Japan Mentions What Employers Can Pay to End Injury Compensation After 3 Years
- Japan's Labour Standards Act Article 81 sets out a specific condition under which employers can discontinue medical compensation payments
- An employer can offer a one-time lump sum equivalent to 1,200 days of average wages to exit ongoing injury obligations
- The 3-year rule under Article 81 applies only to workers who have not recovered since the start of medical treatment
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Japan's Labour Standards Act gives employers a legal route to end ongoing injury compensation payments if a worker's condition does not improve within a set time frame, according to Article 81 of the law.
Under the provision, if a worker who is receiving compensation under Article 75 has not recovered from their work-related injury or illness within three years from the date medical treatment began, the employer is permitted to make a single lump-sum payment to close out the compensation obligation.
Source: UGC
What the 1,200-day payment covers
The lump-sum amount is calculated at 1,200 days of the worker's average wage. Once this payment, referred to as compensation for discontinuation, is made in full, the employer is no longer required to continue providing compensation under the Act for that injury or illness.
The provision effectively creates a cap on long-term liability for employers in cases where medical recovery does not occur within the three-year window. The trigger for invoking Article 81 is not a decision by the employer alone — the condition must be that the worker has genuinely not recovered during the entire three-year period from the commencement of treatment.
How Article 81 fits within Japan's labour framework
Article 75 of the Labour Standards Act is the base provision that obligates employers to cover the cost of medical treatment for injuries or illnesses that arise in connection with work. Article 81 operates as a qualifying exception to that ongoing duty, providing a structured exit mechanism tied to a defined financial settlement.
The 1,200-day calculation is based on the worker's average wage, meaning the actual monetary value of the payment will vary depending on the individual's earnings at the time of the injury.
Workers and employers in Japan operating under the Labour Standards Act should take note that this provision applies specifically to compensation governed by the Act and does not automatically affect any separate entitlements a worker may hold under Japan's Workers' Accident Compensation Insurance system, which runs in parallel to employer obligations under the Labour Standards Act.
Japan publishes 3 key compensation rights for workers
Legit.ng earlier reported that Japan's Labour Standards Act contains several provisions that directly protect workers and their families when workplace injuries or deaths occur, with employers legally required to pay defined amounts based on the affected worker's average daily wage.
Source: Legit.ng
