Career-Up (Regularization) Grant: Up to JPY 800,000 per Employee for Converting Part-Timers to Full-Time Staff

What Is the Regularization Grant under the Career-Up (Regularization) Grant

The Career-Up (Regularization) Grant is a national-level grant program established by Japan's Ministry of Health, Labour and Welfare to promote the career development of non-regular employees. Within it, the Regularization Grant (正社員化コース) specifically targets companies that convert contract, part-time, dispatched, and other non-regular employees into full-time employees.

The Grant's Basic Figures

• Base grant amount: JPY 480,000 per person
• Additional grant (for specific regions such as Hokkaido or remote islands): JPY 160,000 or JPY 320,000 per person
• Maximum total: JPY 800,000 per person
• Annual company cap: In principle no more than 20 people (subject to that year's policy)

This means that if you have an excellent part-time employee working in Hokkaido, converting them to full-time status can earn you a JPY 800,000 grant. For small and medium-sized enterprises with annual revenue in the tens of millions of yen, this grant can significantly reduce personnel costs.

The Grant Disbursement Mechanism

The grant is not paid all at once, but disbursed in installments:

1. First installment (6 months after regularization): JPY 240,000 paid
2. Second installment (12 months after regularization): JPY 240,000 paid
3. Additional portion (if applicable): calculated separately according to conditions

The purpose of this installment-based system is to ensure that companies genuinely fulfill their regularization commitment, rather than temporarily converting employees and later changing their status again.

Core Conditions and Eligibility Requirements for Applying

Not every company can apply for this grant; you need to understand and ensure you meet the following conditions.

Conditions the Company Must Meet

First, your company must satisfy the basic qualifications:

1. Employment-insurance-applicable establishment: The company must have enrolled in employment insurance—this is the most basic condition
2. Social insurance enrollment: The company must properly pay social insurance such as employees' pension (kosei nenkin) and health insurance
3. Labor law compliance: No major labor law violations in the past 3 years (such as unpaid wages, illegal dismissal, etc.)
4. Financial soundness: No risk of bankruptcy or serious financial crisis
5. No tax or social insurance arrears: No outstanding taxes or social insurance premiums

For many Chinese-owned businesses in Japan, these conditions are not hard to meet. However, note in particular that if your company has recently been investigated by the labor standards inspection office (労働基準監督署) and has a violation record, this may affect your eligibility.

Conditions the Employee Must Meet

The employee being regularized must also meet specific conditions:

Pre-conversion status conditions:

• Part-time employees (パート): in principle working fewer hours than full-time staff
• Dispatched employees (派遣社員): assigned through a staffing agency
• Contract employees (契約社員): employed under fixed-term contracts
• Other non-regular employees

Pre-conversion employment period requirement:

The employee must have been continuously employed by your company (or the same corporate group) for 6 months or more before conversion. This condition is critical—if the employee only joined last year, they may not be immediately eligible for this grant and may have to wait until this year to qualify.

Post-conversion commitments:

• After conversion to full-time status, an open-ended employment contract must be signed with the employee
• A commitment that the employee will work at least 6 months or more in full-time status
• Social insurance, employment insurance, and other benefits must be the same as those of other full-time employees

Situations That Do Not Qualify

In certain situations, even if both the company and employee wish to convert, the grant cannot be obtained:

• The employee was already a full-time employee at some company before conversion (the grant only applies to first-time regularization)
• The employee has a family relationship with the company (spouse, direct relatives, etc.)
• Wages were substantially cut immediately after conversion
• The regularization was carried out to evade other labor law obligations

The Application Process: Complete Steps from Preparation to Receiving the Grant

Now that you understand the conditions, let's look at how to actually apply. The entire process takes roughly 12–14 months to fully receive the grant.

Step 1: Thorough Preparation (1–2 months before applying)

Before formally applying, you need to prepare complete documentation and evidence:

Required document checklist:

1. Company-related documents

   • Corporate registration record (corporate registry)
   • Bank account (for the grant to be paid into)
   • Financial statements or tax filing documents for the most recent year

2. Employee-related documents

   • Copy of the employee's residence card (for Chinese employees)
   • Original contract with the employee (part-time or dispatch contract)
   • Payroll records (6 months or more, showing wages paid during the part-time period)
   • Attendance records (showing actual working hours during employment)

3. Social insurance and tax certificates

   • Proof of employment insurance enrollment
   • Proof of social insurance enrollment
   • Proof of no tax or social insurance arrears for the past 6 months

Preparation advice:

Many Chinese business owners run into problems at this stage. If your attendance records are incomplete or your payroll formatting is non-standard, you should organize them immediately. We recommend engaging a professional Sharoshi (labor & social security attorney) to review these documents to avoid rejection due to documentation issues.

