Employment Contracts in Japan – What You Need to Know
Japan’s work culture is distinct, and its labor laws are designed to protect employees in ways that might differ from what you’re used to. At the heart of this process is the employment contract—a critical document that shapes your work life in Japan.
As a former HR head who’s sat on both sides of the hiring table in Japan, I created this guide to help foreign professionals clearly understand employment contracts—and avoid unnecessary cultural misunderstandings.
What This Blog Covers:
1. What Is an Employment Contract in Japan?
2. Type of Contract / Employment Status
3. Working Hours & Overtime
4. Salary & Bonus
5. Paid off & Holidays
6. Probation Period
7. Termination Clause
8. Job Scope & Location
9. Non-Compete & Confidentiality
10. Other Contract Clauses to Watch
11. Red Flags to Watch Out For
12. Final Tips Before You Sign
13. Check Out the Related Blog
Wrap up
1. What Is an Employment Contract in Japan?
In Japan, once you accept a job, your employer must provide either a Notice of Employment (労働条件通知書 / rōdō jōken tsūchisho) or an employment contract (雇用契約書 / koyō keiyakusho). Foreign companies in Japan often send an offer letter, which may serve as the employment contract. In any case, the key terms must be clearly documented—not just shared verbally or via email.
There are important differences between these two documents:
An employment contract (koyō keiyakusho) is a formal agreement that requires signatures and personal seals (hanko) from both the company and the employee. It’s based on the Labor Contract Act (rōdō keiyaku-hō), which encourages but does not penalize employers for failing to prepare this contract.
A Notice of Employment (rōdō jōken tsūchisho), on the other hand, is a mandatory by law. It is issued unilaterally by the employer and does not require the employee’s signature or seal. Here is a template provided by the Ministry of Health, Labor and Welfare. The typical Notice of Employment in Japan is much simpler—this template looks impressively thorough!
✅ Tip: You’ll need written terms to apply for your work visa (or when switching sponsors). Immigration may contact you for clarification—so make sure your contract and your actual job duties match. Any inconsistencies can result in delays or even denial.
✅ Tip: To ensure you fully understand the contents, request a translated version in English or your native language.
2. Type of Contract / Employment Status
On the Company’s Payroll:
Permanent (Full-Time)
No end date, full benefits, bonuses, and reviews, often with retirement age: typically 60 or 65.Fixed-term (Full-Time or Part-Time)
Contract with end date; can be renewed. Must clearly state renewal terms and criteria, as renewals aren’t guaranteed.Contractor (Full/Part-Time)
Typically fixed-term with variable pay/benefits.Intra-Company Transferee (Full-Time – Permanent or Fixed-Term)
This applies to employees transferred from a foreign affiliate. Contract content and conditions vary depending on the assignment, but usually include global mobility benefits such as relocation support.
✅ Tip: Even in intra-company transfers, visa conditions and local labor laws must still be reviewed carefully.
Not on the Company’s Payroll (Invoice basis):
Dispatch (Haken / 派遣)
Hired by staffing agency, placed at client company. Pay and conditions depend on the agency.Secondment (出向)
Employed by one company, working at another.Contractor (Self-Employed)
Works on invoice basis; not an employee.
✅ Tip: After 5 years on a fixed-term contract, you may be eligible to request permanent status (無期転換). Ask HR about this timeline and process.
✅ Tip: Rules of Employment often apply only to permanent employees. If you're not one, ask HR about which parts apply to you and where to find your support contact.
3. Working Hours & Overtime
Full-time is usually 8 hours/day, 40 hours/week
Overtime pay applies after that, with legal premiums
Work hours (e.g., 9:00–18:00 with 1-hour break) must be stated clearly
✅ Tip: Some contracts, often at foreign companies, include “fixed overtime” (固定残業代), where a portion of your salary covers a set number of overtime hours. The law requires this to be clearly stated, including both the amount and hours covered (e.g., “¥50,000 of your monthly salary covers 20 hours of overtime”). This amount is paid regardless of whether you actually work those hours.
✅ Tip: Part-time work (e.g., 8:30–15:30) must also be clearly stated in the contract.
✅ Tip: Flextime arrangement: Japan allows flextime arrangements, where employees work within a flexible schedule around set “core hours.” For example, if core time is 10:00–15:00, you might start your day at 7:00 and finish by 16:00 with a one-hour break. This allows more flexibility while still ensuring team overlap.
4. Salary & Bonus
In Japan, monthly salary is the norm—even if your offer is expressed as an annual total.
Your contract should specify:
Base salary (monthly or yearly)
Bonus: Eligibility (e.g., must be hired by September for the December bonus), frequency (e.g., annual or semi-annual), and calculation (e.g., fixed, merit-based, guaranteed or company discretion).
Incentives (e.g., sales kickers)
Sign-on bonus (if any)
Pay date, method (usually direct deposit)
Cut-off and monthly payroll cycle (e.g., paid on the 25th for previous month). It’s monthly, not daily or weekly.
Deductions: Tax withholding & social insurance
✅ Tip: Even on a fixed salary, overtime must still be paid unless you're a designated manager (管理監督者). Even you are a designated manager, late-night work (10 PM–5 AM) must be compensated. Confirm if you are a designated manager.
Pro Tip: Ask about the compensation review cycle (e.g., annual salary increases or promotions) and how it’s determined. If the company has Rules of Compensation (kyūyo kitei), request a copy.
5. Paid off & Holidays
At least 10 days of paid off after 6 months (some companies allow use earlier)
National holidays vary by company policy
Company closures (e.g., New Year, Obon)
✅ Tip: Many companies now allow hourly or half-day off.
