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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.

When an employment contract contains a clause that is prohibited by the Labor Standards Act, such as a salary below the minimum wage, the contract clause is replaced by the protections of the Act.  This happens regardless of whether the employer and employee agreed to the illegal clause.  Therefore, even if an employee agreed to an illegal wage, he or she still has the right to demand at least the minimum wage from his or her employer.

If you have any questions about hiring or firing employees for your business in Japan, please contact our office for a legal consultation.