Japan HR Information

Updated on: 2025/08/04 14:03 (UTC)

Overview

Japan enacted many of its key employment-related laws in the aftermath of World War II, among them the 1947 Labor Standards Act, which governs the employee-employer relationship; the 1946 Labor Relations Adjustment Act, which governs collective bargaining and the 1949 Labor Union Act, which governs labor unions.

Major revisions or additions to employment law include amendments to the Labor Standards Act boosting overtime pay, which went into effect in 2010, and a revised child care and family care law, passed in 2009, designed to help employees better balance work and family responsibilities.

Hiring

Employment Contracts

The Labor Contract Act requires that an employment agreement between an employer and an employee be in writing. Generally, the written employment agreement is brief and refers to the employer’s work rules for detailed terms of the employment relationship.

The employer may not change any portion of a contract that the worker and employer agreed would not be subject to change.

Employers are allowed to establish a probationary period of up to one year, but periods lasting between three and six months are more common in practice.

Employers must avoid irrational disparities between the working conditions of permanent, full-time employees and nonregular employees. Employers must provide reasons to nonregular workers upon request for any disparity in the terms and conditions of employment. In order to make a determination that it would not be unreasonable to distinguish between a nonregular and regular employee, the employer must consider the :

• the duties of the employee,
• the extent of any changes to the workplace or content of the work, and
• the employee’s skill level, experience, and responsibilities.

A contract for a fixed term, other than those for the completion of a specific task, must not exceed three years, five years for workers over the age of 60 and highly specialized professionals. All contracts should clearly state wages, hours, and other working conditions. The employee may immediately cancel the contract if the actual working terms differ from those described in writing.

Pursuant to amendments to the Labor Standards Act, where an employee on a fixed-term contract has worked continuously for an employer for five years or more, that employee can apply for an indefinite-term employment contract. If an employee has worked at least 10 months under a fixed-term contract, a break of six months or more will disqualify the employment as “continuous” for purposes of the five-year rule. The employee’s fixed-term contract transitions into a permanent contract on the expiration of the fixed-term contract.

An employer with 10 or more employees must draft a set of work rules, submit them to a Labor Standards Inspection Office and publicize them to employees by posting them in the workplace, delivering copies to the employees or otherwise. Worker representatives must be consulted about any plans to change the rules, and changes must be submitted to a Labor Standards Inspection Office.

The work rules must address the following topics:

• the beginning and end of the workday;
• rest periods, rest days, and leave;
• if workers are employed in two or more shifts, issues relating to the change in shifts;
• methods for determining, calculating, and paying wages, as well as issues relating to wage increases;
• any applicable special wages or minimum wages;
• any retirement allowance;
• the termination of employment and grounds for dismissal;
• any requirement that employees bear the cost of food, supplies for work, or other such expenses;
• safety and health issues;
• vocational training, if any;
• accident compensation and/or support for injury or illness outside the scope of employment;
• specifics on commendations or sanctions and
• any other work rules applicable to all employees.

Work rules may not violate applicable laws or collective bargaining agreements. An employment contract for an individual employee may contain terms that are more favorable than those set forth in the work rules, but may not contain terms that are less favorable.

The employer may change the work rules in a manner that is detrimental to its employees only if the change is reasonable in light of:

• the extent of the disadvantage to the employees,
• the reasons and need for the change in the rules,
• the appropriateness of the changed rules,
• the status of negotiations with a labor union or similar entity and
• any other relevant circumstances.

Restrictions on Hiring

Generally, employers may not hire children under 15 years of age and older children not before the first April 1 after they turn 15. However, children ages 13 and 14 may be employed after school in light work duties, with government permission, as long as the combined hours of school and work do not exceed seven in a day or 40 in a week. Generally, children cannot work between 10 p.m. and 5 a.m. or in potentially dangerous jobs. Children under 12 years of age may be employed in motion picture and theatrical performance enterprises. Employers must keep birth certificates of minors on file to prove the workers’ ages.

Employers may not require women to work underground, except when an ordinance of the Ministry of Health, Labor and Welfare has approved such work due to temporary necessity, and may not require pregnant women or women who have given birth within the past year to work in the handling of heavy materials, in places where harmful gas is generated, or in other work that is harmful to pregnancy, childbirth or nursing.

Recordkeeping

The Labor Standards Act requires employers to prepare a roster of employees for each workplace containing each employee’s name, date of birth, personal history and any other information required by ordinance of the Ministry of Health, Labor, and Welfare. Employers also must prepare a wage ledger for each workplace, which must contain the bases upon which wage calculations are made, the amount of wages and any other information required by ministry ordinance.

Employers must keep employee rosters, wage ledgers and other important documents concerning hiring, dismissal, accident compensation and other labor relations matters for at least three years.

Background Checks

Under the Employment Security Law, employers are allowed to collect personal information about job seekers only to the extent necessary to meet the needs of their businesses. A wider scope of inquiry is permitted if employees give their consent to the collection of the information.

Noncompetition Agreements

Noncompetition agreements are valid if reasonable. In determining whether a noncompetition agreement is reasonable, courts look at the substantive and geographic scope of the agreement, its duration, whether such an agreement is needed to protect an employer’s confidential information, the effect of the agreement on the employee’s ability to earn a living and on the public interest and any compensation paid by the employer to offset the restriction on the employee’s activities. Some court decisions have found that compensation is a requirement for an enforceable noncompetition agreement. In general, any analysis of the reasonability of a noncompetition agreement is highly fact-intensive, based on the individual circumstances of the agreement in question.

