RESOURCES

Nov 7 2017 “Overtime work” in Japanese companies explained

Japanese companies are associated with too much overtime-work, as well as extreme cases of “Karoshi” (death caused by overtime). Beyond the media coverage however, what is the reality of overwork time in Japan?

  • Overtime work is legally restricted and controlled under labor law
  • What is the average overtime work in Japan
  • How should it be paid? Look at your salary conditions

 

You may be very scared of Japanese work environment when you hear tragic cases like “Karoshi”. ‘Karoshi’ means death caused by overwork. Despite the fact that the Japanese government is putting a lot of effort in promoting better worklife balance, many foreigners perceive Japanese companies as having too much overtime work.

Outside the media, what are the realities of Japanese overtime work? We will guide you through some of the important facts to get an accurate understanding of the context.

Legal restrictions on overtime work

Japanese law restricts all the Japanese companies not to allow overtime work unless the employer and the employees agree via 36 Kyotei (The 36 agreement, based on Article 36 of the Labor Standards Act). This 36 Kyotei is often already made before you join unless the company is at a very early phase.

Even with this 36 Kyotei, the Japanese government does set the limit of overtime work as 45 hours monthly and 360 hours annually as a basic standard. If the overtime work exceeded more than this limit, such overtime work should be unavoidable irregular cases(URL).

For overtime work, the company is supposed to pay an extra amount of salary. This extra amount (percentage of the salary increase) is legally fixed. For the work during the holiday, you are supposed to receive a further additional salary(URL).

What is the average amount of overtime work?

Contrary to popular belief, the Japanese government does maintain transparency on how it monitors overtime work. To date, the official average overtime work is as little as 11 hours monthly (URL) .

That said, compared to the government report, other sources such as Japan’s version of Glassdoor, suggests this number is underreported. Many of the people here report overtime work of 30 hours monthly(URL). That said, the numbers reported here should also be treated with a grain of salt – as information is submitted anonymously there is no way of verifying these statistics by the company or any other objective third party. The lack of validation of information can ,therefore skew statistics that might not necessarily be representative of a company’s actual work hours. Interestingly, this data suggests that people who are earning higher salary tend to have longer work hours.

Given the range of estimations around the average overtime, employees have in Japan, one certainty is that it varies from a company to company. Depending on the corporate culture of a company, there are companies which can strictly prohibit employees from doing overtime and others where an average of +40hrs of overtime is expected (this is found in industries such as the entertainment/TV broadcasting which is common globally). Companies with excessive overtime that violate labor laws are more commonly known as ‘black kigyos’ or black companies. In light of this, companies are working to combat this image of Japanese companies to improve better worklife balance (with really little overtime) and promote a brand of “white companies” to better their corporate image etc. With this in mind, it’s best whenever possible to speak to multiple employees at a company by directly to get first-hand opinions.

How does overtime work payment work?

As mentioned above, the companies are supposed to pay an extra salary based on the number of overtime work you are doing. However, many of the companies do take a system of monthly salary including “Minashi Zangyo” (expected overtime hours).

Hours of Minashi Zangyo (expected overtime hours) can be set by each employer, it can be ranged for example from 15 hours monthly to 40 hours monthly etc. This Minashi Zangyo will be clearly stated in the work contract you will be making with the employer.

For this Minashi Zangyo, whether you actually do the overtime of that indicated amount or not, the company will pay you the stated monthly salary. Only if your overtime exceeds the stated Zangyo (overtime) hours, they will pay the overtime additional salary.

Some people get really furious whenever they see the work conditions stated that “Minashi Zangyo” as 40 hours or something. They believe that they have to work 40 hours. But the reality is that you do not need to work 40 hours. In a sense, if you can work efficiently and do no overtime work, you will still get the same salary. In some companies, Japanese employees stay at the work just for the sake of getting overtime work payment. This usually results in very bad work life balance and inefficient work style. For some, the “Minashi Zangyo” system can therefore, potentially encourage people for efficient work style.

When considering companies, avoid generalizing work culture in Japan but instead assess the reality of each company individually. Many of the new companies (mostly startups and ventures) are particularly keen on good work life balance, especially companies that are founded and led by Generation Y who value having a good work life balance.

In light of work-related tragedies, the Japanese government continues to stress the importance of enforcing a work-style revolution to eradicate further work/stress related tragedies. Good positive changes are happening in many companies.

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