the Immigration Control Act was approved by the Cabinet on November 2nd and will be implemented in April 2019, but prior to today, the government had not clarified the exact number of workers targeted for acceptance in the near term.

With such a large influx of new workers coming to Japan starting in 2019, lawmakers, industry representatives, and observers have pointed out a number of potential issues and problems related to implementation of the new visa statuses (please see “Potential Issues” below).

In the original announcement, in May of this year, a target number of 500,000 new workers by 2025 had been reported.

The number of foreign workers in Japan hit a record of 1.28 million in October 2017. If it is fully implemented by 2025, the new visa regime would increase this number by thirty-nine percent.

Essentially, the new policy recognizes that the Japanese economy faces severe labor shortages in a wide range of industries and marginally loosens the requirements for a specific set of workers, in an otherwise extremely strict immigration regime.

As detailed in this article (New Specified Skills Residency Visas Coming to Japan: Here’s What You Need to Know), the revision to the Immigration Control Act would establish two new statuses of residence in fourteen industries.

  • Specified Skills No. 1 (特定技能1号)
    • Eligible with certain level of knowledge/skills in specified industries.
    • Cannot bring family members.
    • Maximum stay up to five years.
    • Workers currently in Japan on the Technical Intern visa are eligible to apply for the Specified Skills No. 1 visa
  • Specified Skills No. 2 (特定技能2号)
    • Eligible with higher level of specialization.
    • Can bring family members.
    • Possible to renew visa.
  • Industries include: construction, agriculture, lodging/hospitality, nursing care, and shipbuildingFor a list of the 14 industries, please see: Which industries qualify for the new Specified Skills visa?

Potential Issues

Lawmakers, industry representatives, and observers have pointed out a number of potential issues and problems related to implementation of the new visa statuses.

Overstaying visa

  • In 2017, about 7,000 workers in Japan on the Technical Intern visa (which is a five-year visa, not a long-term working visa status) “disappeared,” meaning that they overstayed their visa and are presumably still residing in the country without a legal status.

Illegal overtime and unpaid wages

  • With respect to foreign workers, in 2017, the Ministry of Ministry of Health, Labor and Welfare found that 70% of 4,226 businesses surveyed had allowed illegal overtime work or owed wages to workers.
  • The same Ministry of Health, Labor and Welfare survey found that some technical interns were forced to work as much as 95 hours of overtime or were only paid just ¥400 an hour for overtime work.
  • Related to the new Specified Skills visa statuses: Companies that have previously employed a Technical Intern who has overstayed their visa will not be eligible to hire workers under the new visa status. Companies also will be required to hire workers directly under the new visa scheme, to prevent malicious middlemen from exploiting workers. The revision to the law will also create an Immigration and Residence Agency (from the current Immigration Bureau), which will do on-site inspections to make sure that companies are compliant with the law.

Pension payments

  • Issues related to pension payments. Similar to Japanese workers, foreigners working in Japan are required to pay into the national pension system, but in order to collect pension payments, a worker must have paid into the system for at least ten years. Workers under the “Specified Skills No. 1” (or for that matter, many foreigners currently in Japan on various other working visas statuses!) may end up losing those pension contributions if they are not able to renew their visa after the initial 5-year term. It is possible to apply for a refund of pension payments after a worker returns to their home country, but the refund is limited to an amount equal to 3-years of pension payments. However, eighteen countries currently do have reciprocal social security agreements with Japan, which makes it possible for workers from these countries to contribute into the Japanese pension system and receive pension payments from their home country.

Health insurance

  • Payments into the national healthcare system are capped at a certain amount, which is determined by a worker’s annual salary, but the actual cost of medical care may reach millions of yen. Some observers have expressed concern that workers under the Specified Skills No. 2 may bring family members to reside in Japan temporarily with them expressly for the purpose of taking advantage of Japan’s healthcare system. This concern is based on actual cases of this happening with foreign workers currently in Japan on other visa statuses.
  • LDP lawmakers have expressed that there are plans to implement strict rules for who is eligible for national health care related to the new visa statuses, as well as restricting family members residing overseas from being covered by national health insurance.

You may also be interested in: Am I eligible to apply for the Specified Skills visa to work in Japan?

Source: Nikkei Shinbun, November 3, 2018