Annual Paid Leave in Japan: Accrual, Carry-Over, Pay and What Happens When You Resign

Annual paid leave in Japan is a right that arises automatically by operation of law for anyone who has worked continuously for six months from their start date and attended on at least eighty percent of scheduled working days. It is not a company benefit but a provision of the Labor Standards Act, and it applies regardless of employment type.

This article brings together the basic rules in one place: how many days you get, carry-over, the employer's obligation to ensure five days are taken, how the day itself is paid, and what happens to unused leave when you resign.

Paid Leave Is Not Granted; It Accrues

Paid leave is not something an employer bestows as a favour. It is a statutory right that arises automatically once the requirements are met. It follows that even if there is no mention of it in the work rules, and even if your employer tells you the company does not offer paid leave, it has accrued all the same.

There are only two requirements.

1. Six months of continuous service from the date you were hired
2. Attendance on at least eighty percent of all scheduled working days

A probationary period counts toward those six months. The claim that a probationary period does not count toward length of service is incorrect.

Days Accrued Increase With Length of Service

For full-time employees, meaning those scheduled to work five or more days a week or thirty or more hours a week, ten days accrue at six months of service, rising every subsequent year. From six years and six months of service onwards the entitlement caps at twenty days a year.

Part-time employees with fewer scheduled days per week also accrue paid leave, on a prorated basis reflecting those days. Even someone working one day a week is covered. The claim that part-time workers have no paid leave is wrong.

For the precise accrual tables, consult the explanatory material published by the Ministry of Health, Labour and Welfare on ensuring five days of annual paid leave are taken, which sets out the figures for both full-time and prorated entitlements.

Carry-Over Expires After Two Years

Unused leave carries over into the following year, but the limitation period is two years. In effect you can carry over one year's worth; beyond that, the oldest days lapse first. For a full-time employee accruing twenty days a year, that means a maximum holding of forty days.

Knowing which days are close to lapsing is the only way to avoid wasting them. Your payslip or attendance system will show the balance.

Five Days a Year Is the Employer's Obligation

A legislative amendment effective April 2019 obliges employers to ensure that five days a year are actually taken by any employee who accrues ten or more days. Managers and fixed-term employees are covered too.

This is not permission to take leave but an obligation to see that it is taken. Where uptake is not progressing, the employer must hear the employee's preferences and then designate the timing. Put the other way round: a workplace where even five days a year cannot be taken is one where the employer is failing a statutory duty.

Employers Can Move the Date, but Cannot Refuse

As a rule you may take paid leave on the date you specify. An employer holds a right to change the timing, but only where granting the date requested would disrupt the normal operation of the business. That is a right to ask you to take it on a different day; it is not a right to refuse the leave itself. Nor are you under any obligation to state your reason for taking it.

How a Day of Paid Leave Is Paid

Wages are payable for a day taken as paid leave. Three calculation methods are recognised: ordinary wages, average wages, and the standard daily remuneration under health insurance. Which one applies must be specified in the work rules. Most employers use ordinary wages, so the amount matches a normal working day.

For piece-rate or hourly workers the amount can differ depending on the method, so it is worth checking once on your payslip what the paid leave line comes to.

Paid Leave When You Resign

Leave remaining as at your last day can, as a rule, be used up. It cannot be taken beyond your leaving date, however, so it has to be worked backwards against the handover schedule. The employer's right to change the timing also becomes hard to exercise at this stage, since there is no later date to move the leave to once you have gone.

Common Questions About Annual Paid Leave

Do I have to give a reason if I am asked?

There is no legal obligation to state a reason. Personal reasons is a sufficient answer. In practice, though, showing some consideration, such as avoiding peak periods, tends to make things go more smoothly.

My attendance allowance was reduced after I took paid leave.

Treating an employee detrimentally on the ground that they took paid leave is something the Labor Standards Act directs employers to avoid. Reducing an attendance allowance, or counting the day as an absence when calculating a bonus, can be problematic. Take your payslip to HR, or to the Labour Standards Inspection Office.

Does my paid leave transfer when I change jobs?

It does not. Paid leave is based on service with a particular employer, so at a new employer you start again from zero. Treat any balance at your current employer as something to use up before you leave.

Can my employer buy out my paid leave?

Buying out paid leave is not permitted as a rule, because the value of the scheme lies in actually taking the time off. Exceptions are recognised in limited cases, such as days that could not be used up on resignation. Even then it is not an obligation on the employer, and whether to agree is its decision.

Summary: Know Your Balance and When It Lapses

Paid leave accrues automatically once the requirements are met, whatever your employment type. You need not give a reason, and your employer cannot refuse the leave itself. At the same time the limitation period is two years, and days you do not use quietly disappear. Start by establishing your balance and when each portion lapses.

This article sets out general principles under Japanese law. Accrual tables and calculation methods are subject to legislative change, so check the Ministry of Health, Labour and Welfare materials referred to above, and consult the Labour Standards Inspection Office or a certified social insurance and labour consultant for specific disputes.