Section 4. Human Resource Management

4.5 Legislation on working hours, breaks and days off

4.5.1 Working hours, breaks, days off

  1. (1)

    Working hours must, in principle, not exceed 40 hours per week or eight hours per day excluding breaks (this is known as "statutory working hours"). However, some businesses are permitted to have their employees work up to 44 hours per week at a maximum of eight hours per day. These businesses include retail and beauty services, cinemas and theatres, businesses related to health and hygiene, as well as restaurants and entertainment businesses with less than 10 regular employees.

  2. (2)

    In the event that an employee works six hours, the employer must give that employee not less than a 45 minute break; this increases to a one hour break where working hours exceed eight hours.

  3. (3)

    Employers must grant employees at least one day off per week, or four days off in any four-week period (this is known as "statutory days off"). Sundays or public holidays need not necessarily be days off, and other days may be selected as employees' days off instead by agreement between the employer and employees.

4.5.2 Agreements on overtime and work on days off

Any employer that requires workers to work in excess of statutory working hours or on statutory days off must submit a Notification of Agreement on Overtime and Work on Days off to the chief of the relevant labour standards inspection office. If employers force employees to do overtime work or work on days off without submitting a Notification of Agreement on Overtime and Work on Days off, they may be penalized.

Even if employers submit a Notification of Agreement on Overtime and Work on Days off, there are limitations for overtime work and work on days off as follows.

(Table 4-2) Limitations for overtime work and work on days off
Period 1 week 2 week 4 week 1 month 2 month 3 month 1 year
Limit 15 hours 27 hours 43 hours 45 hours 81 hours 120 hours 360 hours

However, the extension of working hours to a certain amount of hours beyond the limitations can be included in the Agreement through the appropriate labor-management procedures on a certain period only if there are exceptional circumstances for the extension of working hours beyond the set limitations above. (Article 36 Agreement with Special Provisions)

4.5.3 Employers' "obligation to ascertain and calculate working hours"

Working hours refers to the time that is placed under the command of the employers, and the time the worker engages in the work by the employer’s explicit or implied instruction corresponds to working hours. The Labor Standards Act contains provisions on working hours, holidays, nighttime overtime work, and other working conditions. Employers are therefore under an obligation to properly ascertain and control working hours. Regarding the calculation of working hours, in principle, it is necessary to record time in an objective manner such as through time cards and use of time on personal computers. Even in the case that workers submit their working hours, it is necessary to have measures to confirm that the declared time is accurate.

4.5.4 Overtime payment

Companies must pay an increased rate of wages as set forth in the table below to employees who work in excess of statutory working hours, work on statutory days off or work late at night (between 22:00 and 05:00)

(Table 4-3) Reason for Overtime payment
Classification
Classification Rate of increase
(1) Work in excess of statutory working hours 25%
(2) Work in excess of statutory working hours exceeding 60 hours in a month*1 50%
(3) Work on statutory days off 35%
(4) Work late at night (between 10 p.m. and 5 a.m.) 25%
(5) Work late at night in excess of statutory working hours 50%
(6) Work late at night in excess of statutory working hours exceeding 60 hours in a month*1 75%
(7) Work late at night on statutory days off 60%
  1. *1

    Employers are allowed to offer paid leave in lieu of additional wages for overtime work (the 25% increased portion from 25% to 50% by the revised Labor Standards Act) if agreed upon in a labor-management agreement.

4.5.5 Exceptions for managers and supervisors

Persons in positions of management or supervision and persons handling confidential administrative work who are closely involved in management are not subject to the regulations on working hours, breaks and days off (with the exception of regulations on night work). Whether he or she is regarded as a manager/supervisor is comprehensively judged by facts such as those below;

  • whether the decision-making process of his or her labor conditions and labor management are closely involved in management
  • whether he or she is given the practical authority and business status of a manager/supervisor, regardless of his/her business title
  • whether there is a strict limitation for working hours, such as office hours
  • whether he or she is given theappropriate financial treatment ofa manager/supervisor, such as salary, allowance and bonus

4.5.6 Modified working hour system

Some jobs entail large peaks and troughs in the number of working hours according to the year, month or week. In some of these cases, companies are allowed to adopt a system of calculating working hours whereby the company need not pay increased rates in certain weeks or on certain days even where employees work in excess of statutory working hours, provided that the employees involved work no more than the statutory number of working hours on average within a predetermined period. In this case, however, a labor-management agreement must be entered into or appropriate provisions included in work rules before a flexible system can be adopted.

