Japan Labor Compliance
Introduction
We will explore how Zoho People, a comprehensive Human Resource Management System (HRMS), supports organizations' in meeting Japan’s labor compliance requirements. From automating routine HR tasks to enabling precise tracking of work hour regulations (Article 36), late-night work hours, working calendars, holiday classification, and more. Zoho People is designed to help businesses align with legal obligations while improving internal HR operations.
Key Japan Labor Laws
Working Hour Regulations (Article 36)
In Japan, Article 36 of the Labor Standards Law (often referred to as Article 36 Agreement or 36-kyotei) it allows employees to work beyond the statutory 8 hours per day and 40 hours per week. This agreement is essential for companies regularly assigning overtime work and must be renewed annually.
Overtime Limits:
Even with an Article 36 Agreement, there are legal limits to overtime work. Generally, overtime should not exceed 45 hours per month and 360 hours per year.
Overtime Pay:
Employees must be provided with extra pay for overtime work—usually 1.25 times the regular hourly wage. If an employee’s overtime crosses 60 hours in a month, the pay rate must increase to 1.5 times the regular wage.
Feature Explanation
To add overtime policy:
- Navigate to Settings > Attendance > Configuration > Overtime Policy.
- Click Add Overtime Policy.
- For Japan's overtime policy, you can use the prefill option and customize it as needed.
- Enter the policy name.
- Select policy applicability based on location, department, or employment type.
When an employee qualifies for multiple overtime (OT) policies, the applicable policy is determined based on the following priority order:(i) Employment Type-Based Policy (Highest Priority): If an OT policy is assigned based on the employee’s employment type, such as full-time, part-time, or contractual, it takes precedence over all other applicable policies.(ii) Department-Based Policy (Second Priority): If no employment type-based policy is assigned, the system checks for an OT policy linked to the employee’s department, such as Sales, Engineering, or HR.(iii) Location-Based Policy (Third Priority): If neither employment type-based nor department-based policies are assigned, the system applies the OT policy associated with the employee’s work location, such as Chennai or Bangalore. - Set specific overtime rules for daily, weekly, monthly, and weekend work based on your organization’s needs. For detailed information on how each rule works, click here to learn more.
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Enable the overtime policy report to view consolidated overtime data of applicable employees. This action will show or hide the Overtime Policy Report under Reports > Organization Reports > Attendance > Overtime Policy Report.
To learn more about the overtime policy report/Article 36 report, click here to learn more.
Notification - Turn on the following notifications to alert employees and their reporting managers when the overtime limit is reached.
There are five different alerts that can be triggered and sent to employees and their reporting managers:
- Notify when monthly overtime exceeds the given limit.For this alert, weekend extended overtime hours are excluded for limit calculation.
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Notify when yearly overtime exceeds the given limit.
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Notify when the monthly overtime limit exceeds the specified number of times in a year.
- Notify when the total monthly overtime exceeds the given limit.For this alert, all overtime hours for the month are included for limit calculation, which also includes weekend extended overtime hours.
- Notify when average overtime over the past consecutive months exceeds the given limit.The validation to trigger the notification is based on rolling averages calculated within the calendar year. For example, for a two-month notification, the system will validate the limit each month by checking if the average for the consecutive two months is within the allowed limits.
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Click Save to add the overtime policy. The policy will be immediately effective for the applicable employees, and their overtime hours will be recorded as per the configuration.
Late-Night Work Hours
In Japan, late-night work is defined as any work performed between 10 PM and 5 AM. Employers must pay the employees atleast 25% more than the regular hourly wage for these hours. If this late-night work is also considered overtime, an additional 25% premium applies, resulting in a total of 50% or more than the regular pay.
Feature Explanation
The late-night work hours feature in Zoho People lets you define location-based late-night time ranges (e.g., 10 PM - 5 AM). This helps track the employee’s work hours during late nights separately so that additional pay can be calculated based on those hours.
- To configure this, navigate to Settings (gear icon) > Attendance > Configuration > Attendance Policy.
- Enable late-night work hours option.
- Select the Location.
- Set the From and To for late-night time range.
- Any work done during this time is automatically tracked and shown in reports like Presence hours break-up and Attendance data for payroll. (To view reports, navigate to Reports > Organization Reports > Attendance.)
Rest Periods (Article 34)
Under Article 34 of Japan’s Labor Standards Law, employees must be given proper break time during their workday. If someone works more than 6 hours, they should get at least a 45-minute break. If they work more than 8 hours, the break must be at least 1 hour. Rest periods must be uninterrupted and separate from work.
Feature Explanation
With the break management feature in the attendance service, administrators can set the rest period for employees.
To configure breaks for a shift,
- Navigate to Settings (gear icon) > Attendance > Configuration > Break. Click on Add Break.
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Enter a name for the break, and select the color and icon for it.
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Select the type as Paid or Unpaid to categorize the breaks logged by employees during their work shift hours.
- Select the mode as Automatic or Manual.
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Allocate break time as Fixed time or Based on hours worked.
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Set break duration and select the applicable shifts for the break.
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Click Save.
To learn more about configuring breaks for rest periods, click here to learn more.
Public Holidays
Japan has 16 public holidays recognized under its Public Holiday Law.
Feature Explanation
To manage and import the holidays,
- Navigate to Operations > Leave > Holidays, click on Add Holidays drop-down and select the Holidays Gallery option.
