Currently, employers are in principle prohibited from causing employees to work more than 8 hours a day or 40 hours a week. Subject to a Labour Management Agreement being entered into with a union consisting of more than half the employees in the company or with an employee representative representing more than half the employees, employers can cause employees to work overtime hours of up to 45 hours a month or 360 hours a year. However, employers can escape this rule if special provisions can be agreed.

Recently, a number of well-known corporations in Japan have been investigated by the Labour Standards Inspection Office for illegal overtime work practices. As a result, the concept of death due to overwork and the gruellingly long working hours that form part of Japan's work culture have once again come under the spotlight.

60-hour overtime cap

In response, the Government submitted a proposal on 14 February 2017 to impose a statutory cap of 60 overtime hours per month or 720 overtime hours per year, with corporations breaching the cap to face legal penalties. To accommodate for unusually high workloads during peak seasons, overtime exceeding 60 hours a month may be allowed provided that the annual total is under 720 hours.

Premium Fridays

Further, the Government and business lobby Japan Business Federation have jointly launched the "Premium Friday" campaign whereby employees are encouraged to leave the office at 3 pm on the last Friday of each month, starting from Friday 24 February 2017. While it is generally seen as a positive move by the public, dissidents of the campaign argue that being able to leave early once a month is unlikely to make much difference, and any work that is left undone on Premium Friday will be pushed to the weekend or the following weekday.

What to be aware of

Having a labour management agreement in place is important, but that is only the first step to complying with Japan's intricate overtime laws. Employers should keep track of employees' actual work hours, properly compensate employees for their overtime and ensure that employees are not working beyond the overtime hours stipulated in the labour management agreement. In addition, where possible, employers should encourage employees to leave the office on time, and allowing employees to leave at 3 pm once a month such as on Premium Friday may not be a bad idea.

Written by Florence Cheung