  1. (1)

    System of annual modified working hours

    Employees' working hours must not exceed 40 hours on average per week for a specified period of more than one month but not more than one year. If a company adopts this system, even workers whose statutory working hours are 44 hours per week, under the exemptions detailed in 4.5.1 (1), are subject to the aforementioned 40-hour average.

  2. (2)

    System of monthly modified working hours

    Provided that provisions are drawn up prohibiting employees' working hours from exceeding 40 hours*1 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 eight hours on a specified day.

  3. (3)

    Flextime system

    Another system under which working hours can be adjusted within a monthly period is the flextime system. Under this, the total number of working hours that a worker must work during a fixed period of not more than three month is established, and workers are free within limits to determine what time they start and stop work each day provided that they meet the total number of working hours required.

  4. (4)

    Week-based modified working hours

    Under this system, employers may have employees work for more than eight hours but not more than 10 hours per day, provided that employees' working hours do not exceed 40 hours per week. It should be noted, however, that this system is limited to retailers, inns and restaurants with less than 30 regular employees. Furthermore, if a company adopts the system, even workers whose statutory working hours are 44 hours per week, under the exemptions detailed in 4.5.1 (1), are subject to the aforementioned 40-hour average.

    1. *1

      Under this system, the working hours of workers whose statutory working hours are 44 hours per week under the exemptions detailed in 4.5.1 (1) shall remain 44 hours.

4.5.7 System of discretionary working hours

If employees work outside companies or if the progress of work is considerably left to employees, an ordinary method of calculating working hours may be unsuitable. For such case, there is a “deemed working hour system” under which employees are deemed to have worked for a certain period of time. If the deemed working hours exceed statutory working hours, increased rates of wages will occur for the excess hours.

  1. (1)

    System of deemed working hours outside the workplace

    This system is to deem that employees have worked for prescribed working hours where it is difficult to calculate the employees’ working hours because the employees work outside the workplace for sales, media coverage or other reasons. However, in general, if the employees need to work in excess of the prescribed working hours in order to provide the services, it will be deemed that the employees have worked for “hours generally required to perform those services” or “hours prescribed in the labor-management agreement”.

  2. (2)

    Discretionary working system for professional services

    For certain services that are highly professional and difficult to provide specific instructions pertaining to the means of performing services and the allocation of time, by prescribing working hours in the labor-management agreement and submitting that agreement to the chief of the relevant labour standards inspection office, it will be deemed that the employees worked for the hours prescribed in the agreement regardless of the actual working hours.

  3. (3)

    Discretionary working system for planning services

    For a person who engages in services such as planning, plan proposal, research and analysis in which the method of performing those services must be left to the employee’s discretion to a large extent, if certain matters are resolved with the majority votes of four-fifth or more of the committee members at the labor-management committee, and the matter is registered to Labor Standards Inspection Office, it will be deemed that the person worked for the hours resolved at the labor-management committee regardless of the actual working hours.

4.5.8 High-Level Professionals

Upon an agreement by a worker engaged in the development of financial products, asset management, trading of securities, etc., investment advice, research analysis, or research and development, with a confirmed annual salary of 10.75 million yen or more, the worker can be exempt from the regulations on working hours, breaks, holidays, and late-night premium wages as a "high-level professional" by submitting a resolution of the labor-management committee to the labor standards inspection office concerned. However, the employer must ensure at least 104 days of holidays per year and implement health and welfare measures.

