Employment laws when hiring in Japan
If you’re looking into employing workers for your business in Japan, it’s crucial to understand Japanese employment laws in their entirety. Japanese labor laws apply to all employers and employees, and therefore laws including but not limited to the Labor Standards Law, the Minimum Wage Law and the Employment Security Law apply to all foreigners working in Japan. If you’re looking for a guide to understanding the fundamentals of employment rules in Japan, this is the article for you.
Japanese Labor Standards Act
Although we strongly recommend that you read the Japanese Labor Standards Act in its entirety, we’ll mention some of the most important points that we believe apply to foreign employees in Japan.
- It is strictly prohibited to discriminate by nationality, or other status of any worker (Article 3).
- All working conditions, including but not limited to calculation of wages, working hours, etc. must be clearly stated in your labor contract. Article 15 of the Japanese Labor Standards Act also requires you to have your company’s rules and procedures on wages be in writing.
- Forced labor (i.e. forcing workers to work by acts of violence and/or intimidation) is strictly prohibited (Article 5).
- It’s prohibited to include information in regard to the payment of a penalty or damages for non-fulfilment of a contract, such as employee resignation before the completion of the contract period (Article 16).
- In the event that a worker is absent from work as a result of injury or sickness due to work in relation to your company, it is prohibited to dismiss him/her during his/her period of absence plus 30 days thereafter (Article 19).
- In the event of dismissal of a worker, an advance notice of at least 30 days before dismissal is required. If an advance notice is not given at least 30 days before dismissal, the employer must pay the amount of average wages for the number of days (Article 20 and 21).
- Wages must be paid in currency (except in special cases) directly to the workers at least once a month and on a fixed date (Article 24). In the event that a worker resigns, you (the employer) must pay said worker any outstanding wages within 7 days following said worker’s request for payment.
- The statutory working hours are 8 hours a day (40 hours a week). For certain types of industries, however, statutory working hours can be up to 44 hours a week. In addition, statutory holidays are 1 day a week, or 4 days or more in a 4-week (1 month) period (Articles 32, 35, 40, and 131).
- Any work done in excess of the statutory working hours (i.e. 40 hours or more a week) must be calculated and paid at 25% or more of the employee’s normal wages, and at least 35% for work on statutory holidays (Article 37).
- If an employee works 8 hours or more a day, the employer must give that employee a break of no less than 60 minutes (1 hour). If the employee works six hours a day, that employee is entitled to a break of no less than 45 minutes.
- Employees who have been employed continuously for 6 months or more, and have worked 80% or more of their total working days, are entitled to annual leave with pay (Article 39).
You can read the official English translation of the Japanese Labor Standards Act by clicking here.
Rules of Employment
On top of complying with all the rules of employment in Japan, you’ll need to draft your own work rules as a way to establish your work rules as a legally binding contract of employment. If your company has 10 or more full-time employees, you’ll need to submit your company work rules to the local Labor Standards Inspection Office in your city. If you have fewer than 10 full-time workers employed at your company, it is still strongly advised to draft the rules of employment for your company.
When drafting the rules of employment of your company, at a minimum it must include the following items below:
- Clearly state the official start and finish times of your company work hours, breaks, days off, leave of absence (including childcare and family care leave), and arrangements regarding shifts (in cases where work is performed by two or more teams of workers)
- Wages: How wages in your company are calculated and determined (excluding special bonuses and the like), date of payment of wages, and matters regarding wage raises
- Matters regarding resignation and/or termination of employment (i.e. dismissal)
In addition to the three mandatory points above, your company work rules must clearly state matters regarding the following (if it applies to your company): retirement allowances, extraordinary wages, responsibility for meal expenses, safety and hygiene, job training, workers’ accident compensation, awards and disciplinary measures, and other matters.
For an in-depth look at the Rules of Employment, we strongly recommend reading the Rules of Employment sample document created by the Japan External Trade Organization (JETRO).
Did you find this article helpful? Click here for our article on Contracts and Benefits for Employees in Japan.
This page is intended to be used for informational purposes only and should not be a substitute for obtaining professional legal advice.