We provide practical and useful insights on strategic HR and labor management in Japan, along with ideas for system design and implementation, as relevant topics arise.

In this issue, we have selected key topics from recent regulatory developments and fundamental labor rules that are important for business operations and summarized them from a practical perspective. We hope this will be helpful for your daily operations and HR policy planning.

1.Introduction of the Child and Childcare Support Contribution System

■ Key Point

A new social insurance contribution has been introduced, resulting in a slight increase in costs for both employers and employees starting from April 2026 premiums.

■ Explanation

The Child and Childcare Support Contribution is a new mechanism collected as an additional component of social insurance premiums.

Under the Japan Health Insurance Association (Kyokai Kenpo), a rate of 0.23% has been applied starting from April 2026 premiums (payable in May), which is shared equally between the employer and the employee.

While this creates an additional cost burden for both parties, the rate itself is relatively small, and the overall impact is limited when viewed in isolation.

However, as it forms part of ongoing social insurance costs, it is important to understand this system from a structural perspective.

■ Example

For example, if the standard monthly remuneration is JPY 500,000, applying the 0.23% rate results in a total contribution of JPY 1,150 (500,000 × 0.23%), which is split equally between the employer and the employee:
・Employee contribution: approx. JPY 575
・Employer contribution: approx. JPY 575

While the individual impact is relatively small (a few hundred yen per month), it is important to note that this cost will recur on an ongoing basis.

 

2.Revision of the Equal Pay for Equal Work Guidelines

(Officially Announced in April 2026, Effective from October 2026)

■ Key Point

Differences in treatment are more likely to be considered unreasonable unless they are based on differences in job content, level of responsibility, or scope of job transfer.

■ Explanation

Under the Equal Pay for Equal Work framework, companies are required to demonstrate clear and reasonable justification for differences in treatment between regular employees and non-regular employees.

Such differences must be based on objective factors, including:
・Job content
・Scope of responsibility
・Possibility of job transfer

Differences that are not based on these factors—such as base salary, bonuses, allowances, or benefits—are more likely to be considered unreasonable.

■ Example

For instance, even if regular and fixed-term employees perform similar roles with comparable responsibilities, the following differences may be considered unreasonable if not properly justified:

Bonuses
→ Paid to regular employees but not to fixed-term employees
→ If justified based on “contribution,” actual differences in contribution must be demonstrated

Commuting Allowance
→ Provided only to regular employees
→ Since this relates to actual commuting costs, it is generally difficult to justify differences based solely on employment type

Meal Allowances / Benefits
→ Available only to regular employees
→ As these are not directly tied to job duties, they are generally expected to be provided equally

Therefore, it is important not only to define categories in policy, but also to ensure that such distinctions are aligned with actual job practices.

3.Basic Rules on Working Hours in Japan (Statutory Working Hours and Holidays)

■ Key Point

Japan has strict regulations on working hours, overtime, and holiday work, making accurate tracking of working hours and proper payroll calculation critically important.

■ Explanation

Under the Labor Standards Act, the basic rules are as follows:
・Statutory working hours: up to 8 hours per day, 40 hours per week
・Statutory holidays: at least 1 day per week, or 4 days over a 4-week period

Any work beyond these limits is considered overtime or holiday work and requires premium wage payments.
Japan has detailed rules regarding premium wage calculations, including distinctions for:
・Overtime work
・Late-night work
・Holiday work

These must be properly tracked and calculated.

■ Example

If working hours are not accurately recorded, discrepancies may arise between actual overtime worked and payroll calculations, potentially resulting in unpaid overtime adjustments.

Therefore, in labor management in Japan, it is essential to ensure:
・Accurate recording of attendance data
・Proper tracking of overtime hours
・Payroll calculations in compliance with legal requirements

In addition, unpaid overtime claims can, in principle, be made retroactively for up to five years. However, under current transitional measures, claims are limited to three years for the time being, with a future extension to five years expected.

In practice, an issue raised by a single employee may extend to other employees under similar conditions, potentially requiring company-wide corrections.

As such, deficiencies in time tracking or payroll calculations may lead to significant retroactive costs and operational burdens, making day-to-day accuracy critically important.

 

If you have any questions about the topics covered in this newsletter or would like more information, please visit our Contact Us page.