Paid Leave and Public Holidays in Japan

International companies hiring their first employee in Japan tend to assume paid leave works the way it does at headquarters: a PTO balance in an HR system, accrued monthly or granted as a lump sum, used whenever the employee likes. Japan's system is built differently. It starts from a statutory minimum set by labor law, adds a mandatory "you must actually use some of this" rule that surprised a lot of multinationals when it took effect, and sits inside a public holiday calendar that clusters in ways that affect hiring timelines more than most employers expect.

None of this is exotic once you know the shape of it. But it's easy to under-build a leave policy for Japan if you're starting from a global template.

Annual paid leave: a statutory floor, not a company perk

Under the Labor Standards Act, full-time employees in Japan become entitled to annual paid leave (年次有給休暇, nenkyu) once they have worked for an employer for six months with at least 80% attendance over that period. The entitlement then grows with tenure, roughly:

• 6 months of service: 10 days
• 1.5 years: 11 days
• 2.5 years: 12 days
• 3.5 years: 14 days
• 4.5 years: 16 days
• 5.5 years: 18 days
• 6.5+ years: 20 days (the statutory maximum)

This schedule is a legal floor, not a benchmark to design around. Many international employers choose to grant more generous leave from day one, or waive the six-month wait, specifically because a policy that merely matches the legal minimum reads as unimpressive to experienced candidates in Japan, who generally know what the law already guarantees them. Part-time and non-regular employees working fewer days per week get a prorated version of the same schedule rather than being excluded from it.

Unused leave typically carries over for one additional year before it expires — in practice, an employee can hold up to roughly two years' worth of leave at once (the current year's grant plus whatever is left from the year before). Leave does not need to be paid out at termination in the way some countries require, though many employers negotiate a payout or allow use-it-up during a notice period as a matter of practice.

The rule most new employers miss: mandatory minimum use

Since a 2019 reform to the Labor Standards Act, employers are legally required to ensure that any employee entitled to 10 or more days of annual paid leave actually takes at least 5 of those days every year — and to designate specific dates for the employee if they haven't used enough of their own leave by a certain point in the year. This applies regardless of company size, and it is an employer obligation, not just an employee entitlement: failing to ensure the 5 days are taken is a compliance violation that falls on the company, with statutory penalties attached.

This catches international employers off guard in a specific way. A company that builds its leave system around "employees can take leave whenever they want, no one tracks it" is, for Japan, not merely informal — it is non-compliant. For a first Japan hire, this usually means setting up even a lightweight way to track leave taken against the 5-day minimum, and being willing to proactively schedule days for an employee who is close to year-end without having used enough. It is a small operational detail that nonetheless is the kind of thing a sharoushi (labor and social security consultant) will ask about immediately, and worth setting up correctly before a first hire's six-month mark rather than after.

Public holidays: more of them, and they cluster

Japan observes around 16 national public holidays a year, noticeably more than many countries employers are hiring from. When a holiday falls on a Sunday, a substitute holiday rule (furikyu) generally shifts the day off to the following Monday, so holidays rarely get quietly absorbed into a weekend the way they sometimes do elsewhere.

Two clusters matter most for planning:

Golden Week, a run of several public holidays from late April into early May, during which much of the country effectively stops working for the better part of a week. The New Year period, typically late December through the first few days of January, is not entirely composed of statutory public holidays, but it is treated as a near-universal company closure by custom — offices, government services, and many business counterparts are simply unreachable.

A third period, Obon in mid-August, is not a public holiday at all under Japanese law, but many companies close for several days around it anyway, following long-standing custom around ancestral observances and the fact that much of the country travels during that week regardless.

The practical implication for an international employer: these three windows are poor choices for a Japan hire's start date, for critical onboarding steps that depend on government offices (visa procedures, ward office registration, bank account setup), or for product launches and partner negotiations that assume a fully staffed counterpart on the other end. A candidate who accepts an offer in March with an expected early-May start date, for instance, may find their first week interrupted by Golden Week before they've even finished onboarding paperwork.

What this means for a leave policy written at headquarters

A few adjustments are worth making deliberately rather than discovering midway through a first hire's tenure:

• Build in tracking for the 5-day mandatory minimum from day one, even if your broader PTO system doesn't otherwise track usage this closely.
• Decide up front whether your company-wide holiday calendar will follow Japan's public holidays or a global list — a Japan employee working through a Japanese public holiday because the headquarters calendar didn't include it is a common and avoidable early friction point.
• Plan hiring and onboarding timelines around Golden Week and the New Year period the way you would already plan around a headquarters-country holiday cluster — ask candidates directly whether a proposed start date collides with either.
• If your company closes for Obon by custom in its home market or wants to align Japan with the rest of a global team's summer schedule, say so explicitly in the offer; it isn't something a Japanese employee will assume by default since it isn't a legal holiday.

As with most Japan-specific employment mechanics, the details here are governed by statute, not convention, and the penalties for the mandatory-use rule in particular are real. Confirming your specific leave policy and tracking approach with a qualified sharoushi or Japan employment attorney before a first hire's start date is worth the modest cost relative to fixing a compliance gap after the fact.