Japan’s minimum wage and SME subsidy revisions to improve productivity. Japan’s Ministry of Health, Labor and Welfare (MHLW) is supporting small and medium-sized enterprises (SMEs) and micro businesses to improve their productivity and in order to raise the minimum wage.
Comprehensive, all in Japanese, on minimum wage laws, are found here at https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/roudoukijun/chingin/index.html
An English Outline of the Minimum Wage Laws is found here.
NOTE:
As noted earlier, the sources of recent news and information from the Ministry of Health, Labour and Welfare (MHLW) website are mostly in Japanese. However, there is an English MHLW site that provides some basic information. If there are English sources, Verse endeavors to provide them.
The procedures and documentation required to report to the government and / or to apply for subsidies are complex, even for Japanese companies, and must of course be handled in Japanese. As with all social welfare and labour law matters in Japan, however, please seek out professional Sharoushi support to ensure you and your company remains in compliance.
Verse Corporation publishes articles on timely issues in Japanese Social Welfare and Labour Law.
The sources of recent news and information from the Ministry of Health, Labour and Welfare (MHLW) website are mostly in Japanese. However, there is an English MHLW site that provides some basic information. As with all social welfare and labour law matters in Japan, however, please seek out professional Sharoushi support to ensure you and your company remains in compliance.
October 2022 – Minimum wage increases to go into effect
Examples from of the previous and new levels some major centers are shown below.
A helpful spreadsheet calculator, in Japanese, helps companies determine their minimum wage responsibilities.
It can be found here. https://www.mhlw.go.jp/content/11200000/000735769.xlsx
Minimum Wage System Background, Related Government Subsidy Support and Employer Resources
The MHLW provides a comprehensive website of resources regarding minimum wages, occupation types, exceptions, etc. It can be found here. https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/koyou_roudou/roudoukijun/chingin/index.html
The Ministry defines the minimum wage system, and the related subsidy support program for SMEs, as follows*
“Regarding the minimum wage, the “Action Plan for Work Style Reform” (approved by the Council for the Realization of Work Style Reform on March 28, 2017) states, “We will raise the minimum wage at an annual rate of about 3% while taking into consideration the nominal GDP growth rate. Through this, we aim to raise the national weighted average to 1,000 yen. In
order to raise the minimum wage, we will support small and medium-sized enterprises and small businesses to improve their productivity, and improve transaction conditions. .”It has been with.
The Ministry of Health, Labor and Welfare is supporting small and medium-sized enterprises (SMEs) and micro businesses to improve their productivity in order to raise the minimum wage.”
Overview of the minimum wage system
The minimum wage system is a system in which the country sets the minimum amount of wages based on the Minimum Wages Law, and employers must pay wages equal to or higher than the minimum wage amount to workers.
- Overview of the minimum wage system
- Minimum Wage System Brochure (Everyone Checks! Minimum Wage.) [PDF format: 2.47MB]
- Pamphlet on Minimum Wage System (Minimum Wage for Taxi Drivers) [PDF format: 1.60KB]
Regional minimum wage
There are 47 regional minimum wages, one for each prefecture, which apply to all workers and their employers at business establishments within a prefecture, regardless of industry or occupation. A minimum wage is set.
Specified minimum wage
Specific minimum wages are set for specific industries in specific regions where relevant labor and management consider it necessary to set minimum wages higher than the regional minimum wages for core workers. There are 227 minimum wages nationwide (as of December 31, 2021).
- About the specific minimum wage
- Nationwide List of Specified Minimum Wages
- Nationwide specific minimum wage
- HP of each prefectural labor bureau
Special permission system for reduction of minimum wage
If the minimum wage is applied uniformly to workers whose working ability is significantly lower than that of ordinary workers, there is a risk that employment opportunities will be narrowed. Exceptions to the minimum wage reduction are granted on an individual basis.
The application for permission must be submitted to the Labor Standards Inspection Office that has jurisdiction over the location of the place of business.
- Exceptional Permission Application Form for Minimum Wage Reduction and Instructions
- Special Permission Manual for Minimum Wage Reduction
Electronic application is convenient for notification based on the Minimum Wage Act! !
If you have any questions, please contact the nearest Labor Standards Inspection Office.
Investigative research on minimum wages
This is a report that analyzes and verifies the impact of Japan’s minimum wage on wages and employment, etc., under the Ministry of Health, Labor and Welfare’s 2021 commissioned project “Minimum Wage Research Project” (contractor: Mitsubishi Research Institute, Inc.).
- Report on minimum wage [PDF format: 12.88MB]
- Report on Minimum Wages (summary version) [PDF format: 1.62MB]
2. Support for productivity improvement, etc. for minimum wages and wage increases
Support for improvement of productivity of SMEs and micro businesses toward raising the minimum wage
Business improvement subsidy
This is a system established by the government to support the improvement of the work of small and medium-sized enterprises and small businesses and to increase the wages of employees.
For SMEs and small businesses that have made capital investment to improve productivity and raised the lowest wage in the workplace (minimum wage at the workplace) by a certain amount or more, the expenses incurred for the capital investment help some.
