Are users of Type A continuous employment support "workers"? Employment contracts, minimum wage, and the reduction exception

In short: Users of Type A continuous employment support (the "employment type") conclude an employment contract with the office, so they are in principle "workers" under Article 9 of the Labor Standards Act. The Minimum Wage Act, the Labor Standards Act, and labor insurance therefore apply, and wages at or above the regional minimum wage must be paid.

However, where a worker's ability is markedly low due to disability, a reduced minimum wage can be applied to that worker if the office obtains a "minimum wage reduction exception" from the prefectural labor bureau director under Article 7 of the Minimum Wage Act. Wages cannot fall below the minimum wage without permission. For business owners who open and operate Type A continuous employment support offices, this article organizes, from the viewpoint of a Shakai Hoken Roumushi, the worker status of users, the application of the minimum wage and the reduction exception, and the relationship between wages and income from productive activity.

Are users of Type A continuous employment support workers?

Continuous employment support is a service that provides opportunities to work and to engage in productive activity to persons with disabilities for whom employment at an ordinary workplace is difficult, and provides training and other benefits needed to improve their knowledge and abilities (Act on Comprehensive Support for the Daily and Social Lives of Persons with Disabilities, Article 5; because of the renumbering that accompanied the new "employment selection support" service on October 1, 2025, please confirm the exact paragraph number in the e-Gov law search). Of these, Type A is the "employment type," where the office concludes an employment contract with the user. Type B is the "non-employment type," without an employment contract.

Because a Type A user works under the direction and supervision of the office in exchange for wages, that user is in principle a "worker" under Article 9 of the Labor Standards Act. Once a person is a worker, the Labor Standards Act, the Minimum Wage Act, the Industrial Accident Compensation Insurance Act, the Employment Insurance Act, and other labor-related laws apply as they are. A Type B user has no employment contract, and what is paid is not wages but a "kochin" (allowance).

Category	Contract	What is paid	Worker status (in principle)
Type A continuous employment support (employment type)	Employment contract	Wages	Is a worker
Type B continuous employment support (non-employment type)	No employment contract	Allowance (kochin)	Is not a worker

For the staffing and designation-standard labor of Type A and Type B, see staffing standards and labor for Type A and Type B continuous employment support; for the concept of "worker status" itself that separates employment from outsourcing, see the line between outsourcing and employment is not decided by the contract. Whatever the contract is titled, if the substance is employment, the person is treated as a worker.

When you conclude an employment contract under Type A, how does the minimum wage apply?

Because a Type A user is a worker, the regional minimum wage of the location of that workplace applies. Wages at or above the minimum wage set by the hour must be paid, and any provision below the minimum wage is void as to that part and is raised to the minimum wage amount (Minimum Wage Act).

• Having a disability is not, in itself, a reason to fall below the minimum wage. To reduce it, the reduction exception described below is required.
• The minimum wage is reviewed every year and is revised in October in many regions. For how the revised amount is set, see how much will the minimum wage rise in October 2026.
• The Labor Standards Act rules on working hours, breaks, overtime pay, and annual paid leave apply the same as for other workers.

The payment of wages is an employer's obligation under the Labor Standards Act. Delicate cases of whether a user is a worker, and disputes over wages or dismissal, are the business of an attorney and are not handled by our office.

When can the minimum wage reduction exception be used?

Article 7 of the Minimum Wage Act provides that only when the employer obtains permission from the prefectural labor bureau director (the application is routed through the head of the competent Labor Standards Inspection Office) may a reduced minimum wage be applied to the following workers. For Type A, the first item is mainly relevant.

Item	Worker covered
Item 1	A person whose working ability is markedly low due to a mental or physical disability
Item 2	A person during a probationary period
Item 3	A person receiving authorized vocational training as prescribed by ordinance
Item 4	A person engaged in light work / a person engaged in intermittent labor

• Reduction is possible only after permission is obtained. Falling below the minimum wage without permission violates the Minimum Wage Act.
• The reduction rate is calculated according to the working ability of the covered worker. It is not a uniform reduction because of a disability; it is set individually from the difference in ability compared with the worker used as a benchmark.
• Preparing and submitting the permission application is the business of a Shakai Hoken Roumushi. You can consult our office on calculating the reduction rate and on operation after permission.

Whether to use the reduction exception is examined from both wage design and the balance of the productive activity. Rather than relying carelessly on reduction, the proper course is to consider it together with a review of the productive activity itself.

How do you organize the training benefit, wages, and income from productive activity?

Type A is a service covered by "training benefits" among the independence support benefits under the Act on Comprehensive Support for Persons with Disabilities (Article 6). The office is paid a training benefit (an independence support benefit) for providing services to users.

The key point here is that the source of the wages paid to users and the training benefit are considered separately. Under the operating standards, wages for Type A are in principle paid from the income of the business related to productive activity, and it is not contemplated that the training benefit received as a designated business be applied to wages (the detailed provision is set by ordinance (operating standards); please confirm the latest text).

• Whether the balance of the productive activity is enough to pay wages is central to the business plan. A deteriorating balance directly affects the payment of wages and the continuation of the business.
• Wages (consideration for labor) and support as training (the object of the benefit) are different in nature. Keeping them separate in both accounting and labor management makes later explanations easier.
• Documents that are naturally required for a worker—the wage ledger, attendance records, and the notice of working conditions—are prepared for Type A the same as for any other workplace.

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For fees when you ask 四葉社会保険労務士事務所 to handle payroll and wage design, see the fee schedule.

Who should you ask for the designation application, the property, and the worker-status judgment?

