Five Structural Reasons Why "Freedom to Transfer" Won't Work Under Japan's New Training and Employment Program — Is It Just Relabeling the Technical Intern System?

At the end of 2024, the number of foreign residents in Japan reached 3,768,977 — a record high for the third consecutive year, representing a 10.5% increase over the previous year. Japanese society has already entered a structure that cannot function without foreign residents.

Against this backdrop, the Training and Employment Program, set to take effect on April 1, 2027, is attracting significant attention. As the successor to the Technical Intern Training Program, it sheds the 30-year facade of "international contribution" and places "securing and developing human resources" at the forefront. The most significant institutional change is "freedom to transfer" — allowing workers to change employers at their own discretion.

Under the Technical Intern Training Program, the de facto prohibition on transfers was the primary driver of disappearances. The 9,006 disappearances in 2022 demonstrate the reality that "fleeing" the system was the only means of escaping abusive conditions.

The Training and Employment Program appears to address this problem head-on. However, a close reading of the legislation reveals that "freedom to transfer" is subject to five requirements, each of which can function as a substantial barrier. Can changing the signboard change the structure? This article examines that question.

Five Transfer Requirements — How "Free" Is Freedom?

The transfer requirements outlined by the Immigration Services Agency for the Training and Employment Program are as follows.

Requirement 1: One to two years of employment at the same host organization. The period is expected to be set at one or two years depending on the sector, but this effectively functions as a "minimum binding period." Although shorter than the three-year term under the Technical Intern Training Program, the structure remains unchanged — if unpaid wages or harassment occur during this period, workers face a binary choice between enduring until they meet the transfer requirements or disappearing. JILPT has pointed out that the period setting is subject to the power dynamics of labor-management negotiations in each sector.

Requirement 2: Passing a basic-level skills examination or equivalent. The hurdle of sitting for an exam with insufficient Japanese language ability is higher than it appears. Because educational opportunities for exam preparation vary significantly depending on the host company, situations where "inability to pass the exam prevents transfer" can arise structurally.

Requirement 3: Japanese language proficiency equivalent to JLPT N5 or above. N5 corresponds to "the ability to understand basic Japanese to some extent" — a seemingly low bar. However, the problem is that post-arrival Japanese language education depends heavily on the host company's discretion. At small and medium enterprises lacking educational infrastructure, even N5 proficiency may be unattainable.

Requirement 4: The transfer destination must be a "certified host organization." While this condition is imposed on the receiving side rather than the transferring worker, it effectively restricts the range of transfer options. The certification criteria remain largely undefined, and if certified organizations are scarce in rural areas, transfer destinations will automatically concentrate in urban areas.

Requirement 5: Transfer procedures must go through Hello Work (Public Employment Security Offices). Rather than independent job searching, mandatory mediation through a public agency is required. For foreign workers with limited Japanese proficiency who are unfamiliar with Japanese job-hunting customs, using Hello Work itself becomes a barrier. Moreover, Hello Work's capacity for serving foreign nationals varies significantly by region.

All five requirements must be met "simultaneously" for a transfer to be permitted. Each requirement appears individually reasonable, but cumulatively they ensure that the number of foreign workers who "can actually transfer" is extremely limited.

The Profit Structure of Supervising Support Organizations — Incentives Against Transfers

Under the Training and Employment Program, current "supervising organizations" (kanri dantai) will be rebranded as "supervising support organizations" (kanri shien kikan). The name changes, but the fundamental structure — collecting management fees from host companies and overseeing foreign workers — remains intact.

This creates a structural conflict of interest. The income of supervising support organizations depends on management fees from host companies. When a foreign worker transfers, the management fee income from the original host company is lost. In other words, supervising support organizations have no incentive to actively facilitate transfers. On the contrary, discouraging transfers becomes economically rational.

As the analysis by Asia Welfare Education Foundation demonstrates, even under the current system, cases have been reported where supervising organizations advise trainees to "just endure it" when consulted about problems. Whether this structure will change simply by renaming organizations to "supervising support organizations" remains questionable. The effectiveness of institutional monitoring and evaluation mechanisms is at stake.

Intake Caps and the Reality of Labor Shortages

Through a Cabinet decision, the government set the combined intake cap for the Training and Employment Program and Specified Skilled Workers at 1.23 million by the end of FY2028. However, according to estimates by Persol Research and Consulting, a labor shortage of 3.84 million workers is projected by 2035. The 1.23 million cap covers less than one-third of the projected shortfall.

This supply-demand gap exerts pressure on how the system operates. For rural companies struggling with labor shortages, transfers mean "losing personnel in whom they invested for training." The motivation to block transfers is strong, and even if transfers are institutionally permitted, they may be obstructed at the operational level. The reason "transfer restrictions" were preserved for 30 years under the Technical Intern Training Program was precisely that this dynamic served the interests of system designers as well.

What the transfer requirements of the Training and Employment Program reveal is a structural dilemma between two policy objectives: "worker protection" and "labor retention."

The protection dilemma. Freedom to transfer is essential as a means of escaping abusive conditions. However, if transfers were fully liberalized, foreign workers would concentrate in higher-wage urban areas, further exacerbating labor shortages in rural agriculture, care, and construction. The five requirements represent the system designers' "solution" to this dilemma, but in practice, the center of gravity tilts toward labor retention — keeping workers in place, particularly in rural areas.

The oversight dilemma. A structure in which the entity responsible for protecting foreign workers' rights receives compensation from host companies constitutes a conflict of interest. The Training and Employment Program calls for the "optimization" of supervising support organizations, but as long as the income structure remains unchanged, the direction of incentives will not change. This stands in contrast to South Korea's Employment Permit System, which eliminated private intermediary organizations and adopted a model where the government directly manages matching.

The information dilemma. Transferring presupposes the ability to "find a transfer destination," but for foreign workers with limited Japanese proficiency and no access to labor market information, practical options are extremely narrow. The Hello Work mediation requirement is intended to publicly compensate for this information gap, but if on-the-ground capacity has not kept pace, the requirement becomes hollow.

Ultimately, the risk is high that freedom to transfer will become a right that "exists on paper but cannot be exercised." Just as the Technical Intern Training Program functioned as a labor procurement device under the guise of "international contribution," the Training and Employment Program may uphold the banner of "freedom to transfer" while preserving a structure that locks workers in place.

Monitoring operational mechanisms rather than legislative language. Publishing transfer outcome data and making attrition rates at each requirement stage visible. Redesigning the income structure of supervising support organizations to eliminate conflicts of interest. Without these implementations, the Training and Employment Program will remain "Technical Intern Training Program version 2."

• Structural Contradictions of the Technical Intern Training Program — Between 'International Contribution' and Labor Shortages
• Structural Transformation in the Era of 21 Million Non-Regular Workers — Has "Equal Pay for Equal Work" Narrowed the Gap?

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References

Training and Employment Program Q&A (Ikusei Shuro Q&A) — Immigration Services Agency. Ministry of Justice

Foreign Resident Statistics (End of 2024) — Immigration Services Agency. Ministry of Justice

Transfer Requirements Under the Training and Employment Program — Japan Institute for Labour Policy and Training (JILPT). Business Labor Trend, April 2024

On the New Training and Employment Program — Asia Welfare Education Foundation. Asia Welfare Education Foundation

Foreign Worker Training-Employment Program: Intake Cap Set at 1.23 Million — Nikkei. Nikkei

Labor Market Future Projections 2035 — Persol Research and Consulting. Persol Research and Consulting

Final Report of the Expert Council on Technical Intern Training and Specified Skilled Worker Programs — Immigration Services Agency. Ministry of Justice

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