How to create offer letters for employees in Japan
When you hire an employee in Japan, one of the first things you'll do is send a job offer letter.
It’s crucial to get this right. Japanese employment law is pro-worker and an offer letter should help keep you compliant with labor laws in Japan—so you can avoid costly legal disputes and penalties.
It should also make the conditions of employment clear to the potential employee. Keep in mind that in addition to the offer letter, you’re required to create “Work Rules” and register them with Japan’s Labor Standards Inspection Bureau if you have 10 or more employees. This constitutes a part of an employment contract once a new hire accepts your offer.
Here’s everything you need to send a legally compliant offer letter to hire a full-time employee in Japan.
Japan job offer letter checklist
- Position (job title), job description, start date, and probationary period. You should explain that their suitability for their job duties will be evaluated during their probationary period. In Japan, probationary periods typically range between three and six months.
- Working hours. Outline the expected working hours and any overtime policies that the employee will be subject to. The standard Japanese working week is 40 hours. Employees are entitled to extra compensation of at least 25% of their normal wage for additional hours worked, with higher rates kicking in if an employee works on a day off, late at night, and/or more than 60 extra hours a month (though there are some exemptions for smaller companies).
- Compensation and benefits
- Salary. Specify the employee's salary or hourly compensation in JPY, as well as any other compensation they may receive (equity compensation, bonuses, etc.).
- Payment frequency. Specify how often the employee’s salary will be paid out. Japanese workers are usually paid once on the 25th of every month.
- Equity. If applicable, specify any equity compensation—such as restricted stock units (RSUs), stock purchase plans, or stock options—the employee will receive.
- Benefits. Benefits can be outlined in the offer letter, but be sure to address them in general terms so that if they change in the future, an amendment to the offer letter isn't required. In Japan, the following benefits are mandatory for full-time employees (though not always listed in an offer letter):
- Health insurance contributions
- Pension fund contributions
- Unemployment insurance
- Vacation entitlements
- Statutory holidays
- Maternity and childcare leave
- Annual health check-ups
- Vacation. The employment contract should include details about your company's vacation leave policy, especially if you offer more leave than the required minimum of 10 days paid leave per year for full-time employees in Japan.
- Termination policy. Clearly explain the terms of termination, including the notice that will be provided, and any conditions that may lead to termination. Japan has limited grounds for involuntary termination. It has to be for severe cause for actions such as theft, violence, egregious insubordination, longstanding poor performance, or lying about credentials. You must provide 30 days’ notice of dismissal or pay the terminated employee out in full.
- Confidentiality and non-disclosure. Include in the offer of employment a clause outlining the employee's responsibilities regarding confidentiality and, if necessary, non-disclosure of the company's information.
- Other key details. If there are any other key details relevant to your company's policies and procedures, include them in the offer letter.
- If the offer is contingent on any conditions—like satisfactory results from a routine background check, signing company policies documents, proof of their eligibility to legally work in Japan—then list them out.
- Request that the employee signs and returns the offer letter to confirm their acceptance of the job before their start date, or include an expiration date for the offer letter that serves as a deadline for signature.
- Contact information and phone number
- Non-compete and non-solicit agreements. Include provisions outlining the employee’s non-competition and non-solicitation responsibilities after leaving your company—but only if they’re reasonable for your employee.
- Personal data collection. Include information about how you will collect, use, store, and process personal employee information.
- Intellectual property. Convey the expectations for the intellectual property ownership of any improvements, inventions, discoveries, and other modifications to work products by the employee on company time.
- Workplace health and safety. Include information about how you will ensure a safe, hazard-free work environment for your employee.
- Location. Establish expectations for in-office vs. remote work, if applicable.
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Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
