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In-depth Reshaping the Japanese Workplace: Can “Work-Style Reform” Succeed?
Japan’s New Labor Laws and the Need to Shift from a Culture of Excessive Working Hours

Kuroda Sachiko [Profile]

[2018.07.27]

The Diet has voted to approve the government’s plans to reform the way people work in Japan. But will the new legislation really have the desired effect, or is there a risk that some of the new rules may end up making matters worse?

For decades, excessive working hours have been one of the hallmarks of Japanese society. Despite repeated calls for reforms to move away from this culture and improve the way Japanese people work, the reality remains unchanged: Japan still has some of the longest working hours among developed countries. Prime Minister Abe Shinzō has made work-style reforms one of the key objectives of the current session of the Diet. But will the proposed new legislation succeed in bringing real change to Japanese working habits? In this article, I want to look at recent moves to reform Japan’s working culture and examine some of the outstanding problems that remain, focusing on five key issues: upper limits on overtime, use of paid leave, achieving more diverse and flexible working styles, promoting side business, and employee training.

New Caps on Overtime: A Step-by-Step Approach

First, regarding the upper limits on overtime, the labor standards law was recently amended to include new regulations that will supposedly limit the amount of overtime to less than 100 hours in any one month, and no more than 720 hours in total over the course of a year. This amounts to 60 hours a month, or roughly 3 hours of overtime per working day.

As shown in the table below, Japanese people are steadily getting busier on weekdays. This is based on my calculations using individual data from a time-use survey carried out regularly by the government’s Bureau of Statistics. In 2016, around one third of men and 10 percent of women in full-time jobs were working 11 hours a day or more. This represents actual working hours, and does not include commuting time or breaks. If we take regular full-time hours to be eight hours a day, these figures mean that many people are working for three hours or more of overtime on average every day.

The recently introduced caps on overtime have been criticized in some quarters for setting the limits too high: 100 hours of overtime a month could still lead to “overwork” in some cases, critics claim. But there is also a risk that the legislative system would lose its effectiveness if an attempt were made to impose overambitious standards that are totally detached from the current reality.

The priority should be to start with caps that can realistically be implemented, and make sure that they are followed. Ideally, further revisions would then be introduced at an early stage to bring down the monthly limits further and gradually reduce the total amount of annual working hours.

In making these revisions, it is important to consider ways of simplifying the rules. The recent caps on overtime were set after consideration of a wide range of diverse opinions; as a result, the rules are quite complicated. A system of rules that is easy to understand would also make it easier for citizens to keep an eye on companies that may be breaking the law.

Forcing Workers to Take Time Off

Second, the recent revisions to the Labor Standards Act include provisions designed to encourage employees to use more of their annual paid leave. For employees who receive an allowance of ten days or more of paid leave a year, five of these days will now have to be taken within a designated period. This revision has attracted less attention than the limits on overtime, but is also an important step toward changing work-styles in Japan.

At present, Japanese workers take an average of around eight days of paid leave per year. This is less than half of what they are theoretically entitled to. Somewhere between 10 and 20 percent of workers do not take a single day off in a whole year. One reason why these figures are so low is that in the past the decision when to take time off lay entirely with employees.

This meant that employees could not use their annual leave entitlements unless they specifically asked permission do so. This often created an atmosphere in workplaces in which employees felt reluctant to ask for leave if their colleagues and superiors were not taking days off. This recent change places an obligation on employers to “force” employees to use at least five days of leave a year, whether they like it or not. This is regarded as a first step, and it is hoped that the take-up rate for annual leave will further increase in the future.

  • [2018.07.27]

Professor in the Faculty of Education and Integrated Arts and Sciences, Waseda University, where she specializes in labor economics. Born in 1971. Graduated from Keiō University, where she also received her Ph.D. Worked at the Bank of Japan and as an associate professor at the Institute of Social Science, University of Tokyo, before taking up her current position in 2014. Works include Rōdō jikan no keizai bunseki: chōkōrei shakai no hatarakikata o tenbō suru (An Economic Analysis of Working Hours: The Prospects for Work-Styles in a Super-Aged Society).

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  • Trying Out Teleworking at Nippon.comAs working from home gradually becomes an option for company workers in Japan, Nippon.com has instituted its own system allowing employees with young children to telecommute. How are the workers making use of this new flexibility?
  • Reality Check on Work-Style Reform: Filling In the Big PictureEconomist Tsuru Kōtarō assesses the virtues, failings, and implications of the government’s action plan for “work-style reform” in a political and economic context and discusses the challenges that lie ahead.
  • Work-Life Balance Holds the Key to Japan’s FutureJapan has changed fundamentally since the era of rapid economic growth, yet Japanese companies remain wedded to an obsolete workplace culture in which core employees, overwhelmingly male, are expected to work grueling hours while leaving domestic matters to their wives. Business consultant Komuro Yoshie argues for government incentives and supports to promote a work-life balance suited to Japan's rapidly aging society.
  • Long Road Ahead for True Labor ReformOn March 28, Prime Minister Abe Shinzō’s government released a “plan of action,” approved by labor and business leaders, for labor reforms targeting long working hours and excessive wage and benefit disparities. Labor scholar Yamada Hisashi cautions that the plan, while well intentioned, omits important steps needed to ensure meaningful reform and avoid unintended consequences.

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