Japan

Labor Compliance Guide

Labor Requirements

The Labour Law in Japan is regulated mainly by the Labor Standards Law of 1947 which governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, annual leave, special leaves & other employment relationships.The other acts that govern employment relationships are the Japan Constitution and Labor Contract Act of 2008.

Hours & Pay Regulations

Normal Working Hours

The normal working hours shall not exceed 8 hours a day (excluding break time) and 40 hours a week (excluding break time). The maximum number of working days in a week cannot exceed 6 days. 

 

Employees in positions of management or supervision and employees who are closely involved in management are not subject to the regulations (rules) on working hours, breaks, and days off (with the exception of regulations on night work.

 

System of irregular working hours includes:

      • A System of Annual Variation – This system provides for the averaging of working hours over a period of up to 1 year, in which employees may be required to work up to 52 hours in one week, provided that they are not required to work more than 48 hours in any 3 consecutive weeks or more than 40 hours per week on average.
      • A System of Monthly Variation – Under this system, employees working hours shall not exceed 40 hours on average per week for a specified period of not more than one month. The employer may have employees work in excess of 40 hours in a specified week or in excess of 8 hours on a specified day.
      • Flexible Working System – Also called Flexi system, allows for working hours to be adjusted within a monthly period. Under this system, the total number of working hours that an employee must work during a fixed period of not more than 3 months is established, and the employees are free within limits to determine what time should be the starting and ending time of work, provided that the total number of working hours required are met.
      • FreeStyle Working of Weekly Variation – Under this system, employers may have employees work for more than 8 hours but not more than 10 hours per day, provided that employees’ working hours do not exceed 40 hours per week.

Employers in prescribed industries who usually employ less than 10 employees may require them to work up to 44 hours in a week. Labor Standards Law, 1947, Art. 32 – 36 and Art. 12-4(5), 12-5, 16(1), 18, 19 of the Ordinance for Enforcement of the Labour Standards Act, 1947. 

 

Recording Requirements

The employer shall maintain the rosters of employees including working hours, wage ledgers, and important documents concerning hiring, dismissal, accident compensation, wages, and other matters of labor relations for a period of 3 years. Labor Standards Law, 1947, Art. 109. 

Overtime

Any hours worked above the normal working hours of 8 hours per day and 40 hours per week is considered as overtime. An employer can require its employees to work longer than the normal work hours or on the statutory rest days by entering into a labor-management agreement with a union organized by a majority of the employees at the workplace.

Cap on Overtime: Following are the level of restrictions on the overtime hours of an employee:

      • Basic Limit Rule – An employee’s overtime work must not exceed 45 hours per month and 360 hours per year unless special circumstances arise.
      • Extended Limit Rule – In the case of special circumstances, the employer is allowed to extend the working hours as mentioned in the Basic Limit rule. In such cases, the total number of overtime work and work on statutory holidays (e.g., Sundays), cannot exceed 100 hours per month, and the average overtime hours cannot exceed 80 hours per month in the applicable 2 to 6 months period. The basic limit of 45 hours per month must not be exceeded more than 6 times in a year. The yearly hours for overtime work shall not exceed 720 hours.

Note – Extension in working hours for underground work and other work specified by legislation as especially injurious to health shall not exceed 2 hours per day.

 

Pay – An employee who works overtime is entitled to a premium of 25% of the ordinary wages. In cases, where the overtime work exceeds 60 hours in a month, the employee shall be entitled to a premium of 50% of the ordinary wages.

 

However, an exemption for payment of 50% premium for overtime work exists for small and medium-sized employers, who are defined as employers whose capital or amount of investment is ¥300 million or less (¥50 million or less for employers that primarily conduct business in the retail or service industry and ¥100 million or less for employers that primarily conduct business in the wholesale industry), or employers whose usual number of employees is 300 or fewer (50 or fewer for employers that primarily conduct business in the retail industry and 100 or fewer for employers that primarily conduct business in the service or wholesale industry). This rule will however apply to such businesses, effective April 1, 2023.

 

Compensatory time off – Employers may provide paid compensatory time off instead of overtime pay if this has been agreed by the labor and management representatives. Labor Standards Law, 1947, Art. 32 – 32(5), Art. 20 of the Ordinance for Enforcement of the Labour Standards Act, 1947. 

Night Work

For overtime performed late at night (from 10 p.m. to 5 a.m.), the employee shall be paid at a rate of no less than 25 percent over the normal wage per working hour. Time off instead of pay can be offered if this has been negotiated by labor and management representatives.

 

Employees are entitled to 50 percent over the normal wage per working hour for overtime work during the night. If night work overtime is in excess of the 60-hour statutory monthly limit, the employee is entitled to a 75 percent premium.

Breaks

An employer shall provide employees with at least 45 minutes of rest periods during working hours when working hours exceed 6 hours, and at least 1 hour when working hours exceed 8 hours. The break time must be given all at once unless an agreement exists otherwise between the employer and the labor union. Labor Standards Law, 1947, Art. 34.

