5+ employee labor law(LSA): allowances, vacation, termination

Businesses with five or more employees and those with fewer than five employees are subject to different labor standards laws. Regardless of the number of employees, regulations such as minimum wage, labor contract preparation, 4 major insurances enrollment, break time, paid holidays, maternity leave and childcare leave, severance pay, and prior notice of dismissal must be observed in all workplaces. You can find detailed information here.

 

The criteria for distinguishing businesses with fewer than five employees is the number of permanent workers. Even if it appears that there are more than five employees, they may be subject to less than five according to the criteria.

 

Number of permanent workers = Annual number of workers / Number of days in operation

Calculation Example 1: Four employees work for 20 days (Monday through Friday) in a month

Annual number of workers: 80 = 4 employees x 20 days

Number of days in operation: 20 days

Number of permanent workers: 4 = 80 / 20 days

 

Calculation Example 2: Five employees work five days (Monday through Friday), and four others work two days (Saturday and Sunday)

Annual number of workers: 33 = (5 employees x 5 days) + (4 employees x 2 days)

Number of days in operation: 7 days

Number of permanent workers: 4.7 = 33 / 7 days

 

Case 2: A Workplace with Fluctuating Numbers of Regular Workers

Case 2 is a workplace where the number of regular workers fluctuates continuously. In this case, if the number of employees with 5 or more regular workers during the relevant period is more than half, it is classified as a workplace with 5 or more employees, and if it is less than half, it is classified as a workplace with less than 5 employees. If an unfair dismissal occurs in such a workplace, it must be determined whether, as of the application date, the number of workers is 5 or more for a period of one month to determine whether the application can be made.

 

Things to consider when calculating annual leave in a workplace where the number of regular workers fluctuates. The basic two principles are that if a workplace is classified as having 5 or more employees for 1 year, annual leave accrues. Another is that if a workplace cannot be recognized as having 5 or more employees for 1 year, and is recognized as having less than 5 employees for 10 months and more than 5 employees for 2 months, then 1 day of paid leave per month is generated if the worker has worked for 2 months with no absences.

 

Applicable to all workers, not just regular workers

When calculating the number of regular workers, employment status is not considered. All workers, such as part-time workers, temporary workers, non-regular workers, foreign workers (including illegal residents), are included. A worker who works 4 hours a day in the morning or afternoon is also counted as one. However, dispatched workers, subcontracted workers, and representatives are not considered workers.

 

A workplace where the representative's family works together

If a workplace is run only by relatives, including spouses, they are not considered workers. However, if at least one directly employed worker is included, all personnel working in the workplace are classified as workers. In this case, the representative is excluded from the worker.

 

For example, if a store operated by the representative, the representative's spouse, and the representative's daughter has employed 3 employees, there is a high possibility that this workplace will be classified as a workplace with 5 or more employees. If the representative does not properly pay the holiday work allowance, which is one of the regulations applicable to workplaces with more than 5 employees, he or she may be punished. In addition, if the representative does not comply with the regulations that a workplace with 5 or more employees must observe, he or she will admit that his or her family is working falsely.

 

Below are the contents of the Labor Standards Act applicable to workplaces with 5 or more employees:

1. Overtime, night, and holiday work allowances: 50% of the base salary must be paid as a supplement.
2. Annual paid leave: 15 days of paid leave are generated (11 days in the first year) for workers who have worked more than 80% of the time.
3. Leave allowance: At least 70% of the average wage must be paid to workers during the leave period (when the employer is on leave due to the employer's circumstances).
4. Restrictions on dismissal, written notice: Dismissal procedures and justifications must be in place. For more information, click here.
5. Request for relief from unfair dismissal: You can apply to each local labor committee.

 

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