Employee-count criterion under the Toriteki Act: how to count, and cautions when switching from bills to cash paymentIn the new rules, the "size of a company" is also decided by the number of people who work there
The Toriteki Act adds an employee-count criterion to the capital criterion. The employee-count criterion is used when the capital criterion does not apply. Counting is based on what is recorded in the wage ledger. The Japan Fair Trade Commission also warns about cutting the price when switching from bills to cash payment.
- ○Applies: Regular employees on continuing contracts
- ○Applies: Contract employees, part-timers and casual workers
- ○Applies: Day laborers employed for more than 1 month
- ×Does not apply: Dispatched workers (they are employees of the dispatching company)
Key points
- The number of employees is based on the wage ledger. It counts regular employees on continuing contracts, contract employees, part-timers and casual workers, day laborers employed for more than 1 month, and so on. Dispatched workers are not included because they are employees of the dispatching company.
- The point of determination is when the manufacturing consignment or similar is made. For the current month, if conditions are met, such as knowing the number of people paid wages two months earlier by the end of the previous month and telling the commissioning business, that number can be used.
- The commissioning business has no obligation to check the employee count. If the contractor gives a wrong answer and the commissioning business is therefore found in violation, a recommendation is not issued right away; guidance and advice are given as needed.
- When switching from bills to cash payment, deducting the discount fee for raising cash from the price is an illegal reduction. Unilaterally discounting the unit price may amount to unreasonably low pricing or unilateral price-setting.
What to do in practice
- Based on the wage ledger, find out your own employee count (including part-timers and casual workers, excluding dispatched workers).
- When you stop using bills, check that you have not unilaterally lowered the price.
Until now, the rules for companies that ask others to do work were decided by the company's amount of money. From now on, the number of people working there is also looked at. Companies have also been told to be careful about price cuts when they stop using bills.
Points
- A company's size is looked at not only by its amount of money but also by the number of people who work there.
- Part-timers and casual workers are counted too, not only regular employees.
- When you stop using bills, you must not lower the price on your own.
What the words mean
- Employee
- A person who works at that company.
- Wage ledger
- A record book of who was paid how much.
- Japan Fair Trade Commission: Japan Fair Trade Commission: Points for businesses to note as the Toriteki Act takes effect
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.