Japan flag Japan: Operating a Business in Japan

Work conditions in Japan

The Active Population in Figures

Labour Force 68,355,05668,838,95668,680,759

Source: International Labour Organization, ILOSTAT database

Total activity rate 77.76%79.05%79.82%
Men activity rate 85.78%86.47%86.65%
Women activity rate 69.49%71.40%72.77%

Source: International Labour Organization, ILOSTAT database

Employed Persons, by Occupation (% of Total Labour Force) 2015
Wholesale and retail trade; repair of motor vehicles and motorcycles 17.0%
Manufacturing 16.7%
Human health and social work activities 12.3%
Construction 7.8%
Accommodation and food service activities 6.0%
Transportation and storage 5.7%
Education 4.8%
Administrative and support service activities 4.6%
Public administration and defence; compulsory social security 3.7%
Agriculture, forestry and fishing 3.6%
Professional, scientific and technical activities 3.4%
Information and communication 3.3%
Financial and insurance activities 2.8%
Real estate activities 1.4%
Arts, entertainment and recreation 1.1%
Electricity, gas, steam and air conditioning supply 1.0%
Mining and quarrying 0.0%

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Working Conditions

Legal Weekly Duration
While working conditions are set at 8 hours per day and 40 hours per week, employees frequently work 50 or 60 hours a week. Compared with the United States, the United Kingdom, France and Germany, Japanese employees consistently work the highest number of hours. Japan is also the country with the least annual vacation, including weekly rest days and vacation.
Retirement Age
Age 65, with a minimum of 25 years of contributions. An early pension is payable between ages 60 and 64.
Working Contracts
Contracts determine if the employee is part of the regular or non-regular staff. Permanent employees form the regular staff and permanent contracts represent 65.4% of jobs in Japan. Among the non-regular staff, there are different types of contract: part-time workers, temporary workers, dispatched workers, fixed-term contract workers and entrusted employees (shokutaku). About 23% of jobs are non-regular jobs under part-time contracts. In the years following the Asian financial crisis, recourse to part-time jobs has developed considerably.
Labour Laws
Doing Business: Japan, to obtain a summary of labour regulations that apply to local entreprises

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Cost of Labour

Minimum Wage
According to the Japanese government data, the minimum wage is 7.4 USD, approximately 805 yen per hour in 2020.
Average Wage
Average annual income of employees: 40,573 USD, approximately 4,479,259 yen.
Social Contributions
Social Security Contributions Paid By Employers: Japan has four different kinds of insurance system which companies are legally obliged to take part in:

  • Workers' Accident Compensation Insurance: the maximum premium rate is 8.8% and the minimum is 0.25%. The employer bears the whole cost of premiums. 0.35% in cases of import and trade, and sales industries.
  • Employment Insurance: The insurance premium rate is 0.9%, the employer paying 0.6%.
  • Health Insurance and Nursing Care Insurance: general insurance premiums are 9.90%, the employer paying 4.950% (5.735% if aged 40 or over).
  • Employees' Pension Insurance: Insurance Contributions are 18.3%, the employer paying 9.15%.

For more information, visit the Japan External Trade Organization JETRO site.
Social Security Contributions Paid By Employees:

  • Employment Insurance: The insurance premium rate is 0.9%, the employee paying 0.3%.
  • Health Insurance and Nursing Care Insurance: general insurance premiums are 9.90%, the employee paying 4.950% (5.735% if aged 40 or over).
  • Employees' Pension Insurance: Insurance Contributions are 18.3%, the employee paying 9.15%.

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Social Partners

Social Dialogue and Involvement of Social Partners
The majority of collective bargaining is conducted by local labour unions or work unit unions. These work unit unions account for 90% of unions in Japan. Federations do not control the actions or policies of unit unions and typically engage in political or public affairs activities. There are two major trade unions: the Industrial Trade Unions and the National centres (mainly JTUC- RENGO). Typically, JTUC-RENGO and management organisations (such as Nippon Keidanren, the Japan Business Federation) establish a venue for regular discussions. When the labour union and the management organisation share a policy opinion, a joint policy proposal is submitted to the Governmental Councils. Every year between March and April, unions launch their 'Spring Wage Offensive', known as Shunto.
Nippon Keidanren
Japanese Trade Union Confederation (JTUC-RENGO)
Unionisation Rate
The unionisation rate was 18.5% in 2010 and has dropped over the years, especially in private sector SMEs and micro-enterprises.
Labour Regulation Bodies
The Japan Institute for Labour Policy and Training
Ministry of Health, Labour and Welfare
The Office of the International Labour Organisation in Japan

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Latest Update: June 2022

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