Regulations On Digital Wage Payment Services By Fund Transfer Service Providers

1. Introduction

Previously, Japanese labor laws and regulations required employers to pay wages to their workers only in cash or by transfer into the workers' bank accounts or other similar accounts at financial institutions. After prolonged discussions by the Japanese government since 2019 and the collection of public comments by the Ministry of Health, Labour and Welfare (the "MHLW")¹, an amendment to the Ordinance for Enforcement of the Labor Standards Act (Ordinance of the Ministry of Health and Welfare No. 23 of 1947, as amended; hereinafter, the "Ordinance") was passed in 2022 and went into effect on April 1, 2023, allowing employers to make such wage payments to accounts of workers held with Fund Transfer Service Providers ("FTSPs"; such accounts, "FTSP accounts") under certain conditions (the "Amendments").