Japanese Labor Law

Foundations of Japanese Labor Law

The fundamentals for Japanese labor law are constituted in the Labor Standards Act (労働基準法, roudou kijun-hou). It covers all the major points, from work contracts to wages, working hours and holidays, workplace security and compensation in case of workplace accidents.

You can find an English translation of the Labor Standards Act here.

The most important points from Chapter I of the law are:

• Employers can not use nationality, religion, or social status of workers as a basis for discriminatory treatment (Article 3)
• Men and women have to be paid equal wages for equal work (Article 4)

Employment Contracts

According to Article 15 of the Labor Standards Act, an employment contract has to include clear information on wages, working hours and other working conditions. If working conditions stated in the contract clearly differ from the actual working conditions, the employee has the right to cancel the contract immediately.

Probationary Periods

There are no direct laws or regulation regarding the minimum of maximum length of a probationary period. However, there is judicial precedent from a 1984, when a company from Nagoya lost a court case on the issue of keeping employees on a probationary period for over one year.

Most probationary periods in Japan fall between 3 and 6 months.

As long as an employee has been working at a company for 14 days or longer, all regulations for dismissal apply, even if the employee is on a probationary period. This means the employer has to give 30 days’ advance notice or pay the employee at least 30 days’ worth of average wage. For more infos on layoffs and dismissals, see below.

To extend a probationary period, the employer first has to state the possibility of that happening in the work contract. In addition, they also have to obtain the employee’s consent in written form.

Working Hours and Overtime

The Labor Standard Act states that regular working hours can’t exceed the following limitations:

• 40 hours per week (44 hours in some industries)
• 8 hours per day

*Excluding breaks and rest periods.

If working hours exceed 6 hours per day, employers also have to provide at least 45 minutes of rest.

For working hours that exceed these basic limitations, employers have to pay premium wages (commonly referred to as overtime pay). The exception to this rule is so-called assumed overtime (みなし残業, minashi zangyo). For more information, see below.

Wages and Salary

How high your salary is depends on your job type and the company you work for. However, there are a few basic rules that influence the number on your monthly paycheck. We’ve summarized them in the sections below. For more info on average salary for different job types and industries, have a look at this page.

Minimum Wage

Employers are required to pay their employees an hourly minimum wage. Because of differences between living expenses, minimum wage varies by prefecture.

In 2020, the average minimum wage was 901 JPY. Below, you can find a list of higher-paying prefecture where minimum wage was higher than the national average:

Prefecture	Minimum wage (JPY/hour)
Tokyo	1013
Kanagawa	1012
Osaka	964
Saitama	928
Aichi	927
Chiba	925
Kyoto	909

Minimum wage in Japan has been rising continuously. In the last 10 years, it has increased by around 23% (in 2010, the national average was 730 JPY). Minimum wages are expected to keep rising for the time being, especially in the big population centers: The greater Tokyo area, Osaka, and Nagoya (Aichi).

Overtime Pay

For work exceeding the basic limitations (40 hours per day, 8 hours per week), employers have to pay premium wages. Premium pay needs to fulfill the following requirements:

• Over 40 and below 60 hours per month: 25 ~ 50% higher than average pay (most employers go with the lower limit of 25%)
• Over 60 hours per month: At least 50% higher than average pay

Other conditions under which employees receive premium pay are:

• Work between 10 PM and 5 AM (Late-night work): At least 25% higher than average pay
• Work on holidays not required by law: At least 25% higher than average pay
• Work on holidays required by law: At least 35% higher than average pay

These premium payments are cumulative. For example, exceeding the 40-hour overtime limit by working on a holiday will result in 25% + 25% = 50% higher pay than average.

There is one major exception for premium overtime pay: Fixed overtime (みなし残業, minashi zangyou).

For fixed overtime, employer and employee agree on monthly including a certain amount of “assumed” overtime in advance (e.g. 20 hours per month). If the employee works less than the agreed amount (e.g. only 5 hours), the employer still has to pay them the full 20 hours’ worth of overtime pay. On the other hand, employees don’t receive any extra overtime pay as long as they stay below the agreed-upon limit.

In practice, assumed overtime systems help employers avoid paying premium overtime pay on a case-to-case basis and can be beneficial for the employee as well. However, bad blood can arise in cases where employees continuously stay under the agreed-upon limit (it’s not illegal to do so, however).

Holidays and Paid Leave

Work is important, but getting rest is crucial as well. Here’s everything you have to know about taking your well-deserved time off.

Regular Holidays

Japanese Labor Law only requires employers to give their employees at least one day off per week. However, because of the basic limitations being set at 40 hours per week and 8 hours per day, most companies follow the international standard of the 5-day workweek.

Aside from regular weekly holidays, there are national holidays. Japan has a total of 16 national holidays. They are distributed relatively evenly throughout the year, with one holiday per month on average. There are some exceptions, though. Most notably, June has no national holidays at all.

If cases where a national holiday falls on a Sunday, the following Monday becomes a “substitute holiday.”

Paid Leave

Full-time employees are entitled to a minimum of 10 days of paid leave in their first year. To be able to receive the paid leave days, employees have to:

• Work at least 30 hours a week
• Be present at work for more than 80% of workdays
• Have worked for the company for a certain amount of time (3 – 6 months are most common)

The required minimum amount of paid leave increases by 1 to 2 days for every year the employee stays at the company. This automatic progression stops after around 6.5 years, at 20 paid leave days per year.

Time at company (years)	Minimum number of paid leave days
0.5	10
1.5	11
2.5	12
3.5	14
4.5	16
5.5	18
6.5	20

Unused paid leave can be carried over into the next year, but expires in the year after that.

To prevent trouble at work, many companies determine so-called “recommended paid leave days” (有給推奨日, yuukyuu suishou-bi) during which employees are asked to take a holiday at the same time. These days usually fall in the “blank” spaces between national holidays. For example, if there’s a national holiday on a Tuesday, the preceding Monday might be declared a recommended paid leave days.

It is also customary to not take too many paid leave in succession. Most employers encourage their employees to limit the number of paid leave taken at once to 1 to 2 days.

Not taking recommended paid leave days or taking multiple days of paid leave at once is not forbidden by law. However, office culture and the working environment can make it difficult to go against these “unwritten rules.”