Optia Partners

Labor Laws and HR

Relevant Labor Laws

There are 3 main labor laws in Japan that corporations need to take into account; the Labor Standards Law which sets the standards for working conditions, the Industrial Safety and Health Law which sets standards regarding health and safety and the Minimum Wage Law.

Work Rules

When a company reaches 10 employees or more, it is required to draft a set of work rules and submit them to the local Labor Standards Inspection Office. The work rules should be in line with Japanese Labor Standards and should cover details in regard to fundamental conditions such as working hours, salaries and termination. It is advised to consult the Labor Standards office in regard to the required content for a company work rules handbook.

Social and Labor Insurance

When a company has hired 5 employees or more, social and labor insurance should be provided for all employees. The company should contact their local social insurance office and submit notification of the number of employees and other required information.

Employee Contracts

Employee contracts at minimum should contain details about the following employment conditions.

The term of the contract or a statement to the effect that there is no defined term. Usually contracts should not specify a term of 3 years or longer.
The workplace and the duties that the employee will have to perform.
An outline of start and finish times, overtime, breaks, days off and leave.
How wages are calculated, the pay period and payment day.
Conditions related to resignation and dismissal, including all grounds for dismissal.

Probation Periods

Probation periods are allowed to be specified in employee contracts and usually last for around 3 months, however if an employer refuses to grant full employment after the probation period has elapsed, it will be treated in the same manner as dismissal. Valid reasons for refusal of employment must be cited.

Expected Terms and Conditions

What is officially required of employers and what is expected of employers may differ on occasion so it is always good to be aware of the common work practices and expectations in Japan.

It is generally expected that local benefits such as social and labor insurance are provided.
It is generally expected that transportation costs between home and the office are provided.
One week holiday in August for Obon is normal. Most employees usually visit their hometowns during this period.
There are usually 3 public holidays in the beginning of May for Golden Week. Many Japanese additionally take 2 paid holidays and take the week off to travel.
Japanese do not expect a long break over the Christmas / New Year period.
Most companies have a bonnenkai (end of year party) and some have a Shinnenkai (start of the year party).

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