Employer of Record (EOR) in Japan

Japan’s advanced economy and skilled workforce offer immense opportunities for business expansion. Our Employer of Record Japan services ensure that your business complies with the country’s strict labor laws. We handle all aspects of employment, from payroll to taxes, allowing you to focus on growing your business without the burden of establishing a local entity.

Employment Benefits

Mandatory benefits

In Japan, mandatory contributions are essential for employees, ensuring their access to social security benefits. These contributions include health insurance, pension plans, and employment insurance, forming a crucial part of the labour welfare system. Employers must understand their responsibilities regarding these contributions to maintain compliance.

Health Insurance	Contributions are typically deducted from salaries, and the insurance covers a portion of medical expenses. Typically ranges from 4% to 10% of the employee’s monthly salary, and depending on the region and health insurance association. This cost is shared between the employer and employee.
Employee’s Pension Insurance (EPI)	Employees participate in the Employees’ Pension Insurance (EPI), which provides retirement benefits and disability pensions. Contributions are shared equally between employees and employers, which totals to an approximately 9.15% of the employee’s monthly salary.
Employment Insurance	This insurance generally has a contribution rate of 0.6% of the employee’s monthly salary, with employers contributing a higher rate of around 0.4% and employees contributing 0.2%.
Workers’ Accident Compensation Insurance	The contribution rate for this benefit varies by industry, but generally ranges from 0.2% to 1.0% of the employee’s monthly salary. This is paid entirely by the employer.

In Japan’s competitive job market, providing a comprehensive benefits package is essential for attracting and retaining top talent. Employers frequently offer additional benefits such as private health insurance, performance-based bonuses, flexible work arrangements, and opportunities for professional development, alongside mandatory contributions to Social Insurance and Employee Pension Insurance.

These extra perks not only improve employee satisfaction and productivity but also foster long-term loyalty, helping you build a committed and motivated workforce. By offering a well-rounded benefits package, you can enhance your employment offer and create a supportive environment that encourages both personal and career growth.

Our Employer of Record (EOR) service in Japan can help you design a benefits package tailored to your industry and workforce requirements. We ensure that your benefits offerings are fully compliant with local regulations and meet the expectations of skilled professionals. By partnering with us, you can create a compelling benefits package that strengthens your employment offer and supports both employee well-being and career growth.

Additional perks and benefits

In addition to mandatory contributions, many employers in Japan offer additional perks and benefits to enhance employee satisfaction.

These can include flexible work schedules, wellness initiatives, and opportunities for professional development. Offering such benefits is essential for attracting and retaining top talent in a competitive job market.

Transportation allowances	Many companies offer allowances to cover commuting costs, making it easier for employees to travel to work.
Bonuses	Seasonal bonuses, particularly in summer and winter, are common and can significantly boost employees’ annual income.
Health and wellness programs	Employers often provide access to gym memberships, mental health services, and wellness initiatives to promote a healthy workforce.
Childcare support	Some companies offer childcare facilities or subsidies to help working parents manage their responsibilities.

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Working Hours and Leave Policies

Standard working hours

Statutory working hours

Japan’s approach to statutory working hours reflects its dedication to a balanced work-life culture.
- Standard working hours: The standard working hours in Japan are typically 40 hours per week, usually structured as 8 hours a day.
- Rest days: Employees are entitled to at least one rest day per week, with many companies adopting a two-day weekend policy.
Overtime regulations

Overtime regulations in Japan are crucial for ensuring fair compensation for extended work hours.
- Employees must receive additional compensation for overtime work, typically at 125% of their regular hourly wage.
- Employers are required to obtain consent from employees before assigning overtime work.
- There are limits on the maximum number of overtime hours allowed, with efforts to promote work-life balance.
- Certain industries may have specific regulations that differ from general standards, particularly in sectors facing labour shortages.

Leave entitlements

In Japan, leave entitlements play a crucial role in fostering a healthy work-life balance and enhancing employee well-being. With a range of leave options including annual leave, sick leave, and parental leave, employees are well-supported to take the necessary time off for personal and family needs.

Annual leave:

Employees are entitled to a minimum of 10 days of paid annual leave after six months of continuous employment, increasing with tenure.
Sick leave:

There is no statutory sick leave in Japan, but many employers offer paid leave or short-term disability benefits.
Maternity leave:

Female employees are entitled to 14 weeks of maternity leave, with a portion of their wages paid by the government.
Paternity leave:

Fathers can take up to one year of parental leave, with job protection and financial support available.
Public holiday leave:

Japan has 16 public holidays, and employees are entitled to take these days off with pay.

In Japan, detailed local laws govern employee leave entitlements, making strict compliance essential for your business. At AYP, we manage leave entitlements accurately and in full compliance with Japan’s regulations. Let us manage the complexities of local compliance, so you can concentrate on growing your core business.

Visa and Work Permits

Employment visas

Employment visas in Japan are essential for foreign nationals seeking to work legally in the country. These visas are tailored to various professional roles, ensuring that the skills and expertise of international workers are effectively utilised.