- Select Japan using the region drop-down to view and list the corresponding regional holidays.
- Use the checkboxes (left corner) to select the holidays that you want to add.
To learn more about adding holiday manually and holidays gallery, click here to learn more.
All these holidays can also be added/imported to Zoho People and can be assigned to users based on their location or shift.
Working Calendar
The work calendar in Zoho People refers to establishing the workdays, weekends, annual year, and statutory weekends specific to your organization rules. You can also create a different working calendar for the employees who are in different location or shift.
To setup work calendar for Japan region,
- Navigate to Settings (gear icon) > Leave > Configuration > Work Calendar.
- You can click on any work calendar to make changes or define your own work calendar by clicking on Add Work Calendar.
- To know more about adding a new work calendar, click here to learn more.
Variable Working Hours
Manage Shifts
Administrators can configure employee shifts within the organization using a flexible shift scheduling system.
To know more about adding and editing shifts, click here to learn more.
To Manage Shifts, navigate to Operations > Shifts > Manage Shifts. This space allows you to create, delete, edit shifts, import and export, and all of its associated preferences.
Employee Shift Mapping
Employee shift mapping is assigning employees to specific working shifts. This process helps manage and complete work on time by ensuring the right resources are allocated to the appropriate shifts. To know more about employee shift mapping, click here to learn more.
To perform employee shift mapping, navigate to Operations > Shifts > Employee Shift Mapping tab.
Shift Pattern
This feature allows you to create shift patterns with a custom shift schedule for a week, month, or custom days based on your organization's operational requirements. To know more about creating shift pattern for weekly or monthly type, click here to learn more.
To perform this action, navigate to Settings (gear icon) > Shifts > Configuration > Shift Patterns > Add Shift Pattern.
Weekly Shift Pattern - The shift pattern changes weekly based on the selected pattern change week and the set shift pattern.
Monthly Shift Pattern - The pattern changes monthly based on the selected pattern change month and the set shift pattern.
Lenient Attendance System
Administrators can enable lenient mode in the attendance service, allowing the system to calculate total working hours based on valid check-in and check-out. With this setup, employees only need to check in at a specified time to be marked present for the entire day. You can manually set the expected working hours for employees or set them with their assigned shift timings. Learn more.
To cofigure this, navigate to Settings (gear icon) > Attendance > Configuration > Attendance Policy.
Annual Paid Leave (Article 39)
Under Article 39 of Japan’s Labor Law, employees who have worked for six months and attended at least 80% of their scheduled workdays are entitled to paid leave. The number of leave days increases with years of service. Employers are required to grant this leave, but they can adjust the timing to ensure it doesn’t affect business operations.
Feature Explanation
Using the leave type gallery feature in leave service, administrators can define the annual leave policy with accrual options to specify how many days are granted and when they are credited. The rest option lets you set rules for leave reset, carry forward, and encashment.
With the leave type gallery in settings, administrators can select a predefined leave policy template specific to the Japan region.
To configure this, go to Settings (gear icon) >. Leave > Configuration > Leave Policy > Leave Type Gallery.
Core Working Hours for Flexi Shift
In Japan, flextime systems allow employees to adjust their start and end times within a set framework, often including core working hours. Core working hours are the specific time slots during which employees are required to be present at work.
Feature Explanation
Core working hours are the fixed time period within a shift during which employees are required to be actively working, even if their shift allows for flexible start or end times. For Example: If a shift runs from 9:00 AM to 5:00 PM and the core hours are 10:00 AM to 3:00 PM, employees can begin earlier or later, however must be present during the 10:00 AM to 3:00 PM window for team collaboration and to support operational efficiency.
To know more about core working hours, click here to learn more.
To configure this, Settings (gear icon) > Shifts > General > Manage Shifts > Add Shift.
In Attendance, administrators can enable the grace period policy to set allowed deviations for core working hours. Once the limit is exceeded, a specific type of leave can be deducted as a consequence.
To learn more about grace periods policy, click here to learn more,
Navigate to Settings (gear icon) > Attendance > Configuration > Specific Policies > Add Specific Policy .
Holiday Classification
Set up holiday classifications to facilitate different pay rates for employees who work on holidays. You can tag these classifications to holidays of your organization's calendar.
- To configure this, navigate to Settings (gear icon) > Leave > Configuration > Additional Options.Employees can view the holiday along with its classification type, and the classification is also included in related Leave service reports.
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In addition to the system classifications, you can click Add Classification to add new holiday classification.
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After adding a new one, to view this navigate to Leave (left side bar) > Holidays. Click on the filter option (right corner) and select the holiday classification you added.
Example holiday classifications include: Public Holiday, Bank Holiday, Regional Holiday, Weekend Holiday, and more.
Late Arrival & Early Exit Reminders
By enabling the required notifications to alert the reporting manager if their reportees check in late, check out early, or fail to check in based on their shift schedule.
To configure this,
- Navigate to Settings (gear icon) > Attendance > Configuration > Check In and Check Out.
- For every late check-in: The reporting manager will receive an instant notification.
- For early check-outs: A notification will be sent to the reporting manager at the end of the shift, listing all employees who checked out early.
- For missed check-ins: A notification will be sent at the configured time, listing all employees who have not checked in.
- To customize Email Template to your organizational preference, click Customize Email Template.
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