Rules of Employment (就業規則) for a Multinational's Japan Subsidiary: The 10-Employee Trigger and Group Handbook Conflicts

Rules of employment (就業規則, shugyo kisoku) are the written workplace rules that a Japanese employer must draw up and file with the Labour Standards Inspection Office once it continuously employs 10 or more workers. They set working hours, leave, pay, separation, and discipline for everyone at the workplace, and Japanese law gives them a direct effect on each employee's contract. For a multinational's Japan subsidiary, the rules of employment are where the group handbook meets Japanese labour law: some group policies carry over, some must be rewritten, and some cannot apply in Japan at all. This guide covers the trigger, the required content, the interaction with a group handbook, changes, filing, and who may prepare the rules.

Key Takeaways

• The obligation starts at 10 workers. Article 89 of the Labor Standards Act requires an employer that continuously employs 10 or more workers to draw up rules of employment and file them, and to file again whenever the required particulars change.
• Some particulars are mandatory in every set of rules. Working hours, breaks, days off and leave; how wages are determined, calculated, and paid; and separation from employment, including grounds for dismissal, must always be covered.
• The rules set a floor for every contract. Under Article 12 of the Labor Contracts Act, any part of an employment contract below the standards in the rules of employment is invalid and replaced by the rules.
• A group handbook does not replace them. Group policies bind Japan employees as working conditions only to the extent they are reflected in the rules or the contract, and the rules themselves cannot override Japanese law.
• Preparing and filing them for a fee is reserved work. Under the Social Insurance and Labour Consultant Act, only a sharoushi may prepare labour law documents such as rules of employment for others for a fee.

When the 10-Employee Trigger Applies to a Japan Subsidiary

A Japan subsidiary must draw up and file rules of employment once it continuously employs 10 or more workers, assessed for each workplace.

The trigger is set by Article 89 of the Labor Standards Act: "An employer that continuously employs 10 or more workers must draw up rules of employment covering the following particulars and must file those rules of employment with the relevant government agency." The Ministry of Health, Labour and Welfare (MHLW) asks employers to prepare and file rules that fit each workplace (事業場, jigyojo), so a subsidiary with a Tokyo office and an Osaka branch should treat the count and the filing as a question for each location. How part-time, fixed-term, and dispatched staff count toward the threshold is a point to confirm with a sharoushi before the tenth hire, because the answer decides when the filing is due.

A subsidiary below the threshold has no filing obligation, but it can still adopt rules of employment. Article 7 of the Labor Contracts Act provides that where an employer informs a worker of rules of employment that set reasonable working conditions, the contract's contents are based on those rules unless the parties agreed otherwise individually.

What Japanese Rules of Employment Must Contain

Article 89 lists particulars every set of rules must cover, plus particulars that become mandatory once the employer has a policy on that subject.

Three particulars must appear in every set of rules; the rest become mandatory once the employer has any rule on that subject. Many group policies fall in the conditional group: a global bonus plan, a severance formula, an expense policy, or a code of conduct with sanctions all become particulars that the Japan rules must state. The MHLW publishes model rules of employment, most recently revised in its December 2025 version, which can serve as a starting structure. The table maps each particular to a group handbook question.

Particular under Article 89	Mandatory or conditional	Question for the group handbook
Start and end times, breaks, days off, leave, and shift rotation	Mandatory	Do group flexible-working and leave policies fit the statutory limits of 40 hours a week and 8 hours a day, and the annual paid leave of 10 days after 6 months of service at 80% attendance?
How wages are determined, calculated, and paid; pay closing and payment dates; raises	Mandatory	Does the group pay policy state the Japan pay cycle and the basis for salary reviews?
Separation from employment, including grounds for dismissal	Mandatory	Does the group policy assume termination without cause, which Japanese law does not permit?
Retirement allowance or severance pay: who is covered, how it is calculated, when it is paid	Conditional	Does a group severance formula need to be restated in yen terms for Japan employees?
Special wages such as bonuses, and any minimum wage	Conditional	Is the global bonus discretionary, and is that discretion stated in the Japan rules?
Costs borne by workers, such as equipment or meals	Conditional	Do group equipment or device policies charge employees for anything?
Safety and health, and vocational training	Conditional	Do group training or health policies create obligations that should be written into the rules?
Compensation for injury or illness	Conditional	Do group sick pay or injury benefits exceed the statutory scheme?
Commendations and sanctions: types and degrees	Conditional	Does the group code of conduct list sanctions that must be restated, within Article 91's limits on pay cuts?
Any other rule applying to all workers at the workplace	Conditional	Which remaining group policies, such as remote work or IT use, should apply as working conditions?

Group Handbook or Japan Rules: Which One Governs

Japanese law ranks statute first, then collective agreements, then rules of employment, which set a floor no individual contract can go below.