Step 2: Communicating with the Employee and Signing a New Contract (1 month before conversion)

This is a step many companies overlook. You need to:

1. Clearly explain to the employee: detail the changes to full-time status, salary and benefits, working hours, welfare benefits, etc.
2. Written notice: record the employee's consent to regularization by email or in writing
3. Sign a new employment contract: sign an open-ended full-time employment contract with the employee; the contract content must fully meet full-time standards

Pay special attention to one point in this process: you cannot reduce the employee's wage because of the conversion. Some companies think "wages were lower during part-time, so keep the same low wage after conversion"—doing so is regarded as evading the grant's conditions. Generally, the post-conversion wage should be equal to or higher than the previous wage.

Step 3: Formal Conversion and Application (in the month of conversion or within 1 month afterward)

After the employee is formally converted to full-time status, you need to:

1. Submit the application to Hello Work (public employment security office)

   • Location: the nearest Hello Work or labor bureau
   • The company can submit directly, or entrust a Sharoshi (labor & social security attorney)

2. Submit the application form and related materials

   • Career-Up (Regularization) Grant application form
   • Regularization plan (explaining the plan and purpose of conversion)
   • Comparison of employment contracts before and after conversion
   • Attendance book and payroll ledger
   • Proof of social insurance enrollment

3. Hello Work review

   • Initial review usually takes 2–4 weeks
   • You may be asked to provide supplementary materials

Step 4: Receiving the Grant (6 months and 12 months after conversion)

Assuming your application is approved in the first month, the subsequent grant disbursement schedule is as follows:

• 6 months after conversion (7th month): first installment of the grant (JPY 240,000) deposited into the account
• 12 months after conversion (13th month): second installment of the grant (JPY 240,000) deposited into the account
• Additional portion (if applicable): calculated separately according to region and conditions

Real-World Case Studies of Chinese-Owned Businesses in Japan

Let me use a few real scenarios to illustrate what this grant actually means for Chinese-owned businesses.

Case 1: Regularization Upgrade in the Restaurant Industry

Mr. Wang runs a Chinese restaurant in Tokyo, with the following staff structure:

• 1 manager (full-time employee)
• 3 chefs (part-time)
• 2 servers (dispatched employees)

One of the chefs, Li Ming, had already worked at the restaurant for 2 years, was highly skilled, and was a key member of the team. Mr. Wang planned to convert Li Ming to full-time status.

Before conversion: Li Ming earned JPY 280,000 per month (part-time)

Regularization application:

• Meets 6+ months of continuous employment (actually 2 years) ✓
• Company has employment insurance and social insurance ✓
• No labor law violation record ✓

Result:

• Li Ming was converted to full-time status, with monthly salary adjusted to JPY 320,000
• The company received a grant of JPY 480,000 (base)
• After deducting the additional social insurance contributions (about JPY 3,000–5,000 per person per month), the grant effectively covered the increased social insurance costs over 1–2 years
• Li Ming gained a more stable career path, and Mr. Wang gained a cost subsidy and a more stable workforce

Case 2: Dispatch-to-Full-Time Conversion in Manufacturing

Ms. Zhang, a Chinese business owner, runs an electronic parts processing plant in Saitama. She had long employed 20 dispatched workers through a staffing agency. Because dispatch fees rise year by year (dispatch fees are about 25–30% of the employee's wage), she decided to convert the 5 best-performing dispatched workers into directly employed full-time staff.

Prior cost calculation:

• Dispatched worker monthly wage: JPY 250,000 per person
• Staffing agency handling fee: about JPY 60,000–75,000 per person
• Total cost: JPY 310,000–325,000 per person

After conversion:

• Directly employed full-time wage: JPY 270,000 per person (including employer social insurance burden)
• Company grant: JPY 480,000 per person × 5 people = JPY 2,400,000

Actual effect:

• Saves about JPY 45,000 per person per month in dispatch fees
• 5 people save about JPY 2,700,000 per year, exactly covering the increase in social insurance and wages
• This JPY 2,400,000 grant is like an extra bonus, which can be used for equipment investment or other business expansion

Frequently Asked Questions (FAQ)

Q1: Is there a residence card requirement for Chinese employees? Can the grant be applied for?

