I am a contract worker. The other day I was told by the HR manager that my wages will be reduced by 10,000 yen from next month. However, the company is planning to open a new shop in the adjacent prefecture and I don’t think the company is in any financial difficulty. Do I have to accept this salary reduction?

2022/5/17

Salary reductions are a lowering of the terms of your employment contract. Japan’s Labour Contract Law stipulates that if an employer wishes to implement changes the terms of an employment contract that prejudice the worker in question, the worker’s consent is required (Labour Contract Law, Article 9). Therefore, unless you agree to the pay cut, the employer cannot reduce your salary. In the case in question, you should demand that the company pay you the same salary as before.

If the wages of other employees have also been reduced, it is possible that the work rules have been changed. A reduction in pay due to a change in the work rules is illegal unless the change in the work rules is highly necessary and reasonable.

If the company refuses to pay you the same salary as before, or if the work rules have been changed, you should report the matter to your local Labour Standards Inspection Office (Labour Standards Inspection Office Foreign Language Consultation Dial: https://www.startup-roudou.mhlw.go.jp/foreigner. html) or contact a labour union or a labour lawyer.