Japan’s working-hour regulations set an upper limit on working hours to protect workers’ health. Employers must comply with the Labour Standards Act for workers in Japan, regardless of the parent company’s nationality or overseas practices.
These labour regulations fall into three categories. Items 2 and 3 below apply where prescribed requirements (e.g. a labour management agreement) are met; otherwise, item 1 below applies.
Principles: statutory working hours, breaks, weekly days off and overtime under an Article 36 Agreement;
Special rules (flexibility): variable working-hour systems, flextime and deemed working-hour systems; and
Special rules (exemptions): workers in supervisory or management positions, and the highly skilled professional system.
Working hours and employer control
Yusaku Akasaki
Partner
Osaka
T: +81 6 6676 8834
E: akasaki_y@clo.gr.jp
Under the Labour Standards Act, “working hours” is defined as the time during which an employee is objectively assessed as being under the employer’s direction and control (Supreme Court, 9 March 2000).
Therefore, working hours are not limited to time in the office or company-approved time. For example, the following may count as working hours:
Time spent changing clothes where the company specifies the place or method (such as required uniforms);
Voluntary overtime of the workers that the employer knows of and accepts; and
Travel time during which the worker must respond to the instructions of an employer. An employer cannot exclude work actually performed merely because it bypassed the approval procedure; even working hours performed by remote work must be assessed by the same standard as on-site work.
Japan LSA working hour standards
Takeshi Osawa
Partner
Kyoto
T: +81 75 257 7411
E: osawa_t@clo.gr.jp
Japan’s principal rules on working hours involve minimum standards intended to protect workers’ health and guarantee their personal time. Any work condition that does not meet the minimum standard referred below is void.
Working hours. Both the eight-hour daily and 40-hour weekly limits must be observed. At certain workplaces with few workers (e.g. less than 10 workers) in the following businesses, the limit is 44 hours a week instead of 40 hours:
Businesses that sell, supply, retain or lease materials or hairdressers;
Businesses that make or screen motion pictures, theatrical performances or other entertainment;
Businesses that treat or nurse ill or infirm people or other health and hygiene establishments; and
Hotels, restaurants, eating and drinking establishments, service trades, or places of amusement.
Working hours of an employee working across multiple locations are also aggregated; a company employing a worker with a side job must manage the statutory limit by aggregating hours across both.
Breaks. An employer must provide at least a 45-minute break if the working hours exceed six hours, and at least one hour if the working hours exceed eight. In either of these cases, the employer must let the worker use the break freely. Breaks must be given to all workers at the same time, unless a written agreement provides otherwise. This does not apply to some businesses such as transport, financial and telecoms businesses.
Individualised remote work break times are treated the same way, as per the Guidelines for Promoting the Appropriate Introduction and Implementation of Telework.
Days off. An employer must provide a worker with at least one day off per week. However, providing at least four days off over a four-week period is permitted.
“Statutory days off” are not synonymous with all employer-designated days off. The premium pay for holiday work is required only for work on statutory days off.
Overtime and work on days off. Working beyond statutory hours or on statutory days off is prohibited, except for exceptional cases:
Temporary need due to a disaster: With the labour authority’s permission (or, if urgent, notification without delay after the fact); business pressure alone does not qualify;
Necessity for public duties: For local government employees at government offices; generally not applicable to private companies; and
Article 36 agreement: The most common basis in practice, described below.
Article 36 agreement’s overtime limits
Takashi Sasaki
Associate
Osaka
T: +81 6 6676 8834
E: sasaki_t@clo.gr.jp
An “Article 36 Agreement” allows overtime and work on days off where an employer has concluded a written agreement with the majority union at the workplace or, if none, a person representing most workers (elected democratically, e.g. by vote or show of hands, from those not in a position of supervision or management), and has filed it with the labour standards inspection office.
It must specify the covered workers, the covered period and the extra hours or days-off work permitted.
The overtime cap is 45 hours a month and 360 hours a year. Even under a special clause for temporary circumstances:
Overtime must not exceed 720 hours a year;
Overtime plus days-off work must total under 100 hours in any single month;
The average over any two to six-month span must not exceed 80 hours; and
The 45-hour cap may be exceeded in no more than six months a year.
Additionally, actually requiring over-time requires the obligation to be set in
the work rules (Shugyo Kisoku), not merely the agreement.
Regardless of the agreement, the employer must pay the premium for overtime, days-off work and night work (10pm to 5am): at least 25% for overtime (50% beyond 60 hours a month); 35% for statutory days off; and 25% for night work; a Cabinet Order sets the rate.
LSA flexible working hour systems
The principal rules may not suit businesses with seasonal fluctuations or self-directed styles, such as remote work.
Therefore, the Labour Standards Act provides mechanisms for easing these regulations, subject to a labour management agreement or similar arrangement, under which working hours may be averaged over a specified period, provided they are within the statutory limit.
Variable working-hour systems: Working hours may exceed the statutory daily or weekly limits on particular days or weeks as long as the average does not exceed 40 hours per week over a specified period (e.g. one month, one year or one week);
Flextime system: Sets total hours within an agreed upon period, while workers have flexibility to determine their daily start and finish time;
Deemed working-hour system for off-site labour: When it is difficult to calculate the actual hours worked, the employee is generally deemed to have worked the prescribed hours; and
Discretionary work systems: For work in which the manner of performing the work and the allocation of working time must be left substantially to the employee’s discretion (e.g. professional type and planning type), a fixed number of hours is deemed worked, regardless of actual hours (the worker’s consent is required).
Flextime can be well suited to remote work. However, working from home alone does not justify use of the off-site deemed working hours system. If the employer can ascertain actual hours, it must manage those hours (remote work guidelines).
LSA working-hour regulation exceptions
For work where strict application of the principal rules does not reflect the reality of the job, or where it is appropriate to leave working arrangements to the worker’s discretion, the Labour Standards Act provides limited exceptions to working-hour regulations. These exceptions only apply when specific substantive requirements are satisfied, not as a nominal measure:
Workers in a position of supervision or management: Judged by alignment with management, freedom from time control and treatment; and
Highly skilled professional system: Requires projected annual pay of at least JPY10.75 million (USD67,289), a covered role, written consent, a labour management committee resolution and filing, tracking of health-management time, at least 104 days off a year, among other conditions.
A worker called a “manager” or “exempt employee” in the home country will not fall into the category of a supervisory or management position unless the substantive requirements are met, exposing the company to the principal working-hour regulations the same as the other workers and unpaid-overtime liability. Even workers in a position of supervision or management must still be paid the night-work premium (Supreme Court, 18 December 2009).
Japan working hours compliance essentials
Japan’s working-hour regulation starts from strict minimum standards – 40 hours a week, eight hours a day, breaks and a weekly day off – and imposes both substantive and procedural requirements on anything beyond those parameters.
For foreign companies already in Japan, or entering the market, the safe approach is to first put in place employment contracts, work rules, an Article 36 Agreement and attendance management matching these principles and then consider flexibility or exemption systems only as genuinely needed.
CHUO SOGO LPC
Osaka Dojimahama Tower 15F
1-1-27 Dojimahama Kita-ku,
Osaka 530-0004, Japan
Tel: +81 6 6676 8834
Fax: +81 6 6676 8839
www.clo.jp