Reference Citations

Employment Contracts: Labor Standards Act, 1947, No. 49, arts. 14 -18, 89; Law Concerning the Establishment of Related Laws to Promote Working Way Reform, 2018 (Japanese)

Restrictions on Hiring: Labor Standards Act, 1947, No. 49, art. 56

Recordkeeping: Labor Standards Act, 1947, No. 49, arts. 107 - 109

Background Checks: Personal Information Protection Law, 2003, No. 57, art. 16

Immigration and Work Permits

In General

A foreign employer wishing to station an employee in Japan for longer than 90 days must have a physical presence in the country. Once this physical presence is established, an employee who has at least a year’s service with the employer can apply for a visa.

Three types of visa are available for foreign workers: skilled labor, intracompany transferee, and highly skilled professional. The determination of whether someone is a highly skilled professional is made using a points system that takes into account academic background, business experience and salary.

Permission to Hire Foreign Worker

A foreign employer wishing to station an employee in Japan for longer than 90 days must have a physical presence in the country (an office or other dedicated space), at the very least a representative office. Once this physical presence is established, an employee who has at least a year’s service with the employer can apply for an intracompany transferee visa.

A Certificate of Eligibility, which specifies the activity a visitor will engage in while in Japan, will facilitate the process of applying for a work visa and cut actual processing time from months to days. The application is made in Japan by the prospective employee’s employer (the “sponsor”) at a regional immigration office. The employer must submit a Letter of Reason for Invitation identifying the employee and specifying the work he or she will do or a Letter of Guarantee, which makes the employer sponsor responsible for the employee’s expenses and conduct while in Japan as well as his or her return home.

The employer forwards the Certificate of Eligibility to the employee, who then applies at the nearest Japanese consulate for a visa, a process that can take several days to complete. A visitor who will be staying in Japan no longer than 90 days and will not be performing compensable work—someone attending a conference, for example, or a business meeting—doesn’t need a visa, although a return ticket is required to prove the individual will in fact be leaving the country.

Visas and Work Permits

Three types of visa are available for foreign workers, the first two of which are valid from one to three years:

• skilled labor,
• intracompany transferee and
• highly skilled professional.

The determination of whether someone is a highly skilled professional is made using a points system that takes into account academic background, business experience, research achievements, and salary.

The advantages of qualifying for a highly skilled professional visa include such preferential treatment as:

• permission to engage in multiple activities,
• permission to stay for five years,
• easier qualification for permanent residence,
• quicker processing of entry and residence procedures, and
• permission for spouse to work.

On entering Japan, an expatriate employee must present his or her passport to the immigration control officer and will be photographed and fingerprinted as part of the Japanese antiterrorism program.

An expatriate employee will be issued a residence card at the port of entry, which must be presented within 14 days of arrival in Japan at the local government office in the municipality where the employee will live, at which time the employee must give the local government official notification of moving in. The employee must notify the local government offices at both the former and new locations when changing address.

The Japanese government does not impose limits on the number of short- or long-term visas that it will issue.

Applicants for permanent residence who score over 80 points on the Immigration Ministry’s points-based system are eligible for permanent residency after one year of temporary residency. Applicants scoring over 70 points on the scale are eligible for permanent residency after three years.

Spouses of work-residence status holders (with the residence status of “dependent”) are not allowed to work, unless they obtain permission at the local immigration bureau which will allow them to work for a maximum of 28 hours per week. If such spouses seek to work more than 28 hours a week, they must obtain a residence status that permits them to work independently.

Penalties

Employers found to have employed foreign nationals illegally face possible imprisonment of up to three years or a fine not exceeding three millionyen (or both). When hiring or firing a non-Japanese national, an employer is obligated to report that individual’s name, resident status, period of stay, nationality and other details to its local Public Employment Security Office. If the employer is a non-Japanese entity and is relocating a non-Japanese employee to Japan for an intracompany transfer, the employer will need to disclose the commencement and end dates of the transfer. Punishment for noncompliance may include a fine of up to 300,000 yen.

Reference Citations

Visas and Work Permits: Visa Application Procedures

Nondiscrimination

In General

Employers may not discriminate against employees or prospective employees on the basis of race, creed, sex, social status, family origin, nationality, union membership and activity or age.

Types of Discrimination

According to the Japanese Constitution, “all of the people are equal under the law and there shall be no discrimination in political, economic, or social relations because of race, creed, sex, social status, or family origin.” Under the Labor Standards Act, an employer may not discriminate “with regard to wages, working hours, or other working conditions by reason of the nationality, creed, or social status of any worker.” Various other employment laws prohibit discrimination based on gender, union membership and activity and age and require employers to provide opportunities for people with disabilities.

Employers cannot mistreat workers who make allegations against those who are in more senior positions. Companies are also obliged to take preventive measures against managers who abuse their power in the workplace.

Age Discrimination

Under the Employment Measure Law, “employers must, when it is regarded as necessary in order for workers to effectively display their abilities, endeavor to provide equal opportunity to workers in relation to recruitment and employment, irrespective of age.”

Under the Act on Stabilization of Employment of Elderly Persons, employers must allow their employees to work until the age of 65. Employers should also make “efforts” to secure employment opportunities for employees up to the age of 70. This means that employers who have set a mandatory retirement at less than age 70 or have introduced a continuous employment system until age 65, should take one of the following measures:

• raise the retirement age to 70;
• abolish the retirement age;
• continue to employee individuals up to age 70;
• employ individuals who have reached the mandatory retirement age as independent contractors up to age 70; or
• help employees to work on social outreach projects established by the employer until they reach age 70.

