Japan, an island nation in East Asia, is an archipelago of 6,852 islands in the Pacific Ocean that stretch for approximately 1,500 miles (2,400 km) in a northeast-southwest arc. Nearly the entire land area is taken up by the country’s four main islands; from north to south these are Hokkaido, Honshu, Shikoku, and Kyushu.

The country is a constitutional monarchy. Japan has a large and, to a great extent, ethnically homogeneous and heavily concentrated population in the low-lying areas along the Pacific coast of Honshu. More than 99% of the population speaks Japanese. A heavy emphasis is placed on education, and Japan is one of the world’s most literate countries. The economy of Japan is the third-largest in the world after the United States and the People’s Republic of China.

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Japan.

Capital :
Tokyo
Currency :
Japanese Yen (JPY, ¥)
Languages spoken :
Japanese
Population :
125.5 million (2022 est.)
Minimum wage 2022 :
JPY 930 hourly (National Average)
Cost of Living index :
$$$$ (15 of 139 countries)
Payroll Frequency :
Monthly
VAT - standard rate :
5%
GDP - real growth rate :
1.6% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2022.

Date
Holiday Name
Extra Information
January 1
New Year’s Day
January 10
Coming of Age Day
Movable - The second Monday of January
February 11
National Foundation Day
February 23
Emperor's Birthday
March 21
Vernal Equinox Day
Movable - The date of the Northward equinox in Japan Standard Time
April 29
Shōwa Day
May 3
Constitution Memorial Day
May 4
Greenery Day
May 5
Children’s Day
July 18
Marine Day
Movable - The third Monday in July
August 11
Mountain Day
September 19
Respect for the Aged Day
Movable - The third Monday of September
September 23
Autumnal Equinox Day
Movable - The date of Southward equinox in Japan Standard Time
October 10
Sports Day
Movable - The second Monday in October
November 3
Culture Day
November 23
Labor Thanksgiving Day

Contract Sharing Time


The approximate time for sharing the contract with an employee in Japan is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • There is a Happy Monday system where public holidays are planned on Mondays to grant the benefit of an extended weekend to employees on a five-day workweek.
  • A 2019 regulation has made it mandatory for managers to take at least five days off out of their annual leave allocation of 10-20 days. Japan has one of the lowest utilization of holidays in the world.
  • There is no statutory provision for sick leave.
  • A physical checkup is mandatory for all companies. The cost of the physical checkup varies depending on the employee’s age and the clinics, as clinics/doctors are able to decide the cost at their discretion.
  • Stress checkup is only mandatory when the company has more than 50 employees. For companies with up to 50 employees, the stress checkup is just an optional, non-statutory benefit.
  • Employment Medical Advisor (doctor) is only mandatory when the company has more than 50 employees. The cost of this treatment varies depending on the number of employees.
  • Guideline to promote the appropriate introduction and implementation of telework indicates that it is important for labor and management to establish rules on telework in advance.

Labor Conditions


Working Hours

An employer must not have workers work more than eight hours per day for each day of the week, or 40 hours per week, excluding break periods. An employer should provide workers with at least 45 minutes of rest periods during working hours when working hours exceed six hours, and at least one hour when working hours exceed eight hours. 

Overtime

If an employee is expected to work overtime on a regular basis, there must be a written agreement and it has to be filed with the Labor Inspection Office.

Employees cannot be required to perform overtime exceeding 45 hours per month or 360 hours per year. In special circumstances such as unexpected orders, employers are allowed to cross the basic limit rule. However, overtime hours on statutory holidays (such as Sundays) cannot exceed 100 hours per month. The yearly extended limit rule lies at 720 hours per year.

When employees work overtime or work on holidays, an additional payment to the hourly base salary applies:

  • Overtime (typically over eight hours a day): an additional 25%, at maximum, 50%
  • Overtime (above 60 hours in a month): additional 50%
  • Night-time (defined as working between 10 pm and 5 am): additional 25%
Probation Period

There is no mention of the probationary period in the employment law. Probation periods are, however, common in Japan and normally range from three to six months, and should not exceed one year. 

Termination Notice Period

If an employer wishes to dismiss a worker, the employer must provide at least 30 days advance notice. An employer not giving 30 days’ advance notice must pay the worker the average wage they would earn in working for a period of at least 30 days. 

The provisions of a month’s advance notice of dismissal do not apply to a worker falling under one of the following items:

  • A person hired on a day-to-day basis who has been employed consecutively for a period of less than one month;
  • A person employed for a fixed period not longer than two months;
  • A person employed in seasonal work for a fixed period of not longer than four months;
  • A person who is in a probationary period and who has been employed consecutively for a period of fewer than 14 days.

Leave / Time Off

Annual Leave

An employer must grant paid leave of 10 consecutive or non-consecutive working days to a worker who has been employed continuously for six months from the day of their hiring and who has reported to work on at least 80% of the total working days.

Further, every year of seniority adds to the annual paid leave to the employees’ account in the following manner:

SeniorityTotal Annual Leave
6 months10 days
1 year11 days
2 years12 days
3 years14 days
4 years16 days
5 years18 days
6 years20 days

Sick Leave

There is no statutory provision for sick leave. Employees may use their accumulated paid vacation leave when sick.

Parental Leave

Child Care Leave

A worker may take child care leave upon application to their employer, provided the child to be cared for is less than one year of age and if they have been employed for a continuous period of at least one year. During childcare leave, the beneficiaries get 67% of their gross monthly salary including allowances excluding honorariums for the first 180 days after maternity leave ends that reduces to 50% until the child turns one-year old within the first continuous leave. 

