Japan-based clients (Customer) may take use of Globalization Partners' consulting and project-based services to help their businesses grow in Japan with the help of a qualified expert (or team of professionals) who can suit their specific needs (Services). As part of the project-based Services that it contracts to offer for its Clients, Globalization Partners provides its own staff of Professionals to help with the work. By having Globalization Partners employ the Professional in accordance with Japanese labor legislation, the Customer is spared the trouble of setting up a Japanese subsidiary or branch office only for the purpose of staffing the latter with local workers.

With the help of the designated Professionals who have the necessary skills and experience to carry out such tasks, our Service Provider Model enables Customers to acquire the necessary services and complete projects in Japan without the hassle of dealing with legal, HR, payroll, tax, and compliance issues related to establishing a local presence and employing Professionals.
Vacancies in Japan

When it comes to employment, Japanese law places a strong emphasis on the rights of the person. It's really challenging to let someone go, and it has to be done in a "socially acceptable" way. It is essential in Japan to have a set of "Work Regulations" that regulate the conditions of employment.

Most of a worker's rights and responsibilities are laid down in the Work Regulations in Japan (shuugyou kisoku). If you have 10 or more workers, you must develop and submit Work Rules to the Labor Standards Inspection Bureau. Some aspects of employment, such as hours worked, holidays, termination of employment, and compensation, will be spelled out in the Work Rules, which will be included into the employment contract. Workers in the professional sector are protected by the local team work regulations in effect.

The following are some of the most common perks in Japan that may come in handy while negotiating an offer letter and employment contract with a Japanese candidate.
Japanese Employment Agreements

Employers in Japan are required to furnish workers with some terms and conditions of employment in writing, although the Japan Labour Standards Law does not prescribe a structure of employment contracts. A written employment contract or a copy of the company's "work rules" would both enough to satisfy this mandate on the part of the employer (shuugyou kisoku). Each of the Professionals we've hired via Globalization Partners has signed an employment agreement that complies with the laws in their home country.

Employers in Japan should use a solid employment contract that details the employee's pay, perks, and termination criteria. The wage and any other remuneration figures in a Japanese offer letter or job contract must always be stated in Yen rather than any other currency.
Japan's Working Hours

Unless otherwise negotiated with a union or a representative of the local workforce, a typical workday in Japan runs from Monday through Friday, with a 40-hour workweek. The contract should include the maximum number of overtime hours that will be permitted.

Pay rates for overtime must not go below the following minimums:
Minimum overtime pay is 125% of the regular hourly rate.
Pay increase of 135 percent for working on a day designated as a day of rest.
Overtime pay between the hours of 10:00 p.m. and 5:00 a.m. is paid at 150% of the regular hourly rate, a 25% premium.
Overtime pay for working late on a day off is 160% of the regular rate, or a 25% premium.
If you put in more than 60 hours of overtime every month, your pay will increase by 150%.
If you work more than 60 hours of overtime every month, you'll be paid 175 percent more.

The final two charges are now waived for small and medium-sized businesses. Workers "in positions of supervision or management or those handling confidential topics" are also often excused from overtime.
Seasonal Breaks in Japan

In Japan, there are 16 official holidays that all citizens and workers are granted time off to commemorate.

Day One of the New Year
Celebration of Maturity Day Commemoration of Childhood
Spring equinox Constitution Day Showa Day All Souls' Day
Happy Vegetation Day
Holiday Honoring the Marine Corps' Dedication to Children
Holiday Honoring Seniors in the Mountains
The Autumnal Equinox is a time for physical activity and healthy eating.
Cultural Celebration
Monday after workers' thanksgiving
The Birthday of the Emperor

When a holiday (other than New Year's) occurs on a Sunday, the following Monday is celebrated as the holiday. While it is not required by law, most international firms will offer their paid staff the day off on national holidays.
Japan Holidays

After working for a company for 6 months in Japan, employees are entitled to at least 10 days of paid leave every year. The benefit accrues at a rate of 1 extra day per year for the next two years, and 2 extra days per year after that, up to a maximum of 20 extra days per year. Unused vacation time will be lost after two years.
Sick Day in Japan

Unless otherwise specified in the employee's work regulations or employment contract, a company is under no legal obligation to pay an employee while they are off sick or injured.
Leave for New Parents in Japan

Working mothers are eligible for paid time off beginning six weeks before the due date and continuing for an additional eight weeks after the baby is born. A woman should not return to work for her employer during the first eight weeks after giving birth unless both of the following conditions are met:

In six weeks, she plans to return to work.
The doctor has given his or her word that it is safe for work to resume.

Unless otherwise stated in the employment contract or work rules, companies are under no obligation to provide paid maternity leave.

