Japan is a country that exemplifies hard work and dedication. A strong work ethic and a stable Labor law structure in place has put Japan amongst the most efficient countries around the world.
The Labour Law framework in Japan takes care of employee statutes surrounding the workplace. Certain reforms in this labor law took place in 2018- the “Work Style Reform Legislation”, that saw many changes in the current law structure. Revisions were made to the pay composition, health and security benefits, visa requirements for employees and overtime pay. Many amendments took effect in April 2019, with employers taking immediate action to comply with the new requirements. These amendments strived to ensure smooth operations and happy employees. We have some points that will help you study the concept of overtime pay in Japan.
An Introduction to Overtime Pay in Japan
As per the Japanese Labour Law, every employee working more than 40 hours a week, on holidays or late night between 10pm-5am, is entitled to overtime pay. This is an exception for professionals working in a Management position. Non-compliance with the overtime rules and regulations by the Employer could result in imprisonment for up to six months or fines of up to 300,000 Yen.
Overtime Limits and Rates
As per Article 36 of the labor law, certain limits have been imposed on working overtime. The basic limits to overtime working hours are restricted to not more than 5 hours per day, 45 hours per month and/or 360 hours per year.
Under special circumstances, the employer is allowed to use an Extended limit (in cases of a sudden change in operations or product requirements) with the limit being exceeded to not more than100 hours per month, and 720 hours per year.
The rates of overtime pay constitute an additional payment to be made on the hourly base salary.
- For overtime taken above the staple working hours (8 hours a day) an additional 25% will be added to the hourly base wage.
- Working in the night-time (between 22:00 – 05:00), an additional 25% to be added to the base wage per hour.
- Working during Weekends and Holidays could add an additional 35% and undertaking overtime continuing up till night-time an additional 50% will be added to the hourly wage.
- Finally, working on a Holiday (continuing from night-time) would yield an additional 60% to the base wage.
In a country where working overtime is a norm, these clauses help people earn what they deserve. Effort, dedication, and sincerity to their jobs is a characteristic in Japanese companies and when people are compensated in direct proportion for their contribution, they aim to contribute better and are motivated to perform. This is just one of the characteristics that make the work-life in Japan a fair and just one. We hope this article helped you in navigating the overtime pay concept and structure in Japan. All the best!