What to Include in a Work Rules (Shugyo Kisoku) Document for a Japan Office

Introduction

A Work Rules document — Shugyo Kisoku (就業規則) — is what turns a company's intentions about working hours, pay and conduct into terms an employee in Japan can actually rely on. For a foreign company opening its first Japan office, it is easy to assume this is simply the local name for a staff handbook. It is not. The Labor Standards Act sets out who has to produce one, what it must contain, and what an employer has to do with it once written. This guide covers those requirements in plain language, and what to check before you file.

Does Your Office Actually Need One?

Under Article 89 of the Labor Standards Act, an employer that regularly employs 10 or more workers must draw up Work Rules and file them with the local Labour Standards Inspection Office (労働基準監督署).

Two details are routinely misread by companies new to Japan:

• The count is per workplace, not per company. A business with a six-person Tokyo office and a six-person Osaka office is treated as two establishments of six, not one of twelve. Conversely, a single office that grows past ten triggers the obligation for that office on its own.
• "Regularly employs" describes the normal state of the workplace, not a headcount on one particular day, and it is not limited to full-time permanent staff. Part-time and fixed-term employees working there on an ongoing basis are generally counted, which is why offices with a large part-time roster reach the threshold sooner than expected.

Below ten employees, filing is not required — but writing the rules anyway is usually worth it. Under the Labor Contract Act, reasonable Work Rules that have been properly made known to employees generally become part of the employment contract. That cuts both ways: it is the mechanism that makes your rules enforceable, and the reason vague drafting causes problems later.

What Has to Be in the Document

Article 89 does not prescribe a single nationwide form. It sorts content into three tiers instead, and understanding that distinction is what stops a first draft from coming back.

Matters you must always include

These appear in every set of Work Rules, without exception:

• Working hours — the times work begins and ends, rest periods, days off and leave, plus how shifts rotate if employees work in two or more shifts.
• Wages — how pay is determined, calculated and paid; the wage closing date and the payment date; and how pay rises are handled. (Retirement allowances and bonuses are treated separately, below.)
• Retirement and termination — the rules on resignation, retirement age and termination, including the grounds on which an employee may be dismissed.

Matters you must include only if your company has them

This second tier is conditional. You are not obliged to offer any of these, but if your company does operate such a system, the rules governing it belong in the document:

• Retirement allowances — who qualifies, how the amount is calculated, when it is paid
• Bonuses, other temporary payments, and minimum wage amounts
• Costs borne by employees, such as meals or work supplies
• Safety and health
• Vocational training
• Compensation for work-related accidents, and support for injury or illness outside work
• Commendations and disciplinary sanctions
• Any other matter that applies to all employees at that workplace

This tier is where incomplete drafts usually go wrong. A company that pays a discretionary bonus but says nothing about it in the Work Rules has an incomplete document — even though the bonus itself was never compulsory in the first place.

Company-specific rules

Anything else — dress code, communication norms, use of company equipment, confidentiality expectations — is optional and yours to decide. Remember that once written, these clauses are read as part of the terms of employment, so keep them to rules you are genuinely prepared to apply consistently.

Working Hours, Leave and Remote Work

The working-hours section is the one employees consult most often and the one that dates fastest. Be specific about start and finish times, the length and timing of rest periods, which days are days off, and how annual paid leave is requested and granted.

If your office offers remote work, flexitime, or a discretionary-work arrangement, say so here. An arrangement that exists only as a manager's informal permission is hard to rely on and hard to withdraw. Setting out who is eligible, how working hours are recorded off-site, and how overtime is approved turns an unwritten habit into a rule both sides can point to.

Wages and Termination

These two sections attract the most scrutiny, for the same reason: they are what an employee turns to when something has gone wrong.

For wages, state the closing date and payment date explicitly, and describe how overtime, late-night and holiday premiums are calculated rather than simply promising they will be paid "in accordance with law". For termination, list the grounds for dismissal concretely. A clause reserving the right to dismiss "for any reason the company deems appropriate" offers far less protection than it appears to — Japanese practice expects specific, identifiable grounds.

One constraint worth knowing before you draft a disciplinary section: where a sanction reduces wages, the Labor Standards Act caps how much may be deducted, both for any single instance and as a proportion of one pay period's total. Design the penalty scale with that ceiling in mind.

Filing, Consultation and Making the Rules Known

Writing the document is only the first of three steps.

1. Ask for an opinion. Under Article 90, before filing you must ask the opinion of a labour union representing a majority of employees at that workplace or — where no such union exists — a person representing a majority of employees. That written opinion is attached to the filing. Note the wording carefully: the law requires you to consult, not to obtain agreement. A dissenting opinion does not block the filing, but it does become part of the record.
2. File with the Labour Standards Inspection Office for the area where the workplace is located.
3. Make the rules known to employees. An employer is required to make the Work Rules known — by posting them in the workplace, distributing them, or making them accessible electronically. This step gets skipped more often than any other, and it matters more than it looks: rules an employee has had no realistic opportunity to read are weak ground for an employer to stand on.

Amendments follow the same path. Revising the document means consulting again and re-filing the revised version; a change made quietly in an internal folder has not taken effect the way the company assumes. Work Rules also cannot fall below statutory minimums or conflict with an applicable collective agreement — where they do, the stronger protection for the employee prevails.

Common Mistakes

• Translating a home-country handbook. Policies drafted for another jurisdiction rarely map onto the Article 89 categories, and usually omit several mandatory items outright.
• Leaving out a benefit you actually provide. Silence about an existing bonus, allowance or retirement payment makes the document incomplete, not flexible.
• Vague dismissal grounds. These are the clauses most likely to fail when tested.
• Filing once and forgetting. A document that no longer matches how the office really works becomes evidence of what you said the rules were.
• Treating filing and communicating as one step. They are two separate obligations.

Keeping the Document Useful

Set a fixed annual review, and treat any change in headcount, working pattern or pay structure as a reason to revisit the rules sooner. When you do update them, tell employees what changed rather than silently reissuing the file — it is both good practice and evidence that the make-known obligation was met.