In Japan, employees are entitled to paid annual leave under the Labor Standards Act (Rōdō Kijun Hō). The minimum entitlement starts at 10 days after six months of continuous service and increases with length of service, up to a maximum of 20 days. The 2019 Work Style Reform introduced a mandatory minimum of five days of annual leave that must be taken each year.

Statutory entitlement

10 days of annual leave after 6 months of continuous service (80% attendance). Increases to 11 days after 1.5 years, 12 days after 2.5 years, and up to 20 days after 6.5 years of service. Paid at the employee's average wage.

Eligibility

Employees must have worked continuously for at least six months and have attended at least 80% of working days to be entitled to paid annual leave.

Employer obligations

  • Grant paid annual leave as per the statutory minimum (10–20 days based on service and attendance).
  • Pay the employee's average wage during annual leave.
  • Ensure each employee takes at least five days of annual leave per year (mandatory minimum under the 2019 Work Style Reform).
  • Pay out unused annual leave on termination of employment.
  • Not discourage employees from taking annual leave.
  • Maintain records of annual leave taken by each employee.

Employee rights

  • Right to 10–20 days of paid annual leave based on length of service.
  • Right to take at least five days of annual leave per year (mandatory minimum).
  • Right to choose the timing of annual leave (subject to reasonable operational requirements).
  • Right to paid leave payout on termination.

Common pitfalls

  • Not ensuring the mandatory five-day minimum — employers must ensure each employee takes at least five days of annual leave per year.
  • Not accounting for the 80% attendance requirement — employees who have attended less than 80% of working days are not entitled to paid annual leave.
  • Not paying out unused leave on termination — this is a statutory requirement.

How annual leave increases

Annual leave starts at 10 days after six months of service (with 80% attendance). It increases as follows: 11 days (1.5 years), 12 days (2.5 years), 14 days (3.5 years), 16 days (4.5 years), 18 days (5.5 years), and 20 days (6.5 years and beyond).

The mandatory five-day rule

Under the 2019 Work Style Reform, employers must ensure that each employee takes at least five days of annual leave per year. Employers who fail to comply may face fines of up to ¥300,000 per employee.

Unused leave carry-over

Unused annual leave can be carried forward for up to two years from the date of entitlement. After this period, the leave expires. On termination, all unused leave must be paid out.

Frequently asked questions

What happens if an employee does not take the mandatory five days?

The employer must designate specific days as annual leave to ensure the employee takes at least five days. Failure to do so may result in fines.

Can annual leave be paid out instead of taken?

During employment, annual leave must be taken. On termination, unused leave is paid out. Some companies allow payout of unused leave above the statutory minimum.

Are part-time employees entitled to annual leave?

Yes. Part-time employees are entitled to pro-rated annual leave based on their working hours and attendance.

Sources

This page is provided for general guidance and does not constitute legal advice. Always check the cited primary source for current law before making employment decisions.