Japan is an island country in east Asia that is located within the Pacific Ocean. The country is part of the Ring of Fire and spans an archipelago of 6,852 islands, the 5 main islands being Honshu (the "mainland"), Hokkaido, Shikoku, Kyushu, and Okinawa.

Japan has the world’s 3rd-largest economy, and is built on powerful technology. The population is very welcoming, making Japan one of the most desirable places to do business.

The minimum wage in Japan is around JPY 961 per hour, and the standard workweek is 40 hours at 8 hours per day. Overtime is regulated by contracts and collective agreements, and paid between 125%-160% of the regular salary.

Parental Leave

Pregnant employees are entitled to 14 weeks of paid maternity leave beginning 6 weeks before the due date and 8 weeks after the birth. This leave is paid at a rate equivalent to 2/3 of their regular salary and funded by the labor insurance office.

The father is also entitled to paid paternity leave for up to one year after the birth, and this leave is referred to as “childcare leave” in Japan. The father does not receive a salary while on this leave unless stated in the employment contract, but they are entitled to a partial allowance from social security.

Sick Leave

Employees are not explicitly entitled to sick leave in Japan, but can use their paid vacation time as sick leave.

Paid Leave

They are 16 public holidays in Japan, and employees are also entitled to paid leave based on how long they’ve worked at their company.

• 0-6 months = 10 days of paid leave
• 6-18 months = 11 days of paid leave
• 1.5-2.5 years = 12 days of paid leave
• 2.5-3.5 years = 14 days of paid leave
• 3.5-4.5 years = 16 days of paid leave
• 4.5-5.5 years = 18 days of paid leave
• 5.5-6.5 years = 20 days of paid leave

Employees can also receive leave for bereavement, hospitalization, menstruation, or civic duty.

Process

Terminating employment contracts in Japan can be demanding, and employees are able to dispute terminations and only accept the termination with a severance package.

Notice Period

Employers need to provide 30 days of notice for terminations or provide payment in lieu of notice.

Severance Pay

There are no requirements for employers to offer severance packages, but employees can dispute to receive a severance package equal to one month of pay for each year at the company.

While not mandatory, it’s customary to pay a 13th month and sometimes even 14th-month salary bonus to employees, each equal to 1 month of wages. One is usually a summer bonus paid in June and the more common one is a winter bonus paid in December. In 2024, Japan introduced a digital nomad visa.