Securing the appropriate employment visa is crucial for compliance with Japanese immigration laws and a smooth transition into the Japanese workforce.

Engineer/Specialist in Humanities/International Services Visa

Designed for professionals with specialised knowledge in fields like engineering, humanities, and international services. Requires relevant qualifications and a job offer from a Japanese company.
Intra-company Transferee Visa

For employees of multinational companies who are being transferred to a Japanese branch, subsidiary, or parent company. Applicants must have been employed by the overseas office for at least one year prior to the transfer.

Business visas

Business visas in Japan cater to individuals who need to visit Japan for business-related activities such as meetings, conferences, or market research. These visas are typically short-term and do not permit the holder to engage in regular employment. Understanding the appropriate business visa is crucial for ensuring legal compliance and smooth business operations in Japan.

Temporary Visitor Visa

For short-term business activities such as attending meetings, conferences, and conducting market surveys. Usually valid for stays of up to 90 days.
Business Manager Visa

For individuals who plan to start or manage a business in Japan. This visa requires a detailed business plan and evidence of sufficient investment or capital.

Other relevant visa types

In addition to employment and business visas, Japan offers various other visas catering to specific needs and situations. These visas ensure that individuals can legally reside and perform their intended activities in Japan.

Understanding these visa options is essential for anyone planning to stay in Japan for purposes beyond employment or short-term business.

Dependent Visa

For family members of foreign nationals residing in Japan, enabling them to live together.
Cultural Activities Visa

For individuals participating in unpaid cultural or artistic activities or learning Japanese culture.
Working Holiday Visa

For young people from countries with reciprocal agreements with Japan, allowing them to work and travel in Japan for up to one year.
Specified Skilled Worker Visa

For workers in industries facing labour shortages, such as caregiving, construction, and hospitality. Requires passing a skills and Japanese language test.

Navigating Japan ‘s employment visa and work permit regulations can be challenging due to strict rules and detailed requirements. Our Employer of Record (EOR) service simplifies the visa application process, ensuring full compliance with Japan ’s immigration laws. We handle everything from documentation to approvals, allowing you to onboard international talent quickly and seamlessly without the usual complications. Avoid the stress and potential delays—partner with us to ensure a smooth, compliant visa process.

Termination and Offboarding Procedure

Terminating employees in Japan can be challenging due to stringent labor regulations. Unlike in some countries, redundancies are not a permissible reason for termination in Japan. All terminations must be justified with a strong, individual reason, such as serious misconduct or substantial performance issues. Employers must provide evidence to support the termination decision and follow proper procedures to ensure compliance with Japanese labor laws.

During offboarding, employers must adhere to specific practices to ensure a smooth and compliant process. This includes settling all final payments, such as wages and unused leave entitlements

Offboarding and termination in Japan require careful attention to local labor laws. AYP’s Employer of Record (EOR) services simplify these processes, ensuring smooth transitions and full compliance with Japan’s regulations. Let us take care of the legal intricacies so you can focus on your business.

Advantages of Using Employer of Record through AYP

Partnering with AYP’s Employer of Record Japan offers significant advantages in navigating the country’s complex employment regulations. Our all-encompassing service handles payroll, benefits, and tax compliance, mitigating the risks associated with direct hiring.

With our in-depth understanding of Japanese labor laws, your company can confidently meet all legal obligations related to employment contracts, termination procedures, and workplace standards. This proactive approach simplifies your administrative tasks and protects you from potential legal disputes and compliance issues.

By entrusting AYP’s EOR Japan with these critical responsibilities, you can focus on expanding your business and achieving your strategic goals. Let AYP be your reliable Employer of Record Japan partner in delivering a seamless and compliant employment experience in Japan.

FAQs

What is Employer of Record Japan?

An Employer of Record (EOR) in Japan assumes the legal responsibilities for employees, enabling your business to hire talent without the need to establish a local legal entity.

What is the cost of hiring through Employer of Record (EOR) Japan services?

The cost of hiring through EOR services in Japan typically ranges from USD 400 to USD 800 per employee per month, depending on the specific services provided.

Why choose Employer of Record (EOR) Japan over direct hiring?

Using an Employer of Record (EOR) in Japan simplifies market entry and expansion, allowing you to focus on your core business while we handle HR management, compliance, and local regulations.

Who is the Employer of Record (EOR) service provider in Japan?

Several EOR service providers operate in Japan, including AYP. AYP offers comprehensive EOR solutions to help you hire, manage, and pay employees while ensuring full compliance, with no hidden costs for your peace of mind.

What is the process of hiring EOR employees in Japan?

AYP’s onboarding process for employees in Japan includes:

Conducting a thorough analysis of the client’s requirements
Performing a cost simulation for employee hiring
Assisting with obtaining necessary work permits
Preparing employment contracts that comply with local regulations
Enrolling employees in benefits programs
Sending a welcome email to new hires

Employer of Record (EOR) Japan