Amendments to the Subcontract Act

A bill partially amending the Act Against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors (“Subcontract Act”) and the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises (collectively, “Amendment to the Subcontract Act, etc.”) was passed and enacted in a plenary session of the Japanese House of Councillors on 16 May 2025. The Subcontract Act was enacted to ensure fairness in subcontracting transactions and protect the interests of subcontractors. This amendment to the Subcontract Act includes both substantive changes that require significant operational adjustments — such as prohibiting payment by promissory note — and formal changes, such as modifications to legal terminology. This newsletter will provide an overview of the amendments to the Subcontract Act and their implications.