Japan: An Employment Overview

As a result of recent developments in the labour and employment laws of Japan, including regulations on working hours and whistle-blowing, as well as global developments in respect of workplace diversity and employee well-being, the employment law-related advice and assistance sought by our clients have become more diverse. In line with these trends, our labour and employment law practice has kept up to date with Japanese and global market practices, in addition to keeping current with the constantly changing legal environment. This article provides an outline of some of the recent hot topics in the Japanese labour market.

Whistle-Blowing

In Japan, the Whistle-blower Protection Act (WPA), enacted in 2004, provides protection for whistle-blowers. Amongst other protections, the WPA prohibits the dismissal or any form of unfair treatment of employees who disclose, in the public interest, information regarding any violation or potential violation of certain Japanese laws as designated by the WPA.

To facilitate whistle-blowing and to protect whistle-blowers from retaliation, the WPA was amended in June 2022. Under the amended WPA, employers who generally employ more than 300 employees are required to (i) implement measures necessary for the adequate handling of whistle-blowing and (ii) designate a point person in charge of receiving whistle-blowing complaints, conducting investigations, and implementing remedial measures. Employers who generally employ 300 employees or less, on the other hand, are only required to make efforts to satisfy these requirements.

Since the enactment of the amended WPA, we have seen a rapid rise in the number of clients, particularly large organisations, facing whistle-blowing complaints.

Harassment

Employers are also required under Japanese law to implement measures for the prevention of sexual harassment (since 2007) and maternity harassment (ie, workplace behaviour that adversely affects the working environment of employees who (i) request for, or make use of, benefits or measures concerning pregnancy, delivery, childcare or family nursing care or (ii) are pregnant or have given birth) (since 2017).

The law was further amended to require employers to implement measures for the prevention of power harassment (ie, workplace behaviour that (i) takes advantage of a person’s superior position to cause distress; (ii) goes beyond what is reasonable and necessary in the course of work; and (iii) harms the working environment of other employees). These amendments in law have been applicable to large-scale organisations since June 2020 and to small and medium-sized enterprises since April 2022.

Ever since the aforementioned legislative amendments were put in place, we have seen a significant increase in the number of clients facing harassment complaints, particularly power harassment complaints.

Workplace Diversity

An employer can freely choose the person it wishes to employ under the Constitution of Japan. That said, there are laws and regulations that impose certain restrictions on this freedom for purposes of ensuring workplace diversity. For example, employers with more than a certain number of employees are required to ensure that the proportion of disabled employees among their workforce exceeds the “legal employment rate”, which is 2.5% as of October 2025. Additionally, employers are obliged to implement measures for the employment of older workers up to the age of 65. Furthermore, for purposes of promoting the employment of women and creating good working environments for them, certain rules on information organisation and disclosure have been established. Under these rules, employers with 101 workers or more are required by law to publish certain information related to their employment of women. As part of this initiative, such employers are required from 1 April 2026 to disclose information on (i) the difference in wages between men and women and (ii) the proportion of women in managerial positions in their organisations.

Freelancers/Gig Economy

To address the decline in Japan’s working‑age population, the government has been promoting diversity in workstyles and work culture, as well as encouraging workers to take up side jobs. As a result, freelance work, whether as a primary or side occupation, has grown in prevalence. The boundaries between employees and freelancers (that is, independent contractors) are not always clear. If a worker who is intended to be hired as an independent contractor is later deemed an employee despite the intention of the hiring company, the company could face substantial legal and financial risks. This danger was illustrated by a recent decision of a labour committee that certain platform workers constitute employees under the Labour Unions Act. It is therefore essential for employers to conduct a careful legal assessment at the outset of any engagement. Companies must also comply with the recently enacted Freelance Protection Act, which requires hiring contracts to comply with certain conditions and provides protections for freelancers.

Regulations on Working Hours

Under the Labour Standards Act (LSA), standard working hours of employees in Japan must not exceed eight hours a day and 40 hours a week. Employees who work beyond such daily or weekly standard working hours are entitled to extra wages for overtime work. In compliance with these legal requirements, employers in Japan typically require their employees to keep certain prescribed working hours (eg, 9 am to 6 pm with a one-hour break in between). However, with the growing prevalence of remote work, an increasing number of companies are introducing, or considering introducing, greater flexibility in working hours. The LSA actually allows employers to adopt flexible work hour systems (eg, flextime system) as exceptions to the aforementioned overtime regulations provided these employers meet certain conditions, such as the execution of a labour management agreement. In practice, however, many companies allow employees to work flexibly irrespective of prescribed hours without meeting the necessary legal requirements. As a result, these companies have inadvertently accumulated unpaid overtime payments. In view of this, it is important for employers to fully understand and comply with the relevant legal requirements so as to be able to enjoy flexibility without incurring undue overtime payments.

Employee Well-Being

According to a report released by a study group of the Ministry of Health, Labour, and Welfare in 2019, “well-being” is a concept that encapsulates good physical, mental, and social health, with individual rights and rights of self-realisation guaranteed. To create an environment that empowers employees to enjoy a healthy and fulfilling life, in which a diverse workforce can play an active role, an increasing number of companies are promoting initiatives to (i) reduce long working hours to help their employees to achieve work-life balance and maintain good health; (ii) improve the treatment of non-regular employees; and (iii) ensure diverse work styles and the like. Such initiatives are commendable and in line with global trends, and we would advise companies wishing to improve their operations to do so by prioritising employees’ well-being.