Article 92 of the Labor Standards Act states that the rules of employment must not violate any laws and regulations or any collective agreement applicable to the workplace, and allows the authorities to order a revision. Article 12 of the Labor Contracts Act states that a labour contract stipulating working conditions below the standards in the rules of employment is invalid in that part, and the rules apply instead. Article 13 of the same Act adds that where the rules themselves violate the law, they do not apply to that extent.

For a multinational, the practical consequence is that the group handbook has no independent standing in Japan as a source of working conditions. A group policy affects a Japan employee's terms when it is written into the filed rules of employment or agreed in the individual contract. A policy that sits only in the global handbook, such as an at-will statement or a unilateral right to change benefits, cannot override the rules or the statute. The cleaner structure treats the Japan rules as the authoritative document for working conditions and keeps the global handbook for guidance that does not alter pay, hours, or separation. The contract-level view of the same question is covered in employment contracts and labour rules in Japan, and the clause-by-clause localisation of group templates is set out in localizing your group employment policies for Japan.

Changing Japan Rules of Employment After a Group Policy Change

Rules can be changed with the majority's opinion and a refiling, but a change that disadvantages employees binds them only if it is reasonable.

Group policy changes reach Japan employees through a change to the rules of employment. The procedure is set by Article 90 of the Labor Standards Act: in drawing up or changing the rules, the employer must ask the opinion of the labour union organised by a majority of workers at the workplace or, if there is none, of a person representing a majority of the workers, and must attach that opinion to the filing. The statute requires the opinion to be heard and filed; it does not require the majority's consent.

Consent becomes relevant when the change makes conditions worse. Article 9 of the Labor Contracts Act prevents an employer from changing working conditions to a worker's disadvantage by changing the rules without that worker's agreement, subject to Article 10. Article 10 allows such a change to bind employees only where the changed rules are made known to them and the change is reasonable, judged by the extent of the disadvantage, the need for the change, the appropriateness of the new rules, the status of negotiations with a union or similar body, and other circumstances. A group-wide cut to an allowance or bonus formula therefore needs a documented business reason before it is filed.

Filing Rules of Employment and Making Them Known to Employees

Rules are filed with the competent Labour Standards Inspection Office with the majority opinion attached, and must be made known to every employee.

The MHLW directs employers to file rules of employment with the head of the competent Labour Standards Inspection Office (労働基準監督署, rodo kijun kantokusho) for the workplace, and Article 89 requires a new filing whenever a mandatory particular changes. Filing is not the end of the obligation. Article 106 of the Labor Standards Act requires the employer to make the rules of employment known to workers, for example by displaying or posting them at all times in a conspicuous location in each workplace or by the other methods the Act permits. Articles 7 and 10 of the Labor Contracts Act also both depend on workers having been informed of the rules.

Language is a practical question for headquarters. The filing is made to a Japanese authority, so the filed text is prepared in Japanese, and Japan employees read that version. An English translation helps headquarters approve and maintain the rules, but the translation should be labelled as a reference copy so there is no doubt about which text was filed and made known to employees. The administrative side of keeping the rules, records, and filings current is described in HR administration in Japan for foreign companies.

Who May Prepare and File Rules of Employment

Preparing and filing rules of employment for a fee is reserved for a licensed sharoushi under the Social Insurance and Labour Consultant Act.

Article 27 of the Social Insurance and Labour Consultant Act (社会保険労務士法) bars anyone other than a sharoushi or sharoushi corporation from performing, for others and for a fee, the work in Article 2(1)(i) to (ii) of that Act. That work includes preparing documents submitted under labour and social insurance laws, submitting them on the employer's behalf, and preparing the books and documents those laws require, which covers rules of employment. The Japan Federation of Labor and Social Security Attorney's Associations puts the number of sharoushi at approximately 40,000. An employer may draft and file its own rules; a third party doing so for a fee must be a sharoushi. Headquarters running a vendor selection should ask who will prepare and sign the filing, a point covered in how to choose a back-office provider for your Japan subsidiary.

Frequently Asked Questions

Does a Japan subsidiary with fewer than 10 employees need rules of employment?

No filing obligation applies below 10 continuously employed workers. A subsidiary can still adopt rules voluntarily, and under Article 7 of the Labor Contracts Act, rules that set reasonable conditions and are made known to workers form the baseline of each contract. Adopting them before the tenth hire avoids rewriting individual contracts later.

Can the global employee handbook be filed as the Japan rules of employment?

Only if it covers every particular Article 89 requires and complies with Japanese law. Grounds for dismissal, the Japan pay cycle, and statutory leave need Japan-specific text, so filing separate Japan rules is the simpler route.

Working with AQ Partners. Our Tokyo team provides back office operations for foreign companies operating in Japan, including rules of employment, employment contracts and offer letters, and monthly payroll coordination with a licensed sharoushi. Book a consultation to discuss your Japan employment documents.