✅ Tip: Additional paid/unpaid leaves (sick, maternity, paternity, family care, condolence…etc.) are often in the Rules of Employment. Always ask to review them.
6. Probation Period
Commonly 3–6 months
✅ Tip: Probation may be extended with a performance improvement plan. Make sure extension reasons and time-lines are clear to avoid uncertainty.
7. Termination Clause
Japan’s labor laws make dismissal difficult, protecting employees from arbitrary firing. Instead, companies may offer resignation recommendations (退職勧奨) with severance pay or salary continuation during a transition period. This requires mutual agreement, and you can refuse it.
Look for:
Notice period: 14 days is the legal minimum for permanent employees, though some companies state 30 days in the contract or their Rules of Employment.
Grounds for dismissal: These should be specific (e.g., gross misconduct, not vague “poor performance”).
Pro Tip: You're legally allowed to resign with 14 days’ notice under law. However, cultural expectations may pressure you to stay longer for task handovers. Be cautious of threats like “we’ll sue for damages” if you leave early—these are often unenforceable. If tensions arise, retirement agencies (taishoku daikō) can negotiate on your behalf, especially in cases of harassment or disputes.
https://www.check-roudou.mhlw.go.jp/hanrei/taisyoku/jisyoku.html
8. Job Scope & Location
Your contract should clearly define your job scope (gyōmu naiyō) and work location. Vague descriptions like “general HR” or “sales-related duties” can confuse Immigration Bureau officials, potentially jeopardizing your visa application. Ensure your role is specific (e.g., “software development for client projects”) and matches your visa category.
Pro Tip: When it comes to job scope, I usually list at least 5+ bullet points in the contract or offer letter. It’s critical to make sure your expectations align with your employer’s. If the duties listed aren’t what you expected, don’t hesitate to raise it with HR or your hiring manager before you sign.
Pro Tip: Job scope is critical for selecting the appropriate visa. For example, if you're applying for an Engineer/Specialist in Humanities/International Services visa (90% of foreign workers obtain this Visa), you cannot work as a construction site laborer (建設現場労働者). That would be considered unauthorized employment. Make sure your job duties fall within the visa category to avoid any risk of violating immigration law.
✅ Tip: If you may work at multiple locations, this must be stated in the contract.
9. Non-Compete & Confidentiality
Some contracts include Non-Disclosure Agreements (NDAs) or post-employment restrictions.
✅ Tip: A non-compete clause may restrict you from joining a competitor after you leave the company. In Japan, these clauses are difficult to enforce due to the constitutional right to occupational freedom—but it’s still important to understand exactly what you’re agreeing to.
✅ Tip: Confidentiality is taken very seriously in Japan. Never take client information, business materials, or internal documents with you—this could lead to legal action, even if you created the materials yourself.
✅ Tip: NDAs often remain binding after your employment ends. Sharing sensitive information—even casually or unintentionally—can be a violation, especially if it impacts trust or the company’s reputation.
✅ Tip: Be careful with social media and private conversations. Talking about internal matters or client work online, even indirectly, can be considered a breach of confidentiality.
10, Other Contract Clauses to Watch
Companies issue offer letters or contracts before visa applications. Some firms, especially foreign ones, conduct background checks first. Applications can run parallel to checks, but contracts often include clauses like: “Your employment is subject to successfully completing a background check and obtaining an appropriate visa.” Make sure to read your contract carefully.
🚩 11. Red Flags to Watch Out For
No written contract (!)
Contract only in Japanese (ask for a bilingual version)
Unclear duties or vague job scope
No mention of overtime pay
Unrealistic working hours with no compensation
These red flags aren’t just theoretical—they’ve happened to real people.
Here are a few actual cases reported in Yokohama:
An American English teacher was paid less than the minimum stated in the contract because the school claimed they couldn’t attract enough students. With support from Hello Work and the Labor Center, the employer was persuaded to pay the full amount.
An Argentine manufacturing worker didn’t receive *retirement allowance after quitting. The worker claimed permanent status, the company said it was a temporary role. Mediation failed and the case was dropped.
✅ *Tip: What’s commonly called “retirement allowance” (退職金) in Japan may be misunderstood in English. If you (Full time/Permanent)’re leaving a company voluntarily after certain period, this payment is closer to what’s called a “departure benefit” or “company-leaving allowance.”
Be aware that “severance pay” in English often implies dismissal or layoff-related compensation, and may not apply to all resignations in Japan.
A Chinese restaurant worker had unpaid wages for a year. After repeated requests and with interpreter support, the employer eventually agreed to pay in installments following labor consultation.
✅ Tip: About 36% of foreign worker consultations in Yokohama relate to wage problems, followed by workplace accidents, lack of social insurance, and wrongful dismissal. Don’t take these risks lightly.
✅ 12. Final Tips Before You Sign
Ask for a copy in English (or your native language) if needed
Keep your signed contract—don’t rely on verbal agreements
Make sure your job scope matches the visa category you’re applying for
Ask HR or a labor advisor if anything is unclear
Don’t be afraid to raise questions—early clarification is better than future trouble
13.Check the past blog – Job in Japan series
Job in Japan 7 – Statutory Company Benefits
Hello Work Hacks: Free Government Job Support for Foreigners in Japan
Wrap up
Japan has strong worker protections—but also some unspoken rules. Taking the time to understand your employment contract will help you avoid surprises and start your new job with peace of mind.
🗨️ Got questions? I’ve reviewed hundreds of contracts—feel free to contact me anytime!