Laws about hiring are complicated, and the same is true in Japan. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in Japan, you have two real options when it comes to hiring. We’ll detail both below.
If you want to successfully hire in
Japan
, you have two options:
Laws about hiring contractors are significantly more simple in
Japan
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Japan
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Japan
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Japan
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Japan
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Japan than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Japan.
Paid leave in Japan is set in the employment contract as dependent upon the years of employment. This paid leave is in addition to any public holidays.
There are 16 public holidays. While there are no legal requirements to pay for public holidays, it is common to grant those days as paid days off.
Sick leave is not mandatory; some companies may introduce their own sick leave policies, and employees often use their holiday to cover sick leave or claim social insurance.
All female employees are eligible for maternity benefits, consisting of 14 weeks paid leave, six weeks before the due date, and eight weeks after.
The maternity payment is made by the Social Insurance based on the National Health Insurance rates, which are currently 420,000 JPY per child.
However, suppose the employee is enrolled in the employees’ Health Insurance. In that case, they may receive a Maternity Allowance of 2/3rds of the regular salary rate from 42 days before birth until 56 days after delivery.
The father is entitled to paid paternity leave for up to one year after the birth as childcare leave. Paternity leave is referred to as ‘childcare leave’ in Japan, and new fathers employees are entitled to this benefit.
However, the employee does not receive a salary while on leave unless stated in the employment contract. They are entitled to a partial allowance from social security.
Childcare leave can be taken by the mother or the father and starts from the day after the maternity leave ends. Labor insurance covers childcare leave, and an employee can take childcare leave until the child is one year old.
If both parents take childcare leave, the leave is then extended to when the child is one year and two months old.
Family Care Leave - unpaid leave to care for a spouse, child, parent, or grandparent for up to 3 months.
No Info.
In Japan, an employee is entitled to bereavement leave. For the death of a father, mother, spouse, or child, an employee is entitled to 5 days of leave and three days for the death of a grandparent, grandchild, sibling, child’s spouse, or spouse’s parent.
The termination process varies according to the employment agreement and collective agreement in place. It is based on the type of contract, the job role, the region, and the reason for termination.
The notice period in Japan is usually 30 days, and if notice isn’t given, the employer can provide payment in lieu.
In Japan, there is no statutory severance pay regulation.
Probation period for permanent employees is generally between 3 and 6 months.
The standard work week in São Tomé & Príncipe is 8 hours a day, or 40 hours a week.
Japanese labor laws generally limit overtime to 45 hours a month. However, if a company goes through extraordinary circumstances and its employees agree to work more overtime, they can be granted an extra dispensation to work up to 80 hours of overtime per month.
If an employee is expected to work overtime regularly, a written agreement must be filed with the Labour Inspection Office. When an employee is requested to work overtime or work on holidays, the maximums are 5 hours per day, 45 hours per month, and 365 hours per year.
Overtime payment is calculated as an additional payment to the hourly base salary as follows:
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