Disability Discrimination

The Basic Law for Persons with Disabilities states that “no one shall be allowed to discriminate against persons with disabilities or violate their rights and benefits on the basis of disability.”

The Disabled Persons Employment Promotion Law establishes an employment quota system under which an employer that employs more than a specified number of employees is required to employ a certain percentage of workers with disabilities. The quota is reviewed at least every five years. Presently, all companies must have at least 2.3 percent of their workforce made up of people with disabilities, which means that employers with 43.5 or more employees are required to have at least one handicapped employee. Once a year, an employer must report to the local Public Employment Security Office the number of workers with disabilities it employs. The Public Employment Security Office may require an employer that fails to meet its quota to prepare a plan to do so and to pay a fine to help fund programs for people with disabilities.

Gender Discrimination

The Act on Securing Equal Opportunity and Treatment Between Men and Women in Employment requires that “with regard to the recruitment and employment of workers, employers shall provide equal opportunities for all persons regardless of sex.”

Under the Labor Standards Act, an employer may not “engage in discriminatory treatment of a woman as compared with a man with regard to wages by reason of the worker being a woman.” The Act on Securing Equal Opportunity and Treatment Between Men and Women in Employment further states that “employers shall provide equal opportunities for all persons regardless of sex” and specifically bars employers from discriminating against workers because of sex with respect to assignment, promotion, demotion, training, loans for housing and other similar fringe benefits, change in job type and employment status, efforts to encourage retirement, mandatory retirement age, dismissal, or renewal of the labor contract. Employers are barred from taking actions that have a disparate impact on one sex unless there is a legitimate nondiscriminatory reason for doing so. Employers also may not dismiss or adversely treat female employees because of pregnancy, childbirth, marriage, or request for maternity leave.

Under the Act on Securing Equal Opportunity and Treatment Between Men and Women in Employment, employers are required to ensure that workers are not adversely affected by sexual harassment or by their responses to harassment. Japanese law defines sexual harassment to include situations in which “women workers suffer a disadvantage in their working conditions by reason of said women workers’ response to sexual speech or behavior in the workplace.” Such disadvantages can include dismissal, demotion or reduction of pay, as well as those situations in which “women workers’ working environments suffer harm due to said sexual speech or behavior.”

Employers must notify employees of their policies against sexual harassment, establish a process for responding quickly and appropriately to complaints of sexual harassment, protect employees’ privacy in connection with sexual harassment complaints and establish a policy to protect employees who report sexual harassment from retaliation.

Gender Pay Reporting: Employers with more than 300 employees must develop action plans for promoting female employees and publish information on the activities of female employees at the company, including gender wage gaps.

Reference Citations

Nondiscrimination: Japan Constitution, 1946, art. 14; Labor Standards Act, 1947, No. 49, art. 3

Age Discrimination: Employment Measures Act, 1966, No. 132, art. 10

Gender Discrimination: Act on Securing Equal Opportunity and Treatment Between Men and Women in Employment, 1972, No. 113, art. 5

Employee Privacy

Employee Data

Employers collecting employees’ personal information must disclose the purpose for which the information is to be used as soon after the collection as possible. When obtaining employees’ personal information in writing directly from the employee, the employer must expressly show the purpose prior to acquiring the information.

Personal information includes fingerprint data, facial recognition data, and passport data. Employers must obtain employees’ consent when gathering “special care-required personal information,” which includes information pertaining to a person’s race, religion, and medical history.

Employers must maintain records of personal data transferred or received, including the name and address of the receiving or transferring third party, when providing or receiving personal information to or from a third party.

Employers also must obtain the prior consent of their employees when they seek to transfer personal information to a third party outside Japan unless the third party is in a country where regulation on personal information protection is considered to be equivalent to that of Japan or the third party maintains an internal personal information protection system consistent with standards set by the Japanese government.

Employers seeking to provide personal data to third parties must give prior notification to the Personal Information Protection Committee.

Employee Monitoring and Surveillance

Employers can monitor employees’ use of email, Internet, and telephone and observe them via closed-circuit television. Employee consent generally is not required, but guidelines issued by the Ministry of Economy, Trade, and Industry state that employees should be made aware of any monitoring, its purpose, and to whom the data will be supplied. Employees must be informed if monitoring may result in disciplinary action.

Reference Citations

Employee Data: Personal Information Protection Law, 2003, No. 57, arts. 15-24

Employee Monitoring and Surveillance: Personal Information Protection Law, 2003, No. 57

Compensation

Hours of Work

The Labor Standards Act sets the regular Japanese workweek at no more than 40 hours and the standard workday at no more than eight hours, subject to certain exceptions relating to flexible work schedules. Any hours worked above these thresholds are considered overtime.

Employers must provide workers with at least one rest day per week or at least four rest days during a four-week period. Employers also must provide rest periods of at least 45 minutes if the workday exceeds six hours and at least one hour if the workday exceeds eight hours.

Employers must “make efforts” to ensure that there is an interval between the end of working hours for one day and the beginning of working hours for the next day.

The law governing rest days and periods does not apply:

• to workers in agriculture, animal husbandry, or fishing;
• to managers, supervisors, and persons handling confidential matters; or
• if the employer has obtained approval from a Labor Standards Inspection Office, to persons engaged in keeping watch or in intermittent labor.

In addition, a female employee with a child under 1 year of age is entitled to two unpaid 30-minute rest breaks to care for the infant.

Employers are required to track the working time of all employees.

