JAPAN Trends and Developments Contributed by: Hiroaki Matsui, Mari Ueki, Yui Omoteyama and Rei Yamaguchi, AI-EI Law Firm
employee status under the LSA, issues have been pointed out in terms of disparities in negotiation and information-gathering capabilities in transactions and working conditions. In this regard, it should also be noted that recent legislation has been enacted to protect independent contractors, ensuring fair trans - actions and improving working conditions, through the Act on the Improvement of Transactions with Specified Contractors (Act No 25 of 2023, the “New Freelance Act”), and the Act came into effect on 1 November 2024. The New Freelance Act imposes obligations to: • clearly state transaction conditions (Article 3); • pay compensation by the due date (Article 4); • accurately display recruitment information (Article 12); and • establish harassment prevention measures (Article 14). Given that long-term contractual relationships will generate economic dependence between the entrus - tor and freelancer, provisions similar to those of the Act against Delay in Payment of Subcontract Pro - ceeds, etc to Subcontractors (Act No 120 of 1956) are established, prohibiting: • refusal of acceptance (Article 5, paragraph 1, item 1); • reduction of compensation (same paragraph, item 2); • return of goods (item 3); • unfairly low prices (item 4); • coercion to purchase or use services (item 5); • unjust requests for economic benefits (paragraph 2, item 1); and; • unjust changes or redelivery of delivered content (paragraph 2, item 2). Additionally, there are obligations to consider child - care and nursing care (Article 13) and to provide notice and reasons for termination (Article 16) for entrustors. In the case of violations of some provisions, freelanc - ers can report to the relevant government authorities (Fair Trade Commission, Small and Medium Enterprise Agency or the MHLW). Also, entrustors must not treat
freelancers unfavourably for making such reports (Arti - cle 6, paragraph 3; Article 17, paragraph 3). Regarding violations of the New Freelance Act, the Fair Trade Commission has established a contact point for reporting suspected violations of the New Freelance Act, and is accepting consultations and reports of violations. Additionally, on 17 June 2025, the Fair Trade Commission issued its first recommen - dation against two major publishing companies for failing to disclose transaction conditions such as com - pensation amounts and to pay compensation by the due date to freelancers (freelance writers) contracted as business partners, and made this recommendation public. Additionally, on 25 October 2024, the MHLW announced the establishment of a consultation desk at the Labour Standards Inspection Office for indi - viduals with concerns regarding their employee status under the LSA, etc, and it is accepting consultations on whether the freelancer qualifies as an “employee”. Furthermore, on 2 May 2025, the MHLW established a new study group on the definition of “employee” under the LSA. It is expected that the above-men - tioned factors and criteria for “employee” under the LSA (Ministry of Labour, LSA Study Report, The Crite - ria for Determining “Employee” under the LSA , dated 19 December 1985) will be revised for the first time in In Japan, in the context of workplace harassment, sexual harassment and then maternity harassment were regulated. After that, a type of harassment called power harassment (which is not commonly catego - rised as a type of workplace harassment in overseas jurisdictions) has also been regulated. approximately 40 years. Harassment Regulations Employers must take necessary measures for employ - ment management, so that the workers they employ neither suffer any disadvantageous working condi - tions on the grounds of those workers’ response to sexual harassment in the workplace, nor suffer any damage to their work environment due to sexual har - assment (Article 11, paragraph 1 of the Act on Equal Opportunity and Treatment between Men and Wom -
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