Global Compliance Desk – Japan
Japan: Upcoming Labour Law Amendments
Over the last few years, there have been several developments in Japanese labor legislation based on the ‘Work Style Reform bill’, a strategic plan issued by the Japanese government wherein certain important changes were introduced into various labor legislations including the Labor Standard Act (LSA), the Industrial Safety Act, the Labor Convention of Personnel Management, and the Conversion of employment status for part-time workers and fixed-term workers, among others.
The Work Style Reform Bill amends various aspects such as the maximum limit of Overtime, Annual Leave, time tracking requirements, Childcare Leave, Caregiver Leave, etc over a period of time.
Kindly refer to our detailed blog on the Key Aspects of the Work Style Reform.
Amendments Effective on April 1, 2023
Raise in extra wage rate for overtime work exceeding 60 hours per month for SMEs
According to Article 37 of LSA, an employee who works overtime is entitled to a premium of 25% of ordinary wages. In cases where the overtime work exceeds 60 hours in a month, large-sized employers shall be entitled to pay employees a premium of 50% of the ordinary wages.
Currently, there are no premium rates for overtime work exceeding 60 hours in small-medium enterprises (SMEs). Effective from April 1, 2023, the premium wage rate for overtime work exceeding 60 hours per month will be raised for small-medium enterprises (SMEs) also at a premium of 50% of the ordinary wages equivalent to large enterprises.
Furthermore, in order to ensure the health of employers who work overtime in excess of 60 hours per month, paid leave (complementary rest period) may be granted instead of paying premium wages for the increase.
Effective April 1. 2023, the Premium Rate of 50% for Overtime work exceeding 60 hours per month for night work (22:00 to 5:00) shall also be applicable.
Recording Requirement for Childcare leave
Effective from April 1, 2023, an employer who regularly employs more than 1,000 employees is required to publicly disclose the status of its employees’ taking of childcare leave once a year. The information to be publicly disclosed is either of:
- the percentage of male employees taking childcare leave, or
- the percentage of male employees taking childcare leave or days off granted for the purpose of childcare.
The disclosure can be made on the employer website or the website prepared by the Ministry of Health, Labour, and Welfare.
Amendments Effective on April 1, 2024
As per the amendments under the Work Style Reform, the LSA has defined the basic rule and the upper limit of overtime hours. Currently, the basic rule of 45 hours per month, 360 hours per year, and the extended rule of 720 hours per year do not apply to certain businesses and operations as they are subject to a grace period or are exempted from the upper limit regulations.
From April 1, 2024, the cap regulation will also apply to the Construction business, car driving business, doctor, Sugar manufacturing industry in Kagoshima and Okinawa prefectures, Research and development of new technologies, new products, etc along with the prescribed limit.
The aforementioned changes were made in light of the trend in Japanese employment laws toward greater flexibility and diversity in working methods. Employers must take note of the aforementioned changes and incorporate them into their employment laws and regulations in order to comply with modifications.