Work Reform Bill Passed in Japan

What Does it Mean to Businesses and Employers in Japan?

work reform Japan
Shinjuku, Tokyo, Japan
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The Work Style Reform Bill is Passed Through the Lower House

The Work Style Reform Bill was passed by Japan’s lower parliamentary house in the last week of May. This Bill is the first major change to employment law in seventy yearsand seeks to protect the workforce from overwork, reduce inequalities and improve efficiencies.

The legislation will cap the amount of overtime work permissible, the first legislated cap on overtime in Japan. It will ensure that all workers regular and non-regular are treated equally, earning equal pay for equal work, sothat non-regular workers, who make up as much as thirty percentof the workforce, are protected from exploitation. It also seeks to exempt high waged professional workers from regulations that govern working hours. This means that professionals can choose their own working hours but will not be paid overtime. Professionals will be measured on the achievementof objectives rather than on hours worked.

According to the Bill,the cap on overtime is one hundred hours per month twenty hours higher than the guidelines of the Ministry of Wealth, Labor and Welfare, which has set eighty as the number of hours that can be worked without negatively impacted on the worker’s health. This high overtime cap is one of the criticisms levelled at the legislation. Businesses violating the cap on overtime hours will pay penalties.

Only 53% of women continue to work after having a child…

The legislation was opposed by the opposition who wish to have the exemption for professional workers removed from the Bill saying that it will lead to more overwork rather than less.

The Japan Business Federation has supported the legislation.

How Can Business Respond

Many businesses have already started enforcing shorter working hours, but a shrinking and ageing workforce, and high employment levels meanthat Japanese businesses will have to become more productive if they are to continue at current levels of output.

The legislation will pose challenges for both employees and employers. Employees who have become dependent on high overtime wages will have to learn to adapt, and businesses who already battle to find adequate skills in a market where the number of workers is decreasing will have to find alternatives.

Businesses will have to review their processes, improving productivity and rooting out inefficiencies. The empowerment of women in the workplace could also help improve the availability of skills. Only fifty-three percent of women continue to work after having a child. Career development and promotional opportunities for women is also important. Even for those who return to work, long periods of time taken to raise children results in them not acquiring the skills necessary to take advantage of promotional opportunities.

Businesses that offer flexible and reduced hours and the ability to work from home can keep these women in the workforce and help them to continue to develop their skills. A few organizations in Japan have recently introduced teleworking into their organizations. This allows employees to work from home and saves them the long commute.

Many companies now actively promote work-life balance programs. Research has found that these programs can financially benefit the organizations that see them as an investment in their people.

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Written by Joel Devidal

Joel Devidal is a serial entrepreneur and long time fan of Japan, it's unique lifestyle, culture and delicious food . He has grown several profitable businesses during his 20+ years in small business and IT.

He focuses primarily on Japanese online marketing and Internet retail industries, investing and advising startups wanting to enter the Japanese market.

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