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Economy

Japan draws up work reform plan setting overtime caps

Diet to consider legislative changes this year

Late-night work is not uncommon in Japan, where overwork is a serious problem.

TOKYO -- Japan's government has compiled an action plan for work reform aimed at reducing overwork and promoting equal pay for equal jobs.

The prime minister's office hosted a meeting of the Council of Work Style Reform on Tuesday, where the plan was put together. "This will be a historic first step to change how people work in Japan, and 2017 will be remembered as the starting point," Prime Minister Shinzo Abe said.

The plan is a hallmark of Japan's efforts to remedy the post-war culture of expecting full-time employees to work long hours, among other issues.

"If we cannot have legislative proposals passed, the efforts will be all for naught," Abe said, urging cabinet members to draw up related bills promptly.

Abe is deeply invested in the work reform initiative. The work style reform council, created by experts in September, has discussed ways of reducing overwork as well as improving conditions for employees who don't have full-time status.

The council created guidelines concerning equal pay for equal work at the end of 2016. And earlier this month, a three-way agreement was reached among the government, labor and employers to set limits on overtime. These moves are incorporated into the action plan.

Reducing overtime has required particularly extensive deliberations. The action plan calls for overtime to be capped at 45 hours a month in principle, or 360 hours a year. The annual limit can be doubled to 720 hours if management and employees agree. Out of consideration for temporary surges in workload, special circumstances would allow monthly overtime approaching but below 100 hours.

The Japan Business Federation, commonly known as Keidanren, had maintained caution against setting such overtime limits, arguing that the move would undermine workers' discretion. Still, the caps were set, based on the prime minister's recommendation.

Part-time and other non-full-time status workers account for nearly 40% of the overall labor force in Japan. The equal pay for equal work initiative would thoroughly eliminate unreasonable disparities in pay when compared with full-time staffers. The gap in benefits should also be minimized, and employers will have to explain when making distinctions.

Increasing wages has also been a key challenge. Abe told employers and labor in the fall that 2017 compensation should rise at least as much as they did the year before -- thereby calling for a fourth straight year of base pay upgrades.

The action plan says the minimum wage should rise by about 3% per year, setting a targeted weighted national average of 1,000 yen ($9.03) per hour.

Thorough discussions have yet to take place on such issues as labor participation and job mobility to lead more people into growth industries. Policies to promote job switching and women's advancement have been limited to subsidies. Telecommuting and working on side jobs from home have been brought up, but specific measures to promote them have yet to be discussed.

The council will reconfirm the direction of the reform from April and beyond, for related bills to be submitted to this year's Diet session. The aim is to implement the initiatives starting from fiscal 2019, and to have systems take root and checked on over a decade through fiscal 2026.

"When it comes to drawing up legislative proposals, we wish the employer-labor agreement will be given heavy weight," said Keidanren Chairman Sadayuki Sakakibara.

(Nikkei)

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