How to introduce digital wage payment — the labour-management agreement and practical pitfalls

In short: Digital wage payment lets an employer pay wages into the account of a fund transfer service operator designated by the Minister of Health, Labour and Welfare (a so-called "〇〇Pay"), provided the worker consents. It became possible in April 2023 when the Ordinance for Enforcement of the Labour Standards Act was revised. Introduction requires a labour-management agreement and the individual consent of each worker, and there is no duty to move the whole of the wages.

Under what conditions is digital wage payment allowed?

Wages must be paid in currency, directly to the worker, in full (Labour Standards Act, Article 24, paragraph 1). These are three of the five principles of wage payment: payment in currency, payment directly, and payment in full. Even transfer to a bank account has, in principle, been permitted as an exception to the currency-payment principle where the worker consents.

Digital wage payment adds "payment into the account of a designated fund transfer operator" to this exception. Under the ordinance amending Article 7-2 of the Ordinance for Enforcement of the Labour Standards Act (Ministry of Health, Labour and Welfare Ordinance No. 158 of 2022, promulgated on 28 November 2022), it became possible from 1 April 2023. It may be used only for the account of an operator that is a Type II fund transfer operator under the Payment Services Act and has received the designation of the Minister of Health, Labour and Welfare.

There are now three options for receiving wages.

Method of receipt	Basis	Precondition
Account at a bank or other financial institution	Enforcement Ordinance, Art. 7-2, para. 1, item 1	Worker's consent
Securities comprehensive account (certain requirements)	Same, item 2	Worker's consent
Account of a designated fund transfer operator (digital payment)	Same, item 3	Worker's consent + labour-management agreement

None of these can be decided unilaterally by the company; the worker's consent is the starting point. Digital payment alone additionally requires a labour-management agreement at the workplace.

What should the labour-management agreement and the individual consent include?

Digital payment requires a two-step procedure: a labour-management agreement and the worker's individual consent. They have different roles, so one alone is not enough.

Procedure	With whom	Main contents
Labour-management agreement	The majority union, or the representative of a majority of workers	The scope of covered workers / the scope of the designated fund transfer operators to be used, etc.
Individual consent	Each worker who wishes to use digital payment	Fund transfer operator account number / amount to be received / designation of an alternative account (a bank account, etc.)

The point easily overlooked in the individual consent is the designation of an alternative account (a bank account, etc.). A designated fund transfer operator has a mechanism to move the amount exceeding the account balance cap, and the like, to a bank account, etc. designated in advance by the worker, and the worker registers the account for that purpose. An arrangement with no bank account at all is not envisaged.

Another premise is that it cannot be compelled. A company cannot decide that "everyone will be paid digitally from now on." Workers who do not wish to do so can still be paid into a bank account as before. There is also no need to move the whole of the wages digitally; only a part may be routed.

How is the 1-million-yen account balance cap managed?

A designated operator is required to take measures to ensure that the amount of its debt to the worker (the account balance) does not exceed 1 million yen, or measures to bring it promptly to 1 million yen or less if it is exceeded (Enforcement Ordinance, Art. 7-2, para. 1, item 3). Any portion likely to exceed the cap is automatically paid out to the bank account, etc. designated by the worker. This 1 million yen is the premise on which the balance is protected even in the event of the operator's failure.

Here lies a practical pitfall. The "1 million yen" is a cap on the account balance, not a cap on the amount receivable at one time. Separately from this, each operator may set its own, lower cap on the amount receivable at one time (see the "example receipt caps" below). If the wage amount exceeds an operator's receipt cap, that month's wages may not be payable digitally in full.

Designated operators are also required to have the following protections.

• A guarantee mechanism under which the worker is reimbursed within six business days in the event of failure
• A mechanism to compensate for losses from unauthorised withdrawals and the like
• The ability to cash out (withdraw) at least once a month with no fee, in units of one yen (including cashing out at ATMs, etc.)

Where can I check whether a fund transfer operator is designated?

Designated operators are posted on the "list of designated fund transfer operators" on the website of the Ministry of Health, Labour and Welfare. As of 1 July 2026, four operators are designated (confirmed on 30 August 2026).

Designation No.	Operator	Service	Date of designation
No. 00001	PayPay Corporation	PayPay salary receipt	9 August 2024
No. 00002	Recruit MUFG Business Co., Ltd.	COIN+	13 December 2024
No. 00003	Rakuten Edy, Inc.	Rakuten Pay salary receipt	19 March 2025
No. 00004	au Financial Service Corporation	au PAY salary receipt	4 April 2025

The example receipt caps, at the time the public materials were consulted, are said to be 200,000 yen for PayPay, 300,000 yen for COIN+, and 100,000 yen each for Rakuten Pay and au PAY, but the caps and the designated operators may be added to or changed. When considering introduction, check the list at that time and each operator's conditions against the official information of the Ministry and each operator.

What to watch for is that a 〇〇Pay that has not received a designation cannot be used for wage payment. Even a payment service with the same name must be an account designated as a salary-receipt service. Even if an employee says "I want to receive it in this app," checking whether it is designated comes first.

What should be put in order in the work rules and payroll system?

The method of paying wages is an item that must be stated in the work rules (Labour Standards Act, Art. 89, item 2, "the method of ... payment of wages"). If digital payment is introduced, it must be reflected in the provisions on the method of wage payment in the work rules. The duty to draw up and file work rules itself is organised in from how many employees are work rules mandatory, and what is not mandatory.