Workers may take up to 93 days off per family member in need of care. Unless otherwise specified in the Work Regulations, employees are not compensated for these absences.

An employee is eligible for childcare leave beginning the day after maternity or paternity leave finishes and ending the day before the child's first birthday. In some circumstances, the deadline might be moved forward to the day a kid turns one and a half.

Paid time off for child care:

First, a one-time payment of JPY 420,000 for giving birth.

Two) Not having to pay your share of the social insurance premium

Thirdly, maternity pay: around two-thirds of regular pay for nine months, or the length of a mother's or father's absence.

During parental leave, you'll get a benefit equal to around two-thirds of your regular pay.
Japanese Supplemental Benefits

Creating a work environment that is both secure and positive is highly valued in Japan. All workers are entitled to a free yearly checkup and physical from their employers, and this is a legal requirement. Employers may also be obligated to provide stress checks, however this depends on the nature of the job being performed.

To properly assign the overall employer's cost including benefits in Japan, we propose allocating an additional 10%-15% over and above the gross wage as benefits cost.
Bonuses

In addition to their regular monthly salary, Japanese workers are not entitled to receive bonuses under any circumstances. Commission is the standard form of payment for sales staff, mirroring the structure of sales compensation packages in the United States.
Severance or Termination in Japan

In Japan, probationary periods are widespread and often last between 3 months and 1 year. Termination of employment during the probationary term is not always arbitrary if the employer has objectively valid reasons for doing so. Terminating an employee legally during their probationary term is simpler than doing it afterwards. The probationary term and the circumstances under which it may be extended must be specified in the employee's work regulations and/or the employment contract.

In Japan, working people have extensive legal protections. Once employed, it is very difficult for an employer to fire an employee. If there are no objectively acceptable reasons for a dismissal and the firing is not generally seen as suitable by society, the dismissal will be deemed unlawful as an abuse of rights under local law. In practice, it is quite difficult for an employer to meet these standards. Employees may only be fired for "cause" in the eyes of the law.

The specific conditions that qualify as just cause for dismissal in Japan might vary widely from case to case, but in general, they are:

Violence or theft
Severe disobedience; the offense must be very serious
Failure to improve despite receiving official warnings, receiving remedial training, and considering alternative employment options
Making up one's credentials to the point that it hinders performance or makes it hard to complete one's tasks

In the event of a dismissal, employers are required to provide at least 30 days' notice or provide basic salary in place of notice. Conventionally, companies require workers to provide 30 days' notice before they may quit.
Taxation in Japan

When it comes to social security, Japan is hard to beat. Everyone (even workers) has access to first-rate medical care, retirement plans, unemployment insurance, and other benefits thanks to the social safety net. Due to the high quality of government benefits, it is unusual for Japanese firms to give additional insurance benefits to their employees.

In Japan, both workers and employers contribute to a pension plan as part of the country's social security system. If an employee has contributed to the plan for at least 25 years, they are eligible to receive benefits. If you work for a company and reach retirement age, you'll be eligible to get your pension.

A similar public healthcare system exists in Japan. In most organizations, workers are offered four different forms of insurance:

Medical coverage
health and retirement benefits
unemployment insurance and workers' comp

Directors are entitled to "social insurance," which includes health and welfare pension coverage. Both the company and the worker pay half of the monthly premium.

Directors are not eligible for "labor insurance," which includes workers' compensation and unemployment benefits. Both the whole cost of workers' comp insurance and a large portion of the cost of unemployment insurance fall on the employer.

Salary income and other forms of employment income are subject to both federal income tax and any applicable municipal taxes on residents. In terms of the national income tax, rates are progressive and range from 0% to 50%. The tax is a fixed amount for all local residents. The fee is determined by individual municipalities.
How Collaboration in Globalization Benefits Everyone

It is time-consuming, costly, and complicated to set up a branch office or subsidiary in Japan in order to employ a small workforce. Strong worker safeguards may be found in Japanese labor law, but complying with them requires careful attention to detail and familiarity with local best practices. Through Globalization Partners' Service Provider Model, the Customer is able to work with one or more Professionals who are qualified to meet the needs the Customer has identified in order to successfully complete a project or assignment, making it simple and easy for the Customer to expand its operations in Japan. We spare you the trouble of establishing a foreign branch office or subsidiary to hire qualified labor by assigning appropriate Professionals to facilitate the provision of Services, handling all employment, HR, and payroll matters relating to the Professionals, and ensuring compliance with local laws. You can stop worrying about IT and concentrate on operating your business thanks to our Service Provider Model.

Get in touch with Globalization Partners if you're looking for a Service Provider in Japan and would want to learn more about how we can help.