In general, employers and employees are given expansive freedom to agree to any type of employment contract they wish. However, the Labor Standards Act contains a series of protections for employees that restrict employers’ ability to draft unfair employment agreements. The minimum wage is among these protections. Even if an employee agrees to a salary below the minimum wage, labor law demands that the salary be raised to the minimum level.
The rate of overtime pay in Japan varies by the type of overtime the employee is performing. For example, working in excess of statutory working hours will result in overtime pay of 125% of an employee’s salary, while hours worked late at night in excess of statutory working hours exceeding 60 hours in a month should be paid at 175% of an employee’s base hourly salary. In addition to these two types of overtime there are a variety of other situations that result in different pay scales being applied.
Employees in Japan must be paid at least once per month and on a specified date. The wage must also be at least the minimum wage guaranteed by the prefecture where the employee works. Employers are allowed to deducted social insurance premiums, taxes and other expenses from an employee’s wages. Wages may be deposited directly into an employee’s bank account with the employee’s approval.
In addition to the subsidies, tax breaks and other incentive programs offered by the national Japanese government, the local Osaka prefectural government also offers programs to encourage foreign businesses to establish a presence in the prefecture. For example, foreign businesses expanding into Osaka can get subsidies of up to 5% off purchases of land for a headquarters building or up to 1/3 off of their rent when renting. Renovating an old factory or R&D facility can also results in a subsidy.