HRsolution » COUNTRIES » Japan

Overview of Japan

Japan is an island nation in the Pacific, just of the coast of Korea. It is made up of 4 main islands which make up 97% of the nation’s landmass and 6.852 further islands. The capital city Tokyo is the world’s most populated megacity with a population of 38 million. Japan has a total population of 126,5 million. Japan is a Parliamentary Constitutional Monarchy and due to its size, the country is politically divided into 8 different regions and 47 different prefectures. Japan has a very low unemployment rate at 2.4% and very high literacy rate of almost 100% amoung the youth. Japan is known for being one of the safest countries on Earth. The Japanese are known for being very hard workers and so employers are allowing power naps at work.

When doing business in Japan, treat everyone with respect and be polite. When meeting with a Japanese business partner, be prepared to bow as a greeting instead of shaking hands. Dress formally for a business meeting and take lots of notes to show your interest. Also be a little early for a business meeting as being on time is almost seen as being too late. When addressing a person, always add “san” after the name as this is a sign of respect. Do not expect decisions to be made immediately during the meeting, this will take some time.

Currency of Japan

  • Japanese Yen

Health Insurance and the Social Security system of Japan

In Japan, the social insurance consists of:

  • Health Insurance
  • Social Pension
  • Nursing Insurance added for people between 40 to 65 years old
  • Children Upbringing

The employee pays half of these taxes, the other half is paid by the employer. The Children upbringing tax is paid only by the company. The social security taxes are paid only in the following month that they are due. This means that new employees do not pay Social Insurance in their first month.

Japan has a National Universal Healthcare system. Japanese employees who are enrolled in the social insurance scheme, benefit from the national coverage. Employees receive a Social Insurance card and with this can visit any medical institution of their choice, thereby only paying 30% of the standard costs.

Employer cost of Japan

The cost for an employer to hire someone in Japan is a plus of 15.49% to the gross salary.

Salary and bonuses of Japan

Employees who work on a wage are paid monthly.

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Public Holidays in Japan

If a public holiday falls on a Sunday, the following Monday will be the public holiday.

  • January 1st – New Years Day
  • Second Monday of January – Coming of Age Day
  • February 11th – National Foundation Day
  • February 23rd – The Emperor’s Birthday
  • Around March 20th – Vernal Equinox Day
  • April 29th – Shōwa Day
  • May 3rd – Constitutional Memorial Day
  • May 4th – Greenery Day
  • May 5th – Children’s Day
  • Third Monday of July – Marine Day
  • August 11th – Mountain Day
  • Third Monday of September – Respect for the Aged Day
  • Around September 23rd – Autumnal Equinox Day
  • Second Monday of October – Health and Sports Day
  • November 3rd – Culture Day
  • November 23rd – Labor Thanksgiving Day

Working Hours in Japan

Office hours are from 9:00am till 5:00pm, Monday till Friday. Many offices are also open for half a day on Saturday.

A regular work week is 40 hours. However, working long hours and more than others is a matter of pride.

If an employee is a manager, overtime is expected and is not paid. Overtime limits are 5 hours per day, 45 hours per month and 360 hours per year. If an employee works overtime, they will be compensated with 125% of their hourly wage.

Vacation in Japan

In Japan, the amount of vacation days an employee receives is based on their seniority in the company:

  • 6 months seniority – 10 days paid vacation
  • 1.5 years seniority – 11 days paid vacation
  • 2.5 years seniority – 12 days paid vacation
  • 3.5 years seniority – 14 days paid vacation
  • 4.5 years seniority – 16 days paid vacation
  • 5.5 years seniority – 18 days paid vacation
  • 6.5 years seniority – 20 days paid vacation

Employees may accumulate up to 2 years of unused vacation time.

Sick Leave in Japan

When an employee gets sick in Japan, they use their paid vacation time as a leave of absence to recover. Some foreign companies may grant sick leave to their employees as a special benefit.

Termination/Severance in Japan

When dismissing an employee in Japan, the byword is doing so with care as Japan is well-known for its lifelong employees. The best way to go about it is negotiating a voluntary resignation by the employee. Employees will require a lump-sum resignation payment equal to several months’ salary, depending on the circumstances of the employee.

The second way is disciplinary dismissal. The third is due to economic circumstances but even this is hard and several hurdles have to be cleared before the final clearance is given.

The notice period is a 30 days.