When you set up a Type A office, the responsible qualification is divided by process. Each becomes a separate contract.

What to do	Main person in charge
Application of labor and social insurance, wage design, the minimum wage reduction exception application, maintaining work rules and employment contracts	Shakai Hoken Roumushi (our office)
Designation application as a disability welfare service provider (prefecture / municipality)	Gyoseishoshi
Securing and leasing the property that becomes the office	Real estate transaction specialist
Legal judgment on the worker status of users; disputes over wages or dismissal	Attorney
Taxation—income tax, consumption tax, corporate tax	Tax accountant

The designation application can be connected to 四葉行政書士事務所, but 四葉行政書士事務所 is a separate, independent entity from our office, and the Shakai Hoken Roumushi work and the Gyoseishoshi work are contracted separately (we do not take on both under one engagement). Our office does not receive referral fees. You can consult 四葉社会保険労務士事務所 from the very entrance of organizing your labor affairs.

Frequently asked questions

Q. Does the minimum wage apply to users of Type A continuous employment support?
A. Yes. Type A is the "employment type" with an employment contract, and the user is in principle a worker under Article 9 of the Labor Standards Act, so wages at or above the regional minimum wage of the workplace location must be paid. You cannot fall below the minimum wage merely because of a disability; to do so, a reduction exception under Article 7 of the Minimum Wage Act is required.

Q. If a person has a disability, can wages naturally be set below the minimum wage?
A. No. To reduce it, permission from the prefectural labor bureau director (the application is routed through the competent Labor Standards Inspection Office) is required. The reduction rate is not set uniformly because of a disability but is calculated individually according to the covered person's working ability. Falling below the minimum wage without permission violates the Minimum Wage Act.

Q. Does the minimum wage apply to the Type B allowance as well?
A. Type B is the non-employment type without an employment contract, and what is paid is not wages but an allowance. Because the user is in principle not a worker, the Minimum Wage Act does not apply. However, even if the contract is nominally Type B, if the substance is employment the person may be treated as a worker, so individual judgments must be made carefully.

Q. May wages paid to users come out of the training benefit?
A. Wages for Type A are in principle to be paid from the income of the business related to productive activity, and it is not contemplated that the training benefit received as a designated business be applied to wages. Because the balance of the productive activity is the source of wage payments, it is important to project that balance at the business-plan stage. Please confirm the detailed treatment in the operating standards (ordinance).

Sources

• Definition of a worker: Labor Standards Act, Article 9 (a person, regardless of the type of occupation, who is employed by a business and is paid wages). The Act is Act No. 49 of 1947.
• Definition of continuous employment support: Act on Comprehensive Support for the Daily and Social Lives of Persons with Disabilities (Act No. 123 of 2005), Article 5. "Providing opportunities to work to persons with disabilities for whom employment at an ordinary workplace is difficult, and, through the provision of opportunities for productive and other activities, providing training and other benefits prescribed by ordinance needed to improve their knowledge and abilities." Type A (employment type) is the category that concludes an employment contract. Because of the renumbering that accompanied the new employment selection support service (Act No. 104 of 2022) on October 1, 2025, confirm the exact paragraph number in the e-Gov law search (referenced 2026-09).
• Training benefit: Act on Comprehensive Support for Persons with Disabilities, Article 6 (one of the independence support benefits).
• Application and effect of the minimum wage: Minimum Wage Act (Act No. 137 of 1959). The obligation to pay wages at or above the minimum wage; the voidness of a provision below it.
• Minimum wage reduction exception: Minimum Wage Act, Article 7. With permission of the prefectural labor bureau director (the application routed through the head of the competent Labor Standards Inspection Office), a reduced minimum wage may be applied to (1) a person whose working ability is markedly low due to a mental or physical disability, (2) a person during a probationary period, (3) a person receiving authorized vocational training as prescribed by ordinance, and (4) a person engaged in light work / intermittent labor (Ministry of Health, Labour and Welfare / prefectural labor bureaus, "Application for permission of the minimum wage reduction exception," referenced 2026-09).
• Source of Type A wages: under the standards on personnel, equipment, and operation of designated disability welfare service businesses (ordinance), wages for Type A are to be paid from the income of the business related to productive activity. Confirm the specific provision number in the latest ordinance (referenced 2026-09).
• Business of a Shakai Hoken Roumushi: Article 2 of the Certified Social Insurance and Labor Consultant Act.

This article does not decide whom to consult. 四葉社会保険労務士事務所 can advise on the application of labor and social insurance, wage design, the minimum wage reduction exception application, maintaining work rules and employment contracts, and payroll and attendance management. The designation application as a disability welfare service provider is the business of a Gyoseishoshi, the office property is the business of a real estate transaction specialist, legal judgments and disputes over the worker status of users are the business of an attorney, and taxation is the business of a tax accountant. The Shakai Hoken Roumushi work and the Gyoseishoshi work are contracted separately as separate, independent entities. Our office does not receive referral fees. The final decision on whether a user is a worker in an individual case, or whether the reduction exception is granted, is made by the Labor Standards Inspection Office and the prefectural labor bureau. For fees when consulting 四葉社会保険労務士事務所, see the fee schedule; for frequently asked questions, see the FAQ.

This article is general information. Individual judgments, such as the worker status of users and whether the reduction exception applies, are made by a qualified professional after a consultation, in light of the latest primary sources (the Ministry of Health, Labour and Welfare, the prefectural labor bureaus, municipalities, etc.) and individual circumstances. Written by Joji Uramatsu (Shakai Hoken Roumushi, Gyoseishoshi, Registered Real Estate Transaction Specialist).