EXCLUSIVE: Japan FTC Inspects 5 Staffing Firms over Alleged Fee Cartel

Tokyo, June 2 (Jiji Press)–Japan’s Fair Trade Commission on Tuesday conducted on-site inspections of Persol Tempstaff Co., Recruit Staffing Co. and three other companies for allegedly forming an illegal cartel to raise staffing service fees, Jiji Press learned. According to informed sources, this was the first on-site inspections conducted by the antimonopoly watchdog on companies in the temporary staffing industry. The five firms likely aimed to secure their own profits, with the companies suspected of agreeing to raise such fees around November 2022, the sources said. Staffing service fees are paid by companies that accept workers sent by the temp agencies. According to the website of the Japan Staffing Services Association and other sources, about 70 pct of such fees are salaries paid to dispatched workers, while the remaining 30 pct represent the temp agencies’ share, which covers various costs such as social insurance premiums, recruitment advertisement expenses and costs on temp workers’ paid leave, with a profit margin coming to 1.2 pct. The five firms are suspected of having raised such fees in hopes of boosting their own profits, rather than using the money to improve working conditions for their dispatched workers. According to the association’s website, the number of temp workers in Japan stood at around 1.42 million in fiscal 2021, accounting for 2.5 pct of all employed people. The market size has expanded since restrictions on the dispatch of temp workers to manufacturing operations were lifted in 2004, reaching some 8.6 trillion yen in fiscal 2020. END [Copyright The Jiji Press, Ltd.]