 

Leave to Take Care of a Sick Child

A worker raising a child who is not yet of elementary school age may obtain unpaid leave to care for the child in the event of injury and/or illness upon application to their employer. This leave is limited to five working days per fiscal year.

 

Maternity Leave

A pregnant employee may take up to 14 weeks’ leave, commencing up to six weeks prior to the anticipated date of birth and finishing eight weeks after childbirth. All women employees insured by the Employees’ Health Insurance system are eligible for paid maternity leave. 66.67% of the insured’s average daily basic wage in the last 12 months is paid, depending on wage class. The benefit is paid for 42 days before (98 days for expected multiple births) and 56 days after the expected date of childbirth. If the insured receives wages, benefits are suspended or partially reduced.

 

Paternity Leave

There is no present statutory system of paternity leave. Under a new system applicable from October 2022, fathers will be allowed to take parental leave for up to four weeks within eight weeks of their partner’s giving birth. Fathers must provide two weeks’ notice to their employer and can take such leave in two batches. During the leave, fathers will receive employment insurance benefits equivalent to 67% of their pre-leave wages. 

 

Adoption Leave

Although there are no special leave provisions for adoption, adoptive children by ‘special adoption’ (including those who are being given care by the worker before the completion of the adoption process) are treated in the same way as biological children for the purposes of Parental leave.

Other Types of Paid Leave

Periods Leave

If a woman who finds it to be extremely difficult to work on a day of her menstrual period requests leave, the employer must not make her work on the day of her menstrual period.

 

Unpaid Leave

There is no statutory provision for unpaid leave except the short-term child care leave discussed in the parental leave section.

Statutory Benefits

Social Insurance consists of:

  • Health and nursing insurance
  • Employment insurance
  • Employees’ pension insurance
  • Worker’s accident compensation insurance

The employer contribution is as follows:

 

 

CategoryContributionMaximum PremiumBasis
Health insurance
  • 4.935% (On salaries)
  • 5.83% (If 40 years old or older)
  • JPY 68,597 per month
  • JPY 81,037 per month
Monthly

 

 

Welfare pension insurance9.15%JPY 59,475 per monthMonthly
Employment insurance0.95-1.25*%No limitTotal payroll
Workmen’s accident compensation insurance
  • 0.25-2.60%** (Manufacturing)
  • 0.25-8.8%*** (Other businesses)
No limitTotal payroll

 

 

Family allowances0.36%JPY 650,000Monthly

 

*As per the employer’s industry. On October 1, both employee and employer contribution rates are to increase so that totals range from 1.35% to 1.65%.

**Maximum per year as of 2018.

***Depends on the type of business. 0.002% is added to the above premium to fund benefits for asbestos-induced diseases.

Health Insurance

Enrollment in public health insurance is compulsory, regardless of citizenship, for all those who have resided in Japan for three months or more. Rather than being freely selected by enrollees, public health insurance schemes are designated according to employment status, age, and residence. If an enrollee is neither the head of household nor eligible through their own employer, then the scheme is designated based on the head of the household’s employment status, age, and residence. 

Other Insurances

Accident Insurance

The employer contributes 0.25% to 8.8% of payroll, depending on the type of business.

If a worker sustains an injury or suffers illness in the course of employment, the employer must furnish the necessary medical treatment at their expense and compensation for that absence from work at the rate of 60% of the worker’s average wage.

Unemployment Insurance
  • The employee must have at least 12 months of coverage in the last 24 months before unemployment (in case of unemployment due to insolvency or dismissal, at least six months of insurance during the last 12 months);
  • The employee must be registered with the Public Employment Security Office and be capable of, and willing to work;
  • The unemployed person must report to the Public Employment Security Office once every four weeks;
  • Unemployment must not be due to voluntary leaving, serious misconduct, refusal of a suitable job offer, or nonattendance to vocational training (otherwise, the benefit may be limited to one to three months). 

Public Pension

Contributions are made by the:

  • Employer – 9.15% of monthly payroll, based on 31 wage classes;
  • Employee – 9.15% of monthly wage class earnings, based on 31 wage classes;
  • Government – National Pension Program – 50% of the total benefits and administration costs.

The retirement age is 65 years. The old-age pension in Japan is split into two different programs, the National Pension and the Employees’ Pension systems. The National Pension scheme covers the Japanese Old Age Basic Pension, Old Age Welfare Pension, Disability Pension, Survivors’ Pension, childless widow’s pension, and death grant. The employers do not contribute to the national pension scheme. 

The Employees’ Pension systems include salaried workers contributing to the Employees Pension Insurance (Old-Age Employees’ Pension) and public service workers and others contributing to Mutual Aid Associations. 

Other Statutory Benefits

Bereavement Benefit

If a worker has died in the course of employment, the employer must pay a compensation equivalent to 1,000 days of the average wage to the bereaved family.

Funeral Expenses

If a worker has died in the course of employment, the employer must pay an amount equivalent to 60 days at the average wage as funeral expenses to the person managing the funeral rites.

Funeral Grant

A lump sum is paid to a dependent who pays for the funeral. If there is no dependent, the actual cost is paid to the person who pays for the funeral.

Family Allowances

The employer contributes 0.36% of wages for employees’ children up to age three while the rest is paid by the government.

Child Allowance

The beneficiaries must satisfy an income test that varies depending on family composition.

JPY 15,000 a month is paid for each child younger than age three and JPY 10,000 a month is paid for each of the first two children aged three up to graduation from elementary school (JPY 15,000 a month for each subsequent child), and JPY 10,000 Ja month for each child in junior high school. For persons who do not meet an income test, JPY 5,000 a month is paid for each child up to graduation from junior high school. 

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

 

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