- Work Style Reform Promotion Support Center
- Seminars and business trip consultations held by related organizations related to the above industries in order to provide consultation support on business improvement for wage increase and to introduce support projects for improving profitability and productivity of hygiene-related sales etc. We will send a lecturer to the meeting.
- Work style reform promotion support subsidy (organization promotion course)
- Employers’ associations of SMEs consisting of three or more companies will subsidize the costs required for initiatives that contribute to improving
- Employers’ associations of SMEs consisting of three or more companies will subsidize the costs required for initiatives that contribute to improving
Developing an environment that facilitates wage increases, such as support for productivity improvement
(1) Support project for raising wages
career advancement subsidy
Subsidies will be provided in cases where fixed-term contract workers, etc., have their base wages revised by 2% or more, and their wages are raised.
Support subsidy for securing human resources (subsidy course for personnel evaluation improvement, etc.)
We will subsidize companies that have improved productivity, increased wages, and reduced the turnover rate by developing a personnel evaluation system that includes ability evaluations and establishing a wage system that does not rely solely on seniority or regular wage increases.
Support subsidy for securing human resources (support course for facility improvement, etc.)
A business owner who intends to improve employment management prepares an “employment management improvement plan” (hereinafter referred to as the “plan”), makes capital investment related to the plan, and achieves a certain level of employment management improvement and improvement compared to before the start of the plan. A fixed amount will be subsidized when productivity improvement is achieved.
(2) Support for improving labor productivity
Labor-related subsidies will be increased for establishments that have improved labor productivity.
Click here for productivity requirements
Support for raising wages and improving productivity, etc. including other ministries and agencies
Manual for introducing support measures for SMEs and small businesses to raise minimum wages and wages [PDF format: 2.53MB] The
Ministry of Health, Labor and Welfare and the Small and Medium Enterprise Agency can use this manual for companies’ efforts to raise minimum wages. Regarding support measures, we have created a manual to introduce the content and related consultation desks, and to strengthen cooperation between each consultation desk.
3. Main wage systems
Five principles of wage payment
Wages must be paid (1) in currency, (2) in full, (3) directly to the worker, (4) at least once a month, and (5) on a fixed date . In the case of deducting from wages other than those stipulated by laws and regulations, such as taxes and social insurance premiums, a labor-management agreement with a labor union organized by a majority of workers or a person representing a majority of workers is required.
extra wages
If a worker is required to work overtime, work late at night (generally from 10:00 pm to 5:00 am), or work on holidays, the company must pay premium wages ( if the worker is required to work beyond legal working hours , late-night work: 25% or more; work on legal holidays: 30% or more ). From April 1, 2010, the premium wage rate will be raised to 50% for overtime work exceeding 60 hours in a month at large companies.
leave allowance
If an employee is forced to take a leave of absence due to the circumstances of the company, an allowance (leave allowance) of 60% or more of the average wage (*) must be paid for the prescribed working days for which the company is absent.
- *Average wage: In principle, the amount obtained by dividing the total amount of wages paid to the worker in the previous three months by the total number of days (calendar days) during that period.
minimum wage system
- Employers must pay workers wages equal to or higher than the minimum wages set by the government. Even if a wage lower than the minimum wage is determined by an agreement between the worker and the employer, it shall be null and void by law and shall be deemed to be the same as the minimum wage.
- Minimum wages include regional minimum wages (applied to all workers in a prefecture, regardless of industry or occupation) and specific minimum wages (applied to workers in specific industries and occupations). I have.
- The minimum wage is determined for each prefecture based on comprehensive consideration of (1) the cost of living of workers, (2) the wages of workers, and (3) the ability to pay wages for ordinary businesses. When considering workers’ living expenses, consideration must be given to consistency with public assistance measures so that workers can lead a healthy and cultured minimum standard of living.
- In addition, if you do not pay the minimum wage amount for each region, you will be penalized (fine: maximum of 500,000 yen).
4. Introduction of other measures related to wages
Revision of the Labor Standards Act
In order to curb long working hours and realize a society in which work and life are well-balanced, the premium wage rate will be raised when overtime work exceeds 60 hours in a month at large companies. enforced from April 1, 2010).
Wages used to calculate premium wages
- Wages used to calculate premium wages [PDF format: 302KB]
- Explains how to handle overtime, holidays, and late-night work when calculating extra wages.
Comprehensive measures against unpaid overtime work
Overtime without pay is unacceptable, and we thoroughly comply with laws and regulations to eliminate it.
Guidance for Securing Labor Claims
We will inform you about how to get the company to pay the unpaid wages.
Overview and results of the replacement payment system for unpaid wages
For workers who left the company without being paid wages due to corporate bankruptcy, part of the unpaid wages is paid in lieu of payment.
We inform you about the “in-house deposit system” in which employers deposit part of their wages on behalf of workers.
Ministry of Health, Labor and Welfare commissioned project “SME Model Wage System”
A model wage system (model wage system) is introduced so that business owners of small and medium-sized enterprises can work on improving their own wage system.
Examination of ideal spouse allowance
This report summarizes case examples of companies that have implemented revisions and points to note for smooth revisions, which can be used as a reference when private companies are considering revising spouse allowances.
Topic: Japan’s Minimum wage and SME subsidy revisions to improve productivity.
