Avoid Salary Cut in Japan

Except for some special cases, employers cannot change labor conditions unilaterally. Companies need to obtain a voluntary consent from their employees to reduce their salary.

Even if you once gave a consent to the reduction, you are still able to argue the validity of reduction by insisting that the consent was forced by the company.

In many case, companies implies that you would get fired or put you in difficult situation unless you agree to the reduction. The consent given under such situation cannot be voluntary one.

And some of more awful companies suddenly cut salary without explaining anything to their staffs.

You may be also interested in our another article about “Avoid Wrongful Termination in Japan.”

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Change of Rules of Employment

Instead of obtaining consent from employees, it is possible for employers to reduce salaries of their staffs by changing the rules of employment.

However, Companies must meet very strict requirements to reduce salary by changing the rules of employment. 

The Principle of full salary payment

My company deducts 1000 yen from my salary for coffee we can freely drink at office. Is this OK?
Unless it is described in the labor management agreement, it’s illegal.

Can employers freely deduct some expense from employees?

Answer is No.

Employers may withhold taxes, pension and social insurance premiums(health insurance and unemployment insurance), but they are not allowed to deduct other expenses from your salary unless a labor-management agreement has been concluded with the labor union or a representative of the majority of workers.


How to avoid salary reduction

Employers need to pay full amount of salaries or allowance for absence even in financially difficult situation.  They cannot freely reduce employee’s salaries.

If you find your salary has been reduced in past by you employers, you should ask lawyers whether you can get it back.