Japan FTC Inspects 5 Staffing Firms over Alleged Fee Cartel

Tokyo, June 2 (Jiji Press)–The Japan Fair Trade Commission on Tuesday conducted on-site inspections of five major staffing companies in Tokyo, including Persol Tempstaff Co. and Recruit Staffing Co., for allegedly forming an illegal cartel to raise staffing service fees. According to informed sources, these were 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 their executives suspected of agreeing around November 2022 to raise staffing service fees from fiscal 2023 at the latest, 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 represents the temp agencies’ share, which covers various costs such as social insurance premiums, recruitment advertisement expenses and costs for temp workers’ paid leave, with a profit margin coming to 1.2 pct. The five firms are suspected of raising such fees in hopes of boosting their own profits, rather than using the money to improve working conditions for their dispatched workers. According to labor ministry data, the number of dispatched workers totaled about 2.2 million in fiscal 2024, a 3.9 pct increase from the previous year, while the industry’s annual sales grew 9.4 pct to 9,900.5 billion yen. The average fee for an eight-hour dispatch rose 3.6 pct to 26,257 yen. “We will fully cooperate with the JFTC’s investigation,” an official of Persol Tempstaff said. END [Copyright The Jiji Press, Ltd.]