On that basis, the practical matters to put in order are as follows.

• Whether the payroll and transfer system supports digital payment (whether it can process split transfer destinations)
• Where and how to keep each worker's consent form and alternative account information
• Informing workers that they can choose the method of receipt (including consideration for those who do not wish to)

How payroll is run, and whether it is outsourced or in-house, changes how you prepare. The market rate for outsourcing is organised in how much does it cost to have a Shakai Hoken Roumushi handle payroll, and building an in-house arrangement in running payroll in-house with freee. Reviewing the wage-related regulations at the same time as the 2024 change to the working-conditions notice rules avoids duplicated work.

Frequently asked questions

Q. An employee said "I want to receive my salary via a 〇〇Pay." Can I respond straight away?
A. You cannot start on the spot. First, check whether that 〇〇Pay is a fund transfer operator designated by the Minister of Health, Labour and Welfare, using the Ministry's list. Even for a designated operator, you must conclude a labour-management agreement at the workplace and obtain the worker's consent, including the designation of an alternative account (a bank account, etc.). It also needs to be reflected in the method of wage payment in the work rules. It can be introduced once the steps are followed, but several preparations are the premise.

Q. As a company policy, can we switch everyone to digital payment?
A. No. Digital payment is premised on the worker's consent and cannot be forced on those who do not wish it. Even if some workers choose to be paid into a bank account, they cannot be treated disadvantageously for that reason. There is also no need to move the whole of the wages; a form in which only a part is paid digitally can be chosen.

Q. If the account balance cap is 1 million yen, are there cases where the full salary cannot be received?
A. The 1 million yen is a cap on the account balance, and any portion likely to exceed it is designed to be moved to the bank account, etc. designated in advance. However, separately from this, each operator may set its own, lower cap on the amount receivable at one time. If the salary exceeds that receipt cap, that month's salary may not be payable digitally in full. Check each operator's conditions before introduction.

Q. Can you open a fund transfer operator account for me, or advise which service is best?
A. Opening a fund transfer operator account, or advising on the merits of a service as a financial product, is not our work. What we support is the labour and wage-practice side: preparing the labour-management agreement, reviewing the work rules, and designing the format and operational flow for the individual consent. The choice of service itself should be confirmed with each operator's official information or an appropriate professional.

Sources

• Labour Standards Act (Act No. 49 of 1947), Article 24, paragraph 1 — wages must be paid in currency, directly to the worker, in full (payment in currency / directly / in full), subject to exceptions where laws or a collective agreement provide otherwise, etc.
• Ordinance for Enforcement of the Labour Standards Act (Ministry of Health and Welfare Ordinance No. 23 of 1947), Article 7-2 — where the worker consents, the employer may pay wages by (1) transfer to a deposit account at a financial institution, (2) a securities comprehensive account meeting certain requirements, or (3) a fund transfer to the account of a fund transfer operator designated by the Minister of Health, Labour and Welfare. Paragraph 1, item 3 requires, of a designated operator, measures to ensure the amount of its exchange-transaction debt to the worker does not exceed 1 million yen, or measures to bring it promptly to 1 million yen or less if exceeded
• Ordinance Partially Amending the Ordinance for Enforcement of the Labour Standards Act (Ministry of Health, Labour and Welfare Ordinance No. 158 of 2022, promulgated on 28 November 2022) — the amendment to Article 7-2 enabling digital wage payment. In force from 1 April 2023
• Labour Standards Act, Article 89, item 2 — the decision, calculation and method of payment of wages, etc. are matters that must be stated in the work rules
• Ministry of Health, Labour and Welfare, "On wage payment into the account of a fund transfer operator (digital wage payment)" — introduction requires a labour-management agreement with the majority union or majority representative (scope of covered workers, scope of designated operators used, etc.) and each worker's consent (including the designation of an alternative account, a bank account, etc.). Operator requirements include the 1-million-yen account balance cap, a guarantee mechanism reimbursing within six business days on failure, compensation for unauthorised withdrawals and the like, and the ability to cash out at least once a month with no fee (confirmed on 30 August 2026)
• Ministry of Health, Labour and Welfare, "list of designated fund transfer operators" — as of 1 July 2026, four operators are designated (No. 00001 PayPay Corporation / No. 00002 Recruit MUFG Business Co., Ltd. [COIN+] / No. 00003 Rakuten Edy, Inc. [Rakuten Pay salary receipt] / No. 00004 au Financial Service Corporation [au PAY salary receipt]). Because each operator's receipt cap and the roster of designated operators may change, confirm the latest from the Ministry and each operator's official information (confirmed on 30 August 2026)
• Payment Services Act (Act No. 59 of 2009) — the basis for the registration and category (Type II fund transfer business) of fund transfer operators

Because each operator's receipt cap and the fact of designation may change, confirm them each time at the point of introduction.

This article is general information. Individual judgments, in light of the latest primary sources (Ministry of Health, Labour and Welfare, e-Gov, etc.), are made by a qualified professional after a consultation. What 四葉社会保険労務士事務所 supports on digital payment is preparing the labour-management agreement, reviewing the work rules, and designing the format and operational flow for the individual consent. For fees, see the fee schedule; for frequently asked questions, see the FAQ. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).