Minimum Wage

Minimum wages are set for Japan’s 47 prefectures and some industries within these prefectures. Effective from October 2024 to September 2025, standard hourly minimum wage changes from 1,113 (yen) to 1,163 (yen) in the Prefecture of Tokyo.

Under the law, employers are not required to pay the applicable minimum wage to the following categories of employees:

• workers with a significantly lower ability to work due to a mental or physical disability,
• probationary workers,
• workers getting vocational training,
• workers whose hours are especially short,
• workers engaged in light work and
• any other workers specified by the Ministry of Health, Labor, and Welfare.

When an employee’s absence from work is caused by the employer, as in a temporary layoff, the employer must pay the employee an allowance equal to 60 percent of normal wages.

The employer must comply with employee requests for an early payment of wages accrued to date to cover childbirth, illness, accident or other emergency expenses.

Overtime

Overtime hours generally are limited to 45 hours per month and 360 hours per year. These standard maximum numbers of overtime hours can be exceeded for a limited period only if an employee and employer sign an agreement allowing the employee to work extended overtime hours. Overtime hours are those that an employee works in excess of 40 hours in a week or eight hours in a day.

An employer may require an employee to work overtime hours only if there is a written employment agreement signed by both the employer and employee that permits overtime hours to be worked. If there is a written agreement permitting overtime work, the agreement must be submitted to a Labor Standards Inspection Office. Where overtime is necessitated by unforeseen circumstances, the employer must, if possible, obtain advance permission of a Labor Standards Inspection Office before requiring employees to work overtime. If such advance notice is not possible, the employer must notify a Labor Standards Inspection Office after the overtime hours commence.

Under provisions of the Work Style Reform Act of 2018, overtime requirements regarding extended overtime hours and overtime premium pay are differentiated among employers until March 31, 2023, based on whether they are large employers or small- and medium-sized employers (SMEs). Starting April 1, 2023, the overtime hour and overtime premium pay provisions are not differentiated among employers based on whether they are large employers or SMEs.

The Japanese government’s definition of SME varies among industry sectors and is based on an employer’s having an amount of capital that is no greater than a specified amount or a number of employees no greater than a specified number. Employees who are annually paid at least ¥10.75 million and whose work requires highly specialized expertise may consent to being exempt from the maximum numbers of overtime hours under the Work Style Reform Act, as long as their employer implements steps to safeguard their wellbeing, such as ensuring they take at least 104 days off per year or monitoring the number of hours that they work both within and outside the office.

There are specified extended maximum numbers of overtime hours that can be worked beyond the standard maximum numbers of overtime hours even if there is an agreement between an employee and employer for the employee to work in excess of the standard maximums, and such an agreement can be established only when there are special circumstances of a temporary nature that require extended overtime hours to be worked. The extended maximum number of overtime hours that an employee may work under an agreement between the employee and employer is 100 hours per month and 720 hours per year, including work on holidays or other rest days when they normally would not be required to work. An employee cannot work more than the standard monthly maximum number of 45 hours of overtime for more than six months during any 12-month period, and the monthly average number of overtime hours worked throughout the six applicable months of that 12-month period must be no greater than 80 hours, including work on holidays or other rest days.

Employers are required to pay to an employee an overtime premium of 25% for overtime hours that the employee worked during a month for each of up to 60 overtime hours that the employee worked during the month. If an employee works at least 45 overtime hours in a month but not more than 60 hours during the month, the overtime premium customarily is more than 25% and up to 50% as negotiated between the employer and employee. Large employers are required to pay to an employee an overtime premium of 50% for overtime hours that the employee worked during a month in excess of 60 overtime hours that the employee worked during the month.

Effective until March 31, 2023, SMEs are required to pay an employee an overtime premium of 25% for overtime hours that the employee worked during a month in excess of 60 overtime hours that the employee worked during the month. Effective starting April 1, 2023, SMEs are required to pay an employee an overtime premium of 50% for overtime hours that the employee worked during a month in excess of 60 overtime hours that the employee worked during the month.

Employers may offer paid time off instead of overtime pay if negotiated by labor and management representatives. Employees may take paid leave on an hourly basis up to the equivalent of five days if labor representatives and the company agree to do so.

An employee with a child under 3 years of age must be exempted from overtime work and/or permitted to work a flexible part-time schedule upon request. An employee with a child of preschool age must be exempted from overtime work in excess of 24 hours a month or 150 hours a year upon request.

Wage Payment

Employees must be paid at least once a month on a specific date in legal tender. Employers may pay wages directly into an employee’s bank account if the employee agrees.

Employers must issue at the time of payment a slip stating the amount of the salary and the amount of tax withheld.

Mandatory Bonuses

Although not required by law, Japanese companies commonly give a winter and a summer bonus.

If a bonus scheme is set by an employment contract, the payment is legally classified as wages and employers are legally obligated to pay it.

Reference Citations

Hours of Work: Labor Standards Act, 1947, No. 49, arts. 32 - 36; Law Concerning the Establishment of Related Laws to Promote Working Way Reform, 2018 (Japanese)

Minimum Wage: Minimum Wages Act, 1959, No. 137, arts. 4, 40-42

Overtime: Labor Standards Act, 1947, No. 49, art. 37(1)-(3); Law Concerning the Establishment of Related Laws to Promote Working Way Reform, 2018 (Japanese)

Wage Payment: Labor Standards Act, 1947, No. 49, arts. 24 - 25

Benefits

Vacation

Employees who have been employed for at least six months and who have reported for work on at least 80 percent of their working days during that time are entitled to 10 days of paid annual leave. Employees are entitled to an additional day of vacation for each of the following two years of employment and an additional two days of vacation for each of the subsequent four years of employment. The maximum amount of paid vacation is 20 days. Leave may be taken consecutively or incrementally. Up to two years of unused vacation may be carried forward.

