Japan’s Labor Reform Law Helps Corporate Japan Rethink Work Styles

The government of Japan introduced a labor reform law in June. The law will change Japanese working behaviors that are detrimental to workers and their health. Several high profile examples of workers harmed by overworking led to the creation of the labor reform law.

What is the issue?

The Japanese work culture is famous for its focus on overworking employees. This culture is popularly known as “karoshi,” a Japanese word that means death from overwork. It is ingrained in corporations and is expressed in several ways:

  • Employees who stay late receive praise for their hard work
  • Companies frown upon employees who depart work before their supervisors
  • Most employees feel guilty for taking paid holidays and vacations

One of the most well-known examples of karoshi is the death by suicide of Matsuri Takahashi, a 24-year old employee who put in a lot of overtime at Japan’s largest advertising firm, Dentsu Inc., on Christmas Day in 2015. She had not been able to sleep much after working over 100 hours of overtime a month in the time leading up to her death.

Working 80 hours or more of overtime each month is seen as the threshold level where employees have an increased chance of dying. Many Japanese companies have employees working at this level or even higher. In addition to stress and suicide, other health effects of karoshi include heart attacks and strokes.

What does the labor reform law require?

Japan’s labor reform law:

  • Requires employers to limit overtime work to less than:
    • 100 hours per month
    • 720 hours per year
  • Ensures equal pay for equal work
  • Skilled professional workers with high wages are exempt from working-hour regulations
    • This group includes product developers, financial traders, bankers, consultants, and researchers

Several Japanese companies had already starting taking steps to reduce their reliance on overtime prior to the law’s enactment. They also had been trying new programs to make it easier for employees to take paid holidays. The new law now requires all employers to make specific efforts to reduce overtime.

What should employers expect?

Employers should expect they must comply with the new labor reform law. Several companies have noted positive effects related to their efforts to reduce overtime. For example, SCSK Corporation states that its profits have doubled over a six year time period while they had implemented programs to reduce overtime. Management recognized that healthy and rested employees contribute more to the company’s bottom line performance since they can provide value-added services to customers.

In addition to helping protect employees from karoshi, the new labor reform law creates working environments that are more favorable to women, mothers, foreign workers, younger workers, and mature workers. As Japan continues to face a decline in its working population, the government recognizes that anything it can do to help companies provide better working hours and conditions will in turn draw a larger pool of prospects into the labor market.

What should employers do?

Employers should examine their working culture, policies, and programs to be sure they comply with the new labor reform law. They should develop human resource information systems that will allow reporting on statistics required by the new law.

Conclusion

Global Mobility Solutions’ team of global relocation experts has helped thousands of our clients with country-specific employment requirements. We can help your company understand how to comply with Japan’s new labor reform law. Learn best practices from Global Mobility Solutions, the relocation industry and technology experts who are dedicated to keeping you informed and connected. Contact our experts online or give us a call at 800.617.1904 or 480.922.0700 today.

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