#7 Holidays and Days Off

Ensuring proper rest days and holidays for employees is a critical aspect of labor management in Japan. Employers are legally required to provide statutory holidays. Understanding the distinction between statutory and non-statutory holidays, the modified holiday system, and overtime premium requirements is essential for compliance. In summary:

• Employees must receive at least one day off per week or at least four days off within a four-week period under the modified holiday system.

• Statutory holidays have different premium wage requirements compared to non-statutory holidays.

• Employers may require holiday work or overtime only if a “36 Agreement" is signed and properly filed.
  

Below, we provide a detailed breakdown of the regulations governing holidays and days off in Japan.

Basic Principle

As mandated by Article 35, Paragraph 1 of the Labor Standards Law, employers must provide their workers with at least one day off per week,

The starting day of the week for calculating this weekly period can be defined in the workplace regulations which is important for accurately determining when overtime or rest day obligations begin and end. If no specification is provided, a week is generally understood to run from Sunday to Saturday.

Exceptions

As an alternative to the standard one-day-off-per-week rule, employers may adopt the Modified Holiday System (変形休日制: Henkei kyujitsusei), which allows for at least four days off within a four-week period (Article 35, Paragraph 2).

When implementing the Modified Holiday System, workplace regulations must clearly define the four-week period and specify the minimum four days off to be provided within that timeframe.

Statutory and Non-Statutory Holidays

The minimum required days off under Article 35 are referred to as statutory holidays (法定休日: Hotei Kyuitsu). Any additional day off that a company voluntarily provides beyond the legal requirement is considered a non-statutory holiday (法定外休日: Houteigai Kyuujitsu).

For example, if a company follows a 5-day workweek with Saturdays and Sundays off, the employer must designate either Saturday or Sunday as the statutory holiday in the employment contract. The other Saturday or Sunday will be considered as a non-statutory holiday.

It is essential to clearly specify which day is the statutory holiday, as overtime regulations and premium wage calculations differ between statutory and non-statutory holidays.

Signing a 36 Agreement

If an employer needs employees to work beyond the legal limits on overtime or statutory holidays, a 36 Agreement (36協定: Saburoku Kyōtei) must be established under Article 36 of the Labor Standards Act. This agreement is made between the employer and either a labor union or a majority worker representative.

• Agreement Contents: The 36 Agreement outlines the maximum overtime or holiday work hours allowed and any necessary conditions.

• Advance Signing: The agreement must be signed before the work begins.

• Submission: The signed agreement must be submitted to the local Labor Standards Inspection Office.
  

Without a valid and properly filed 36 Agreement, any overtime or holiday work may be considered a violation of labor regulations, potentially leading to fines, legal action, and back pay liabilities. Proper documentation ensures that both the employer and employees understand their rights and obligations, helping to avoid disputes and compliance issues.

Payment of Premium Wages for Statutory Holiday Work

If employees work on statutory holidays, they must be paid a premium wage of at least 35% above their regular wage.

For work on non-statutory holidays, a holiday premium wage is not required. However, if the work exceeds 8 hours per day or 40 hours per week, the excess hours must be paid as overtime at a minimum rate of 25% above the regular wage. For example, if an employee earning ¥2,000 per hour works 10 hours on a non-statutory holiday, the 2 excess hours would be paid at ¥2,500 per hour (¥2,000 × 1.25). Additionally, if the work exceeds 60 hours per week, the excess hours must be paid as overtime at a minimum rate of 50% above the regular wage, or ¥3,000 per hour in this example (¥2,000 × 1.50).

If you are considering expanding your business to Japan, please contact Quantum Accounting Inc. for a free consultation during the planning phase or general consultation (available in both English and Japanese). Quantum Accounting's professionals are experts in accounting, tax, legal, and labor issues. Our goal is to provide you with a one-stop professional firm for all the services you need to expand your business into Japan. We are confident that we can help you.

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