4.5.9 Paid leave

Employers must grant 10 days' paid leave to employees that worked for six consecutive months from the time of hiring and who worked on not less than 80 per cent of all schedule work days. This paid leave may be taken consecutively or separately. Where an employee's application to take paid leave will hinder the normal business operations, the employer may require the employee to take such paid leave at a different time. The number of days of paid leave available to employees increases in proportion to employees' length of service as set forth in the following table.

(Table 4-4) Number of days of annual paid leave granted
Years of service 0.5 1.5 2.5 3.5 4.5 5.5 6.5
Leave days granted 10 11 12 14 16 18 20

The right to annual paid leave expires after two years. In other words, annual paid leave left over from one year may be carried over and taken the next year only. For instance, if an employee is awarded 10 days' paid leave in 2004, but opts not to take paid leave in that year, the employee may carry those days over to 2005 and use them in addition to any leave days which become available in 2005. However, those 10 days awarded to the employee in 2004 cannot be carried over to 2006 or beyond. It should also be noted that employees that have been continuously employed at the same company for not less than seven years and six months can take a maximum of 40 days' paid leave in any one year, including days that became available within that year and those carried over from the previous year. If a worker does not fully exercise their right to annual paid leave and it expires for reasons such as expiration or retirement, whether to provide payment in lieu for the unused number of days of paid leave depends on the agreement at the company. However, such handling is not desirable as this can discourage workers from taking annual paid leave, and it is important to develop a work environment where annual paid leave can easily be taken.

The Company is obliged to ensure that employees who are granted 10 or more annual paid leave days take at least five days per year. While annual paid leave should be taken in units of whole days in principle, up to five days' worth of paid leave per year can be taken in hourly units if agreed upon in a labor-management agreement.

Employers are not required to grant paid leave days in addition to those described above to cover days on which employees did not work as a result of any non-work-related illness or injury. It should also be noted that most Japanese companies grant a few additional paid leave to employees for marriage, death of close relatives, and childbirth by the employee's spouse, etc.

Part-time workers with few working days and short working hours per week are granted annual paid leave in proportion to the number of prescribed working days that they work.

4.5.10 Maternity, childcare and family care leave

  1. (1)

    Maternity leave

    If an employee of expectant mother requests permission for leave of absence six weeks prior to the expected date of delivery (14 weeks in the case of multiple pregnancies), the employer must approve the request. Furthermore, employers are, in principle, prohibited to cause any female employee to work for a period of eight weeks commencing from the day following that on which the employee gave birth.

  2. (2)

    Childcare leave

    If an employee with a child aged less than one-year-old requests permission for a leave of absence (by the child's first birthday in principle, or up to the age of 24 months if certain conditions are met), the employer must approve the request. Also, an employee is eligible for childcare leave at childbirth while his spouse is on maternity leave after delivery, on top of the regular childcare leave. Employers may deem employees who have worked at the company for less than one year to be ineligible for childcare leave, provided, however, that the employer does so by stipulating to that effect in a labor-management agreement.

  3. (3)

    Exemption from non-scheduled work, obligation for short-time working system, and limitation of overtime work

    If an employee with a child aged less than three years old requests to be exempted from non-scheduled work, he/she must not be made to work in excess of prescribed working hours. If an employee with a child aged less than three years old requests to take short-time working hour system, he/she must be allowed to do so. If an employee with a child of preschool age requests to be exempted from non-scheduled work, he/she must not be made to work overtime in excess of 24 hours in a month or 150 hours in a year.

  4. (4)

    Family care leave

    If an employee with a family member who has been judged to require a certain level of nursing care requests permission for a leave of absence to provide such nursing care, the employer must approve such a request in separate periods for up to three times for a total of 93 days per family member concerned. Employers may deem employees who have worked at the company for less than one year and those whose employment will terminate after the 93 day period and 6 months pass from the scheduled start date of family care leave as ineligible for family care leave, provided, however, that the employer does so by stipulating to that effect in a labor-management agreement.

