Work and Wages

Minimum Wage

Minimum wages in Japan are governed under the Minimum Wages Act of 1959. The minimum wages set under the Minimum Wages Act apply to all workers who are employed at an enterprise or place of business and receives wages there from, without regard to the kind of occupation, excluding persons employed in businesses or offices employing only family members residing together and domestic employees.

The basic minimum wages are separately established in each region of the country. Based on the deliberation of the Regional Minimum Wage Council in each prefecture, and determined by the chief of the prefectural labor bureau, the minimum wage is comprehensively applied to all types of employees in each prefecture. In addition, there are also special minimum wages, which may be set for specified businesses or occupations on the applications of interested parties. In order to guarantee the payment of minimum wages level for low paid workers, regional minimum wages are set for every region of Japan. (2) Regional minimum wages are set while taking into account the living expenses of workers, wages of workers and the ordinary enterprises' ability to pay the wages in the region.

All types of minimum wages are set by the Minister of Health, Labour & Welfare, or the Directors of the Prefectural Labour Offices, following an investigation and inquiry of the Central or Prefectural Minimum Wages Council for each region, which is composed of an equal number of members representing respectively workers, employers and the public interest. The Minimum Wages Council conducts an investigation and inquiry with respect to all regional minimum wage reviews and, if the Minister or Directors considers it necessary, with respect to an application for a special minimum wage. Once its investigation and inquiry is conducted, the Council then submits its opinion on the regional or special minimum wage to the Minister or Directors.

Upon receipt of the Minimum Wages Council’s opinion, the Minister or Directors can request another inquiry of the Council or give public notice of the summary of the opinion. If a public notice is given, interested workers and employers may then file objections within 15 days of the public notice. Any objections received must be referred to the Minimum Wages Council for its opinion concerning the objection. Once the period for filing objections has passed and, if relevant, the Minimum Wages Council has submitted its opinion on any objections raised, the Minister or Directors shall make a decision in relation to the minimum wage and give public notice of its decision. The decision for setting a revised minimum wage comes into effect 30 days after the date on which public notice is given and for abolishing the minimum wage on the date on which public notice is given.

The criteria for determining or updating minimum wages include wage trends (level of wages in the country), economic conditions/growth, employment trends, and consumer price index/inflation rate.

The minimum wage rate in Japan is different in different regions of Japan. There are 47 different regions in Japan and the wage changes according to the region.

In line with the provisions of Labour Standards Act and the Minimum Wages Act, any individual convicted of violating the provisions regarding payment of minimum wages shall be punished as follows:

  1. for failing to pay wages equal to or greater than the minimum wage amount to workers covered by the minimum wage - by a fine not exceeding 500,000 yen;
  2. for failing to inform workers of applicable minimum wages, by posting information continuously at conspicuous places in workplaces and by other means - by a fine not exceeding 300,000 yen;
  3. for refusing, impeding or evading an inspection, or failing to make a statement or making a false statement to questions asked by Labour Standards Inspectors - by a fine not exceeding 300,000 yen;
  4. for failing to pay wages in accordance with the requirements of the Labor Standards Act pertaining to method and timing of payment, payment of piece-rate workers, emergency payments and absences allowances - by a fine not exceeding 300,000 yen; or
  5. for dismissing or giving disadvatageous treatment to a worker by reason of the worker reporting an alleged violation of the Act to any of the relevant bodies - by a fine not exceeding 300,000 yen (or up to 6 months imprisonment).

Sources: § 2,9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 22, 32, 39-41 of the Minimum Wages Act, 1959; §24-27 of the Labour Standards Act, 1947 

Regular Pay

Wages are defined as any payment to the worker from the employer, including salaries, allowances and bonuses.  The allowances and bonuses may be paid according to particular work rules, e.g. housing allowance or retirement allowance. The full amount of the wages must be paid in cash and directly to the employee and at least once a month on a specified date.  Where payment is made more frequently than once a month, dates must be specified for the payment.

An employer cannot reduce wages without the consent of the employee. No statutory regulations explaining the circumstances in which the salary maybe deducted by the employer could be found, except where the employer can make salary cuts for disciplinary action. Although salary deduction is regulated under Employment Rules, the amount of decrease for a single occasion must not exceed 50 percent of the daily average wage, and the total amount of decrease should not exceed 10 percent of the total wages for a single pay period. Payroll deduction is generally prohibited and employees' consent for such deductions is unenforceable.

Partial deduction from wages is permitted in cases otherwise provided for by laws and regulations or in cases where there exists a written agreement with a labor union or with a person representing a majority of the workers (where labor union is not organized).

Sources: §11, 24 & 89 of the Labour Standards Act, 1947; §2(3) of the Minimum Wages Act, 1959

Regulations on Work and Wages

  • 労働基準法(1947) / Minimum Wages Act, 1959
  • 最低賃金法(1959) / Labour Standards Act, 1947

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