Employers must ensure that employees who are entitled to 10 or more days of annual paid leave actually take at least five of these each year.

Employees are not entitled to paid annual leave for any year in which they do not report for work at least 80 percent of working days. An employee is considered to have reported for work if absent due to a work-related injury or illness, for child care or family care leave or for reasons related to childbirth.

While employees are entitled to determine when they take their paid leave, employers can require the employee to change the timing of the leave if the normal operation of the employer’s business would be interfered with, provided the employee will have another opportunity to take the leave.

Holidays

The declaration of a national holiday is not binding on private businesses, and employers are not required to provide paid or unpaid leave for such holidays.

The national holidays typically set by the government each year are as follows:

• Jan. 1: New Year’s Day
• Second Monday in January: Coming of Age Day
• Feb. 11: National Foundation Day
• Feb. 23: Emperor’s Birthday
• Vernal Equinox (date in March varies)
• April 29: Showa Day
• May 3: Constitution Memorial Day
• May 4: Greenery Day
• May 5: Children’s Day
• Third Monday in July: Marine Day
• August 11: Mountain Day
• Third Monday in September: Respect for the Aged Day
• Autumnal Equinox (date in September varies)
• Second Monday in October: Health and Sports Day
• Nov. 3: Culture Day
• Nov. 23: Labor Thanksgiving Day
• Dec. 23: Emperor’s Birthday

A national holiday that falls on a Sunday is celebrated the next day. Government offices, banks, and most nonretail businesses are closed on national holidays, but many restaurants and stores remain open.

Maternity Leave

A female employee is entitled to take maternity leave for up to six weeks preceding the expected date of birth, up to 14 weeks if she is expected to give birth to more than one child. After childbirth, the mother is required to take eight weeks’ leave. During pregnancy and the year following childbirth, female employees must not be assigned to handle heavy materials, work around harmful gases, or perform any other duties that could put mother or child at risk.

New mothers are entitled to two 30-minute nursing breaks daily for up to 12 months following childbirth.

An employer need not pay wages during maternity leave unless its work rules require it. Employment insurance provides compensation of 60 percent of the employee’s wages for six weeks of maternity leave prior to childbirth, 14 weeks if the mother is expecting more than one child, and eight weeks after. If the employer wishes to pay the employee while she is on maternity leave, its social insurance liability will be reduced by the amount paid.

Paternity Leave

There is no statutory requirement for paternity leave, but an employee, male or female, is entitled to up to one year of child care leave after maternity leave ends (see Child care leave below).

Effective Oct. 1, 2022, male employees may take up to four weeks of paternity leave within the first eight weeks of their child’s birth. The leave can be divided into two separate periods.

Employers must take measures to encourage employees to apply for and take paternity leave.

Sick Leave

Employers are not required to provide sick leave, but it may be included in an employer’s work rules or in collective bargaining agreements. Japan’s national health insurance program entitles employees to two-thirds of the applicable standard wage as sick leave allowance after three days of absence for 18 months.

Other Leave

Child care leave. A male or female employee is entitled to up to one year of partially paid leave to care for a child up to the child’s first birthday and, if the mother cannot obtain child care, until the child is 2 years old. Child care leave begins after maternity leave and can be taken by both male and female employees.

An employer may refuse a request for child care leave only if a worker is prohibited from taking leave under a collective bargaining agreement and if, in the case of a fixed-term worker, it is clear that the employment relationship will end before the child reaches 18 months old.

An employer need not pay wages during child care leave unless its work rules require it. Government-funded employment insurance provides compensation of 30 percent of the employee’s wages during leave. Employees who return to work following leave and stay with the company for six months receive an additional 10 percent of wages for the period of the leave.

Employers must take measures to encourage employees to apply for and take childcare leave.

Effective April 1, 2023, companies with more than 1,000 employees must report the annual percentage of male employees taking childcare leave.

Sick child leave. An employee raising a child not yet of elementary school age may take leave without pay to care for the child in the event of illness or injury. Such leave is limited to five working days per fiscal year for parents with one preschool-age child and 10 days for those with two or more. Employees may take this leave on a full-day or half-day basis. An employer may refuse a request for sick child leave only if it is prohibited under a collective bargaining agreement and the following circumstances exist:

• the requesting employee has been employed by that employer for less than six months or
• an ordinance of the Ministry of Health, Labor and Welfare identifies the employee’s position as one for which good cause exists to deny a request for leave.

Family care leave. Under the Child Care and Family Leave Law, if a family member of an employee needs constant care for two or more weeks because of an injury, sickness, or physical or mental disability, the employee is entitled to two forms of partially paid family care leave:

• five days a year to take care of one family member or 10 days a year to take care of two or more family members and
• up to 93 days per family member, which can be taken in three different periods during the course of the year.

An employer need not pay wages during family care leave unless its work rules require it. Government-funded employment insurance provides compensation of 40 percent of the employee’s wages during leave.

Menstruation leave. Under the Labor Standards Act, an employer must provide leave if a woman requests it because work during her menstrual period “would be especially difficult.” The employer is not required to pay wages during such leave.

Leave due to death in the family. Employers generally (but are not required by law to) allow employees to take up to five days’ paid leave for the death of a father, mother, spouse, or child and up to three days for the death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent.

Leave for marriage. Employers generally (but are not required by law to) allow employees to take five days’ paid leave upon marriage.