  5. (5)

    Leave of absence to nurse a child or to take care of family

    If an employee with a child of preschool age requests to nurse his/her sick or injured child, he/she may take a leave of absence of up to five days per year (or up to 10 days per year if he/she has two or more children of preschool age). In addition, if an employee with a family member requiring nursing care requests permission for a leave of absence to nurse such a family member, he/she may take a leave of absence of up to 5 days per year (or up to 10 days per year if he/she has two or more of such family members). This leave can be taken in hourly increments.

The above periods of leave may be unpaid. Under certain conditions, however, an employee may receive certain benefits under health insurance coverage during the above period (1) and under employment insurance coverage during the above periods (2) and (4).

4.5.11 Investigations by labor standards inspectors

Labor Standards Inspectors are professional staff members of the Ministry of Health, Labor and Welfare who enter business sites (factories, offices, etc.) under the authority of Japanese labor laws and regulations, observe how employers follow those laws and regulations and ensure sound working conditions and the welfare of workers. They are also responsible for ensuring workers' occupational accident compensation for persons who have suffered from labor-related accidents.

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Section4: Documents businesses are required to submit to authorities

Section Documents Where documents are listed within the URL The competent authorities and relevant web pages
4-3 Notice of EmploymentExternal site: a new window will open See the pdf below Ministry of Health, Labour and WelfareExternal site: a new window will open
4-3 Employment Agreement Ministry of Health, Labour and WelfareExternal site: a new window will open
4-5 Notification of Agreement on Overtime work Working on Holidays Ministry of Health,
Labour and WelfareExternal site: a new window will open
4-6 The Model Rules of EmploymentExternal site: a new window will open See "The Model Rules of Employment" Ministry of Health,
Labour and WelfareExternal site: a new window will open
4-9 Notification of Acquisition of Employment Insurance Qualification Ministry of Health,
Labour and WelfarePDFファイル(外部サイトへ、新しいウィンドウで開きます)(3.2MB)
4-9 Application to Enroll in Employees' Health Insurance / Employees' Pension InsuranceExternal site: a new window will open See "Application form" Japan Pension ServicesExternal site: a new window will open
4-9 Labor insurance Estimated insurance premiums / Increased estimated insurance premiums / Final insurance premiums Declaration Ministry of Health,
Labour and WelfarePDFファイル(外部サイトへ、新しいウィンドウで開きます)(3.2MB)
4-9 Basic amount for calculation of monthly remuneration of person insured Health insurance and Employees' pension insurance Insurance
Application to enroll in Employees' Pension Insurance for insured persons aged 70 and older
Japan Pension ServicesExternal site: a new window will open
4-9 Report of Dependents (change)External site: a new window will open See "Report form" under "Coverage of Your Dependents" section. Japan Pension ServicesExternal site: a new window will open
4-9 Notification of the Establishment of a Labor Insurance Relationship Ministry of Health, Labour and WelfarePDFファイル(外部サイトへ、新しいウィンドウで開きます)(3.2MB)
4-9 Notice of establishment of the business place to which employment insurance is applied Ministry of Health,
Labour and WelfarePDFファイル(外部サイトへ、新しいウィンドウで開きます)(3.2MB)
4-9 Application for Workplace CoverageExternal site: a new window will open See "Application form" Japan Pension ServicesExternal site: a new window will open
4-9 Declaration of Tax Exemption for Salaried Employees (Change)External site: a new window will open Select the desired format from the formats below National Tax AgencyExternal site: a new window will open
4-10 Income Tax Withholding Certificate National Tax AgencyExternal site: a new window will open

Materials listed as ‘Reference’ contain samples of documents regarding registration, visa, taxation, personnel and labor matters that are necessary when a foreign company establishes a corporation or other entity in Japan. These documents are not published by competent authorities and therefore are not official. For those who are going through the official procedures, please obtain the latest official documents from the competent authorities and related bodies or consult a person who specializes in advising on such information and procedures.

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