Revised Construction Business Act to Take Full Effect on December 12 – Cabinet Decision
Regulations on Labor Cost Estimates to Be Enforced
November 17, 2025 – Administration / Public Sector
The Japanese government has officially decided that the Revised Construction Business Act and the Act on Ensuring Proper Tendering and Contracting for Public Works will be fully enforced on December 12. Under the revised rules, quotations and contracts that include excessively low labor cost estimates, based on the “Standard Labor Cost Criteria,” will be prohibited.
Additionally, contractors will be newly prohibited from submitting “unreasonably low contract prices” and “excessively short construction periods.”
Toward the enforcement date, preparations are underway, including the Central Construction Industry Council issuing recommendations on standard labor costs and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) publishing relevant compliance guidelines.
On the 14th, the Cabinet approved a government ordinance specifying certain provisions of the revised laws. The ordinance clarifies the scope of construction contracts subject to recommendations or public disclosure when clients violate labor cost estimation rules. Contracts in which the “cost normally required to carry out construction work” is less than 5 million yen (or less than 15 million yen for building construction work) will be excluded from such measures, minimizing the impact on general consumers ordering new homes or home renovations.
MLIT has also released a draft ministerial ordinance related to the revised acts, and the legal framework for full enforcement is nearly complete. The draft stipulates that statutory welfare costs and safety/health management expenses, in addition to labor costs and material costs, will be included within the scope of the estimation regulations.
