HR Solutions & Employee Relations in Japan with IRIS
IRIS HR consulting has experience helping businesses grow in Japan. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can help your business hire, recruit, and pay staff overseas in new, unfamiliar countries, such as Japan. As a leading Eastern economy, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.
Take your business to Japan with IRIS HR Consultancy.
Global expansion in Japan
Establishing your business in Japan
Japan is the third largest economy in the world by nominal GDP, making it a strong destination for businesses who are looking to potentially expand into global markets. It’s also the third largest manufacturer – behind China and the USA only.
Japan is a technological supercentre, with the largest electronic goods industry, and is famed for innovation, as well as excellence in the automotive sector. It also has world class infrastructure, especially in the city centres.
Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.
Before entering the Japanese market, you will need to honour labour regulations, which have developed over the years. Establishing a business in Japan will require local knowledge – everything from establishing your operation based on location, to understanding the ‘employees’ market’.
Complying with these procedures can be easier when you partner with IRIS HR consultants – we can help you reach Japanese markets.
Employment laws in Japan
When first expanding your business into Japan, navigating local laws, legislation and rules of employment laws is no mean feat, especially if you’re unfamiliar with the country’s strict labour focused policies. Throughout the world map, these laws are almost never universal. Rather, employment is dynamic and reflects the country social, economic, cultural opportunities.
For example, a lot of the working environment in Japan is governed by the social norms and ‘Work Rules’, which are considered part of an employment contract.
Did you know?
Japan has an ageing population with 27% of its populace over the age of 65. Culturally, they have a lot of respect for their elders.
Employment rights & contracts in Japan
Contracts and employment in Japan are governed by the Japan Labour Standards Law. While this doesn’t govern a format as such, certain terms and conditions must be written.
Most contracts contain a “Work Rules” (shuugyou kisoku), which is required by law. Employers with more than ten employees are required to log these with the Labour Standards Inspection Bureau. These cover the basics of the workday, working hours, holidays, ending employment and payment.
Hiring & recruitment in Japan
When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer and thereafter – including before, during and after the commencement of an employment contract.
What are the working hours in Japan?
The standard working week in Japan is established at up to 40 hours, or otherwise which must be agreed by a union or representative of local employees.
Overtime in Japan
Overtime has strict minimum rates, starting at 125% of base hourly wage. Different overtime payments are changed depending on time and day of additional hours worked, and if there is any surplus. This does not generally include managerial personnel.
Maternity Leave in Japan
Japan has a generous maternity leave scheme. Japanese culture values families, so strict rules surround the mother and her return to work.
The pregnant employee is entitled to start maternity leave within six weeks of the birth date and return no sooner than eight weeks after birth. Lump sums are paid upon childbirth, as well as other monetary benefits. A mother may resume six weeks after birth if she wishes to, and a doctor certifies that her work will not cause any stress to her health.
Once the maternity leave concludes, then childcare leave may begin, which lasts up until the day the child becomes 12 months of age. In certain circumstances, this happens once the child turns one and a half years old.
Employees who are eligible for family care leave are allowed up to 93 days per family member, which is not required to be paid.
There is currently no statutory provision for paternity leave, although this is under Governmental review, to encourage fathers to take such leave. At present, fathers have the option to take up to one year parental leave, but the take-up rate remains extremely low to-date
Adoptive parental leave
Adoptive parents don’t have any statutory minimum eligibility, but it tends to be the same rights as working mothers and fathers, with the exception of the pre-birth allowance.
Public Holidays in Japan
Japan celebrates 16 holidays, which are not required to be days-off, but are commonly granted by employers as such:
- New Year’s Day
- Coming of Age Day
- Foundation Day
- Vernal Equinox Day
- Showa Day
- Constitution Memorial Day
- Greenery Day
- Children’s Day
- Marine Day
- Mountain Day
- Respect for the Aged Day
- Autumnal Equinox Day
- Health and Sports Day
- Culture Day
- Labour Thanksgiving Day
- The Emperor’s Birthday
If any of the public holidays occur on a Sunday, aside from New Year’s Day, then the next workday counts as a holiday.
Japanese employers are required to give employees who have worked for more than six months at least 10 days holiday. Thereafter, for every year worked, this allowance increases by one day for the first two years and then 2 days per year after that.
This is up to a maximum of 20 days annually, and unused annual leave expires after two years.
We’ve Got You Covered
Deliver your business to new, exciting markets with confidence and compliance.
End of Service
HR in Japan requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.
For these more complicated matters, you will need expert HR guidance to navigate Japanese labour laws and remain compliant.
Termination (including Severance) in Japan
Societal restrictions make it hard for dismissal in Japan as there is a lot of notion around appropriate severance. Employees receive a great deal of protection, both at a local and a national level.
Dismissal must be given with a 30 days’ notice period or payment of salary in lieu. Acceptable reasons for dismissal are not fixed but generally include:
- Theft or violence
- Serious insubordination – must be egregious
- Serious and on-going poor performance after formal warnings have been given, corrective training provided, and other potential positions explored
- False information regarding skills or background that impacts performance or makes the fulfilment of duties impossible
Pensions in Japan
Japan has a strong social security system, which includes pensions and retirement planning. As long as an employee has been paying into the system for 25 years, they are entitled to receive benefits when they reach 65 years of age.
Social Security Coverage
As the social security system provides pensions, health and other services are funded jointly by employees and employers on shared contributions (50/50) toward both the health and welfare pension insurance, which are considered social insurance.
Labour insurance, which includes workers’ compensation and unemployment insurance, are wholly funded by the employer, and directors aren’t unable to benefit from labour insurance, unlike social insurance.
This is a commonplace provision by employers, and typically covers employees at all levels within the organisation
Accidental Death & Dismemberment (AD&D) insurance
This type of insurance is prevalent as a supplemental benefit, and again, is offered to employees of all levels.
Health and wellbeing
In Japan, all employers are required by law to provide annual medical check-ups for all employees. In some industries and jobs, employers must also provide mental wellbeing and stress check-ups.
Why Partner With IRIS?
When entering established economies and societies like Japan, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.
Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Japan.
Our cost-effective, knowledgeable approach to HR in Japan makes us an ideal partner to commence your overseas plans.