Civil rights and public duty leave. An employee is entitled under the Labor Standards Act to take time off to vote or perform other public duties. There is no requirement that an employer compensate an employee for this leave.

Pensions and Social Security

All Japanese residents must be covered by the National Pension system which provides basic pension benefits. The program is administered by the Japan Pension Service and includes the mandatory Employees’ Pension Insurance program.

All Japanese employees are enrolled in the pension system by their employers and are required to make contributions to the system deducted by the employer from their wages. Employers contribute an equal amount to the system on behalf of each employee.

Foreign workers who have contributed to the national pension system for at least six months but no more than 25 years can claim a lump-sum withdrawal payment within two years of leaving Japan.

Workers’ Compensation

Employers must pay all insurance premiums for a government-operated program to compensate employees for work-related illnesses and injuries. The program compensates employees for medical expenses, a percentage of lost wages and disability expenses.

If the injury or illness results in the worker’s death, survivors are compensated for funeral expenses and receive either a pension or a lump-sum benefit.

Reference Citations

Vacation: Labor Standards Act, 1947, No. 49, art. 39(1)-(6)

Holidays: Law Concerning National Holidays, 1990, No. 178 (Japanese)

Maternity Leave: Labor Standards Act, 1947, No. 49, arts. 64(2), 65-66

Paternity Leave: Child Care and Family Leave Law, 1991, No. 76, art. 5 (Japanese)

Other Leave: Child Care and Family Leave Law, 1991, No. 76, art. 5 (Japanese); Labor Standards Act, 1947, No. 49, arts. 7, 68

Workers’ Compensation: Labor Standards Act, 1947, No. 49, art. 75

Labor Relations

In General

Employees have the right to organize and to bargain and act collectively. When a labor dispute has occurred that creates the danger of a strike, slowdown or lockout, the parties may engage in conciliation, mediation or arbitration.

Right to Organize

The Japanese Constitution grants workers the right “to organize and to bargain and act collectively.” The Labor Union Act bars employers from discrimination based on union membership and prohibits companies from barring employees from joining a union or requiring them to leave one as a condition of employment. If a union represents the majority of the employer’s workers, however, the union and the employer may enter into a collective bargaining agreement requiring all employees to be bound by that agreement. There is no requirement that employees of a company be represented by a single union, so there may be more than one union representing employees in the same workplace.

With two exceptions, a collective bargaining agreement applies only to employees who are members of the union that negotiated it. Those exceptions are:

• If at least three-fourths of the employees performing the same type of work in a particular workplace are bound by a collective bargaining agreement, the agreement is also binding on the remaining nonunion workers performing that work in that workplace. It does not bind employees who are members of another union.
• If a majority of the employees performing a certain type of work in a particular locality are bound by a particular collective bargaining agreement, the minister of Health, Labor and Welfare or the prefectural governor may, at the request of either party to the agreement and pursuant to resolution of the Labor Relations Commission, decide that the agreement should also apply to the remaining workers performing that work in that locality and their employers.

Collective bargaining agreements may not exceed three years in duration. Exceptions to this rule include labor contracts covering workers age 60 and over and contracts covering workers having “expert knowledge, skills, and experience,” both of which may extend up to five years. Additionally, labor contracts that cover work with a definite period of time needed for completion, such as construction, can extend for the period necessary to complete the work.

The Labor Union Act considers the following acts by employers unfair labor practices:

• discriminating against employees because of their union membership or union activities, barring employees from joining a union, or making it a condition of employment that an employee withdraw from a union;
• refusing without justification to bargain collectively with employee representatives;
• controlling or interfering with the formation or management of a union or giving financial assistance to defray a union’s operating expenses or
• terminating or otherwise adversely treating an employee because he or she reported an unfair practice by the employer or participated in a Labor Relations Commission investigation, hearing or settlement process.

Works Councils

There are no provisions in Japanese law for works councils.

Dispute Resolution

Under the Labor Relations Adjustment Act, when a labor dispute has occurred that creates the danger of a strike, slowdown, or lockout, the parties may engage in conciliation, mediation or arbitration.

Conciliation. At the request of either party or on its own initiative, the Labor Relations Commission may appoint one or more conciliators to assist the parties in reaching a settlement. If the conciliator determines there is no prospect of a settlement, the conciliator notifies the commission and the attempt at conciliation ends.

Mediation. At the request of both parties or at the request of one party pursuant to the terms of a collective bargaining agreement, the commission may appoint a mediation committee to mediate the dispute. If the dispute involves services essential to the daily life of the general public or otherwise seriously affects the public welfare, a mediation committee also may be convened at the request of the commission; the minister of Health, Labor and Welfare; or the prefectural governor. After hearing the views of the parties, the mediation committee has the authority to draft a settlement proposal and present it to the parties.

Arbitration. At the request of both parties or at the request of one party pursuant to the terms of a collective bargaining agreement, the commission may appoint a committee to arbitrate the dispute. The arbitration award, which has the same effect as a collective bargaining agreement, must be made in writing.

Unfair labor practice disputes. When an employee or union files a motion asserting that an employer has committed an unfair labor practice, the Labor Relations Commission must conduct an investigation without delay and may, if necessary, hold an evidentiary hearing. After reviewing the arguments and evidence, the commission can recommend a settlement to the parties but, if no settlement is recommended or agreed to, must issue written findings of fact and an order either dismissing the motion or granting some or all of the relief requested by the party making the complaint. A party that is dissatisfied with an order of the commission may either appeal to the Central Labor Relations Commission or file a court action seeking rescission of the order.