 

Weekly Rest 

Employers must provide employees with at least 1 rest day per week or at least 4 rest days during a four-week period. Labor Standards Law, 1947, Art. 35 – 36.

Work On Rest Days

The work performed on a weekly rest day (holiday) is considered Overtime work. Work on rest days must be compensated at a rate of at least a premium of 35% of the employee’s ordinary pay. An employee who works on a rest day during nighttime hours shall be paid a premium of 60% of the ordinary wages. Labor Standards Law, 1947, Art. 35 – 36.

Sunday Work

Employees will be entitled to rest periods or days off equivalent to the time that is worked during the extended hours or days off.

Public Holidays

Employees are generally entitled to the following 16 national holidays:

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

Note: This is not required by law to provide the above-mentioned holidays as non-working days and the employer is not obligated to pay the employees for such national holidays.

 

A national holiday that falls on a Sunday is celebrated the next day (Transfer Holiday). Additionally, any day that falls between two other national holidays shall also become a holiday (This is generally referred to as Citizen holiday). National Holiday Law, Art. 1 – 3.

Annual Leave

An employee who has been in continuous employment for a period of at least 6 months calculated from the date of hiring and has worked for 80% of the total working days is entitled to a minimum annual paid leave of 10 days. For employees who have reported for work for less than 80% of the total working days, the employer is not required to grant the employee annual leave in the following year. 

 

For the subsequent years, in case the employee’s attendance at work is at least 80% of the total working days for the previous year, then the number of annual leave days increases until the total number of annual leave reaches 20 days a year, as follows:

  • 6 Months: 10 Days
  • 1 Year 6 Months: 11 Days
  • 2 Years 6 Months: 12 Days
  • 3 Years 6 Months: 14 Days
  • 4 Years 6 Months: 16 Days
  • 5 Years 6 Months: 18 Days
  • 6 Years 6 Months or More: 20 Days

Pay – Employees are entitled to either average wage or the number of wages that would normally be paid for working hours to the employees during the period of annual leave.

 

Timing of vacation – The employer grants paid leave during the period requested by the employees unless it would interfere with the normal operation of the enterprise in which case, the employer may grant the leave during another period. 

 

Manner of taking a vacation – Annual leave may be taken either in a consecutive period or divided periods of time. 

 

Carry forward of leave – Up to two years of unused vacation may be carried forward. Employers are required to provide a specific time period during the year in which the employees who are entitled to 10 or more days of annual leave can take 5 days of annual leave compulsorily. Labor Standards Law, 1947, Art. 39. 

Minimum Wage

Effective Oct 1, 2020, the minimum wage in Japan is ¥902 /hour.

 

Special Leave

Sick Leave

There is no provision for sick leave in the legislation. Generally, employees use paid annual leave for sick reasons.

 

Employees are entitled to time off from work due to work-related illness or injury but not for non-work-related injury/illness. The employer shall pay compensation for the leave of absence of the employee due to work-related injury or illness at a rate of 60% of the employee’s average wage plus medical costs. Labor Standards Law, 1947, Art. 75 – 77.

Maternity Leave

A female employee is entitled to take maternity leave for up to 6 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 8 weeks’ leave.

 

Employment insurance provides compensation of 60% 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 8 weeks after.

 

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 in addition to the usual break time.  A pregnant employee may request time off, during the scheduled working hours, for receiving the health guidance or medical examinations. No salary shall be paid for the period of the time off. Labor Standards Law, 1947, Art. 65 – 67A.

Child Care Leave

Employees are entitled to up to 1 year of partially paid leave to care for a child up to the child’s 1st 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. A request for child care leave may only be refused in the below circumstances:

      • A collective bargaining agreement prohibits taking leave.
      • The employee has worked for the employer for less than one year;
      • In the case of fixed-term employees it is clear that the employment relationship will end before the child turns 1 year old; or
      • The employee works two days or fewer per week.

Child Care and Family Leave Law, 1991, No. 76, Art. 5.

Family Care Leave

An employee is entitled to take time off from work to care for sick/injured family members in the below manner:

      • Short term leaves – Employees can take up to 5 days of leave to accompany a family member who requires nursing care to the hospital, etc (the limit increases to 10 days if there are two or more family members who require nursing care).
      • Long-term leave – An employee who has a family member requiring constant nursing care because of injury, sickness, or physical or mental disability may take care leave each time this family member is in such a situation. The maximum period of nursing care leave is 93 days in total per family member.

Employees are entitled to avail of such leave on an hourly basis at any time during working hours. Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave, §5.

Leave for Civil Rights and Public Duty

An employee is entitled to take time off to vote or perform other public duties. Labor Standards Act, 1947, No. 49 Art.7.

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 children. 

 

An employee is entitled to take leave on an hourly basis at any time during working hours. Employees who work for less than 4 hours a day are also entitled to take off on an hourly basis from work to provide care to the sick/injured child. Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave, §2-16 and 61.

Menstruation Leave

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 during such leave. Labor Standards Law, 1947, Art. 68.

Last updated on: September 13th, 2021