Japanese Labor Law Essentials you Need to Know

What rights do you have as an employee in Japan? An overview of what you need to know about Japan’s Labor Laws – from what has to be written in your contract to rules regulating overtime and dismissal.

Constitutional Foundations

The main piece of legislation on working conditions in Japan is the Labor Standards Act (労働基準法, ろうどうきじゅんほう). The basic principles it promotes are based on the Japanese constitution, more precisely articles 14 and 27.

Article 14. 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. […]

Article 27. All people shall have the right and the obligation to work. Standards for wages, hours, rest and other working conditions shall be fixed by law. Children shall not be exploited.

Looks like a solid foundation. Let’s take a look at the details.

Non-Discrimination and Equality

Any discrimination based on race, creed, gender, social status, or family origin is banned by the Constitution, Article 14.

Article 3 of the Labor Standards Act further prohibits discrimination against people because of nationality etc. to impact their wages or working conditions.

Article 4 guarantees the same for men and women with respect to wages. Don’t let anyone tell you something different.

Employment Contracts

Contract Contents

Employment contracts should always clearly state the working conditions. This includes wages, working hours and paid leave. Regulations on overtime and transportation allowance are also commonly included.

Contracts that define any sort of penalty payment or damages for non-fulfillment of the contract are not legal (Art. 16, Labor Standards Act).

Probation Periods

Many Japanese companies have probation periods for new employees. While 3-month periods are common there are no laws governing the duration of these trial periods and renewals are allowed.

There are laws protecting you from being fired randomly during this time though. If one has worked for a company for at least 14 days, the employer still has to give you 30 days notice when they want to fire someone during their probation period (Art. 21, Labor Standards Act).

READ ON　 Types of Employment Contracts and what they mean for you.

Wages

Payment of Wages

Wages in Japan have to be paid in currency (no stocks, etc.) the whole amount has to be paid in full and directly at least once a month on a fixed date (Art 24, Labor Standards Law).

This does not include statutory deductions like taxes and insurance premiums, which your employer will deduct from your salary before paying it to you.

Minimum Wage

Paying under the minimum wage in Japan is not allowed. Minimum wage is not fixed but is continuously adjusted by the Ministry of Health, Labor, and Welfare and by the Minimum Wage Deliberation Commission on both the national and local level.

Minimum wage varies by industry and region. So, don’t be surprised when you find the minimum wage in Fukuoka or Sapporo to be lower than the one in Tokyo (as minimum wage reflects the cost of living).

READ ON　 Minimum wage trends in Japan

Working Hours and Holidays

Regular Working hours

By law, the statutory working hours in Japan are 8 hours a day, 40 hours a week, with up to 44 hours in selected industries (Art. 32,40,131; Labor Standards Act).

Overtime Limits

While these regular hours exist, overtime is made possible up to certain limits, if the company submits a “Notification of Agreement on overtime and work on days off” to the Labor Standards Inspection Office. Failure to do so can result in penalties for the company.

Overtime limits:
15h per week, 27h in 2 weeks, 43 hours in 4 weeks
45h per month, 81h in 2 months, 120h in 3 months, and 360h per year

Overtime Pay

Labor Laws set overtime pay at an extra 25% for work after hours and late-night work. For work on weekends and holidays the rate is 35%. In theory, if you would work overtime after 10pm you would get an additional 25% for every hour worked.

In practice, some companies give fixed monthly overtime payments for the average amount of overtime to simplify this process.

Vacation

Statutory holidays are 1 day a week or at least 4 days in a 4-week period (Art. 35, Labor Standards Act). While working Saturdays is okay by the law, almost all companies embrace the 2-days off per week.

Any employee working for more than 6 months with at least 80% attendance has a right to paid annual leave (Art. 39, Labor Standards Act). For full-time employees, it starts at 10 days per year and increases every year to a maximum of 20 years.

While this is the minimum paid leave required by law, companies are free to give their employees more time off.

READ ON　 Paid Leave – how much you get and how to take it.

Lay-Offs

Notice

Employers need to give employees at least 30 days notice before firing them. If employers give less notice or want the employee to stop coming to work earlier, they need to pay all wages falling short of the 30-day period.

An exception to this rule are lay-offs due to insolvency, natural disasters, or if the worker is responsible for the lay-off. In such cases, the company is required to provide a certificate stating the reasons for dismissal, on the employee’s request.

Legal Limitations to Lay-Offs

Article 27 of the Japanese Constitution promotes job security as a public matter. Strict rules regarding the dismissal of employees are one of the reasons why firing people is still so uncommon in Japan. Lay-offs that are not necessary, where other methods to avoid lay-off have not been tried, and without an objective and reasonable cause are void, and are seen as abuse on the side of the employer.

Various laws also specifically prohibit the dismissal of employees for certain reasons. This includes, but is not limited to work-related accidents, marriage, maternity leave, and gender.

Know your rights

Reading this some people may go “Wait, but…!” Even Japanese employees have surprisingly little knowledge about the Labor Laws. Especially, as a foreigner in Japan, being able to distinguish between law, common practice, and company-specific rules, will help when negotiating working conditions.

Labor Laws of Japan, as the name says, refers to a collection of laws on the issue. The most important ones to be aware of are the two below.

• ■ Labor Standards Act
• ■ Labor Contracts Act