A: This is a common question for Chinese business owners. The answer is: absolutely yes, but the employee must hold a valid residence card. Under relevant Japanese policy, as long as the employee holds a legitimate work residence status (such as Engineer/Specialist in Humanities, Highly Skilled Professional, etc.) and the residence card is valid, they qualify for the grant application. Specifically, eligible employees include those with work qualifications such as "Skilled Labor," "Engineer," and engineering exemptions, as well as those with special qualifications such as "Highly Skilled Professional" and "Business Manager." However, if the employee's residence card has expired or is invalid, the grant cannot be applied for. When submitting application materials, you must provide a copy of the residence card as proof. If you are unsure whether an employee's residence status meets the conditions, we recommend consulting a Sharoshi (labor & social security attorney) or the Immigration Services Agency in advance.

Q2: After conversion, must a part-time employee immediately work a full 40 hours per week? Can there be a gradual transition?

A: This question relates to the definition of a full-time employee. Under Japanese labor law, a "full-time employee" (正社員) generally refers to an employee with an open-ended contract and working conditions jointly established with the company. Regarding working hours, the law requires that a regularized employee's working hours not be significantly below the company's standard working hours. If your company's standard working hours are 40 hours/week, then the regularized employee should also follow the 40 hours/week standard. In practice, however, many companies have different working-hour arrangements for different types of full-time employees (such as fixed-schedule or short-hour work), and as long as such arrangements are clear, in writing, and do not violate labor law, they are usually acceptable. So it is not necessary to reach exactly 40 hours, but consistency with your company's full-time standard is required. If there is a situation clearly below standard—such as "25 hours/week part-time before conversion, still only 20 hours/week required after conversion"—it may be deemed as failing to meet the regularization requirements.

Q3: The company was recently cited for a violation by the labor standards inspection office (労働基準監督署). Can we still apply for this grant?

A: This is a fairly sensitive issue, and many companies have encountered such situations. Under the grant's review rules, if a company received administrative guidance or a penalty from the regulatory authority for violating labor law within 3 years before the application, it may be deemed ineligible. But not all violations completely result in application failure; the key is the severity of the violation and the remediation status. For example, if it was a relatively minor violation (such as non-standard payroll formatting or deviations in break-time arrangements) and the company has fully remediated under the regulator's guidance, an application may still be possible. But if it involves serious violations such as unpaid wages, wage deductions, or forced overtime, it will basically be rejected. My advice is: first consult a professional Sharoshi (labor & social security attorney) to have them assess your company's specific situation. If problems do exist, it is best to complete remediation first, and apply after some time has passed (usually at least 3–6 months of compliant operating records). This greatly increases the success rate.

Q4: If an employee leaves during the 6-month or 12-month period of receiving the grant, does the company have to return the grant?

A: This is an important risk point you must understand before applying. Under the policy, yes, the company must return the grant in part or in full. The specifics are as follows: if the employee leaves before receiving the first installment (6 months), the company does not need to return anything, but will also not receive the first installment of JPY 240,000. If the employee leaves after the first installment but before the second (during the 6–12 month period), the company must return the JPY 240,000 already received in the first installment. If the employee leaves only after the second installment (after 12 months), the company has already received the full grant and does not need to return anything. This is precisely why the grant uses an installment-based disbursement system—to ensure the employee genuinely works stably in a full-time position. Therefore, before conversion you need to very carefully assess the employee's stability. If an employee you plan to regularize has recently shown signs of resignation (for example, considering returning to their home country or switching industries), we recommend communicating thoroughly with them first to ensure the conversion reflects the genuine intent of both parties.

Q5: If a company regularizes 10 employees within the same fiscal year, can they all receive the grant? Is there a quota limit?

A: This relates to the overall budget limit of the grant. Under the Ministry of Health, Labour and Welfare's rules, a single company's number of regularization grant applications within one fiscal year is in principle no more than 20 people, but this figure is not absolutely fixed and may change according to that year's policy adjustments (updates are possible each April). So in theory, if you regularize 10 employees within the same fiscal year, they could all potentially receive the grant. But there is a detail to note here: the total grant amount a single company receives may be limited by that year's budget. For example, some years may stipulate that a single company's total grant for that year not exceed JPY 9,600,000 (20 people × JPY 480,000). In practice, I recommend not regularizing too many employees at once. A more prudent approach is to proceed in stages: regularize 3–5 of the most stable employees in the first year, observe the results and budget situation, and consider whether to continue in the second year. This lowers risk (if an employee leaves midway, the loss is relatively small) and also ensures the stability of the grant.