Individual labor disputes. An employee engaged in an individual labor dispute with his or her employer may participate in alternative dispute resolution proceedings before the local labor bureau or file suit in district court. Pursuant to the Labor Tribunal Law, the employee’s suit may be resolved in expedited proceedings before a labor tribunal of the district court.

Strikes and Lockouts

Strikes are permitted in the private sector, but typically are of short duration. The Labor Union Act states that an employer may not make a claim for damages related to a justifiable work slowdown or strike. The Labor Relations Adjustment Act bars employees during a slowdown, strike, or lockout from hampering or causing the stoppage of maintenance or operation of safety equipment. When a labor dispute involves services essential to the daily life of the general public, at least 10 days’ notice of an impending strike, slowdown, or lockout must be provided to the Labor Relations Commission, as well as to either the minister of Health, Labor and Welfare or the prefectural governor. Slowdowns and lockouts are rare in Japan.

Successorship Clauses

The Act on the Succession to Labor Contracts upon Company Split provides that collective bargaining agreements are binding on the employer and all successors, assigns and transferees.

Reference Citations

Right to Organize: Japan Constitution, 1946, art. 28; Labor Union Act, 1949, No. 174, arts. 7, 17, 18

Dispute Resolution: Labor Relations Adjustment Act, 1946, No. 25, Chs. 2, 3, 4

Strikes and Lockouts: Labor Union Act, 1949, No. 174, art. 8; Labor Relations Adjustment Act, 1946, No. 25, art. 36

Successorship Clauses: Act on the Succession to Labor Contracts Upon Company Split, 2000, No. 103

Safety, Health, and Security

In General

The Industrial Safety and Health Act requires employers not only to take steps to avoid industrial accidents, but to “endeavor to ensure the safety and health of workers in workplaces through creating a comfortable working environment and improving working conditions.”

Employers collecting employees’ personal information must disclose the purpose for which the information is to be used as soon after the collection as possible.

Workplace Safety and Health

The Labor Contract Act expressly requires an employer to “give the necessary consideration to allow a worker to work while securing the safety of his/her life, body, and the like.” Similarly, the Industrial Safety and Health Act requires employers not only to take steps to avoid industrial accidents but to “endeavor to ensure the safety and health of workers in workplaces through creating a comfortable working environment and improving working conditions.”

Courts have held employers legally responsible for the death of an employee from heart disease due to overwork (karoshi), and the Supreme Court has held that employers have a duty not to drive their employees to suicide (karojisatsu). If an employee commits suicide due to workplace stress, the employer may be required to pay damages to the employee’s survivors.

Under the Act on Asbestos Health Damage Relief, the Environmental Restoration and Conservation Agency must compensate individuals who suffer asbestos-related injuries or, in the case of employee death, their survivors. Such compensation includes medical expenses, funeral expenses and a condolence allowance for a surviving spouse.

Employers with 50 or more employees must appoint a company doctor with whom employees can consult about their health.

Reference Citations

Workplace Safety and Health: Labor Contract Act, 2007, No. 128, art. 5; Industrial Safety and Health Act, 1972, No. 57, art. 1; Law Concerning the Establishment of Related Laws to Promote Working Way Reform, 2018 (Japanese)

Termination

Methods of termination generally fall into one of three categories: resignation (mutual agreement between employer and employee), dismissal based on the Labor Standards Act or civil code and disciplinary dismissal. An employee’s resignation presents the lowest risk to the employer. For standard dismissals pursuant to the LSA or civil code, the employer must still demonstrate a valid or justifiable reason. Finally, dismissal for disciplinary reasons is considered justifiable only when the employee has committed a crime or ethical breach, lied on his or her resume or missed more than two weeks of work without a reasonable explanation.

When an employee has been terminated or has retired, the employee may request a certificate stating the dates of employment; the type of occupation, position, and salary and the reasons for dismissal or retirement. The employer is required to provide the certificate without delay and may not include any information the employee has not requested.

Termination by Employer

Termination of an employee is invalid if not done on objectively reasonable grounds. Even a termination justified by work rules may be found invalid if the cause set forth in the work rules is not sufficiently substantial.

The following circumstances provide objectively reasonable grounds for termination:

• mental or physical disease has rendered the employee incapable of performing assigned duties;
• economic reasons require a reduction in force and the employer has taken every reasonable measure to avoid termination;
• inadequate performance by the employee is unlikely to improve with education and guidance;
• the employee obtained employment through misrepresentations or other improper means;
• the employee is absent from work without permission or justification for seven consecutive days or more than 10 days in one month;
• the employee has engaged in acts of violence or intimidation against other employees;
• the employee has engaged in acts of insubordination without justification;
• the employee has become a director or employee of another business without permission of the current employer, and the second job adversely affects the performance of the first;
• the employee has improperly used employment to personally obtain items of value;
• the employee has improperly disclosed confidential business information or trade secrets;
• the employee has been sentenced to a term of imprisonment, and
• the employee has been repeatedly disciplined but has shown little or no improvement.

Generally, an employer must give an employee at least 30 days’ notice of termination or pay the employee 30 days’ wages in lieu of such notice.

No notice is required if:

• continuance of the business has been made impossible because of a natural disaster or other unavoidable reason,
• the employee is being terminated for cause, or
• the employee is still on probation.

