Annual paid leave in Japan: Reforms take effect

Caps on overtime hours and mandatory use of annual paid leave in Japan were among new reform measures aimed at changing the culture of overwork in Japan that came into effect from April 1, 2019.

The new measures were included as part of legislation entered into law during a regular session of the Diet last year resulting in the “Act on the Arrangement of Related Acts to Promote Work Style Reform.”

The act takes a three-pronged attack on a culture of overwork in Japan that has hit the headlines in recent years following the death by overwork of a young employee at advertising giant Dentsu in 2015.

An outline of the act is available in English, item 1 on the agenda being a “comprehensive and continuous promotion of work style reform.” This is followed by reforms to address the practice of long working hours (among other issues), and those to ensure the fair treatment of workers regardless of employment type (part-time, dispatch, et al). 

The new cap on overtime hours for workers at large firms -- 100 hours a month, 720 hours a year -- is perhaps familiar by now, having been at the center of high-profile cases regarding overwork in Japan.  

Who knew though, that as of April 2019 workers in Japan have to take 5 days of annual paid leave a year?

*Annual paid leave: Japanese - nenji yukyu kyuka (年次有給休暇), often truncated to “yukyu”

To clarify. It’s not just that a worker should be given at least 5 days of annual paid leave. Nor that they should use their initiative to take it all. Rather, their employer is, as of April, obliged to ensure that they do use it, all of it, and report as much to the relevant government authority lest they face punishment.

While workers in other parts of the world might scoff at the prospect of having to be forced to take a seemingly minimal five days of paid leave a year, Japan has the numbers to show that coercion or force might be justified in such matters. The results of a 2017 survey conducted by Japan’s Ministry of Health, Labour and Welfare shows that out of an average of 18.2 days of annual paid leave available to workers across Japan that year, less than half of them were used. 

Five days might seem like a small step then, but it is a step and one that, according to a guide to the new five-day ruling, the government hopes will lead to more.

“Let’s not stop at five days. Let’s work on improving the environment so that workers can take more annual paid leave,” reads this writer’s translation of lines from the document.

From now we take a look at this guide entitled, “Ensuring acquisition of annual paid leave, 5 days - An easy-to-understand explanation" (our crude translation from, 年５日の年次有給休暇の確実な取得) - from the Ministry of Health, Labour and Welfare (Prefectural Labour Bureau, Labour Standards Bureau).

It should be noted that much of what follows comes from this writer’s best attempts at a translation from Japanese to English, along with consultation with Japanese friends. It should not be taken as gospel but to date we’ve been unable to find the same document produced in other languages, so hopefully what follows will at least serve to highlight the basics as a start point to get further research underway.  

Ultimately, perhaps the easiest starting point for any questions regarding this should be with HR / management at work.

So who is the target? 

Simply, those workers who are entitled to 10 or more days of paid annual leave. This is the minimum of paid leave that should be granted to those workers who have worked continuously at their place of employment for six months from the day of hiring and have an attendance rate that is at least 80 percent of the total working days, according to Article 39 of Japan’s Labor Standards Law. 

While the rules stipulating paid leave for part-time workers involve a little more mathematics, the principle concerned appears to be the same -- if you’re eligible for 10 days leave, your employer now has to ensure that you use at least five days of that.

The timing of annual paid leave in Japan

In terms of when workers in Japan can take their annual paid leave (the now required five days or otherwise), the document stipulates that paid leave is to be given by employers according to the dates requested by the worker. However, employers have the right to make reasonable changes to these dates should the requested dates of paid leave prevent the normal operation of business. Of course, this begs the question as to the scope of “normal operation of business.” Something for the legal professionals to mull over. 

Timing of paid leave might also be determined, to a larger extent, by a company’s system of planned annual paid holidays -- essentially when periods of paid leave are fixed in advance of the working year.  

While some may look upon such systems with suspicion, here in Japan there is a legitimate case to be made that in the absence of such systems, workers would end up using less of their paid leave. 

Regardless of the extent of a company’s system of planned annual paid holidays, workers in Japan are entitled to at least five days of paid leave that they can use at their discretion, according to the document.

Ultimately though, these newly mandatory five days, it would appear, can be included as those on dates requested by workers, those used on dates that were requested but then adjusted by the employer, or those dates that make up part of a company’s system of planned annual paid holidays. 

We are provided with a basic example of the time period within which these five days are to be taken.  

Example: A worker is hired on April 1, 2019. 10 days of leave are earned / granted as of October 1, 2019 (after six months of continuous employment and presuming at least 80 percent attendance). Under the new ruling, five days of the available 10 days of paid leave must be taken between Oct 1, 2019 and Sept 30, 2020.

As was touched upon earlier, employers in Japan are also obliged to manage the data regarding paid leave available to, and used by, their employees, maintain these records for three years, and submit them to the relevant government agency.

Failure on the part of employers to ensure that the five days are taken, as well as to maintain the appropriate records, could result in fines of up to 300,000 yen (per worker concerned). 

As far as our understanding goes, annual paid leave is not to be conflated with national holidays, regular scheduled days off (weekends e.t.c), or those days when a company is itself closed for business.

Has this five-day ruling slipped under the radar?

Given that most of the reporting about the recent labor reforms has focused on the cap of overtime hours, potentially so.

Meeting a Japanese friend the other day after work, the first topic of conversation was about how their employer had presented them and their coworkers with a document that looked to have been based on the “Ensuring acquisition of annual paid leave, 5 days” we have attempted to address here.  

The new five-day legislation was a surprise to them especially after having for years worked under a system of, well, to put it bluntly, being paid extra per month so as not to use any of their entitled annual paid leave, let alone a mere five days of it. The reason behind such a system has been simple enough -- small business, nobody to cover should an individual wish to take a day off. Instead, when one person has a day off, i.e. the boss, the business closes and everyone has a day off.

While it’s likely the case that for many foreigners working in Japan a reluctance to use all entitled paid leave is probably faint at best, that the new ruling is now in play is surely something deserving of attention. 

If you meet the two basic requirements mentioned earlier, you’re entitled to at least 10 days of annual paid leave. If you don’t initiate the use of at least five of those, your employer now has a duty to do it for you. 

Is it easy for you to take your annual paid leave in Japan?  Were you aware of the new labor reforms?  Let us know in the comments

Reference

“Ensuring acquisition of annual paid leave, 5 days” - An easy-to-understand explanation - Ministry of Health, Labour and Welfare (Prefectural Labour Bureau, Labour Standards Bureau). (March 2019)

Overview of Working Conditions Comprehensive Survey 2017  - Ministry of Health, Labour and Welfare (December 2017)

Research on Annual Paid Holidays - The Japan Institute of Labour (December 2002)