The Subcontract Act becomes the "Toriteki Act": a ban on price setting without consultation, a ban on bill payments, and an employee-count criterionThe Subcontract Act has become a new law called the "Toriteki Act"

On January 1, 2026 (Reiwa 8), the Subcontract Act took effect with a new law name and nickname as the "Toriteki Act (Act on Proper Transactions with Small and Medium Contractors)". The main amendments are a ban on unilaterally deciding the price without responding to price consultation, a ban on payment by bill and similar methods, a criterion based on the number of employees, and the addition of specified transportation commissions.

Key points

• It becomes prohibited to unilaterally decide the price, without responding to a price consultation requested by a small or medium contractor or without giving the necessary explanation.
• Payment by bill is banned. Electronically recorded claims and factoring are also banned where it is difficult to receive the full amount, including fees, by the payment due date. Making the contractor bear the bank transfer fee is also banned.
• Even if the capital criterion is not met, the law applies if the employee-count criterion is met: 300 employees for manufacturing commissions etc., and 100 for service commissions etc.
• A new category covered is the transaction in which the original shipper commissions a primary carrier to transport goods needed for delivery of the object (specified transportation commission).
• The competent minister of the business-supervising ministry is given guidance and advice authority, and the competent minister is added as a place to report retaliation.

What to do in practice

• Check whether bills remain as a payment method with your contractors, and whether bank transfer fees are being deducted.
• Set an internal procedure for consulting and explaining when asked to revise prices.