By statute, an employer may not terminate an employee:

• during the employee’s absence from work for medical treatment due to a work-related injury or illness or for 30 days thereafter unless continuance of the business has been made impossible;
• in cases in which the worker is receiving workers’ compensation and has not recovered from the injury or illness;
• during any leave a woman employee has requested in the period before and after childbirth unless continuance of the business has been made impossible;
• because of the employee’s nationality, creed or social status;
• because the employee has reported a violation of the Labor Standards Act to a Labor Inspection Office;
• because of the employee’s union membership, union activities, or attempt to join or organize a union;
• because the employee made a report of an unfair labor practice to the Labor Relations Commission;
• during the term of a fixed-term employment contract unless there are unavoidable circumstances;
• because of the employee’s sex;
• because of a female employee’s marriage, pregnancy, childbirth or request for leave for childbirth;
• because the employee has requested or taken child care or family care leave or
• because the employee has engaged in whistle-blowing activities.

Whistleblowing. Japan amended a whistleblower law to strengthen protections to whistleblowers and increase regulatory obligations on employers. The amended law requires employers with more than 300 workers to establish comprehensive systems for reporting corporate misconduct. The revised law, among other things, requires covered employers to designate a staff or group within the company to receive and investigate whistleblowing reports.

Plant Closings and Mass Layoffs

If downsizing will result in termination of at least 30 employees from a single workplace within a month, the employer must prepare a termination plan listing the employees to be laid off and detailing any efforts the employer will make to help them find reemployment. The employer must, after consultation with the union or worker representatives, submit a reemployment assistance plan for the approval of the chief of the Public Employment Security Office, whom the employer also must notify before the terminations actually take place.

When an employer terminates employees as a result of downsizing or closing a business, the Employment Measure Law requires the employer to assist them in their search for a new job.

Employers can perform mass layoffs only when compelling reasons exist. In all cases, the employer must:

• be in poor financial condition;
• attempt to reduce costs and reassign employees within the organization;
• establish appropriate selection criteria; and
• give all employees a proper explanation for the redundancy.

If an employer plans to make 30 or more employees redundant at a given workplace within one month, it must create a termination plan that lists the employees and explain the steps it will take to help them find jobs.

Payment on Termination

Severance pay is not mandated by law. If a resigning employee requests, the employer must pay any outstanding wages within 7 days.

Unemployment Insurance

The Employment Insurance Law establishes a government-operated program that provides benefits to workers who have lost their jobs. Participation in the program is mandatory for employers and employees. Both pay a portion of the insurance premium for the program.

Unemployment compensation consists of four benefits:

• a job applicant benefit, which includes a basic allowance, a skills acquisition allowance a lodging allowance, and a sickness and injury allowance;
• an employment promotion benefit, which includes reemployment allowances, a clothing allowance for full-time employment, moving expenses and job-seeking activity expenses;
• an educational training benefit and
• a continuous employment benefit, which includes basic continuance employment benefits and reemployment benefits for older workers, child care leave benefits and family care leave benefits.

Reference Citations

Termination by Employer: Labor Contract Act, 2007, No. 128, art. 16; Labor Standards Act, 1947, No. 49, art. 16, 20

Plant Closings and Mass Layoffs: Employment Measures Act, 1966, No. 132, art. 6

Payment on Termination: Labor Standards Act, 1947, art. 23

Unemployment Insurance: Employment Insurance Act, 1974, No. 116

Personal Taxes

Residency Requirements

For tax purposes, a Japanese resident is any person who has domicile in Japan or who has resided in Japan continuously for more than one year. Expatriates who enter Japan and are likely to stay for more than a year for employment or business are considered Japanese residents from the day of their arrival in Japan.

Nonpermanent residents are individuals who are not Japanese nationals and have lived in Japan for no more than five years in the past 10 years.

Expatriates who can demonstrate that their anticipated stay in Japan is less than one year are treated as nonresidents for tax purposes.

Taxable Income

Residents of Japan pay taxes on their worldwide income. Nonresidents are subject to Japanese income tax on Japan-source income but are not subject to tax on income from sources outside Japan unless that income is either remitted to or paid in Japan.

Taxable income includes salaries, wages, bonuses and allowances.

Tax Rates

Nonresidents generally are taxed at a flat rate of 20 percent, plus a special reconstruction tax of 0.42 percent.

Employment income is taxed at progressive rates from 5 percent to 45 percent based on annual income.

Welfare pension premiums are shared equally between the employer and the employee. The current contribution rate is 18.3 percent of wages. Health insurance premiums also are shared equally between the employer and the employee. They depend on the location of the employer and the health insurance in which the employer participates. Workers’ accident compensation insurance is paid by the employer, at rates that vary depending on the type of business.

Reference Citations

Residency Requirements: Income Tax Act, 1965, No. 33, art. 212

Taxable Income: Income Tax Act, 1965, No. 33, art. 212

Web References

In English unless otherwise noted.

Law and Regulation

Act on Securing Equal Opportunity and Treatment Between Men and Women in Employment (1972)

Basic Law for Persons with Disabilities (1970)

Constitution of Japan (1946)

Employment Insurance Law (1974)

Enforcement Regulations for the Law Concerning the Welfare of Workers Who Take Care of Children or Other Family Members, Including Child Care and Family Care Leave (1991)

Industrial Safety and Health Act (1972)

Labor Contract Act (2007)

Labor Relations Adjustment Act (1946)

Labor Union Act (1949)

Law Concerning Stabilization for Employment of Older Persons

Workers’ Accident Compensation Insurance Law (1947)

Government Websites and Publications

Institute for Labor Policy and Training

Ministry of Health, Labor, and Welfare, Overview of Minimum Wage System

Ministry of Health, Labor, and Welfare, Overview of Pension