As 2024 unfolds, Japan’s labor law is undergoing a series of significant changes that directly impact every organization and employee. For professionals in the HR field, understanding these new legal provisions and making corresponding strategic adjustments is crucial to ensure the company’s compliance with regulations, protect employee rights, and maintain good employment relationships. Here’s an in-depth interpretation of some key labor law changes in Japan for 2024:
1.Amendments to the Notification of Working Conditions:
The amendment to the Notification of Working Conditions in Japan’s 2024 labor law is a significant update. It aims to increase transparency and predictability in employment relationships, ensuring employees fully understand their working conditions, including any possible changes. Key points include:
Explicit indication of changes in the workplace and scope of work: Employers must now specify in the notification any changes in employment location and scope of business, including initial and potential future changes.
Clarification on fixed-term employment contracts: Employers must state the renewal limits of fixed-term contracts, including the number of renewals or the maximum duration.
Explicit right to request conversion to indefinite-term contracts: Employees on fixed-term contracts may have the right to request conversion to indefinite-term contracts, which must be clearly stated by the employer, including conditions and processes.
Conditions post-conversion to indefinite-term contracts: If an employee exercises the right to convert their contract, the employer must specify the post-conversion working conditions.
2.Expansion of Social Insurance Applicability:
From October 1, 2024, the scope of social insurance (including health and welfare pension insurance) expands from companies with 101 employees to those with 51 or more. This means more SMEs and their employees will be covered.
Conditions for social insurance include working more than 20 hours per week, a base wage of over 88,000 Yen per month, an expected employment duration of over two months, and the employee not being a student.
This change will provide more employees with benefits like medical insurance and pensions but may increase HR costs as more employees will need to be covered by social insurance.
3.Regulation on Maximum Working Hours in Industries like Logistics:
Starting April 2024, industries such as driving, construction, and medical practice will face regulations on maximum overtime hours, generally capped at 45 hours per month and 360 hours per year.
Special clauses allow exceptions in some industries, like driving, where overtime can reach up to 960 hours annually under specific agreements.
Improved standard notifications will be applied, setting standards for binding time and rest periods in these industries.
4.Regulation Changes for Freelancers and Business Transactions:
This regulation aims to address unfair conditions and treatment that freelancers might face in transactions with businesses.
It requires explicit transaction terms, including work scope, payment amount, and method.
Employers must pay for services or products within 60 days of receipt to prevent delayed payments.
HR professionals need to ensure contracts and business practices with freelancers comply with these new regulations.
These reforms reflect Japan’s commitment to improving labor welfare and conditions. For businesses, it means greater attention to work-life balance and compliance with new legal requirements. As HR professionals, we must remain flexible and adaptable to ensure our organizations smoothly transition to these new legal frameworks. This involves not only legal compliance but also maintaining a fair, transparent, and competitive work environment to support the ongoing development of our employees and business. Let’s work together to embrace these changes and grow in this evolving labor law environment.
