Japan Work Culture

Work Culture

To succeed in business in Japan, it is vital for both employers and employees to have a strong understanding of the business culture. As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Icelandic work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Japan to start your expansion well-informed.

Companies targeting Japan for their international expansion plans must have total understanding of the country’s unique work culture and business environment. This is a ‘big ask’ for such an intriguing and complex nation. Questions must be tackled before entering this major player on the world’s economic stage.

Japan is the world’s third largest economy with nominal Gross Domestic Product (GDP) of 5.38 trillion US dollars in 2021. Its East Asian location in the northwestern Pacific Ocean makes it a prime mover among Pacific Rim nations, close to the markets of China, South Korea, and Taiwan, with sea routes to Australia and west coast USA.

Incoming employees, however, must be prepared to work as hard in adjusting to the business and workplace culture as to their actual role. Company organization is strictly hierarchical, with each management level knowing its place in the business structure and always deferring to seniority. Patience is key in building trusting relationships.

It’s time to ‘get down to business’ Our guide to work culture and business etiquette in Japan will help you take those important first steps.

• Punctuality: As in most business environments, being on time is essential. Japanese consider it rude to be late. Plan journey times and allow for the traffic, to be sure you arrive on time for the meeting. Call an hour or so before to confirm you are on the way – you will come across as very efficient.
• Language: Japanese is the official language of business; be prepared to engage an interpreter if you or your team leader is not fluent.
• Business Relationships: Politeness, respect and trust will figure prominently in building the relationship. During the initial meeting, ask relevant questions about the company (even though you will have researched it), take notes and show intense interest. The host will appreciate it. If unsure where to place yourself around the table, wait to be shown as this will again show respect.
• Introductions and Greetings: The first meeting might seem overly formal as your counterpart will not know you. Maintain some distance and greet with a slight bow – Japanese are unlikely to shake hands initially. Similarly, be sure to greet the most senior member of the Japanese team first, with a slight nod of the head, avoiding excessive eye contact. Always wait for your opposite number to offer a hand. Japanese family names are first followed by the given name, e.g., Nakamura Akita, and address counterparts by family name, or Nakamura-san, until offered to use their given name.
• Business Cards: Exchanging business cards (meishi) establishes all-important status and rank. Offer with two hands and a slight nod and politely look at the name and title on the one you receive. Your card should be in both languages and always offer the Japanese side uppermost.
• Gift-giving: Offering small gifts is part of the protocol, but it is the ritual that is important, not the gifts value. Once exchanged, gifts are opened in private.
• Dress Code: Business wear is formal; dark suits, white shirts and ties for men, dark dresses, or suits for women. But avoid black suits and ties and that is strictly funeral attire.
• Negotiating the Deal: Patience is key in laying the groundwork as your Japanese counterpart may retreat from openly disagreeing with you. Pre-meeting, confirm the agenda and stick to the deadline – you will likely have been allocated a specific time slot.
• Business Meals: These are often the venues where the ‘real deal’ is on the menu. Etiquette plays its part here too. Do not insert chopsticks into the food between mouthfuls but leave them at the side of the plate. If your glass is empty wait for the host to refill it; if you have had enough, leave a little at the bottom of the glass.

Japan’s Minimum Wage

The minimum wage for 2020/21 is JPY 156,173 (US$1,460) per month and with 12 payments a year equaling JPY 1.87 million (US$17,097) – an increase on 2019 of 2.3%. However, rates differ between the 47 prefectures, also within industries due to collective agreements but the higher one is paid regardless of age, sex, or citizenship. In July 2021 the government proposed to increase the hourly minimum wage by a record JPY 28 (US$0.25) to JPY 930 (US$8.40). Regional differences will still apply, although the government is determined that the absolute hourly minimum should be JPY 800 (US$7.27) per hour.

Probation Periods in Japan

Probationary or trial periods are quite common, but not obligatory, in Japan to allow the employer time to assess the abilities of newly hired staff. Generally, these are between three to six months, although it can be reasonably extended for further evaluation up to a maximum of one year.
At the end of the trial period, the employer must give reasonable cause for not hiring the probationer, especially if there has been an extension.
The individual will be treated by the same laws for dismissal as a full-time employee under the Labor Standards Law.

Working Hours in Japan

The Labor Standards Law (LSL) states employees can work a maximum of eight hours a day or 40 a week. Under labor agreements, flexible hours can be approved without extra hours being counted as overtime; also, they can establish when a workday starts and finishes.

The law allows for one rest day per week or four over four weeks. Employees are allowed a 45-minute break if they work between six and eight hours in a day and one hour’s rest for more than eight hours worked.

Overtime in Japan

Overtime is defined by hours worked over eight a day or 40 a week or if they work holidays unless employees are working flexible hours under a labor agreement.

The Basic Overtime Rule stipulates overtime cannot exceed 45 hours monthly or 360 hours annually. The Extended Limit Rule gives flexibility to the basic rule under special circumstances (e.g., to cover a busy period) but hours still must not exceed 100 per month and average 80 hours over six months.

Additional pay above the normal hourly rate is 25% extra during daytime or night work; 35% for weekends and holidays. Working overtime at night and on a holiday brings a 60% increase on normal hourly rate.