Minimum Wage
Minimum wages in Japan are regulated by the Minimum Wages Act of 1959. The minimum wages established under this Act apply to all workers employed at an enterprise or place of business and paid wages from there, regardless of their occupation. However, this excludes persons employed in businesses or offices that only employ family members living together and domestic employees.
The minimum wage rate in Japan varies by region. There are 47 different regions in Japan, and the wages change according to the region. Based on the deliberation of the Regional Minimum Wage Council in each prefecture, and determined by the chief of the prefectural labour 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 upon the applications of interested parties in order to guarantee the payment of a minimum wage level for low-paid workers. Regional minimum wages are set for every region of Japan. 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 concerning 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. For deliberations, if necessary, the Minimum Wage Council hears the views of relevant workers, employers, and other concerned parties.
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 their 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.
Employers are obliged to pay wages not less than the minimum wage to those to whom the minimum wage is applicable. A labour contract is invalid if it pays employees wages below the minimum wage.
The heads of Labour Standards Inspection Offices and labour standards inspectors are responsible for the enforcement of minimum wages, as stipulated in the Order of the Ministry of Health, Labour and Welfare. Labour standards inspectors execute their duties as judicial police personnel in accordance with the Code of Criminal Procedure (Act No. 131 of 1948) for offences related to violations of the law on minimum wages. In line with the provisions of the 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:
a) 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;
b) 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;
c) 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;
d) for failing to pay wages in accordance with the requirements of the Labour Standards Act pertaining to method and timing of payment, payment of piece-rate workers, emergency payments and absence allowances - by a fine not exceeding 300,000 yen; or
e) for dismissing or giving disadvantageous 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, 9-19, , 22, 32, 39-41 of the Minimum Wages Act, 1959; §24-27 of the Labour Standards Act, 1947
For updated minimum wage rates, please refer to the section on minimum wage.
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
Wages are paid at regular intervals, not exceeding one month. An employer may pay wages in a form other than cash if permitted by law, regulation, or a collective agreement. This is also permitted if the Ministry of Health, Labour and Welfare issues an order specifying the payment type, provided the payment method is reliable and meets the standards set out in that order. Japan has modernised wage payments by allowing wages to be paid directly into e-wallet apps, in addition to bank accounts. Workers, however, retain the right to traditional payments (to bank accounts) if they prefer
An employer cannot reduce wages without the consent of the employee. No statutory regulations explaining the circumstances in which the salary may be 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 per cent of the daily average wage, and the total amount of decrease should not exceed 10 per cent 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 allowed where explicitly provided for by laws and regulations or when there is a written agreement with a trade union or with a person representing the majority of workers (where a trade union is not organised).
Moreover, there is no statutory requirement for 13th or 14th month pay, or for compulsory bonuses, under Japanese law.
Sources: §11, 24,89 & 91 of Labour Standards Act, 1947; §2(3) of the Minimum Wages Act, 1959; 21 of the Ordinance for Enforcement of the Labour Standards Act, 1947