Common Pitfalls in the Application Process and How to Avoid Them

Application Rejection Due to Incomplete Documentation

The most common reason for failure is missing or non-compliant materials. Hello Work has strict requirements for document formatting:

• Payroll records: must be complete monthly versions, showing employee name, working hours, wage composition, etc.
• Attendance book: must show the employee's daily attendance, with no obvious blanks or alterations
• Employment contracts: both pre- and post-conversion contracts must exist, and the post-conversion contract must be open-ended

We recommend having a Sharoshi (labor & social security attorney) check each document one by one before submitting.

Application Failure Due to Wage "Shrinkage"

Some companies want to "cut costs" during conversion and actually reduce the employee's wage. This directly leads to application rejection. For example:

Wrong approach:

• Part-time: hourly wage JPY 1,500 × 160 hours/month = JPY 240,000
• Upon conversion: monthly salary JPY 220,000 (an actual reduction)

This approach will be deemed as "evading the grant conditions."

Correct approach:

• Part-time wage: JPY 240,000
• Wage upon conversion: JPY 240,000 or more (can increase, cannot decrease)

Social Insurance and Tax Arrears

If your company has any social insurance or tax arrears, the entire application will be rejected outright. Before applying, be sure to ensure:

• Social insurance premiums for all months have been paid
• Withholding tax for all months has been withheld and remitted
• Corporate income tax, consumption tax, etc. have been filed and paid on time

How to Maximize the Effect of the Grant: Strategic Advice

Simply receiving the grant itself is not enough; you need to think strategically about how to maximize the effect of these funds.

Choosing the Right Candidates for Regularization

Not every employee is worth regularizing. You should prioritize:

1. Stable work performance: performed well during the part-time period with no major errors
2. Sufficient employment duration: meets the 6+ months of continuous employment requirement, preferably 1 year or more
3. Alignment with company development direction: this employee's regularization aligns with the company's long-term development strategy
4. Personnel cost optimization: regularizing this employee can reduce dispatch fees or other unnecessary costs

Time Planning

Since the grant is disbursed in installments and takes 12 months or more to fully receive, you should plan ahead:

• Apply in the first half of the year (April–June): you can receive the first installment in the second half of the year, and the second installment mid-way the following year
• Avoid concentrated regularization: do not regularize 20 employees in the same month; spreading them across different months can diversify application risk

Combining with Other Policies

Japan also has other related human-resources grants:

• Training Enhancement Grant: if you provide vocational training to newly regularized employees, you may receive an additional grant
• Treatment Improvement Add-On: if the wage increase for regularized employees reaches a certain percentage, you may receive an add-on grant

When consulting a Sharoshi (labor & social security attorney), ask whether these policies can be combined.

Summary: Why Chinese Business Owners Should Value This Grant

For Chinese-owned businesses in Japan, the significance of this grant is not merely economic:

1. Cost optimization: reduces dispatch fees and part-time management costs, with a considerable grant amount (up to JPY 800,000 per person)
2. Employee stability: converting excellent employees to full-time status increases employee loyalty and engagement
3. Corporate compliance: ensures more standardized labor management and reduces legal risk
4. Brand building: having a stable full-time team makes it easier to earn the trust of clients and partners
5. Financial optimization: although full-time employees' social insurance benefits increase the company's burden, the grant and reduced dispatch fees offset it, and may even leave a surplus

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Take Action Now: Get Professional Consultation

If you are interested in this grant but still have specific questions—such as whether your company qualifies, whether a specific employee can be regularized, or how to prepare application materials—we strongly recommend a free professional consultation.

Our professional team includes certified Sharoshi (labor & social security attorneys) and human-resources consultants with years of experience serving Chinese-owned businesses in Japan. Through a free 30-minute consultation, we can:

• Assess whether your company meets the application eligibility
• Analyze whether the employee you plan to regularize meets the conditions
• Develop a personalized regularization and application strategy
• Estimate the specific grant amount you may receive

Don't let this grant of up to JPY 800,000 slip through your fingers. Contact us now to get a dedicated grant plan for your company.